A branch manager discovers that one of their salespersons has been keeping duplicate keys to listed properties for personal use. What action should be taken?
Correct Answer
C) Recover the keys, stop the practice, and report it to the Authority
Keeping clients' keys for personal use breaches the duty to protect the security of clients' property (Rule 9.5) and is likely misconduct. The manager must stop it at once, and Rule 7.2 requires a licensee who suspects misconduct by another licensee to report it to the Real Estate Authority. Whether to dismiss is a separate employment decision that needs a fair process.
Why This Is the Correct Answer
Using clients' keys for personal purposes is a serious breach of trust and likely misconduct. Rule 7.2 requires a licensee with reasonable grounds to suspect misconduct by another licensee to report it to the Real Estate Authority, and the manager's supervisory duty requires the practice to stop immediately. Any employment action is a separate decision that must follow a fair process.
Why the Other Options Are Wrong
Option A: Give a verbal warning and ask the salesperson to hand the keys back
A verbal warning treats likely misconduct as minor, and Rule 7.2 makes reporting suspected misconduct by another licensee to the Authority compulsory.
Option B: Treat it as a purely internal employment matter and recover the keys quietly
Keeping it in-house ignores Rule 7.2: a licensee who has reasonable grounds to suspect misconduct by another licensee must report it to the Authority.
Option D: Let the salesperson return the keys, with no further action if no client complains
Clients' security is at stake (Rule 9.5), and waiting for a complaint leaves likely misconduct unreported and unaddressed.
Deep Analysis of This Agency Practice Question
The question separates two tracks. The regulatory track is fixed by the Rules: stop the conduct, protect clients' property, and report suspected misconduct to the Authority. The employment track (warning, suspension or dismissal) is governed by employment law and needs a fair process; it is not something the Real Estate Agents Act dictates. Answers that stay purely internal, or wait for a complaint, fail the regulatory track.
Background Knowledge for Agency Practice
Rule 9.5 requires licensees to take due care to ensure the security of land they are working on. Rule 7.1 lets a licensee report suspected unsatisfactory conduct by another licensee; Rule 7.2 makes reporting suspected misconduct compulsory. Complaints are handled by a complaints assessment committee, and serious cases can be charged before the Real Estate Agents Disciplinary Tribunal.
Memory Technique
Secure the client's property (get the keys back), Stop the conduct, Report suspected misconduct to the Authority. Employment consequences are a separate, later question.
When a scenario involves a licensee abusing access to clients' property, run through Secure, Stop, Report before thinking about warnings or dismissal.
Exam Tip for Agency Practice
Suspected misconduct by another licensee must be reported to the Authority (Rule 7.2); internal discipline alone is never the complete answer.
Real World Application in Agency Practice
A vendor notices someone has been in her vacant home. The office finds a salesperson copied the key and used the house. The manager retrieves every copy, changes the key register process, tells the vendor, and reports the matter to the Real Estate Authority, while HR runs a separate disciplinary process.
Common Mistakes to Avoid on Agency Practice Questions
- •Treating misuse of client keys as a minor matter for a verbal warning
- •Assuming internal discipline replaces the duty to report misconduct
- •Believing the Real Estate Agents Act requires the manager to dismiss the salesperson
Related Topics & Key Terms
Key Terms:
More Agency Practice Questions
A real estate agent receives two offers on a property at the same time. What is their primary obligation?
Which of the following situations would create a conflict of interest requiring disclosure by a real estate licensee?
Sarah is a licensed salesperson working for ABC Real Estate. When showing a property to buyers, who does she primarily represent?
Under the Real Estate Agents Act 2008, what is the primary duty that a real estate agent owes to their client?
Which licence allows a person to carry out real estate agency work for an agent, but only under supervision?
- → Under section 126 of the Real Estate Agents Act 2008, what must happen after the client signs an agency agreement for the agent to be entitled to commission?
- → A licensed agent discovers that their salesperson has been providing advice about tax implications of a property investment without appropriate qualifications. What is the agent's responsibility?
- → An agency agreement contains a clause stating that the agent's commission is payable even if the property is sold by the vendor directly to a buyer introduced by the agent during the agency period, but the sale settles after the agency expires. Is this clause enforceable?
- → What must a real estate agent disclose to a potential purchaser when showing a property?
- → Under a sole agency agreement, when is the vendor still liable to pay commission to the agent?
- → Sarah holds a salesperson's licence and works for ABC Real Estate. When presenting an offer to a vendor, who is legally responsible for ensuring all disclosure obligations are met?
- → A real estate agent discovers that a property has a leaky roof after the agency agreement is signed but before any offers are received. What is the agent's obligation?
- → Which of the following allows an agent to end an agency agreement before its expiry date?
- → Under the Real Estate Agents Act 2008, what is the primary fiduciary duty that a real estate agent owes to their client?
- → What must a licensee do when they become aware of a material defect in a property they are marketing?
People Also Study
Property Law & Legislation
56 questions
Sale & Purchase Process
63 questions
Professional Conduct & Ethics
46 questions
Property Management
85 questions
Related Study Resources
Previous Question
A branch manager finds that a salesperson has not passed on the auction bidding record that the vendor client asked for. What should the branch manager do?
Next Question
A branch manager discovers that one of their salespersons has been operating without proper supervision for several weeks. Who is primarily responsible for this breach?