A salesperson working under a branch manager wants to purchase a property listed by their own agency. What is the correct procedure?
Correct Answer
B) Obtain the vendor's consent in the prescribed form and give an independent valuation
Section 134 of the Real Estate Agents Act 2008 bars a licensee from acquiring a client's property without the client's consent, and section 134(7) treats the vendor as the client of every salesperson working for the agent. The consent must be in the prescribed form and is effective only if the licensee gives the vendor a valuation by an independent registered valuer at the licensee's expense (s 135).
Why This Is the Correct Answer
Section 134 bars a licensee from acquiring a client's property without the client's consent, and s 134(7) extends 'client' to every salesperson working for the agent. The consent is effective only if given in the prescribed form and the licensee provides a valuation by an independent registered valuer at the licensee's expense (s 135); otherwise the vendor can cancel and no commission is payable.
Why the Other Options Are Wrong
Option A: Nothing special is needed, because the listing belongs to another salesperson
Section 134(7) makes the vendor the client of every salesperson whose work helps the agent, so the restriction applies to this salesperson too.
Option C: Wait until the agency's listing has expired and then approach the vendor privately
Waiting out the listing is a workaround, not the statutory route; while the agency acts, section 134 consent and a section 135 valuation are required.
Option D: Buy through a different agency, which removes any need for the vendor's consent or a valuation
Using another agency does not change the fact that the salesperson's own agency acts for the vendor, so sections 134 and 135 still apply.
Deep Analysis of This Agency Practice Question
The protection exists because a licensee buying a client's property has every incentive to pay less than the client could get elsewhere. The Act answers that with two conditions that go beyond general disclosure: a prescribed consent form, and an independent valuation paid for by the licensee, delivered before consent or, if the client agrees, within 14 days after. If the later valuation is higher than the provisional figure, the client can avoid the contract.
Background Knowledge for Agency Practice
Sections 134 to 137 of the Real Estate Agents Act 2008 deal with licensee conflicts. Section 134 covers acquisitions by the licensee or a related person; section 135 sets the valuation requirement; section 136 requires written disclosure of other financial benefits; section 137 defines related persons. A contract made in breach of section 134 can be cancelled by the client and no commission is payable on it.
Memory Technique
Licensee buying the client's property needs two things: consent on the prescribed Form, plus an independent Valuation at the licensee's cost.
Whenever a licensee or a relative wants to buy a property the agency is selling, check for both the form and the valuation.
Exam Tip for Agency Practice
Sections 134 and 135 require prescribed-form consent and an independent registered valuation; 'full disclosure and consent' alone is incomplete.
Real World Application in Agency Practice
A salesperson wants to buy a unit her agency has listed. The agency gives the vendor the prescribed consent form and a valuation from an independent registered valuer, paid for by the salesperson, before the vendor decides whether to consent.
Common Mistakes to Avoid on Agency Practice Questions
- •Thinking consent alone is enough without the independent valuation
- •Assuming the rules apply only to the salesperson who holds the listing
- •Believing a purchase through another agency avoids section 134
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?
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