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BOVAEP Estate Agent TPC study materials
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BOVAEP Estate Agent TPC practice questions

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Question 1Estate Agency Law, Practice and Professional Conduct

Under the Estate Agents Ordinance of Hong Kong, which body is responsible for granting estate agent licences and regulating the conduct of licensees?

  1. The Hong Kong Institute of Surveyors
  2. The Estate Agents Authority Correct answer.
  3. The Lands Department
  4. The Real Estate Developers Association

Explanation

The Estate Agents Authority is the statutory body established under the Estate Agents Ordinance to license estate agents and salespersons and to regulate their conduct. It operates independently of the Lands Department, which administers land matters, and of professional institutes or developer associations.

Question 2Estate Agency Law, Practice and Professional Conduct

A person who wishes to act as an estate agent in Hong Kong must hold which of the following?

  1. Membership of a recognised trade union
  2. An estate agent's licence granted by the Estate Agents Authority Correct answer.
  3. A practising certificate issued by the Law Society
  4. A business registration certificate alone

Explanation

The Estate Agents Ordinance requires anyone carrying on estate agency work for reward to hold an estate agent's licence. A business registration certificate is a tax and registration document and does not authorise estate agency work, and neither legal practice certificates nor union membership confer that authority.

Question 3Estate Agency Law, Practice and Professional Conduct

An estate agent is instructed to sell a flat. Which document must the agent, before or at the time of signing the estate agency agreement, provide to the client?

  1. A valuation report prepared by a surveyor
  2. The prescribed estate agency agreement and the client's acknowledgement of the agent's explanation of its terms Correct answer.
  3. A mortgage pre-approval letter
  4. A copy of the land lease

Explanation

The Estate Agents Authority requires agents to use the prescribed estate agency agreement and to explain its terms to the client, obtaining the client's acknowledgement. Valuation reports, land leases and mortgage letters are separate matters and are not prescribed prerequisites for the agency agreement.

Question 4Estate Agency Law, Practice and Professional Conduct

In Hong Kong estate agency practice, what does a 'exclusive agency' (exclusive listing) arrangement generally entitle the agent to?

  1. A commission if the property is sold during the exclusive period, subject to the terms of the agreement Correct answer.
  2. The right to set the asking price without the owner's consent
  3. A guaranteed minimum fee regardless of any sale
  4. A commission only if the agent personally introduces the buyer

Explanation

An exclusive agency typically entitles the agent to commission if the property is sold during the exclusive period, even where another party introduces the buyer, depending on the agreement's terms. It does not guarantee a fee where no sale occurs, and it does not transfer to the agent the owner's power to set the price.

Question 5Estate Agency Law, Practice and Professional Conduct

An estate agent receives a client's deposit cheque payable to the agent's firm. Under the Estate Agents Ordinance and the Authority's practice requirements, how should client money be handled?

  1. Deposited into the firm's general operating account and used for expenses if needed
  2. Deposited into a designated client account maintained for client money Correct answer.
  3. Kept in cash in the office safe until completion
  4. Held in the individual salesperson's personal bank account

Explanation

Client money such as deposits must be kept in a designated client account separate from the firm's own funds, so that it is protected and traceable. Commingling with operating funds, holding it personally, or keeping large cash sums all breach proper client-money handling.

Question 6Estate Agency Law, Practice and Professional Conduct

Which of the following best describes the duty of an estate agent regarding conflicts of interest?

  1. The agent may conceal a conflict if it does not affect the price
  2. The agent must disclose any actual or potential conflict to the clients and obtain their informed consent where required Correct answer.
  3. The agent may act for both parties without disclosure if both are friends
  4. The agent may act for both buyer and seller provided the commission is shared equally

Explanation

Agents owe duties of loyalty and good faith, so any actual or potential conflict must be disclosed to the clients and, where the agent proposes to act for both sides, informed consent must be obtained. Concealment or undisclosed dual representation is a breach of professional conduct regardless of the relationship between the parties.

