Twelve working days after receiving a deposit, an agency gets a letter from the buyer's lawyer raising a written requisition on the title. The vendor wants the deposit released. Under s 123(3) of the Real Estate Agents Act 2008, what applies?
Correct Answer
D) It may be paid out only under a court order or an all-party signed authority.
Section 123(3) says that if, while holding money for any party, the agent receives written notice of requisitions or objections about the title, the agent must not pay the money to anyone except under a court order or an authority signed by all the parties. The end of the 10-working-day period does not change this.
Why This Is the Correct Answer
A written title requisition freezes the funds until a court order or all-party authority.
Why the Other Options Are Wrong
Option A: It may be released now, because the 10-working-day holding period has ended.
Section 123(3) applies whenever written requisitions on title are received, even after the 10 working days.
Option B: It must be returned to the buyer at once, because the requisition cancels the sale.
A requisition does not by itself cancel the agreement; the agent must hold the money pending a court order or all-party authority.
Option C: It may be released if the vendor's lawyer certifies that the requisition is invalid.
Section 123(3) does not let one side's lawyer decide; it needs a court order or authority signed by all parties.
Background Knowledge for Compliance
Source: https://www.legislation.govt.nz/act/public/2008/0066/latest/whole.html
Exam Tip for Compliance
A written requisition on title freezes the deposit until everyone agrees or a court decides.
Common Mistakes to Avoid on Compliance Questions
- •Assuming funds are free to release once 10 working days have passed.
More Compliance Questions
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- → 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?
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- → 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?
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