Sect55Guide

Enquiries

Enquiries regarding these Guidelines and forms should be directed to:

Compliance & Enforcement Branch, Consumer Affairs Victoria, Telephone: 03 8684 6292, Fax: 03 8684 6211.

Introduction

Under section 55 of the Estate Agents Act 1980 (the Act) estate agents, their employees, family members and others are

prohibited from purchasing any property or business which the agency is commissioned to sell. This prohibition remains

in force, however, the 1994 amendments to the Act allow this prohibition to be waived in certain circumstances.

The Act makes a clear distinction between two categories of prohibited persons and the procedure that each must follow

when seeking to purchase property which the agency is commissioned to sell.

Relatives of Estate Agents and Agents Representatives

Sub-section 55(14) of the Act provides an exemption in certain circumstances for estate agents, agents' representatives,

employees and/or their immediate family members. (NOTE: The procedures for relatives of clerical and administrative

employees are outlined on page 3).

Any person in this category must apply in writing to waive the prohibition. A person may be permitted to make a purchase

that would otherwise be prohibited if it is shown that: (i) the purchase would not be contrary to the interests of the vendor;

and, (ii) any conditions imposed are met.

These guidelines have been prepared to assist estate agents to meet the requirements of sub-section 55(14) when

applying for permission to purchase a prohibited property or business.

Documents Required for a Section 55(14) Application

A person seeking permission to purchase real estate or business pursuant to section 55(14), where that purchase would

otherwise be prohibited, is required to submit the following documentation in support of the application along with an

application fee of $134.10 (no GST Payable).

1. Awritten valuation of the property from an independent qualified valuer addressed to the vendor and carried

out at the cost of the purchaser.

This valuation must be in the form of a statutory declaration and must state that the valuer has inspected the real

estate or business and is of the opinion that the proposed purchase price, (or in the case of an auction), the valuation

is the fair market price for the real estate or business. (Refer attached format).

The person conducting the valuation must: (i) have completed the valuation stream of the Bachelor of Business

(Property) Course at RMIT; or (ii) be a member of the Australian Institute of Valuers and Land Economists; or (iii) be

a person who was registered as a valuer under the Valuation of Land Act 1960 as at 31 December 1994; or (iv) have

appropriate qualifications to conduct the valuation.

Guidelines and Forms for Applications to Purchase Real

Estate or a Business by a Prohibited Person

Section 55 of the Estate Agents Act 1980

Consumer Affairs Victoria

Telephone (03) 8684 6292 www.consumer.vic.gov.au

The granting of permission to a prohibited person is at the discretion of

the Director of Consumer Affairs Victoria (the Director).

No legally binding sale documents should be signed before the express

permission is given for the purchase to proceed.

The prescribed fee for applications is $134.10 (no GST payable).

Your application will not be considered until the application fee is received.

(24/04/08)

Privacy

Consumer Affairs Victoria is bound by laws that protect your privacy concerning the collection, use and disclosure of your personal information. Where

you do not provide the information required, we may refuse or be unable to process your transaction. We may need to disclose your personal information

to other State and Commonwealth agencies. You can request access to your personal information by contacting us. Our privacy statement is available at

www.consumer.vic.gov.au

Documents Required for a Section 55(14) Application

2. The written consent of the vendor/s to the sale of the real estate or business to the proposed purchaser.

Provision for nomination of a substitute purchaser will not be approved.

This document must be signed by the vendor/s and must contain the following information: (i) acknowledgment that the

vendor is aware of the identity of the purchaser, and of his, her or its relationship with the agency; (ii) the sale price being

offered, and confirmation that this price and the terms of the contract are acceptable to the vendor; (iii) advice as to whether

he vendor's legal adviser has been consulted in relation to the proposed sale; (iv) advice as to whether the vendor has

agreed to pay commission on the sale, and the commission (if any) expressed in dollar terms; and (v) confirmation that

the vendor has sighted the valuation, specifying the market value quoted in the valuer's report. (Refer attached format).

. A complete and unamended photocopy of the sales file.

