RES exam question on Ethics & Professional Conduct: Sarah is acting as buyer's agent for Kevin, a Singapore Citizen, purchasing…
Sarah is acting as buyer's agent for Kevin, a Singapore Citizen, purchasing a 12-year-old condominium. Consider the following statements about Sarah's duties: (i) Sarah must tell Kevin of any material defects she discovers about the property (ii) Sarah must disclose to Kevin, in writing, any referral fee or co-broking payment she receives from the seller's agent (iii) Sarah must disclose to Kevin if she or a family member has a personal interest in the property or a competing transaction (iv) Sarah may collect Kevin's option fee cheque made out to her agency and hand the money to the seller Which combination of statements is CORRECT?
- A(i), (ii), (iii) and (iv)
- B(i), (ii) and (iii) only
- C(i), (iii) and (iv) only
- D(ii), (iii) and (iv) only
Show answer & explanation
Answer
B. (i), (ii) and (iii) only
Explanation
(i) Correct: the Code of Ethics and Professional Client Care (First Schedule, Estate Agents (Estate Agency Work) Regulations 2010) para 6(2)(c)-(d) requires her to keep the client informed of material issues and not withhold relevant facts. (ii) Correct: payments from the other side create a conflict that must be disclosed in writing (Code para 13(2)(a) and (e); CEA PG 1/2011 para 2.1(iv)). (iii) Correct: a personal or family interest is a conflict that must be declared in writing, and she may act only with Kevin's informed consent (Code para 13(2)(a)-(c)). The only exception is delivering a crossed account-payee cheque or cashier's order drawn in favour of the other party (reg 7(2)(a)), not one made out to the agency.
Why the other options are wrong
- (iv) Incorrect: reg 7(1) bars salespersons from holding or handling transaction money.
Study the concept behind this question: CEA Code of Ethics & Professional Conduct
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