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VIC Business Sale - Is Section 52 of Estate Agents Act 1980 Compulsory?

Discussion in 'Commercial Law Forum' started by sharon92, 2 July 2014.

  1. sharon92

    sharon92 Member

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    Hi guys.
    I'm currently stuck and would like to know about contract law and whether the Vendor's section 52 statement under section 52 of the Estate Agents Act 1980 can be waived when preparing a contract? If both parties agree they do not require the statement because they are aware the business is suffering a loss, what can possibly be done under commercial law? Is there a waiver form? Or is the section 52 statement compulsory?

    Regards :)
     
  2. Amanda E

    Amanda E Well-Known Member

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    Hi Sharon,
    My understanding is that the section 52 Vendor's Statement must be provided.
    Have a look at the Consumer Affairs Victoria "Contracts and disclosure statements – estate agents" page.
    This statement is required for the sale of a small business valued at up to $350,000. It is usually completed by the seller and their accountant using the form prescribed under the Estate Agents (General, Accounts and Audit) Regulations 2008.

    You can also read the full wording of Section 52 of the Estate Agents's Act which sets out the requirement and the penalty for non-compliance.
     
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  3. Rod

    Rod Well-Known Member

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    I have sold and bought businesses without a section 52 however it is safer for you as a seller to have one. It helps protects you as long as the information you provide is correct. See it as a bit of insurance, not extra work.
     
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  4. sharon92

    sharon92 Member

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    Thanks guys, however if i was practicing as a lawyer would I be better off getting both parties to sign a waiver? Thereby creating some sort of immunity from liability in the future say if both parties have a dispute later down the track.
     
  5. Rod

    Rod Well-Known Member

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    People are not able to sign away their legal rights. Waivers are sometimes not worth the paper they are written on.

    You should insist on a clause in the sale agreement along the lines that says the buyer has completed their own due diligence to their own satisfaction.
     
  6. sharon92

    sharon92 Member

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    I think a solid clause in the sale agreement would be the better option as compared to a waiver.
    Thanks a lot Rod your answer's have helped me immensely! Your a legend :)
     
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  7. Phoenix Duong

    Phoenix Duong Member

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    If the business is more than $350k, what documents or statistics which is similar to Section 52 seller should provide or buyer should require?
     
  8. MicT

    MicT Member

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    Hi Sharon92,

    I am facing similar situation as yourself. It sounds like adding a solid clause in the Contract of Sale to indicate that Section 52 is not required by Purchaser is the way to go. May I ask, how did the deal end up? Any issues after that?
     

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