The sales file must include the following material: (i) the Section 32 Statement, including a copy of the Certificate of

Title and plan of subdivision; (ii) the engagement authority; (iii) any listing notes, including initial appraisal notes; (iv)

all correspondence; (v) details of previous offers (complete with copies of contracts of sale or contract notes previously

prepared); (vi) copies of all advertising material and cost of advertising to date undertaken with respect to the property;

and (vii) any other relevant material.

4. A statutory declaration made by the selling agent giving details of actions taken to market and sell the real

estate or business.

5. Particulars of the involvement of any other estate agent in the marketing of the real estate or business in the

preceding 12 months.

6. Details of the vendor's solicitor.

The vendor will be advised to inform his or her legal adviser of the details of the proposed purchase.

7. In the event of a proposed purchase by an employee or a relative, a signed statement by the licensed estate

agent or the Officer in Effective Control indicating that he or she agrees to the proposed purchase.

This should include the address of the property, the proposed purchase price and the amount of commission (if any)

expressed in dollar terms.

8. Aletterfrom theproposedpurchaserindicatingwhetherheor sheintends toretainordisposeof theproperty.

Note: Any approval or permission granted will be conditional upon the purchaser notifying the Director of any re-sale

of the property within 6 months of the date of the signing of the contract.

9. A copy of the proposed Contract of Sale.

The Contract of Sale:

(i) MUST NOT BE SIGNED BEFORE MAKING APPLICATION UNDER SECTION 55 OF THE ESTATE AGENTS

ACT 1980.

(ii) MUST allow a cooling-off period of not less than 3 clear business days during which the VENDOR may withdraw

from the Contract.

(iii) MUST NOT provide for settlement or possession of the real estate or business at a time before payment of ALL

purchase moneys by the purchaser. A deposit of at least 10% of the purchase price must be paid by the purchaser

on the signing of the Contract of Sale.

(iv) MUST include any terms and special conditions further required if necessary.

10. Where a person who has obtained permission to purchase a property is to be a bidder at a public auction for

the sale of that property, the following statement must be attached to the Contract of Sale:

Permission has been granted by the Director of Consumer Affairs Victoria under sub-section 55(14) of the Estate

Agents Act 1980 for a person who would otherwise be prohibited from purchasing the property because of a

connection with the selling agent or the selling agent's employees, to purchase the property if the successful bidder

Applicants seeking permission to bid at an auction are advised that their application must be received by Consumer

Affairs Victoria at least three weeks prior to the auction to enable time for the application to be processed. Process of

applications received less than three weeks before the date of the auction cannot be guaranteed.

11. At the request of Consumer Affairs Victoria, any other information, documents, valuation or things relevant

for the purposes of section 55 of the Estate Agents Act.

12. The prescribed fee of $134.10 (no GST payable). Your application will not be considered until the application

fee is received.

Relatives of Clerical and Administrative Employees

Sub-section 55(10) provides for an exemption in certain circumstances for relatives of agency employees where the

employee is not a licensed estate agent or agents’ representative.

The spouse, parent, brother, sister or child of, for example, a receptionist or other clerical employee is permitted to

urchase a property which the agency is commissioned to sell provided that the spouse, parent, brother, sister or child will

be purchasing in their own name and not jointly with the employee,

AND;

that before the purchaser signs the contract, the vendor:

(i) is informed in writing of the prospective purchaser's relationship to the agency employee; and

(ii) agrees to the sale by completing the form approved by the Director.

Note: The exemption in sub-section 55(10) does not apply if the employee will be a new proprietor of the property or

business jointly with his or her spouse, parent, brother, sister or child. If the employee will be a joint proprietor of the

property or business to be purchased, an application in accordance with the procedure set out on pages 1 to 2 will need

to be made to the Director.

Copies of the approved sub-section 55(10) form are available from www.consumer.vic.gov.au or by phoning Consumer

Affairs Victoria on 1300 737 030. The estate agent must send a signed copy of this form to Consumer Affairs Victoria within

7 days of the form being signed. Failure to do so may result in a fine of up to $2,700.

