Part 1: Ethical practice in real estate

The real estate industry has strict guidelines, regulations and legislation that clearly set out the professional and ethical standards required of real estate personnel.

1. a. Ethical Requirements for agents working in NSW, are legislated by: (complete the sentence below)

of the

b. Identify five behaviours that would be considered unethical in Real Estate Practice.

1. Using the legislation you identified in question 1, select the correct rule/rules for each of the statements/areas below. Provide an example situation and explain how it applies to ethical practice.

Statement/Area	Rule/s No or Act	Example and explanation
Example: complying with fiduciary duty and obligations	2	Complying with this rule demonstrates ethical practice by the agent if they act honourably, with respect and due diligence in all dealings with their clients. By maintaining privacy and confidentiality in regards to not disclosing personal details about the client and by faithfully and accurately accounting to the client in relation to all trust monies held. Example: accurately complete agency agreement and follow the instructions in the agreement and account to the client as directed in the agreement. Maintaining the client's records securely and not disclosing their personal circumstances to third parties.
maintaining knowledge of relevant legislation and truly demonstrating this knowledge in real estate activities and transactions
maintaining and developing industry qualifications, licences, competency and currency
acting with honesty, fairness and professionalism
exercising skill, care and diligence
acting in the best interest of clients
following principal's instructions unless unlawful
maintaining confidentiality and security of information
obtaining and acting according to client authority and instructions
maintaining independence and disclosing and managing potential conflicts of interest
disclosing real and potential conflicts of interest, including disclosing material particulars or material facts, beneficial interests, commission, rebates
making sure advertising and communications are not false or misleading
using clear communication in all dealings with all parties to the real estate transaction, including providing written documents and signed documents
Client protection and focus
Acting Respectfully

1. Explain why you must apply ethical conduct requirements in your personal decision making. (60-100 words)

1. Explain three consequence an agent may face by not applying ethical requirements in their decision making. (3 dot points)

1. Identify the federal agency and legislation that covers ethical conduct by agents. Analyse the legislation and select three sections that apply to the ethical conduct of agents. (4 dot points)

1. Examine and interpret the sections of consumer law provided and explain the risks and impact of a breach or fraudulent activity would have on the following areas:

Consumer Law	Risks and impact to consumer	Risk to agency	Risk to industry	Personal risk
Property and Stock Agents Regulations 2014 (NSW)
Schedule 1.2 Specifically the obligation to 'act with integrity in regard to the principal'smoney"
Schedule9
Property and Stock Agents Act 2002 (NSW)
Section 52
Competition and Consumer Act 2010 (CTH)
Section 29

1. Explain how the following documents can assist in the risk management of unethical practices.

Forms	Explanation
Office policies and procedures
WH&S Manual
Incident reports

1. Examine theTenancy Privacy requirements on theOffice of the Australian Information Commissioner (OAIC) website and describe the ethical standards an agent must apply when dealing with matters of privacy and confidentiality. (60-100 words)

1. Explain the ethical requirements for the secure storage of client information in an agency. (60-80 words)

10. a) Explain the process that would be followed to address inconsistencies between what is required by legislation and what is being done by the agency and/or agent.

Agency
Agent

1. b) Explain strategies you could use to respond to both two concerns and two discrepancies between how the agency conducts themselves and the real estate standards for ethical practice and application of legislation.
   1. words)

Concern	Response Strategy
Dishonesty.
Misleading information (verbal/writing/image/etc).
Unsigned agency agreement

Discrepancy	Response Strategy
In breach of licence conditions, agent has not completed required CPD training (50-60 words)
Acted in a manner against company standards/policies/procedures/etc.

1. Identify the sources and experts an agent could contact if they needed assistance/advice concerning legal or ethical matters?

	External sources	Internal sources	Technical experts
1
2

1. Identify and describe two communication strategies the agency could implement to clearly demonstrate their clients consumer rights and responsibilities when dealing with the agency. (40-60 words)
5. You are required to demonstrate that you can adhere to ethical communication practice, read the following scenarios and select/give the response that an agent should give the client.

During an open for inspection a potential buyer says: "This place is pretty old but looks structurally sound." The potential buyer asks the agent what they think. The agent's response should be:

I am really not qualified to answer that. I would suggest to people that if they have any concerns about the structure of a building that they seek professional advice from a registered builder or structural engineer.

Oh yes, it's a real beauty and I have a few keen buyers that are just about ready to snap it up. You should put an offer in soon or you might miss out.

1. You have just listed a new home in an area that had massive bush fires last year, the fire did not burn the property, however the garden shed to the rear of the property was lost in the fire. You are conducting an Open for inspection at the home when a potential buyer approaches you and asks you about the fire.
2. Ethically respond to the prospective buyers enquiry: (40-60 words)

1. Azure Beach Realty Group has just employed an new marketing agency ( Marketing Perfection) for their high end properties. They have just returned the advertisements for a newly listed beach front property and you noticed that the power lines and a large tree infront of the property have been digitally removed from the photographs.

Using theAzure Beach email template, write an email to the owner of Markting Perfection, Nora Conrad, and explain why they are not permitted to alter photographs taken at the property. Explain to Nora, the ethical breach you would commit if you were to use current photographs.

Part 2: Real Estate Prosecution

Research and analyse the(Hinton & Ors v Commissioner for Fair Trading [2006] NSWADT 257] case and respond complete the report below..

1. Case report

NOTE 1: Since 23 March 2020 the Property, Stock and Business Agent Act 2002 (NSW) has been superseded by the Property and Stock Agents Act 2002 (NSW), the relevant sections of the case still apply.

Note 2: The Trade Practices Act 1974 (CTH) has been superseded by the Competition and Consumer Act 2010 (CTH),

Note 3: Section 42 of theFair Trading Act 1987 has been repealed, use relevant section of the Competition and Consumer Act 2010 (CTH), in the response to the question.

1. Identify the main acts and regulations, including at the relevant sections that the agent breached.

	Full title of Acts and Regulation	Section Breached
1
2
3

1. Provide a link to another similar prosecution.

1. Analyse and in your own words explain the ethical breaches the agent committed that led to his prosecution. (80-100 words)

1. Provide and explain another rule of conduct could the breach could relate to.

1. If the agent was a member of the REINSW, would they have breach their code of practice, include the sections they would have breached.

1. Explain how the unethical practice committed by the agent relates to Federal consumer protection legislation. (100 words)

1. Identify the legislation which sets out the monetary value of penalty units and the legislation that determines the value of a single unit. Then calculate the highest monetary penalty the agent could receive for breaching section 32 of the Property and Stock Agents Act 2002 and Schedule 1.2 of the Regulations.

1	NSW legislation sets out the monetary value of penalty units
2	Legislation that determines the value of a single penalty unit.
3	the maximum monetary penalty for breach of s32

1. Using the prosecution provided, explain the process that you or the agency should follow if a breach of ethics was identified. List two ways this may be recorded in the agency? (120-160 words)