An agency received a deposit on 1 June and the vendor has not asked for any statement. Under s 124 of the Real Estate Agents Act 2008, when must the agency give the person entitled a written account of the money?
Correct Answer
C) When asked, and in any case within 28 days after receiving it.
Section 124(1) of the Real Estate Agents Act 2008 requires an agent, as soon as the client asks and in any case no later than 28 days after receiving money in the transaction, to give the person lawfully entitled a written account of that money and how it was applied. If entitlement is genuinely in doubt, the account can wait until the entitled person is identified.
Why This Is the Correct Answer
Section 124 sets the latest time at 28 days after receipt, or earlier if requested.
Why the Other Options Are Wrong
Option A: Only if the person entitled asks for an account in writing.
Section 124(1) requires an account within 28 days even if no one asks.
Option B: Within 10 working days, at the end of the holding period.
Ten working days is the s 123 holding period; the account under s 124 is due within 28 days.
Option D: At settlement, together with the commission invoice.
The account is due when asked and no later than 28 days after the money is received, not at settlement.
Background Knowledge for Compliance
Source: https://www.legislation.govt.nz/act/public/2008/0066/latest/whole.html
Exam Tip for Compliance
Section 123 = 10 working days to hold; s 124 = 28 days to account.
Common Mistakes to Avoid on Compliance Questions
- •Thinking an account is needed only when the client asks for one.
More Compliance Questions
A real estate advertisement states 'Best value in the area' without any supporting evidence. Under the Fair Trading Act, this statement is:
Under the Fair Trading Act 1986, which statement about advertising a property for sale is correct?
A client provides a bank cheque for $30,000 as a deposit and mentions recently selling cryptocurrency to fund the purchase. Under AML/CFT requirements, what is the appropriate next step?
An agent holds $180,000 in trust across four transactions. One agreement is validly cancelled because the purchaser's finance condition was not met, and both parties' lawyers confirm the $60,000 deposit is to be refunded to the purchaser. What is the correct trust account procedure?
Under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, what is the minimum threshold for conducting customer due diligence when establishing a business relationship in real estate transactions?
- → An international client buying a $2.8 million commercial property provides a copy of their overseas passport but refuses any further identity checks or information, claiming diplomatic immunity. How should the agent proceed under AML/CFT requirements?
- → Which statement best describes the trust account requirements under the Real Estate Agents Act 2008?
- → An agency's trust account reconciliation reveals that interest earned on client deposits has been retained by the agency rather than distributed to clients. This practice is:
- → According to trust account regulations, how long must real estate agencies retain records of trust account transactions?
- → What is the primary purpose of the Consumer Guarantees Act 1993 in relation to real estate services?
- → Under the Consumer Guarantees Act 1993, if a real estate agent fails to exercise reasonable care and skill when marketing a property, what remedy might be available to the client?
- → A real estate agency's trust account shows a shortage of $5,000 during a routine audit. What is the most serious disciplinary order available under the Real Estate Agents Act 2008?
- → A real estate agent advertises a property as having a 'new roof' when they know it was repaired but not replaced. A buyer purchases based on this information and later discovers the truth. Which Acts could potentially apply to this situation?
- → Which statement best describes the primary purpose of trust accounts in real estate transactions?
- → A property advertisement states 'Guaranteed rental return of 8% per annum', although no one has contracted to pay that return. Under the Fair Trading Act 1986, this statement is:
People Also Study
Property Law & Legislation
56 questions
Agency Practice
89 questions
Sale & Purchase Process
63 questions
Professional Conduct & Ethics
46 questions
Related Study Resources
Previous Question
An agency is listing a vendor's home. A buyer, whom the agency does not act for, pays the deposit by bank transfer to the buyer's lawyer. Under reg 5B of the AML/CFT (Definitions) Regulations 2011, who is the agency's customer for due diligence?
Next Question
An agency's compliance officer, who wrote its AML/CFT programme, offers to carry out the agency's independent AML/CFT audit. Under s 59B of the AML/CFT Act 2009 and DIA's current audit guidance, what is correct?