By Phillip Leaman

24 July 2018

On 20 May 2018, the Estate Agents (General, Accounts and Audit) Regulations 2018 came into force. The regulations provide for the Section 52 Statement which is required to be provided to purchasers by vendors of small businesses.

Prior to the law change, a small business was defined as one with a sale price under $350,000. The new regulations change the definition of what counts as a small business. The new definition requires a Section 52 Statement be provided to purchasers by vendors for small business sales priced under $450,000.

The Section 52 Statement has also been amended to reflect changes to the Business operating report. The Statement now includes the requirement for the vendor to give purchasers a disclosure statement in accordance with their obligations under the Retail Leases Act 2003.

So what happens if a vendor does not comply with the new requirements of Section 52 of the Estate Agents Act?

If the vendor does not give the purchaser a Section 52 Statement, or the statement they issue is not completed properly, the purchaser is likely able to avoid the contract and get back any deposit paid. The purchaser must act within 3 months of the date the contract is signed, and before they take possession of the business.

A vendor who fails to provide a statement is also liable to a 10 penalty unit fine.

If an estate agent is acting in the sale of the business and the estate agent obtains the signature or takes the deposit without a statement being provided, the estate agent also faces a 10 penalty unit fine.

Often small business transactions create the most problems for vendors. It is important to properly document the transaction irrespective of the value of the sale. Dealing with employees and their entitlements following a transfer is also an issue frequently overlooked by vendors.

Make sure you document your transaction right and seek legal advice from an experienced lawyer.

 

For assistance contact Phillip Leaman or one of the Business Law Team.

Related Articles

View All
Property & Development / Real Estate Agents

Stamp Duty is now payable on late settlement and default penalty interest

The dutiable value of a property is the value in which stamp duty is determined to be due and payable at settlement by...
Read More
Property & Development / Real Estate Agents

Nominating a new purchaser – 3 big things to think about

Some of the questions which you will need to answer when, or even before, you nominate a new purchaser are: How is GST...
Read More
Commercial Law / Real Estate Agents / Owners Corporations & Strata

Changes for Real Estate Agents and Owners Corporation Managers

What are the applicable jurisdictions Current jurisdictions included are Victoria, New South Wales, South Australia,...
Read More
Commercial Contracts & Agreements / Commercial Law / Leasing & Lease Disputes

The 2022 Commercial Tenancy Relief Scheme Regulations are now in effect

The 2022 Regulations were foreshadowed in a press release issued by the Victorian Government on 15 January 2022 Click...
Read More
Property & Development / Mortgages, Loans & Finance / Real Estate Agents

What is the Homebuyer Fund?

The Fund allow individuals the opportunity to own their own home that previously has always been out of reach The Fund...
Read More
Property & Development / Real Estate Agents

Recording: TLFC Law Lunchtime Briefing: 2021 Commercial Tenancy Relief Scheme

If you were unable to attend this session, you are welcome to watch the recording at your convenience...
Read More
Leasing & Lease Disputes / Property & Development / Real Estate Agents

COVID-19 and the new Commercial Tenancy Relief Scheme

A global pandemic, an economy forced into hibernation, and repeated, extended, and somewhat unpredictable lockdowns…...
Read More
Property & Development / Real Estate Agents

TLFC Law Lunchtime Briefing: Post Commercial Tenancy Relief Scheme (CTRS) – what’s next?

If you were unable to attend this session, you are welcome to watch the recording at your convenience Passcode:...
Read More
Property & Development / Real Estate Agents

Changes to the Residential Tenancies Act 1997 (Vic). What do the changes mean for real estate agents, landlords and tenants?

The amendments come into effect 29 March 2021 and are intended to make renting residential property fairer and safer in...
Read More
Property & Development / Leasing & Lease Disputes / Owners Corporations & Strata

Head leases and the Retail Leases Act 2003

In the recent case of Izett St Pty Ltd v Applgold Pty Ltd (Building and Property) [2021] VCAT 174 (3 March 2021, Senior...
Read More
Leasing & Lease Disputes / Real Estate Agents / Retail Clients & Chains

Need extra time on your retail lease? This may help you.

We have observed that tenants are not just being put under financial distress to pay the rent because of the government...
Read More
Leasing & Lease Disputes / Real Estate Agents / Commercial Law

COVID-19 – Commercial Tenancy Relief Scheme to be extended (again)

The CTRS was initially expected to end on 29 September 2020 under the COVID-19 Omnibus (Emergency Measures)(Commercial...
Read More