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Are you selling your residential services business? Residential services businesses provide specialised services to individuals that are often disadvantaged or require support with personal care. Businesses that provide residential services include boarding houses, supported accommodation and aged rental accommodation.

Due to the niche nature of your business, you should be aware of certain considerations when it comes time to sell your business. This article explains what steps you can take to smooth the sale process while complying with the relevant legislation in Queensland.

1. Transfer of Accreditation

The operation and sale of a residential services business requires you to abide by the Residential Services (Accreditation) Act 2002 (QLD) (the Act). In particular, the Act requires the sale to include a transfer of the seller’s accreditation to operate a residential services business. As a seller, you should ensure your sale of business contract adequately addresses how you will transfer your registration and accreditation to the buyer. Your lawyer should include clauses that set out:

  • the forms required for submission;
  • the fees the buyer must pay for the transfer; and
  • the time frame for meeting these requirements as conditions to settlement.

Transfer Checklist

A transfer of accreditation changes the service provider of your existing residential service. To do this, complete the following steps.

      1.  Fill Out the Forms

Both parties should complete, sign and submit a Residential Services Form 4.

This is the application form to become a registered service provider of a currently registered service.

      2.  Pay the Fee The buyer should pay the transfer fee. This amounts to $158.25 (at the date of this article).
      3.  Provide Identification The buyer must provide a certified copy of their identification documents (e.g. passport, drivers licence).
      4.  Check Criminal History The buyer should request a criminal history check and pay the associated $39.40 fee (at the date of this article).

As the transfer application process takes four to six weeks, you should ideally submit Form 4 immediately after both parties have signed the sale contract. This will allow you to start preparing for settlement as soon as possible.

Tip: Placing most of the obligations on the buyer can help ensure that the accreditation transfer is attended to as soon as possible after the contract is signed.

Transfer Process

You should submit a Form 4 to the Residential Services Unit (RSU) of the QLD Department of Housing and Public Works. The RSU will then assess the suitability of the buyer’s ‘associate’. The associate is the individual who will be the new manager of the residential service. The RSU conducts this assessment by looking at:

  • any history of bankruptcy; and
  • evidence of criminal convictions.

2. Transferring Your Employees

The residential services sector is a niche area which requires employees with particular knowledge and skills to care for residents appropriately. As your workers are a key part of the success of your business, the buyer will probably want to retain them after settlement.

Accordingly, during the business sale process, check all your employee records to ensure:

  • they are up to date;
  • they have clear employment terms in place; and
  • each employee’s entitlement to the correct wages, leave and superannuation has been met.

This will demonstrate to the buyer that you have complied with your obligations as an employer and that there are no issues in respect of your employees.

Tip: Getting this information in order at the outset will streamline negotiations for the sale contract. The buyer can make quicker decisions by easily accessing the information you have provided, in order to assess the costs and benefits of retaining your employees.

3. Assigning the Lease

A residential services business relies predominantly on its ability to operate from specific premises set up for providing those services. As it is not the type of business that can easily move, a buyer will want to ensure that they will also be authorised to operate from that location for a reasonably lengthy period. 

During the sale process, review your current lease and consider how long you have left of the term. If there are only a couple of years left, the buyer will likely want to negotiate to extend the lease term. Alternatively, they may choose to obtain a new lease altogether. Ultimately, the viability of these options depends on your landlord. It may be beneficial to reach out to your landlord early on in the process and see how receptive they are to increasing your lease term.

Whatever you and the buyer decide, ensure the sale contract reflects this agreement.

4. Agreements With Residents

Your residents are an integral part of your business. If you have any particular existing agreements with residents, you may need to refer to them in the sale contract. This should be done in a way that means that the buyer will have to honour these agreements.

Alternatively, the buyer may prefer to enter into new agreements with your residents which replace your existing agreements after settlement. Whatever you and the buyer decide, ensure that you are released from liability under these agreements for actions of the buyer after settlement.

If you have written agreements in place, the buyer will likely want to see the terms of these agreements. If you and the buyer have signed a confidentiality agreement, you could provide them with this information before signing the sale of business contract. It is still best to redact the documents at this stage, so you do not provide residents’ personal information to the buyer until they have signed the sale contract.

Key Takeaways

The transfer of your accreditation, premises, and employees are significant components in the sale of your residential services business. Accordingly, you should ensure you deal with them in an informed and commercially-savvy manner. If you require assistance with preparing a sale of business contract, or have questions on how to meet your obligations under the Act, get in touch with LegalVision’s sale of business lawyers on 1300 544 755 or fill out the form on this page.


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