Section 32 Risks: Townhouse vs Established House in Croydon

When it comes to buying a townhouse or an established house in Croydon, many buyers make the mistake of focusing only on the price, location and property features. However, what they often fail to realise is the fact that carefully checking the Section 32 Statement is just as important as inspecting the property itself. Overlooking Section 32 risks can not only lead to unexpected legal or financial issues after the purchase, but it can also affect your future renovation plans, ongoing property costs and even your rights as the property owner.

Since there is a significant difference between buying a townhouse and purchasing an established house, understanding the information provided in the Section 32 Statement, such as easements that may affect future renovations, Owners Corporation obligations, previous building permits and council notices, is essential before signing a contract. Working with an experienced conveyancer in Croydon can also help you understand the legal documents and avoid unexpected issues during the property buying process.

By reviewing the Section 32 risks associated with townhouses and established houses, you can better understand your responsibilities and choose a property that suits your future plans.

What is a Section 32 Statement and Why Does It Matter?

Also known as a Vendor Statement, a Section 32 Statement is a legal document that gives buyers important information about a property before the sale is completed. In Victoria, the seller must provide this document before the buyer formally agrees to the purchase.

The purpose of the Section 32 Statement is to help buyers understand the property’s legal and financial details before making a decision. It can reveal information that may affect the property’s value, future renovations or ongoing costs.

Before signing a Contract of Sale, buyers should understand what the Section 32 Statement says about the property. Reviewing these details can help uncover information that may affect future plans, ownership costs or property changes.

What Information Does a Section 32 Statement Include?

A Section 32 Statement usually contains information such as:

Property title details
Owners Corporation details (if applicable)
Building permits for recent works
Council rates and other outgoings
Easements
Restrictive covenants
Zoning information
Council notices

Each of these details can affect your rights and responsibilities as a property owner. For example, an easement may limit where you can build, while an Owners Corporation may require ongoing fees to maintain shared areas.

What Section 32 Risks Should You Watch for When Buying a Townhouse?

While townhouses can be an excellent option for many buyers due to their affordability, lower maintenance and convenient locations, they often come with legal and financial responsibilities that differ from those of established houses. These responsibilities are usually linked to shared ownership arrangements and common property, making it important to review the Section 32 Statement carefully before purchasing.

Here are some of the key Section 32 risks buyers should look out for when purchasing a townhouse.

Owners Corporation Obligations

Most townhouses are managed by an Owners Corporation, which looks after shared areas such as driveways, gardens and building exteriors. The Section 32 Statement usually includes details about Owners Corporation fees, financial records and any planned maintenance.

Reviewing this information helps buyers understand the ongoing costs and responsibilities that come with owning the property.

Common Property Restrictions

Townhouses often include shared spaces that owners use together. These areas may have restrictions on renovations or changes to the property.

For example, adding a fence, changing the exterior or altering shared areas may require approval from the Owners Corporation. Understanding these restrictions before buying can help you avoid problems later.

By-laws and Living Rules

The Section 32 Statement may also include information about the Owners Corporation’s rules or refer buyers to related documents.

These rules can cover matters such as:

Pet ownership
Parking
Exterior modifications
Use of common areas

Checking these rules before purchasing helps you understand whether the property matches your lifestyle and future plans.

Future Shared Maintenance Costs

Another important Section 32 risk associated with townhouses is the possibility of future shared maintenance costs. Along with regular Owners Corporation fees, owners may sometimes need to contribute towards major repairs through special levies.

By checking the financial information in the Section 32 Statement, buyers can get a clearer picture of ongoing costs and avoid surprises after completing the purchase.

What Section 32 Risks Should You Watch for When Buying an Established House?

Even though established houses offer greater independence and fewer shared ownership responsibilities than townhouses, they come with their own legal considerations that may be revealed in the Section 32 Statement. From easements and previous building works to land boundaries and council notices, there are several details buyers should review carefully before signing the contract.

Here are some of the key Section 32 risks to watch for when buying an established house.

Easements

An easement gives another person or organisation the legal right to use part of your land for a specific purpose, such as drainage, sewerage or utility services.

For example, if there’s a drainage easement running through your backyard, you may not be able to build a pool or an extension in that area. Checking for easements in the Section 32 Statement helps buyers know how they can use the land and what restrictions may apply.

Previous Building Works

If the property has been renovated or extended, the Section 32 Statement may include information about building permits issued for the work.