Question 7Estate Agency Law, Practice and Professional Conduct

An agent advertises a flat as having 'sea views'. In fact the view is largely blocked by a neighbouring building. What is the agent's position?

  1. The agent is protected because advertisements are not contractual
  2. The agent is only liable if the buyer actually completes the purchase
  3. The agent may be liable for misrepresentation and breach of the Authority's advertising requirements Correct answer.
  4. The agent is not responsible because the seller supplied the description

Explanation

Agents must ensure that advertisements and statements about a property are accurate and not misleading. Relying on the seller's description does not relieve the agent of this duty, and liability for misleading advertising can arise independently of whether a sale completes.

Question 8Estate Agency Law, Practice and Professional Conduct

What is the primary purpose of the Estate Agents Authority's requirement that agents keep proper records of transactions?

  1. To allow the agent to sell client data
  2. To increase the firm's tax liability
  3. To enable effective supervision, audit and investigation of compliance Correct answer.
  4. To replace the need for written agency agreements

Explanation

Record-keeping supports the Authority's supervisory, audit and investigative functions and helps protect clients. It does not create tax liability, permit data selling, or substitute for the requirement of a written agency agreement.

Question 9Estate Agency Law, Practice and Professional Conduct

A salesperson employed by a licensed estate agency firm carries out estate agency work. Which statement is correct?

  1. The salesperson must hold a valid salesperson's licence issued by the Authority Correct answer.
  2. The salesperson needs no licence because the firm is licensed
  3. The salesperson's licence is issued by the firm itself
  4. The salesperson may operate independently of the firm's licence

Explanation

Estate agency work may only be performed by licensed estate agents and licensed salespersons. A salesperson must hold a valid salesperson's licence and must act under a licensed estate agency, and the firm cannot issue licences itself.

Question 10Estate Agency Law, Practice and Professional Conduct

An agent is asked by a buyer to prepare an offer. Which practice best reflects the professional standard expected?

  1. Accept a verbal offer and confirm it only after completion
  2. Put the offer in writing, ensure the buyer understands its terms, and transmit it promptly to the seller Correct answer.
  3. Withhold the offer from the seller until the buyer pays a higher deposit
  4. Advise the buyer to offer well above the asking price to secure the property

Explanation

Offers should be documented in writing, explained to the client and communicated promptly and faithfully to the seller. Advising a buyer to inflate an offer or withholding offers to pressure the buyer are improper and undermine the agent's duty of good faith.

Question 11Estate Agency Law, Practice and Professional Conduct

Which of the following is a key element that distinguishes an estate agency relationship from a mere introduction?

  1. The agent's obligation to act in the client's interest and account for money and information Correct answer.
  2. The agent's right to keep the property's keys
  3. The agent's ability to advertise the property online
  4. The agent's friendship with the client

Explanation

An agency relationship creates fiduciary-type duties, including acting in the client's best interest and accounting for money and information. Keys, online advertising and personal friendship are incidental and do not by themselves create or define the agency relationship.

Question 12Estate Agency Law, Practice and Professional Conduct

An agent learns that the property being sold has a serious structural defect that the seller has not disclosed. What should the agent do?

  1. Increase the asking price to reflect the risk
  2. Tell prospective buyers privately without informing the seller
  3. Remain silent because the seller is the client
  4. Advise the seller to disclose the defect and, if the seller refuses, consider whether continuing to act is appropriate Correct answer.

Explanation

Agents must not assist in misleading buyers and should advise the seller to disclose material defects. If the seller refuses, the agent must consider whether continuing to act would involve misleading conduct and may need to decline or terminate the engagement. Secretly informing buyers or adjusting the price does not resolve the ethical issue.

Question 13Estate Agency Law, Practice and Professional Conduct

Under the Estate Agents Ordinance, which of the following activities constitutes 'estate agency work'?

