ABC Estate Agents were engaged by Lynch Property Owners to act as a letting agent to secure tenants for their executive houses. ABC were instructed to ensure they obtained financial and employment references for any proposed tenants. Separately, ABC were paid a commission by Murphy Employment Agency to source accommodation for employees they wanted to recruit. ABC agreed to let one of Lynch Property Owners' houses to a person recruited by Murphy Employment Agency and their friends without seeking any references. The new tenants caused extensive damage to the property that had to be repaired and ran up arrears of rent that could not be recovered.

a) Explain, with justification, two legal issues raised by commission payments being made by both Lynch Property Owners and Murphy Employment Agency. (6 marks)

b) Explain, with justification, the legal effect of ABC's failure to ensure that they obtained financial and employment references. (4 marks)