A Victorian estate agent refers a buyer to a particular mortgage broker and receives a referral fee without disclosing this arrangement. Which ethical and legal obligation has the agent breached?
Correct Answer
C) The obligation to disclose any benefit received from a third party connected with the transaction.
An agent who recommends a service provider and takes a fee for the referral has a conflict of interest. Victorian conduct rules and the agent's duties of honesty require the benefit to be disclosed to the person being referred before they decide whether to use the provider. Receiving the fee is not itself the breach; keeping it secret is.
Why This Is the Correct Answer
A referral fee from a broker gives the agent a financial reason to recommend that broker. The fee must be disclosed to the person referred before they decide, so the failure to disclose it is the breach.
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