  1. Negotiating the sale or purchase of property for reward on behalf of another Correct answer.
  2. Conducting a structural survey of a building
  3. Providing a removal service for a client
  4. Preparing a will for a property owner

Explanation

Estate agency work involves, for reward, doing acts in connection with the sale, purchase, letting or acquisition of property on behalf of another, such as negotiating and introducing parties. Will preparation, removal services and structural surveys fall outside that definition.

Question 14Estate Agency Law, Practice and Professional Conduct

An agent is offered a secret commission by a mortgage broker for referring clients. What is the correct response?

  1. Accept it if the amount is small
  2. Decline it, as secret commissions are improper and must be disclosed to the client Correct answer.
  3. Accept it and disclose it only if the client asks
  4. Accept it because referral fees are always lawful

Explanation

Secret commissions and undisclosed benefits are improper because they compromise the agent's duty of loyalty and can amount to a bribe. Any benefit connected with the transaction must be disclosed to the client and, where appropriate, refused. The size of the payment or the client's silence does not make it acceptable.

Question 15Estate Agency Law, Practice and Professional Conduct

Which of the following best describes the Authority's approach to continuing professional development (CPD) for licensees?

  1. CPD is only required for salespersons, not estate agents
  2. CPD is optional and has no effect on licensing
  3. CPD is satisfied by reading newspapers
  4. Licensees are expected to undertake CPD to maintain and update their professional knowledge Correct answer.

Explanation

The Authority promotes continuing professional development so that licensees keep their knowledge and skills current. CPD obligations apply to licensees generally and are not met by casual reading; they are a structured part of maintaining professional standards.

Question 16Estate Agency Law, Practice and Professional Conduct

A buyer gives an agent a deposit cheque made payable to the seller. Before completion, the agent should do which of the following?

  1. Cash the cheque and hold the cash personally
  2. Follow the agreed and lawful procedure for holding and accounting for the deposit, keeping proper records Correct answer.
  3. Return the cheque and refuse to handle deposits
  4. Deposit the cheque into the agent's own account and pay the seller later

Explanation

Deposits must be handled according to the agreed lawful procedure, with proper accounting and records, and client money must be safeguarded. Paying into the agent's own account, cashing the cheque for personal holding, or refusing to handle deposits all fail the standards of proper client-money handling.

Question 17Estate Agency Law, Practice and Professional Conduct

Which of the following statements about the relationship between an estate agent and the seller is correct?

  1. The agent may prefer a buyer who pays a higher commission to the agent
  2. The agent must put the seller's interests first and must not accept undisclosed benefits from a buyer Correct answer.
  3. The agent may act for the buyer in the same transaction without disclosure
  4. The agent may disclose the seller's confidential reserve price to any interested buyer

Explanation

The agent owes the seller loyalty and confidentiality, so it must not accept undisclosed benefits from a buyer or reveal the seller's confidential reserve. Acting for the buyer in the same transaction requires disclosure and informed consent and is not permissible by default.

Question 18Estate Agency Law, Practice and Professional Conduct

What is the effect of a salesperson signing an estate agency agreement on behalf of the firm without authority?

  1. The firm may still be bound and the salesperson may face disciplinary consequences Correct answer.
  2. The salesperson becomes the client's agent personally
  3. The agreement is automatically void in all circumstances
  4. The seller must pay double commission

Explanation

Where a salesperson acts without authority, the firm may still be bound depending on the circumstances, and the salesperson may be subject to disciplinary action for acting outside authority. The agreement is not automatically void, the salesperson does not become the client's agent personally, and double commission has no basis.

Question 19Estate Agency Law, Practice and Professional Conduct

Which of the following is a proper way for an agent to verify a client's identity for anti-money-laundering purposes?

  1. Rely on a verbal assurance from the client
  2. Ask a colleague to confirm the client looks familiar
  3. Accept the client's business card as proof
  4. Obtain and check reliable identification documents and keep records Correct answer.

Explanation

Agents should obtain reliable identification documents, verify them and keep records as part of anti-money-laundering and counter-terrorist financing measures. Verbal assurances, business cards and casual recognition are not adequate verification.

