What section 52 requires.
Section 52 requires the seller, or the agent, to give the buyer a disclosure statement in the prescribed form before anything binding is signed and before a deposit is taken. Whether a business is a small business for this purpose turns on a price cap set in the regulations, which is why the figure is left to the regulations rather than stated here.
What goes into it.
The statement is onerous. Much of it can be completed with full instructions, but the business operating report inside it must be certified by a practising accountant, and the statement must attach the current lease and any assignments, together with the title details and zoning for the land. Business agents, who handle these often, usually prepare them, so it is less common for a lawyer to do so, and if that work is to be done by the firm it needs to be written into the retainer and the fee disclosure.
Why getting it wrong is costly.
If the statement is not given, is deficient or is in the wrong form, the seller or agent can be fined, and the buyer can avoid the contract by written notice within a limited window set by the Act and before taking possession, with the seller and agent having to repay what was paid. In any dispute the onus is on the seller and agent to prove the statement was given. The obligation cannot be contracted out of. There is a narrow exception where the sale includes certain liquor licences the buyer needs to carry on the business. A separate obligation under section 51 applies where the agent has offered the buyer finance, and the buyer keeps rights at common law and under the Australian Consumer Law if the facts have been misrepresented. Our business sale and purchase service handles the section 52 statement as part of the sale.
A statement that is late, incomplete or in the wrong form hands the buyer a right to walk away and recover their money, and if it is challenged, the seller has to prove it was given. It is not a formality to rush at the last minute.
Law referenced: Estate Agents Act 1980 ss 51, 52; Estate Agents (General, Accounts and Audit) Regulations 2018.