A vendor signs a sole agency agreement on Monday afternoon. The salesperson forgets to give her a signed copy until the following Monday, and the property later sells. Under s 126 of the Real Estate Agents Act 2008, what is the agency's position on commission?
Correct Answer
D) It has no entitlement unless a court orders the commission recoverable despite the delay.
Section 126(1) says an agent is not entitled to commission or expenses unless the work is done under a written agency agreement signed by both parties and a signed copy was given to the client within 48 hours of the client signing. Under s 126(2)–(3) a court may still allow recovery if the failure was inadvertent or beyond the agent's control, the amount is fair and reasonable, and refusing would be unjust.
Why This Is the Correct Answer
Missing the 48-hour copy removes entitlement unless a court makes an order under s 126(2)–(3).
Why the Other Options Are Wrong
Option A: It is fully entitled, because the vendor signed the agreement before any work was done.
Section 126(1)(c) also requires a signed copy to be given within 48 hours; signing alone is not enough.
Option B: It is entitled to half the commission, as a statutory penalty for the late copy.
The Act has no half-commission rule; the entitlement is lost unless a court makes a s 126(2) order.
Option C: It is fully entitled, because the 48-hour rule applies only to general agency agreements.
Section 126 applies to every agency agreement, sole or general.
Background Knowledge for Agency Practice
Source: https://www.legislation.govt.nz/act/public/2008/0066/latest/whole.html
Exam Tip for Agency Practice
Signed by both, copy to the client within 48 hours: all three are conditions of commission.
Common Mistakes to Avoid on Agency Practice Questions
- •Thinking the copy requirement is an administrative courtesy with no effect on commission.
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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Previous Question
A vendor signs a sole agency agreement and gets her copy on Tuesday. On Wednesday morning the salesperson shows the house to a buyer, and at 3 pm the vendor cancels by email under s 130. A week later she sells privately to that buyer. What is the agency's position?
Next Question
A vendor signs a sole agency agreement on Thursday and receives her signed copy the same day. On Friday morning she has second thoughts. Under s 130, how and by when can she cancel?