Victorian Consolidated Legislation

Estate Agents Act 1980 - SECT 51

Statement concerning finance only to be given if finance promised

51. Statement concerning finance only to be given if finance promised



(1) This section applies if an estate agent or auctioneer (or any employee or
person acting on behalf of an estate agent or auctioneer) makes any promise to
a person with respect to the obtaining of a loan of money to defray some or
all of the cost of the purchase price of any real estate or business.

(1A) Before obtaining any signature from the person (or any agent of the
person) on any document that legally binds, or that is intended to legally
bind, the person in respect of the purchase of the real estate or business,
the estate agent or auctioneer must-

   (a)  give to the person, or to any other person signing the document on
        behalf of that person, a statement in writing as provided for in this
        section; and

   (b)  obtain from the person to whom the statement is given an
        acknowledgement in writing of the receipt of that statement.



(2) Notwithstanding anything in subsection (1A)-

   (a)  it shall not be necessary in any case where there are two or more
        purchasers to give a statement in writing to more than one of the
        purchasers; and

   (b)  a statement in writing shall be deemed to be duly given if it is given
        to a person who is authorized by the purchaser to receive it on his
        behalf or who is authorized by one of two or more purchasers to
        receive it on their behalf.

(3) Every statement given under this section-

   (a)  shall set out so that it can be readily identified the situation or
        description of the real estate or business in relation to which the
        statement is given;

   (b)  shall state the name and address of the seller and of the purchaser;

   (c)  shall-

   (i)  set out in accordance with the requirements of subsection (4)
        particulars of any promise made by the auctioneer or agent (or by any
        employee or agent's representative) with respect to the obtaining of a
        loan of money for defraying wholly or in part the purchase price and
        state whether the loan is to be obtained by the auctioneer or agent
        and state also that any other promise which may previously have been
        made with respect to the obtaining of a loan of money for defraying
        wholly or in part the purchase price is withdrawn.



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   (d)  shall state the date on which the statement is given; and

   (e)  shall be signed by the auctioneer or agent or by a person authorized
        in writing by the auctioneer or agent.

(4) The particulars required to be set out by subsection (3)(c)(i) shall be
the terms of the promise actually made by the auctioneer or agent (or by any
employee or agent's representative) save that it shall not in any
circumstances be necessary to set out any particulars other than or in
addition to-

   (a)  the amount of the loan;

   (b)  the rate of interest payable under the loan (but not any higher rate
        which may be payable if default is made in complying with the terms
        and conditions upon which the loan is obtained);

   (c)  the date by which (if the terms and conditions upon which the loan is
        obtained are complied with) the loan is to be repaid;

   (d)  if the loan is to be repayable by instalments, the amount of each
        instalment and the intervals at which the instalments are to be
        payable; and

   (e)  the person, body, or institution from whom or which the loan is to be
        obtained.





(5) If a statement containing substantially-





   (a)  the particulars and information required to be set out and stated by
        subsection (3)(c)(i)-



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is given in accordance with the provisions of this section the purchaser shall
not be entitled, under or by virtue of the provisions of this section, to
avoid any such contract agreement or document on the ground that the
auctioneer or agent (or his employee or agent's representative) has made a
promise with respect to the obtaining of a loan of money which is not set out
in the statement.

(6) If a statement containing substantially-

   (a)  the particulars and information required to be set out and stated by
        subsection (3)(c)(i)-



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is not given in accordance with the provisions of this section, the purchaser
may at his option by notice in writing given to the seller or to the
auctioneer or agent-

   (a)  within one month after he first signs any contract, agreement or
        document in respect of the sale; and

   (b)  before the purchaser has-

   (i)  paid the whole of the purchase money; or

   (ii) taken possession of the property; or

   (iii) accepted title to the property- avoid the contract agreement or
        document; and in any civil proceedings arising out of or connected
        with the contract agreement or document the onus of proving that the
        statement was duly given shall lie upon the party so alleging.

(7) If in respect of any sale to which this section applies-

   (a)  a loan of money is not obtained by or on behalf of the purchaser in
        compliance with any promise set out in any statement given to the
        purchaser pursuant to this section; and

   (b)  the purchaser has not already paid the whole of the purchase money or
        taken possession of the property or accepted title to the property-

the purchaser, if he has done all things reasonably required to be done to
obtain the loan of money, may by notice in writing given, within three months
after he first signs any such contract agreement or document in respect of the
sale, to the seller or to the auctioneer or agent avoid that contract
agreement or document.

(8) Upon any avoidance under this section of a contract agreement or document-

   (a)  the seller shall be liable for the repayment to the purchaser of all
        money paid by the purchaser under the contract agreement or document;
        and

   (b)  the auctioneer or agent (as the case may be) shall be liable for the
        repayment to the purchaser of such part of the said money as was paid
        to him by the purchaser-

and the money shall be recoverable by the purchaser accordingly as a civil
debt recoverable summarily in the Magistrates' Court or in any court of
competent jurisdiction.

(9) Where an auctioneer or agent has under subsection (8) been required to pay
and has paid any money to the purchaser that money, to the extent of any
amount received by the seller in respect of the transaction, shall be
recoverable by the auctioneer or agent from the seller as a civil debt
recoverable summarily in the Magistrates' Court or in any court of competent
jurisdiction unless the seller proves to the satisfaction of the court that
the promise with respect to the obtaining of a loan of money was made without
his knowledge connivance or consent.

(10) Where a promise is made without the knowledge connivance or consent of
the seller, the seller may recover from the auctioneer or agent concerned any
money paid under the contract and not received by the seller which the seller
has repaid to the purchaser and in addition any damage suffered by the seller
consequent on the avoidance by the purchaser of the contract.

(11) Every contract or agreement made or entered into with intent, or the
effect of which would be, to evade or avoid the operation of any provision of
this section shall to the extent of the evasion or avoidance be absolutely
void and of no legal effect.

(12) An auctioneer or agent who, being so required by the provisions of
subsection (1A) fails to give in respect of a sale of any real estate or
business a statement in writing containing substantially the particulars and
information required by subsection (3) shall be guilty of an offence against
this Act and liable to a penalty of not more than 10 penalty units.

(13) Notwithstanding anything to the contrary in this section a contract
agreement or document in respect of the sale of any real estate or business
shall not be voidable by the purchaser by reason only of a contravention by
the auctioneer or agent of any of the provisions of this section if the court
is satisfied that the auctioneer or agent acted honestly and reasonably and
that the purchaser is substantially in as good a position as if all the
relevant provisions of this section had been complied with.

(14) In this section promise does not include-

   (a)  a promise that a seller of land will transfer the land to the
        purchaser conditionally upon his at the same time executing a proper
        mortgage in favour of the seller to secure payment of all or any part
        of the moneys payable or that would thereafter but for the execution
        of the mortgage become payable by the purchaser pursuant to the
        contract of sale; or

   (b)  a promise that the terms of a sale will be or will include a provision
        that the purchase price or any part thereof shall be or may be paid by
        instalments.