Question 20Estate Agency Law, Practice and Professional Conduct

An agent is asked to handle a large cash deposit from a client whose identity is unclear. What is the most appropriate action?

  1. Accept the cash and complete the transaction quickly
  2. Conduct enhanced due diligence and consider making a suspicious transaction report Correct answer.
  3. Split the cash into smaller amounts to avoid scrutiny
  4. Refuse all future business with the client without further action

Explanation

Unclear identity and large cash amounts are red flags requiring enhanced due diligence and, where suspicion remains, a suspicious transaction report. Rushing the transaction, silent refusal without reporting, or structuring cash to avoid scrutiny are improper and may themselves be offences.

Question 21Estate Agency Law, Practice and Professional Conduct

Which of the following best describes the standard of care expected of an estate agent when advising a client on a property transaction?

  1. The agent must guarantee that the property will increase in value
  2. The agent must exercise the skill and care reasonably expected of a competent professional in the circumstances Correct answer.
  3. The agent need only act honestly, regardless of competence
  4. The agent may rely entirely on the client's own knowledge

Explanation

Agents are expected to exercise the skill and care of a reasonably competent professional in the circumstances. They cannot guarantee investment returns, honesty alone is not the full standard, and they cannot simply defer to the client's knowledge where advice is within their expertise.

Question 22Estate Agency Law, Practice and Professional Conduct

An agent is instructed to let a residential unit. Which of the following is consistent with the agent's obligations regarding tenancy documentation?

  1. Leave all documentation to the parties to arrange themselves
  2. Draft the agreement without disclosing the rent deposit terms
  3. Advise the tenant to sign without reading the agreement
  4. Prepare the tenancy agreement and explain its key terms to both parties Correct answer.

Explanation

Agents involved in lettings should prepare or facilitate proper tenancy documentation and explain key terms such as rent, deposit and term to the parties. Leaving documentation entirely to the parties, concealing deposit terms or urging a party to sign unread all fall short of the expected standard.

Question 23Estate Agency Law, Practice and Professional Conduct

Which of the following statements about an agent's duty of confidentiality is correct?

  1. Confidentiality ends as soon as the agency agreement is signed
  2. Confidentiality applies only to written documents
  3. Confidential information should be protected and disclosed only with consent or where required by law Correct answer.
  4. Confidential client information may be shared freely with other agents to speed up a sale

Explanation

Agents must protect confidential client information and disclose it only with the client's consent or where the law requires. Sharing it freely with other agents, treating it as ended on signing, or limiting the duty to written documents misunderstands the obligation.

Question 24Estate Agency Law, Practice and Professional Conduct

An agent discovers that a colleague is falsifying property viewing records to claim commission. What is the appropriate course of action?

  1. Destroy the records to avoid trouble
  2. Ignore it because it does not affect the agent personally
  3. Report the matter through the firm's compliance channels and, where appropriate, to the Authority Correct answer.
  4. Confront the colleague and demand a share of the commission

Explanation

Licensees should report suspected misconduct through the firm's compliance channels and, where appropriate, to the Authority. Ignoring it, seeking a share of the improper gain, or destroying records all compound the wrongdoing and breach professional obligations.

Question 25Estate Agency Law, Practice and Professional Conduct

Which of the following is the most accurate description of the Authority's disciplinary powers over licensees?

  1. The Authority may impose penalties such as fines, suspension or revocation of licences after due inquiry Correct answer.
  2. The Authority may only issue informal warnings
  3. The Authority may imprison licensees directly
  4. The Authority has no power over salespersons

Explanation

After due inquiry the Authority may impose disciplinary penalties on licensees, which can include fines, suspension or revocation of licences. It does not impose imprisonment itself, its powers go beyond informal warnings, and they extend to salespersons as well as estate agents.

Question 26Estate Agency Law, Practice and Professional Conduct

Under the Estate Agents Ordinance, an estate agency agreement between a client and a licensed estate agency must be in writing for which type of transaction?