1. Selling agent 3. Property to be sold

2. Vendor(s)

Type of sale

Property Business

ale price

(if being sold by private treaty insert the sale price

before you give this notice to the vendor)

Application for Purchase of Real Estate or Business by a Prohibited Person

state Agents Act 1980 Section 55(14)

Vendor 1 – Full name

Daytime telephone number Fax number

Postcode

Address

Give details of all actions taken to market and sell the

property/business. Attach a separate sheet if space is insufficient.

Include all details of: advertising/publications; sale board; open for

inspections; number and details of showings; and any other actions

4. Details of actions taken to market and sell

the property/business

Vendor 2 – Full name

Daytime telephone number Fax number

Postcode

Address

Vendor 3 – Full name

Daytime telephone number Fax number

Postcode

Address

Vendor 4 – Full name

Daytime telephone number Fax number

Postcode

Address

Full name

ame of estate agency (company)

aytime telephone number

ax number

ostcode

Address

Address of property/business to be sold

CAV 50 (24/04/08)

Privacy

Consumer Affairs Victoria is bound by laws that protect your privacy concerning the collection, use and

disclosure of your personal information. Where you do not provide the information required by this form,

we may refuse or be unable to process this transaction. We may need to disclose your personal

information to other State and Commonwealth agencies. You can request access to your personal

information by contacting us. Our privacy statement is available at www.consumer.vic.gov.au

Postcode

n accordance with the Evidence Act 1958, the

following people may witness a Statutory Declaration

ithin Victoria

• A member of the Police Force

• The Sheriff or a Deputy Sheriff

• A Justice of the Peace

• A notary public

• A registered medical practitioner

• A registered dentist

• A veterinary practitioner

• A pharmacist

• A principal in the teaching service

• The manager of a bank

• A barrister and solicitor of the Supreme Court

• A clerk to the barrister and solicitor of the Supreme Court

• The Prothonotary or a Deputy Prothonotary of the

Supreme Court

• The Registrar or a Deputy Registrar of the County Court

• The Principal Registrar of the Magistrates’ Court

• The Registrar or a Deputy Registrar of the Magistrates’ Court

• The Registrar of Probates or an Assistant Registrar

of Probates

• The associate to a Judge of the Supreme Court or of the

County Court

• The secretary of a Master of the Supreme Court or of the

County Court

• A person registered as a patent attorney under Part XV of the

Patents Act 1952 of the Commonwealth

• A member or former member of either House of the

Parliament of Victoria

• A member or former member of either House of the

Parliament of the Commonwealth

• A councillor of a municipality

• A senior officer of a Council as defined in the Local

Government Act 1989

• A member of the Institute of Chartered Accountants in

Australia or Australian Society of Accountants or National

Institute of Accountants

• The secretary of a building society

• A minister of religion authorised to celebrate marriages

• A person who holds a prescribed office in the public service

under Section 107A of the Evidence Act 1958

• A fellow of the Institute of Legal Executives (Victoria)

(print your full name)

of,

(print your address)

Postcode

declare that to the best of my knowledge, the contents of this

pplication are true and correct and I make it in the belief that a

person making a false declaration is liable to the penalties of

perjury.

Signature of person making this declaration

Signature of witness

Printed name, address and qualification to witness this

Statutory Declaration

Declared at

(print suburb or town)

Before me, being a person authorised under Section 107A(1) of the

Evidence Act 1958 to witness the signing of a Statutory Declaration.

in the State of Victoria, on the

Note: You must sign this declaration

n the presence of the witness

This section must be completed by the witness

This section must be completed by the selling agent

5. Selling agent’s statutory declaration

(year)(month)(day of)

Privacy

Consumer Affairs Victoria is bound by laws that protect your privacy concerning the collection, use and

disclosure of your personal information. Where you do not provide the information required by this form, we

may refuse or be unable to process this transaction. We may need to disclose your personal information to

other State and Commonwealth agencies. You can request access to your personal information by

contacting us. Our privacy statement is available at www.consumer.vic.gov.au

Valuer’s Statutory Declaration

Estate Agents Act 1980 (Section 55(14))

