Ethical Practice in Real Estate

This assessment focuses on ethical practice in the real estate industry. It covers topics such as ethical requirements for agents, consequences of unethical conduct, risk management, privacy and confidentiality, addressing inconsistencies, and communication strategies for client rights and responsibilities.

Project Assessment
Criteria
Unit code, name and release number
Cluster name: Cl_LegalRequirements
CPPREP4002 - Access and interpret ethical practice in real estate (Release 1)
CPPREP4003 - Access and interpret legislation in real estate (Release 1)
Qualification/Course code, name and release number
CPP41419 - Certificate IV in Real Estate Practice (Release 1)
CPP31519 – Certificate III in Real Estate Practice (Release 1)
Statement of Attainment in Real Estate Practice (Assistant agent)
Student details
Student number
Student name
Assessment Declaration
This declaration only needs to be completed if you are not submitting your assessment online.
 This assessment is my original work and no part of it has been copied from any other
source except where due acknowledgement is made.
 No part of this assessment has been written for me by any other person except where
such collaboration has been authorised by the assessor concerned.
 I understand that plagiarism is the presentation of the work, idea or creation of
another person as though it is your own. Plagiarism occurs when the origin of the
material used is not appropriately cited. No part of this assessment is plagiarised.
Student signature and Date
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Assessment instructions
Table 1Assessment instructions
Assessment details Instructions
Assessment overview The objective of this assessment is to assess your knowledge and
performancerequired to investigate and report on ethical
practices.
Assessment Event
number
2 of 3
Instructions for this
assessment
This is a project-based assessment and will be assessing you on
your knowledge and performance of the unit.
This assessment is in two parts and includes and assessment
feedback:
Part 1: Ethical practice in real estate
Part 2: Real Estate Prosecution
Submission
instructions
On completion of this assessment, you are required to upload it
to the Learning platform (Learning Management System)or hand
it to your assessor for marking.
Ensure you have written your name at the bottom of each page of
your assessment.
It is important that you keep a copy of all electronic and hardcopy
assessments submitted to TAFE and complete the assessment
declaration when submitting the assessment.
What do I need to do
to achieve a
satisfactory result?
To achieve a satisfactory result for this assessment all questions
must be answered correctly.
What do I need to
provide?
Access to a computer with internet and storage device
What will the
assessor provide?
Access to the learning platform as required (Learning
Management System).
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Assessment details Instructions
Links to the following:
Hinton &Ors v Commissioner for Fair Trading [2006] NSWADT
257
Legislation NSW
NSW Fair Trading
Competition and Consumer Act 2010
Property and Stock Agents Regulation 2014
Due date and time
allowed
Indicative time to complete assessment:Four hours.
For the due date refer to the Unit Assessment guide if face to face
delivery, or the delivery timetable if online delivery.
Supervision
This is an unsupervised, take-home assessment. Your assessor
may ask for additional evidence to verify the authenticity of your
submission and confirm that the assessment task was completed
by you.
Assessment
feedback, review or
appeals
Appeals are addressed in accordance with Every Student’s Guide
to Assessment.
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Specific task instructions
Scenario
You’re working for Azure Beach Realty Group (ABRG) as a Sales Representative. ABRG is a
small to medium-sized agency operating in Azure Beach NSW and surrounding areas. Its
operations include residential property management and sales. ABRG also has a small
portfolio of commercial and industrial properties. Real estate operations are conducted
under the one roof where the property managers and sales staff can interact.
The ABRGLicensee, Sarah Hampden, has discussed a case with the team where a real estate
agency was in breach of several provisions of an act (Hinton &Ors v Commissioner for Fair
Trading [2006] NSWADT 257]. Sarah wants to ensure that all staff members are acting
ethically in their real estate activities so that a similar situation won’t happen at ABRG. She’s
asked you to complete the following report.
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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)
have knowledge of the Act and Regulation.
comply with the Act and Regulation.
conduct their business with honesty, fairness and professionalism.
exercise reasonable skill, care and diligence in their dealings.