  1. Only for commercial property lettings
  2. Only where the client is a company rather than an individual
  3. Only for the sale and purchase of residential property
  4. For every type of property transaction covered by the Ordinance Correct answer.

Explanation

The Estate Agents Ordinance requires estate agency agreements to be in writing for all types of property transactions within its scope, not merely residential sales. The agreement must set out the commission, the period of appointment and other prescribed particulars. A verbal instruction alone will not satisfy the statutory formality.

Question 27Estate Agency Law, Practice and Professional Conduct

A client instructs an agent to sell a flat but refuses to sign any written estate agency agreement. What is the agent's correct course of action?

  1. Decline to act until a written estate agency agreement is signed Correct answer.
  2. Ask the client to confirm the instruction by telephone recording instead
  3. Proceed with the marketing and rely on the verbal instruction
  4. Proceed but reduce the commission to reflect the missing paperwork

Explanation

An estate agent must not accept an instruction without a written estate agency agreement in the prescribed form. Acting on a verbal instruction exposes both the agent and the client to disputes over commission and terms. The proper response is to decline until the agreement is signed.

Question 28Estate Agency Law, Practice and Professional Conduct

Which body is responsible for issuing licences to estate agents and salespersons and for regulating their conduct in Hong Kong?

  1. The Buildings Department
  2. The Estate Agents Authority Correct answer.
  3. The Lands Department
  4. The Hong Kong Monetary Authority

Explanation

The Estate Agents Authority is the statutory body established under the Estate Agents Ordinance to license and regulate estate agents and salespersons. The other bodies administer land, banking and building matters respectively and have no licensing role over estate agency practice.

Question 29Estate Agency Law, Practice and Professional Conduct

An agent is about to show a prospective buyer around an occupied unit. Which action best reflects the agent's duty to the seller client?

  1. Arriving unannounced to ensure the buyer sees the unit in its natural condition
  2. Arranging access in accordance with the seller's instructions and giving reasonable notice to the occupier Correct answer.
  3. Leaving the buyer alone in the unit to inspect at leisure
  4. Allowing the buyer to inspect cupboards and personal belongings without restriction

Explanation

The agent owes the seller a duty to act on instructions and to deal with the occupier courteously, which includes reasonable notice and agreed access arrangements. Unannounced entry or unrestricted access to personal effects may breach the seller's instructions and privacy. Professional practice balances marketing needs with the client's lawful directions.

Question 30Estate Agency Law, Practice and Professional Conduct

Which of the following must a licensed estate agency display at its place of business?

  1. The personal identity card numbers of all directors
  2. Its estate agency licence and the licence of each salesperson engaged there Correct answer.
  3. A copy of its latest audited financial statements
  4. A list of all clients currently under instruction

Explanation

A licensed estate agency must display its licence and the licences of the salespersons engaged at the premises. This allows the public to verify licensing status. Financial statements, identity numbers and client lists are not required to be displayed.

Question 31Estate Agency Law, Practice and Professional Conduct

A salesperson wishes to describe a property's floor area in an advertisement. Which approach is consistent with professional requirements?

  1. Omit the area entirely to avoid any risk of misstatement
  2. Round the area upwards to the nearest ten square feet
  3. Quote the largest figure obtainable from any available source
  4. State the area together with the basis on which it was calculated Correct answer.

Explanation

Advertisements should state floor area accurately and disclose the basis of measurement, such as saleable area, so buyers are not misled. Quoting an unexplained or inflated figure risks a misleading representation. Transparency about the measurement basis is the professional standard.

Question 32Estate Agency Law, Practice and Professional Conduct

Which statement correctly describes the commission an estate agent may charge a client?

  1. It must be set by the Authority at a fixed rate
  2. It is freely negotiated between agent and client and stated in the estate agency agreement Correct answer.
  3. It may only be charged after completion of the sale
  4. It is capped at one per cent of the purchase price by statute

Explanation

Commission rates are negotiated between the agent and the client and must be set out in the written estate agency agreement. The Authority does not fix a mandatory rate. The agreement should also address when commission becomes payable.

