Under the Real Estate and Business Agents Act 1978 (WA), what is the fundamental duty an agent owes to their client?

Q: What is the correct answer to: Under the Real Estate and Business Agents Act 1978 (WA), what is the fundamental duty an agent owes to their client?

The correct answer is A fiduciary duty to act honestly, fairly, and in the best interests of the client. Option B is correct because a WA agent owes a fiduciary duty to act honestly, fairly, and in the client's best interests. This includes duties of loyalty, full disclosure of material information, maintaining confidentiality, and avoiding conflicts of interest.

Q: What background knowledge is needed for this Ethics Compliance question?

Fiduciary duties arise from the relationship of trust and confidence between agent and client. In WA, these duties are reinforced by statute (REBA Act 1978), the Code of Conduct, and common law. Breach of fiduciary duty can result in loss of commission, liability for damages, and disciplinary action.

Q: What is a good way to remember the answer to this Ethics Compliance question?

LACE: Loyalty, Avoiding conflicts, Confidentiality, Everything disclosed. The four pillars of an agent's fiduciary duty to their client. Use LACE to recall the key fiduciary duties: loyal, avoid conflicts, keep confidence, disclose everything.

Q: What exam tip applies to this Ethics Compliance question?

Fiduciary duty means the CLIENT's interests come first — above the agent's own interests or the agency's profit.

Q: How does this Ethics Compliance concept apply in Australian real estate practice?

A WA agent receives a strong offer from a buyer who is also their personal friend. The agent must put the seller-client's interests first, present the offer without bias, and disclose their personal relationship with the buyer to the seller.

Question

Ethics ComplianceWAEASY

Under the Real Estate and Business Agents Act 1978 (WA), what is the fundamental duty an agent owes to their client?

Answer Options

A

A duty to maximise profit for the agency

B

A fiduciary duty to act honestly, fairly, and in the best interests of the client

C

A duty to complete the transaction as quickly as possible

D

A duty to only follow the client's instructions without exercising professional judgement