A vendor tells his agent the rear granny flat is ‘fully council approved’. Without checking, the agent repeats this to buyers; one of them buys the property relying on it, and it proves false. Can the agent commit an offence?
Correct Answer
B) Yes, unless he proves he did not know and had no reasonable cause to suspect it was false
Section 52 of the Property and Stock Agents Act 2002 prohibits an agent from inducing a person to enter a contract by a false, misleading or deceptive statement, whether to the agent's knowledge or not. Under s 52(3) it is a defence if the agent proves he did not know, and had no reasonable cause to suspect, that it was false. Repeating an unchecked approval claim risks failing that test.
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