RES exam question on Ethics & Professional Conduct: Sarah, a salesperson, acts for Kevin, a Singapore Citizen, in buying a 12-year-old…
Sarah, a salesperson, acts for Kevin, a Singapore Citizen, in buying a 12-year-old condominium unit. The seller is represented by Daniel of another agency, and Sarah will share Daniel's commission under a co-broking arrangement. Which of the following statements is/are correct? (i) Since Kevin pays her nothing, therefore Sarah need not tell him that she shares Daniel's commission. (ii) Sarah may keep a relative's interest in the unit to herself if Kevin never asks about it. (iii) Sarah may take Kevin's option fee cheque made out to her agency and pass the money to the seller. (iv) Sarah tells Kevin of any material defect in the unit that she discovers.
- A(i) and (iv) only
- B(iv) only
- C(ii) and (iv) only
- D(iii) and (iv) only
Show answer & explanation
Answer
B. (iv) only
Explanation
Answer: (iv) only. Only the duty to report a material defect is stated correctly; the other three each break a rule.(iv) True. A material defect is a relevant fact she may not withhold.Rule: A salesperson discloses commission-sharing and any conflict in writing, keeps the client informed and never holds client money. She may only deliver a crossed cheque drawn in favour of another party.Source: CEA Professional Service Manual (Practice Guidelines, version 1.0 issued 1 Jan 2014, current at 1 Oct 2026, cea.gov.sg), para 1.3.4; Code of Ethics and Professional Client Care, First Schedule to the Estate Agents (Estate Agency Work) Regulations 2010 (in force 15 Nov 2010, current at 1 Oct 2026, sso.agc.gov.sg), paras 13(2)(a), 6(2)(c)-(d); Estate Agents (Estate Agency Work) Regulations 2010 (in force 15 Nov 2010, current at 1 Oct 2026, sso.agc.gov.sg), regulations 7(1), 7(2)(a)
Why the other options are wrong
- (i) False. Kevin pays her nothing, but sharing the seller's side commission must be disclosed to him in writing.
- (ii) False. Declaring a conflicting interest is her duty and does not wait for a question.
- (iii) False. A cheque payable to her agency is money the agency holds, which is forbidden. Only a crossed cheque in the seller's favour may be carried.
Study the concept behind this question: CEA Code of Ethics & Professional Conduct
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