A licensed real estate agent is found to have misappropriated client funds from their trust account. Under the Real Estate Agents Act 2008, which statement correctly describes how far the Real Estate Agents Disciplinary Tribunal's powers go?
Correct Answer
C) Cancellation of the licence, after which they cannot be relicensed for 5 years
Misappropriating trust money is misconduct, and the Tribunal can cancel the licence under section 110(2)(b) of the Real Estate Agents Act 2008. It does not set a reapplication ban itself: section 37(1)(d) makes anyone whose licence was cancelled ineligible for 5 years. The Tribunal can also suspend for up to 24 months, fine up to $15,000, and order compensation of up to $100,000.
Why This Is the Correct Answer
If misconduct is proved, section 110(2)(b) lets the Tribunal cancel the licence. Section 37(1)(d) then makes the person ineligible to hold a licence for 5 years after the cancellation. The Tribunal can also fine, order compensation, and order that no agent employ the person.
Why the Other Options Are Wrong
Option A: A censure and a fine only, with no effect on the licence itself
Censure and fines are available, but misappropriating trust money can justify cancellation, so 'only' understates the Tribunal's powers.
Option B: Suspension of the licence for a maximum of 12 months
Suspension can run for up to 24 months, and cancellation is also available, so this misstates both the cap and the range.
Option D: Supervision orders only, because cancelling a licence is left to the criminal courts to decide
The Tribunal itself cancels licences under section 110(2)(b); the criminal courts do not decide licence status.
Deep Analysis of This Property Law Question
Trust money is the most sensitive area of agency practice. Section 122 requires money received for clients to be held in trust and paid only to the person entitled, and misuse is treated as among the most serious misconduct. The question checks that you know the Tribunal's top order and where the relicensing bar comes from.
Background Knowledge for Property Law
Sections 122 to 125 of the Real Estate Agents Act 2008 govern trust money: it must be banked in a trust account, held for 10 working days, accounted for, and audited. Failing to pay money to the person entitled is also an offence under section 149. The Tribunal's section 110 orders include cancellation, suspension for up to 24 months, fines, compensation, and an order that no agent employ the person.
Memory Technique
Remember 'cancel plus five': the Tribunal cancels, and the Act adds a five-year wait before any new licence.
If an option says the Tribunal can ban reapplying for a period it chooses, or forever, correct it in your head to the statutory 5 years.
Exam Tip for Property Law
Know that suspension is capped at 24 months, not 12, and that the relicensing bar after cancellation comes from section 37, not from the Tribunal's order.
Real World Application in Property Law
An agent uses deposits held in trust to cover office costs. The Tribunal finds misconduct, cancels the licence and orders compensation to the affected buyers. The agent cannot hold a licence again for 5 years, and may also face prosecution under section 149.
Common Mistakes to Avoid on Property Law Questions
- •Thinking suspension is capped at 12 months
- •Believing the Tribunal can impose a permanent reapplication ban
- •Assuming only criminal courts can end a licence
Related Topics & Key Terms
Key Terms:
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- → A real estate agency holds a client's deposit in their trust account. Under the Real Estate Agents Act 2008, the agency becomes insolvent. What protection does the client have for their deposit?
- → Under the Unit Titles Act 2010, who is responsible for insuring the common property of a unit title development?
- → A client complains to a salesperson about the service they received. Under the Client Care Rules, what must the licensee make sure the client knows?
- → According to the Land Transfer Act 2017, what is the primary purpose of the land transfer system?
- → A lawyer is verifying a client's identity before certifying an electronic land transfer instrument. Which document, on its own, would NOT be enough?
- → A registered owner disagrees with a decision the Registrar-General of Land made about their record of title. After any review by the Registrar, where can they appeal under the Land Transfer Act 2017?
- → Under the Unit Titles Act 2010, owners of what share of the principal units can require an extraordinary general meeting to be held?
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- → A licensed salesperson is convicted of fraud in dealings outside their real estate work. Under the Real Estate Agents Act 2008, what can follow?
- → A body corporate wants to pass a special resolution in writing, without holding a general meeting. What is required under the Unit Titles Act 2010?
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