Question 33Estate Agency Law, Practice and Professional Conduct

An agent receives a complaint from a buyer alleging that the agent misdescribed a property. What is the agent's most appropriate first step?

  1. Record the complaint and handle it through the agency's established complaints procedure Correct answer.
  2. Ignore the complaint because the buyer is not the agent's client
  3. Refer the buyer to the seller and take no further part
  4. Immediately offer a cash payment to settle the matter

Explanation

Licensed agencies should have a complaints handling procedure, and complaints should be recorded and dealt with promptly and fairly. Ignoring a complaint or making an unsolicited cash settlement is poor practice. Referring the buyer to the seller does not discharge the agent's own responsibility for its conduct.

Question 34Estate Agency Law, Practice and Professional Conduct

An agent is instructed to sell a property that the agent knows is subject to an outstanding mortgage. What is the agent's proper approach?

  1. Conceal the mortgage from buyers because it is the seller's private financial matter
  2. Advise the seller that the mortgage must be discharged or addressed at completion and reflect this in the transaction Correct answer.
  3. Inform buyers that the mortgage balance will be transferred to them
  4. Refuse the instruction because mortgaged property cannot be sold

Explanation

An outstanding mortgage is a charge on the property that must be discharged or otherwise dealt with at completion. The agent should ensure the seller understands this and that the transaction is structured accordingly. Concealing it or suggesting the debt transfers to the buyer would be misleading.

Question 35Estate Agency Law, Practice and Professional Conduct

A landlord instructs an agent to let a unit, and the agent collects a deposit from a prospective tenant. Which handling of the deposit is most consistent with professional standards?

  1. Retain it as the agent's commission in advance
  2. Deposit it into the agent's general business account and use it as working capital until completion
  3. Pass it directly to the landlord without any record
  4. Hold it in a separate client account and account for it in accordance with the agreement Correct answer.

Explanation

Client money such as deposits should be kept separate from the agency's own funds and accounted for in line with the agreement and record-keeping requirements. Mixing client money with business funds or applying it to commission before it is due is improper. Proper records protect both landlord and tenant.

Question 36Estate Agency Law, Practice and Professional Conduct

An agent is asked to act for both the seller and a buyer in the same transaction. Which statement best describes the professional concern?

  1. Dual representation is always prohibited in every circumstance
  2. Dual representation is permitted provided the agent charges only one commission
  3. Acting for both parties creates a conflict of interest that must be disclosed and managed, and may require the parties' informed consent Correct answer.
  4. Dual representation is permitted only if the agent is a director of a licensed company

Explanation

Acting for both sides creates a conflict between duties of loyalty and confidentiality owed to each party. The conflict must be disclosed and managed, and informed consent obtained where appropriate. Charging one commission or the agent's corporate status does not resolve the underlying conflict.

Question 37Estate Agency Law, Practice and Professional Conduct

A buyer asks an agent whether a property is in a good school catchment area. The agent is unsure. What is the most professional response?

  1. Advise the buyer to verify the position with the relevant authorities rather than relying on the agent's assumption Correct answer.
  2. Confirm that it is, to encourage the buyer to proceed
  3. State that catchment areas are irrelevant to property value
  4. Tell the buyer the agent cannot answer any questions about the area

Explanation

An agent should not make statements on matters outside the agent's knowledge, as an inaccurate assurance could amount to a misrepresentation. Directing the buyer to the authoritative source is the responsible approach. This protects both the buyer and the agent.

Question 38Estate Agency Law, Practice and Professional Conduct

Which of the following best describes the purpose of the statutory requirement that estate agents keep transaction records?

  1. To satisfy the requirements of the Buildings Department
  2. To enable agents to claim higher commission from clients
  3. To provide marketing material for future advertising campaigns
  4. To allow the Authority to verify compliance and to protect clients in the event of a dispute Correct answer.

