A salesperson's nephew wants to buy a house the salesperson has listed. The vendor is happy to go ahead and says she doesn't need a valuation. Under ss 134–135, what must happen?
Correct Answer
A) Consent on the prescribed form and an independent valuation at the licensee's expense.
Section 134(2) bars a licensee from continuing agency work that is likely to lead to a related person acquiring the property without the client's consent. Section 134(3) says consent is effective only if given on the prescribed form (Form 2) and the client receives a valuation under s 135: by an independent registered valuer, at the licensee's expense, given before consent or with agreement within 14 days after. The requirements cannot be contracted out of.
Why This Is the Correct Answer
A nephew is a related person, so Form 2 consent plus a licensee-funded independent valuation is required.
Why the Other Options Are Wrong
Option B: Nothing formal, because a nephew is not a person related to the licensee under the Act.
Section 137(2)(f) includes a nephew of the licensee as a related person.
Option C: Written consent from the vendor only, as she is entitled to waive the valuation step.
Section 134(8) and REA's guidance say the valuation cannot be waived; consent is ineffective without it.
Option D: An independent valuation paid for by the nephew, since he is the one buying the house.
Section 135(1) requires the valuation to be made at the licensee's expense, whoever the buyer is.
Background Knowledge for Agency Practice
Source: https://www.rea.govt.nz/real-estate-professionals/industry-guidance-and-information/conflict-of-interest/
Exam Tip for Agency Practice
Related buyer: Form 2 consent plus an independent valuation paid for by the licensee, with no waiver.
Common Mistakes to Avoid on Agency Practice Questions
- •Letting the vendor waive the valuation because she is comfortable with the buyer.
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 salesperson owns 50% of a company that owns a rental unit her agency is selling. She tells a buyer about her interest only verbally, and he signs the agreement. Later he learns the details and wants to cancel under s 136. What is the position?
Next Question
A salesperson's spouse bought a listed property without the vendor's consent on the prescribed form. The vendor decides to keep the sale, but the agency has already deducted commission from the deposit. What does s 134 say about the commission?