In accordance with the Evidence Act 1958, the

following people may witness a Statutory Declaration

within Victoria

• A member of the Police Force

• The Sheriff or a Deputy Sheriff

• A Justice of the Peace

• A notary public

• A registered medical practitioner

• A registered dentist

• A veterinary practitioner

• A pharmacist

• A principal in the teaching service

• The manager of a bank

• A barrister and solicitor of the Supreme Court

• A clerk to the barrister and solicitor of the Supreme Court

• The Prothonotary or a Deputy Prothonotary of the

Supreme Court

• The Registrar or a Deputy Registrar of the County Court

• The Principal Registrar of the Magistrates’ Court

• The Registrar or a Deputy Registrar of the Magistrates’ Court

• The Registrar of Probates or an Assistant Registrar

of Probates

• The associate to a Judge of the Supreme Court or of the

County Court

• The secretary of a Master of the Supreme Court or of the

County Court

• A person registered as a patent attorney under Part XV of the

Patents Act 1952 of the Commonwealth

• A member or former member of either House of the

Parliament of Victoria

• A member or former member of either House of the

Parliament of the Commonwealth

• A councillor of a municipality

• A senior officer of a Council as defined in the Local

Government Act 1989

• A member of the Institute of Chartered Accountants in

Australia or CPA Australia or National Institute of Accountants

• The secretary of a building society

• A minister of religion authorised to celebrate marriages

• A person who holds a prescribed office in the public service

under Section 107A of the Evidence Act 1958

• A fellow of the Institute of Legal Executives (Victoria)

of,

(print your address)

n the state of Victoria, do solemnly and sincerely declare that I am

a qualified valuer and I inspected and conducted a valuation of the

(tick applicable boxes)

Signature of person making this declaration

Signature of witness

Postcode

Printed name, address and qualification to witness this

Statutory Declaration

Declared at

(print suburb or town)

Before me, being a person authorised under Section 107A(1) of the

Evidence Act 1958 to witness the signing of a Statutory Declaration.

in the State of Victoria, on the

Note: You must sign this declaration

in the presence of the witness

This section must be completed by the witness

(year)(month)(day of)

(date of valuation)

It is my opinion the valuation of

(amount)

is the fair market price for the real estate/business.

I acknowledge that this declaration is true and correct and I make

it in the belief that a person making a false declaration is liable to

the penalties of perjury.

(year)(month)(day of)

This section must be completed by the valuer

Privacy

Consumer Affairs Victoria is bound by laws that protect your privacy

concerning the collection, use and disclosure of your personal information.

Where you do not provide the information required by this form, we may

refuse or be unable to process this transaction. We may need to disclose

your personal information to other State and Commonwealth agencies.

You can request access to your personal information by contacting us. Our

privacy statement is available at www.consumer.vic.gov.au

real estate business

situated at

(address)

Qualification to make this valuation

Note:

The person conducting the valuation must be an

independent valuer not associated with the estate

agency and must:

• have completed the valuation stream of the Bachelor of

Business (Property) Course at RMIT; or

• be a member of the Australian Institute of Valuers and

Land Economists; or

• be a person who is registered as a valuer under the

Valuation of Land Act 1960 as at 31 December 1994; or

• have appropriate qualifications to conduct the valuation.

(print your full name)

Important Notice to the Vendor

Your estate agent or a relative of your estate agent or a relative of an employee of

your estate agent is a prospective purchaser of your property

• The selling agent is required to give you this notice before you sign any document to sell your property or business to that person.

• If your property/business is for sale by auction, the agent must give you this notice at least 3 weeks before the auction.

• It is strongly recommended that you obtain independent advice if you are unsure of the fair market value of your property/business

I/We confirm the sale price of

(write in amount)

I/We

(write in full name(s) of all property owners)

Signature(s) and consent of all vendors (if the vendor is a corporation - a director must sign)

/ /

Date of valuation

/ /

• I have considered the information stated on this form concerning the prospective purchaser’s relationship to an employee of

the selling agency and agree to the purchase.

• Whilst I agree to the purchase I have not, as yet, signed any document binding me to sell to the prospective purchaser named

in this form.

• I understand that if my property/business is sold to the prospective purchaser named in this form at auction

(whether I have

been given this notice before or after the auction) I can withdraw from the contract within 72 hours of signing it by giving written

notice to the purchaser and if I do so I will not be liable to pay the selling agent commission or outgoings.

