A real estate agency discovers that one of their salespeople has been operating without a valid licence for three months. Under the Real Estate Agents Act 2008, what is the potential consequence for the agency?
Correct Answer
B) The agency risks prosecution and discipline for engaging an unlicensed salesperson
Doing real estate agency work without a licence is an offence (s 141), and an agency that employs or continues to engage an unlicensed salesperson commits an offence under section 143 of the Real Estate Agents Act 2008. Agents must also supervise and manage salespeople properly (s 50; r 8.3), so a lapsed licence that goes unnoticed for months can lead to disciplinary action. Commission earned while unlicensed can be forfeited to the Crown (s 139).
Why This Is the Correct Answer
Section 143 of the Real Estate Agents Act 2008 makes it an offence to employ or continue to engage an unlicensed person as a salesperson, and section 50 requires agents to properly supervise and manage salespeople. The salesperson commits an offence under section 141 and can be ordered to forfeit commission earned while unlicensed (s 139).
Why the Other Options Are Wrong
Option A: Nothing, because keeping a licence current is purely the salesperson's own duty
Agents must supervise and manage their salespeople (s 50) and must not engage unlicensed people (s 143). The agency has its own exposure.
Option C: Only the salesperson faces consequences; the agency cannot be charged or disciplined
Section 143 makes it an offence to employ or continue to engage an unlicensed person, and failures of supervision can bring disciplinary action against the agency.
Option D: The agency faces consequences only if it is proved that it knew of the expiry
Section 143 covers continuing to engage an unlicensed person; the agency is expected to have systems that catch a lapsed licence, so a lack of knowledge is no safe defence.
Deep Analysis of This Property Law Question
The question tests the agency's responsibility for the people it engages. Licences are renewed annually, and agencies are expected to track renewals as part of supervision and management.
Background Knowledge for Property Law
Licences last 12 months and must be renewed (s 46). Carrying out real estate agency work without a licence is an offence (s 141), as is employing or continuing to engage an unlicensed person (s 143); the general penalty is a fine of up to $40,000 for an individual or $100,000 for a company (s 138). Section 139 allows forfeiture of commission earned while unlicensed. Agents must properly supervise and manage salespersons (s 50; r 8.3).
Memory Technique
Picture a door check: every salesperson shows a current licence badge before working. An agency that lets someone in without one is itself in breach (s 143).
When a question asks whether an agency is responsible for a salesperson's lapsed licence, remember sections 50 and 143: supervision and engagement are the agency's duty.
Exam Tip for Property Law
Eliminate options that put all the responsibility on the individual. The Act makes engaging an unlicensed person an offence in its own right.
Real World Application in Property Law
An agency's renewal tracking fails and a salesperson works unlicensed for three months. The salesperson has committed an offence and may forfeit commission to the Crown. The agency may be prosecuted for continuing to engage them and may face a complaint over its supervision systems.
Common Mistakes to Avoid on Property Law Questions
- •Thinking licence renewal is only the individual's problem
- •Believing clients automatically recover commission paid
- •Assuming the agency is safe if it did not know
Related Topics & Key Terms
Key Terms:
More Property Law Questions
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A real estate agent discovers that a property they are marketing has a significant structural defect that the vendor has not disclosed. Under the Real Estate Agents Act 2008, what should the agent do?
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Which document is required to be registered under the Land Transfer Act 2017 to transfer ownership of fee simple land?
Under the Land Transfer Act 2017, which of the following would NOT be registered or noted on a record of title?
- → 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?
- → A licensed real estate agent has been convicted of a serious criminal offence unrelated to their real estate work. Under the Real Estate Agents Act 2008, what disciplinary powers does the Real Estate Agents Disciplinary Tribunal have in relation to the concept of 'fit and proper person'?
- → 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 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?
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