A homeowner signed a 150-day sole agency agreement for her house 95 days ago. The house has not sold and she wants to move to another agency. What does s 131 of the Real Estate Agents Act 2008 allow?
Correct Answer
D) She may cancel now by written notice, since more than 90 days have passed.
Section 131(1) says any party to a sole agency agreement for residential property with a term longer than 90 days may cancel it by written notice at any time after 90 days from signing. Notice may be by fax or email (s 131(4)), and s 131(5) overrides contrary terms.
Why This Is the Correct Answer
The agreement is residential, runs longer than 90 days, and 90 days have passed, so s 131 applies.
Why the Other Options Are Wrong
Option A: She must wait until the 150-day term ends before she can leave.
Section 131(1) lets either party cancel a residential sole agency longer than 90 days once 90 days have passed.
Option B: She may cancel only if the agency agrees in writing and she pays its marketing costs.
The s 131 right is unilateral by written notice and overrides contrary terms under s 131(5).
Option C: She may cancel only with 30 days' written notice after the first 120 days have passed.
Section 131 sets no 120-day or 30-day rule; the right arises after 90 days from signing.
Background Knowledge for Agency Practice
Source: https://www.legislation.govt.nz/act/public/2008/0066/latest/whole.html
Exam Tip for Agency Practice
Residential sole agency over 90 days: either party can cancel by written notice after day 90.
Common Mistakes to Avoid on Agency Practice Questions
- •Thinking only the vendor has the 90-day right, or that the full term must run.
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 developer lists 12 new townhouses in one continuous development with an agency under a 6-month sole agency. After 100 days the developer wants to cancel under s 131. What is the likely position?
Next Question
A licensee buys a client's property. The client agreed the valuation could follow within 14 days, and Form 2 records a provisional valuation of $610,000 (an invented figure). The independent valuation comes back at $645,000. What can the client do?