Buyers should check whether additions such as garages, decks, pergolas or extensions were completed with the required approvals. Unapproved building work could lead to unexpected costs or future compliance issues.

Land Boundaries

The Section 32 Statement may also reveal information about the property’s boundaries or any restrictions affecting the land.

For example, fences, retaining walls or neighbouring structures may not always sit exactly on the legal boundary. Understanding these details before buying can help prevent future disputes with neighbours.

Council Notices

The Section 32 statement may include council notices or orders relating to the property.

Furthermore, these notices could involve building compliance, maintenance requirements or other matters that the new owner may need to address after settlement. Reviewing them carefully allows buyers to understand any existing obligations before purchasing.

Townhouse vs Established House: Which Section 32 Risks Are Different?

Although both townhouses and established houses require careful review of the Section 32 Statement, the risks involved are not exactly the same. Townhouses often involve shared ownership responsibilities, while established houses are more likely to have risks related to land, previous building work and property history.

The table below highlights the key differences in Section 32 risks between townhouses and established houses.

Section 32 Risk Area	Townhouse	Established House
Shared ownership responsibilities	May include Owners Corporation fees, rules and shared maintenance obligations.	Usually no shared ownership responsibilities, but owners manage all maintenance costs themselves.
Common property restrictions	Shared areas such as driveways, gardens or building exteriors may have rules about use and changes.	Usually fewer shared property restrictions, but land boundaries and existing structures need to be checked.
Easements and land restrictions	Easements may affect shared areas or limit changes to parts of the property.	Easements are often linked to the land itself and may affect extensions, landscaping or future developments.
Building history and approvals	Newer townhouses may have fewer past renovation issues, but buyers should still check approvals and plans.	Older homes may have unapproved renovations, extensions or structures without the required permits.
Ongoing costs	Owners may need to pay regular fees or contribute to special levies for shared repairs.	Owners generally manage repair and maintenance costs directly without shared fees.
Future changes to the property	Renovations or exterior changes may require approval due to development rules or Owners Corporation requirements.	Changes may depend on council rules, permits and any restrictions affecting the land.

Conclusion

No matter whether you are buying a townhouse or an established house, reviewing the Section 32 Statement is an important step. However, the risks you need to consider can vary depending on the type of property you decide to buy. Townhouses may include Owners Corporation obligations, shared property restrictions and ongoing maintenance costs, while established houses are more likely to involve easements, building permits, land boundaries and council notices.

Understanding these details before signing a contract can help you make a more informed decision and reduce the risk of unexpected legal or financial issues after settlement.

Are you buying a townhouse or an established house in Croydon and looking for a conveyancer to help review your Section 32 Statement and other important property documents? Goodwill Conveyancing offers professional conveyancing services to help buyers review Section 32 documents, identify potential legal risks and move through the property purchase process with confidence.

Frequently Asked Questions

Are Section 32 risks higher for townhouses or established houses?

Neither property type is automatically riskier. Townhouses and established houses come with different types of Section 32 considerations. Townhouses may involve shared responsibilities and Owners Corporation matters, while established houses may have issues related to land, building history and previous works.

Can Section 32 Statements reveal different costs for townhouses and established houses?

Yes. Townhouses may include Owners Corporation fees and special levies, while established houses may involve maintenance or repair costs.

What should buyers compare in a Section 32 Statement when choosing between a townhouse and an established house?

Buyers should compare details such as property restrictions, easements, building permits, council notices and ongoing costs. The information that requires attention can vary depending on whether the property is a townhouse or an established house.

Can a Section 32 Statement help buyers choose between a townhouse and an established house?

Yes. Reviewing a Section 32 Statement can help buyers understand the legal responsibilities, restrictions and potential costs linked to each property type, allowing them to make a more informed purchasing decision.

Are newer townhouses free from Section 32 risks?

Not necessarily. While newer townhouses may have fewer renovation-related concerns, they can still involve risks related to Owners Corporation rules, shared areas, fees and restrictions.

Can Section 32 information affect the resale value of a townhouse or established house?

Yes. Restrictions, ongoing costs, easements or other property details revealed in the Section 32 Statement may influence how attractive the property is to future buyers. Understanding these factors can help buyers consider the property’s long-term value.

Townhouse vs Established House in Croydon: Different Section 32 Risks to Know Before You Buy

Table of Contents