An agent repeats the vendor's claim that an extension was council-approved. It was not. The agent had seen council letters questioning the approval but did not follow them up. Can the agent rely on the s 52 defence?
Correct Answer
D) No; the defence needs no knowledge and no reasonable cause to suspect.
Section 52 of the Property and Stock Agents Act 2002 prohibits inducing a contract by a false or misleading statement, whether or not the agent knew it was false. Under s 52(3) it is a defence only if the agent proves they did not know and had no reasonable cause to suspect it was false. Council letters questioning the approval gave reasonable cause to suspect.
Why This Is the Correct Answer
The council letters gave reasonable cause to suspect, so the s 52(3) defence fails even though the agent believed the vendor.
Why the Other Options Are Wrong
Background Knowledge for Ethics Compliance
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An agent tells an elderly owner she must sign an agency agreement tonight or lose every buyer, then phones her repeatedly after 10 pm when she hesitates. Which Schedule 1 rule is most clearly breached?