Explanation

Record-keeping supports regulatory oversight and provides an evidential trail if a dispute arises between agent and client. It is not a mechanism for increasing commission or a marketing tool. The Buildings Department is not the relevant regulator for this requirement.

Question 39Estate Agency Law, Practice and Professional Conduct

An agent is instructed by a seller who lives overseas and communicates only by email. What should the agent do before acting?

  1. Accept the instruction because email is a common form of communication
  2. Proceed and complete the sale without further verification
  3. Verify the seller's identity and authority and ensure a properly executed written estate agency agreement is in place Correct answer.
  4. Ask the buyer to confirm the seller's identity instead

Explanation

Remote clients present heightened identity and fraud risks, so the agent must verify identity and authority and secure a properly executed written agreement. Relying on the buyer to confirm the seller's identity is inappropriate. Completion without verification exposes the agent to serious risk.

Question 40Estate Agency Law, Practice and Professional Conduct

A salesperson leaves one licensed agency and joins another. Which statement about the salesperson's licence is correct?

  1. The salesperson may continue to use the former agency's name on documents
  2. The licence becomes invalid until the former employer consents
  3. The licence automatically lapses and a new examination must be passed
  4. The licence remains valid but the salesperson must notify the Authority of the change of agency Correct answer.

Explanation

A salesperson's licence is personal and continues in force, but the Authority must be notified of a change in the agency at which the salesperson is engaged. The former employer's consent is not required for the licence to remain valid. Using the former agency's name would be misleading.

Question 41Estate Agency Law, Practice and Professional Conduct

An agent is preparing a listing for a property and considers using a photograph of a similar unit because the actual unit is cluttered. What is the correct approach?

  1. Use the photograph but label it clearly as an illustration of a similar unit Correct answer.
  2. Avoid photographs altogether in all listings
  3. Use the similar unit's photograph without comment
  4. Use the photograph and state it is the actual unit

Explanation

Using a photograph of a different property without clear labelling is likely to mislead prospective buyers. If an illustrative image is used, it must be clearly identified as such. Presenting it as the actual unit would be a misrepresentation.

Question 42Estate Agency Law, Practice and Professional Conduct

Which of the following best describes the agent's obligation when a client instructs the agent to withhold information from a prospective buyer?

  1. The agent should explain that material facts affecting the property cannot be concealed and decline to participate in concealment Correct answer.
  2. The agent should disclose the information to the Authority but not to the buyer
  3. The agent should withhold the information but disclose it after completion
  4. The agent must always follow the client's instruction without question

Explanation

While an agent acts on instructions, the agent must not participate in misleading a buyer about material facts. The agent should explain the limits of confidentiality and refuse to conceal material information. Blindly following the instruction could expose the agent to liability.

Question 43Estate Agency Law, Practice and Professional Conduct

An agent is offered a gift by a prospective buyer shortly after the buyer's offer is accepted. What is the most appropriate response?

  1. Accept it only if the seller is not told
  2. Accept the gift as it was given voluntarily after the transaction
  3. Accept it but share it with colleagues
  4. Decline or disclose the gift in accordance with the agency's policy on benefits Correct answer.

Explanation

Accepting benefits from a party connected to a transaction can create the appearance of improper influence. Agencies should have policies requiring such benefits to be declined or disclosed. Concealing the gift from the seller or client compounds the problem.

Question 44Estate Agency Law, Practice and Professional Conduct

Which of the following best explains why an agent should keep a written record of instructions received from a client during a transaction?

  1. It provides evidence of the scope of authority and helps resolve disputes about what was agreed Correct answer.
  2. It replaces the need for a written estate agency agreement
  3. It transfers legal responsibility for the transaction to the client
  4. It allows the agent to charge additional commission without agreement

Explanation

A contemporaneous record of instructions evidences the scope of the agent's authority and what was agreed, which is valuable if a dispute later arises. It does not replace the written estate agency agreement or shift legal responsibility. Additional commission still requires agreement.

