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:
Correct Answer
B) Misconduct involving dishonesty and breach of fiduciary duty, under s 73
The Act has two categories of breach: unsatisfactory conduct (s 72) and misconduct (s 73). Misconduct includes conduct that agents of good standing or reasonable members of the public would regard as disgraceful, and wilful breaches of the Act or Rules. Deliberately withholding a better written offer (rule 10.10) to favour a friend breaches the fiduciary duty (rule 6.1) and is dishonest, so misconduct is the likely finding.
Why This Is the Correct Answer
Section 73 defines misconduct to include conduct agents of good standing or the public would regard as disgraceful, and wilful breaches of the Act or Rules. Deliberately withholding a better written offer (rule 10.10) to favour a friend breaches the fiduciary duty (rule 6.1) and is dishonest.
Why the Other Options Are Wrong
Option A: Unsatisfactory conduct only, for failing to submit all offers promptly
Failing to submit offers is at least unsatisfactory conduct, but deliberately hiding a better offer to favour a friend goes further, into conduct that would be seen as disgraceful.
Option C: A minor administrative error with no disciplinary consequences at all
Withholding a written offer breaches rule 10.10; it is never an administrative slip without consequences.
Option D: Acceptable practice, provided the friend's offer is genuine and in writing
Rule 10.10 requires all written offers to be submitted; a genuine offer from a friend does not justify hiding the other one.
Deep Analysis of This Professional Conduct Question
The Real Estate Agents Act 2008 has two tiers. Unsatisfactory conduct (s 72) covers work below the standard of a reasonably competent licensee, breaches of the Act or Rules, and negligence. Misconduct (s 73) covers disgraceful conduct, seriously incompetent or negligent work, wilful or reckless breaches, and relevant convictions. Deliberate concealment of a superior offer to benefit a friend is intentional, dishonest and damaging to the client, which places it in the misconduct tier; only the Tribunal can decide a misconduct charge.
Background Knowledge for Professional Conduct
Real Estate Agents Act 2008: s 72 (unsatisfactory conduct), s 73 (misconduct), s 110 (Tribunal orders, including cancellation). Client Care Rules 2012: rule 6.1 (fiduciary obligations), rule 9.1 (best interests), rule 10.10 (submit all written offers). There is no separate category called 'serious misconduct'.
Memory Technique
Careless or below standard is s 72, unsatisfactory conduct. Deliberate, dishonest or disgraceful is s 73, misconduct.
Ask whether the licensee meant it. Deliberate concealment for personal reasons points to s 73.
Exam Tip for Professional Conduct
Intent and dishonesty move conduct from unsatisfactory (s 72) to misconduct (s 73). Watch for invented categories like 'serious misconduct'.
Real World Application in Professional Conduct
A salesperson receives a full-price offer and a lower offer from a business partner, tells the vendor only about the partner's offer, and says no other offers came in. The vendor later finds out. A Complaints Assessment Committee is likely to lay a misconduct charge before the Tribunal, which can cancel the licence.
Common Mistakes to Avoid on Professional Conduct Questions
- •Treating deliberate concealment as mere carelessness
- •Using the non-existent category 'serious misconduct'
- •Thinking a genuine friend's offer justifies hiding a better one
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?
- → A licensee working for Agency A learns confidential information about a client's urgent need to sell due to financial difficulties. The licensee then moves to Agency B and uses this information to approach the former client with a lower offer through a contact. This scenario primarily involves a breach of which professional obligation?
- → According to the REA Code of Professional Conduct and Client Care, what is the primary purpose of the Code?
- → In what situation would the Real Estate Agents Disciplinary Tribunal have jurisdiction to hear a complaint against a former licensee?
- → James, a branch manager, becomes aware that one of his salespeople has been providing misleading information to clients about settlement timeframes. Under the REA Code, what is James's primary obligation?
- → Under section 121 of the Real Estate Agents Act 2008, what must appear on every advertisement an agent publishes?
- → When can a licensee disclose confidential client information to a third party?
- → A client asks their real estate agent to not disclose a known flooding issue to potential buyers. What should the agent do?
- → A real estate agent discovers that a property they are marketing has a building consent issue that the vendor is unaware of. What is the agent's obligation under the REA Code?
People Also Study
Property Law & Legislation
56 questions
Agency Practice
89 questions
Sale & Purchase Process
63 questions
Property Management
85 questions
Related Study Resources
Previous Question
A real estate agent discovers that a property they are marketing has a building consent issue that the vendor is unaware of. What is the agent's obligation under the REA Code?
Next Question
A salesperson receives a complaint that has been referred to the Complaints Assessment Committee. What happens during this stage of the process?