When must a seller be given the REA-approved guide about residential agency agreements?
Correct Answer
B) Before signing the agency agreement
Section 127 of the Real Estate Agents Act 2008 says an agent must not enter into an agency agreement to sell residential property unless the person has been given the Authority's approved guide before signing and has signed an acknowledgment of receiving it.
Why This Is the Correct Answer
Section 127 of the Real Estate Agents Act 2008 says an agent must not enter into an agency agreement to sell residential property unless the person has been given the Authority's approved guide before signing, and has signed an acknowledgment of receiving it.
Why the Other Options Are Wrong
Option A: Within 48 hours after signing the agency agreement
48 hours is the deadline for giving the client a copy of the signed agency agreement (s 126), not for the guide, which must come before signing.
Option C: At the first meeting with the licensee
The first meeting is not the legal trigger; what matters is that the guide is given before the agreement is signed, with a signed acknowledgment.
Option D: When the sale and purchase agreement is signed
A separate approved guide goes with a sale and purchase agreement (s 133); the agency agreement guide must be given before the agency agreement is signed.
Deep Analysis of This Professional Conduct Question
The approved guide explains agency agreements (sole and general agencies, commission, cancellation rights) so the seller understands what they are signing. Section 127 makes giving it, and getting a signed acknowledgment, a precondition to entering the agreement. A second approved guide explains sale and purchase agreements and goes with those documents under s 133. Breaching s 127 does not invalidate the agency agreement, but it is a breach of the Act.
Background Knowledge for Professional Conduct
Real Estate Agents Act 2008: s 126 (no commission without a written agency agreement, copy to the client within 48 hours); s 127 (approved guide before a residential agency agreement is signed, with a signed acknowledgment); s 130 (sole agency may be cancelled by 5 pm the next working day); s 133 (approved guide when a sale and purchase agreement is provided).
Memory Technique
Guide first, signature second. The seller reads the REA guide and signs to say they received it before signing the agency agreement.
When a question asks about timing for the agency agreement guide, choose the option that puts the guide before the signature. Sale and purchase agreements have their own guide.
Exam Tip for Professional Conduct
Look for the word 'before' in timing questions about mandatory disclosures. Consumer protection documents must be provided before clients commit to agreements, not during or after the commitment is made.
Real World Application in Professional Conduct
At the listing appointment the salesperson hands the vendor the REA guide to residential agency agreements, the vendor signs an acknowledgment, and only then does the vendor sign the agency agreement. The agency gives the vendor a copy of the signed agreement within 48 hours.
Common Mistakes to Avoid on Professional Conduct Questions
- •Giving the guide after signing
- •Mixing up the agency agreement guide with the sale and purchase agreement guide
- •Forgetting the signed acknowledgment
Related Topics & Key Terms
Key Terms:
More Professional Conduct Questions
According to the REA Code of Professional Conduct and Client Care, what is the primary duty of a real estate licensee?
A licensee receives confidential information about their client's financial difficulties. When can this information be disclosed to third parties?
During a complaint investigation, what is a licensee's obligation regarding cooperation with the Real Estate Authority?
A licensee discovers that a competing agent has made false statements about a property they have listed. What is the most appropriate course of action?
A licensee is charged with misconduct for serious breaches of the Code. During the disciplinary hearing, they argue that their actions were directed by their branch manager. How will this affect the Tribunal's decision?
- → A licensee keeps working while a complaint against them goes to the Real Estate Agents Disciplinary Tribunal. If misconduct is proved, what can the Tribunal do?
- → A licensee working for Agency A learns confidential information about a client’s financial difficulties. They then move to Agency B and are asked to give market advice on that client’s property to a prospective buyer who is a client of Agency B. How should they handle this situation?
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- → An agent receives two written offers on the same property at the same time: one from the agent's personal friend at $50,000 below the asking price, and one from an unknown buyer at the asking price. The agent presents only the friend's offer. Under the Real Estate Agents Act 2008, this most likely amounts to:
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