Question 45Estate Agency Law, Practice and Professional Conduct

A licensed agency wishes to advertise its services. Which statement in the advertisement would be inconsistent with professional requirements?

  1. A claim that the agency guarantees the highest possible sale price Correct answer.
  2. A statement of the agency's office address and licence number
  3. A description of the services offered
  4. A statement of the agency's years of experience

Explanation

Advertising must not contain false or misleading claims, and a guarantee of the highest possible sale price cannot be substantiated. Stating experience, services and licence details is permissible. Unverifiable superlatives risk misleading the public.

Question 46Estate Agency Law, Practice and Professional Conduct

An agent learns that a colleague has been accepting payments from contractors in return for recommending them to clients without disclosing this. What is the most appropriate action?

  1. Mention it casually to clients but take no formal step
  2. Confront the contractors directly and demand a share
  3. Report the matter through the agency's internal channels or to the Authority as appropriate Correct answer.
  4. Do nothing because the colleague's arrangements are a private matter

Explanation

Undisclosed benefits received for recommending contractors create a conflict of interest and may breach the licensee's duties. The proper response is to report the matter internally or to the Authority. Remaining silent or seeking a share of the payments would compound the misconduct.

Question 47Estate Agency Law, Practice and Professional Conduct

An agent is negotiating the sale of a property and the seller tells the agent that the seller would accept a price lower than the asking price. A buyer asks the agent what the seller will accept. What is the agent's proper approach?

  1. Keep the seller's confidential position and negotiate in the seller's interest Correct answer.
  2. Disclose the seller's bottom line to help the buyer decide
  3. Tell the buyer an inflated figure to increase the price further
  4. Refuse to communicate with the buyer until a formal offer is made

Explanation

Information about the seller's reservation price is confidential to the seller, and the agent must not use it against the seller's interest. The agent should negotiate on the seller's behalf while respecting confidentiality. Disclosing the bottom line or inventing an inflated figure would breach these duties.

Question 48Estate Agency Law, Practice and Professional Conduct

An agent suspects that a buyer's funds may derive from criminal conduct. Which course of action best reflects the agent's anti-money-laundering responsibilities?

  1. Proceed but note the suspicion in a personal diary
  2. Complete the transaction quickly to avoid disrupting the client
  3. Ask the buyer to provide a verbal assurance only
  4. Conduct appropriate customer due diligence, keep records and make a report where required Correct answer.

Explanation

Agents must apply customer due diligence, retain records and report suspicious transactions to the appropriate authority where required. Speed or verbal assurances are not substitutes for proper checks. Personal notes do not satisfy reporting obligations.

Question 49Estate Agency Law, Practice and Professional Conduct

An agent is instructed to sell a property and discovers that the person giving instructions is not the registered owner and holds no written authority. What is the agent's most appropriate response?

  1. Proceed and disclose the position only at completion
  2. Require documentary evidence of the person's authority to act for the owner before proceeding Correct answer.
  3. Proceed because possession of the keys suggests authority
  4. Ask the buyer to obtain the owner's consent

Explanation

An agent must verify that the person instructing has authority to deal with the property, particularly where that person is not the registered owner. Possession of keys is not proof of authority. Proceeding without evidence risks a transaction that cannot be completed and potential liability.

Question 50Estate Agency Law, Practice and Professional Conduct

A salesperson is asked by the agency's director to sign a document confirming that a property has been personally inspected when it has not. What is the salesperson's correct response?

  1. Sign it because a director's instruction must be followed
  2. Sign it but add a private note elsewhere
  3. Refuse to sign a false confirmation and report the matter as appropriate Correct answer.
  4. Ask a colleague to sign it instead

Explanation

Signing a false confirmation is dishonest and may breach the licensee's duties and the law. A direction from a director does not justify making a false statement. The salesperson should refuse and report the matter through appropriate channels.