• I note that I am to be given a copy of this completed form after I have signed it.

Declaration, names and signatures of all vendors

To be completed by the vendor(s)

Acknowledge that I/we have been informed of the indentity of the purchaser and their relationship with the selling agency which is:

(write in the names of all purchasers who are relatives to the estate agent or agency employee and describe what their relationship is

)

Names of purchasers Relationship with agency (eg brother of selling agent)

No Yes

If yes, provide the name and address of your solicitor or legal adviser

No Yes

If yes, specify the agreed commission amount here

No Yes

If yes, specify here the market value

given and the date of the valuation

Vendor(s) Consent

state Agents Act 1980 Section 55

Market value

Have you agreed to pay commission on the sale?

Postcode

The selling agent must lodge this form within 7 days of

being signed by the vendor(s) or risk a fine of $2700.

Privacy

Consumer Affairs Victoria is bound by laws that protect your privacy concerning the collection, use and disclosure of your

personal information. Where you do not provide the information required by this form, we may refuse or be unable to process

this transaction. We may need to disclose your personal information to other State and Commonwealth agencies. You can

request access to your personal information by contacting us. Our privacy statement is available at www.consumer.vic.gov.au

Date

Signature of vendor

Have you consulted a solicitor or legal adviser in relation to the proposed sale?

Have you been given a copy of a valuation conducted by an independent and qualified valuer specifying the market value of the property/business?

Being the vendors of the property/business situated at

(write in address of property to be sold)

Postcode

and the terms of the contract offered are acceptable.

/ /

Date

Signature of vendor

/ /

Date

Signature of vendor

/ /

Date

Signature of vendor

How to lodge and pay for this application

The application fee is $134.10. This application cannot be processed without payment

The application fee of $110.20 can be paid by cheque, money order or credit card. Cash is only accepted if paying in person.

Cheques and money orders are to be made payable to ‘Department of Justice’.

What happens then

Consumer Affairs Victoria will process your application.You may be contacted for further information.

If the form is completed correctly and all necessary documents attached, processing time is on average 2 weeks.

You will be notified of the outcome by letter.

Application for Purchase of Real Estate or Business

by a Prohibited Person

Estate Agents Act 1980 Section 55

Document checklist

You must attach the following for your application to be considered

The Vendor(s) Consent form must have been completed by the vendor(s). You must provide a copy of this form to the vendor.

The Selling Agent’s Statutory Declaration must be completed by the selling agent and witnessed by an authorised person.

The Valuer’s Statutory Declaration form must be completed by an independent qualified valuer and witnessed by an

authorised person.

The valuation provided must be the most recent valuation of the property. You must provide a copy of this

valuation to the vendor.

A copy of the section 32 Statement or Contract of Sale of Business.

A copy of the Engagement Authority Contract signed with the vendor.

A complete and unamended photocopy of the sales file.

If other agencies have been engaged to sell the property/business within the last 12 months, you must provide a list of the

names of those agents.

A written and signed statement from the purchaser outlining the future use of property.

A letter from the Licensed Estate Agent or Officer in Effective Control consenting to this transaction.

Consumer Affairs Victoria

Telephone (03) 8684 6292 www.consumer.vic.gov.au

Date

/ /

Card number

Name of cardholder Card expiry date

Visa Mastercard Bankcard Amex

Signature of cardholder

If paying by credit card fill in your credit card details below.

Amount

$134.10

When you have completed and attached all the necessary

documents, lodge your application by:

sending it by post to:

Consumer Affairs Victoria

GPO Box 123A, Melbourne 3001

personally delivering to:

Consumer Affairs Victoria

113 Exhibition Street, Melbourne

Office hours are 8.30am–5pm Monday to Friday

(closed on public holidays)

Privacy

Consumer Affairs Victoria is bound by laws that protect your privacy concerning the collection, use and disclosure of your personal information. Where

you do not provide the information required by this form, we may refuse or be unable to process this transaction. We may need to disclose your personal

information to other State and Commonwealth agencies. You can request access to your personal information by contacting us. Our privacy statement is

available at www.consumer.vic.gov.au