RES exam question on Regulation & the CEA Framework: A consumer complains to the CEA about a salesperson's conduct in a transaction
Case study: A consumer complains to the CEA about a salesperson's conduct in a transaction. Which is/are correct? (i) The CEA administers the Estate Agents Act and can take disciplinary action against agents and salespersons (ii) Salespersons must adhere to the Code of Ethics and Professional Client Care (iii) The CEA guarantees and reimburses any financial loss a consumer suffers in a property transaction (iv) Estate agents must keep proper transaction records for the prescribed retention period
- A(i) and (ii) only
- B(i), (ii) and (iii) only
- CAll of the above
- D(i), (ii) and (iv) only
Show answer & explanation
Answer
D. (i), (ii) and (iv) only
Explanation
Issue: What is the CEA's regulatory role, and does it underwrite consumer losses? Rule: The CEA administers the Estate Agents Act, sets the Code of Ethics & Professional Client Care, can take disciplinary action, and requires agents to keep transaction records for a prescribed period. It is a regulator — it does not guarantee or reimburse consumers' financial losses. Application: Disciplinary powers (i); Code adherence (ii); record-keeping (iv). Conclusion: (i), (ii) and (iv) are correct.
Why the other options are wrong
- The trap is (iii): the CEA does not indemnify consumers against losses.
Study the concept behind this question: Estate Agent Licensing vs Salesperson Registration (CEA)
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