Maintaining and developing industry qualifications, licences, competency and
currency
Maintaining knowledge of legislation
Complying with fiduciary duty and obligations
Acting with honesty, fairness and professionalism
Exercising skill, care and diligence
Not engaging in high pressure tactics, harassment or unconscionable conduct
Acting in the best interest of clients, including client protection
Practising client focus, courtesy and respect
b. Identify five behaviours that would be considered unethical in Real Estate Practice.
White anting:This is where an agent knowingly tries to influence a customer who has been
to another agent by telling them something that may stop the customer from dealing with
the other agent. For instance, saying something unhelpful such as ‘it’s been on the market a
long time, it must be really overpriced’. It’s also unethical for you to disparage the other
agent.
Buying a listing: This is where an agent inflates the appraisal price so that the vendor will list
with them. This is considered unethical and is reasonably widespread in the industry. It can
also be considered contrary to the legislation requirements.
Underquoting: This is covered in legislation as well by ethics. This practice entices more
customers to your listings by underestimating the price, usually at auctions. The effect that
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this has is that the agent has more ‘foot traffic’ through the open houses, which then
increases their database contact numbers. However, the customer ends up with an
unrealistic expectation as to a probable sale price and can often miss out on the purchase.
Costs to the purchaser can also be incurred for reports such as building inspections and
valuations.
Poaching clients: Directly approaching someone else’s clients to persuade them to sign with
their own agency instead is unethical. For example, an agent sees another agent’s sign while
door knocking and approaches the owner to try and list the property for themselves.
Fraud: NSW Fair Trading is continually monitoring real estate agents for fraud. Prominent
among the top fraud issues are trust account concerns. All licensees have a requirement to
provide a trust account audit from an independent accountant authorised in the area, once
a year. Failure to lodge on time can trigger an investigation. Previous trust account fraud
from agents has been an ongoing concern and NSW Fair Trading relies on ethical agents to
assist them with any reports of alleged misconduct.
2. 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
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Statement/Area
Rule/s
No or
Act
Example and explanation
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
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Statement/Area
Rule/s
No or
Act
Example and explanation
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
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3. Explain why you must apply ethical conduct requirements in your personal decision
making. (60-100 words)
Applying ethical norms is so important. These norms promote the aims of research, such
as knowledge, truth, and avoidance of error. For example, prohibitions against
fabricating, falsifying, or misrepresenting research data promote the truth and minimize
error. Clients and customer are agents bestinterest to protect them and treat all parties
involved in a transaction honestly.
4. Explain three consequence an agent may face by not applying ethical requirements in
their decision making. (3 dot points)
Agents may face Imprisonment for 12 months or 500 penalty units for an individual.
1,000 penalty units for a corporation. They must not act as an agent's representative
unless they are eligible to be employed to do so.
5. 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)
Property and Stock Agents Act 2002 No 66.
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6. Examine and interpret the sections of consumer law provided and explain the risks and impact of a breach or fraudulent activitywould
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”
Schedule 9
Property and Stock Agents Act 2002 (NSW)
Section 52
Competition and Consumer Act 2010 (CTH)
Section 29
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7. 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
8. Examine the Tenancy Privacy requirements on the Office 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)
9. 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
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10. 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 forethical practice and application of legislation.
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/procedu
res/etc.
(50-60 words)
11. Identify the sources and experts an agent could contact if they needed
assistance/advice concerning legal or ethical matters?
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External sources Internal sources Technical experts
1
2
12. 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)
13. 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.
a.
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.
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b. 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.
Ethically respond to the prospective buyers enquiry: (40-60 words)
14. 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 the Azure 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.
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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 the Fair Trading Act 1987has been repealed, userelevant 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
2. Provide a link to another similar prosecution.
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3. Analyse and in your own words explain the ethical breaches the agent committed
that led to his prosecution.(80-100 words)
4. Provide and explain another rule of conduct could the breach could relate to.
Ethics is a good rule of thumb that can help you decide directly against evil and against evil.
Moral behaviour depends on following principles, but using quality and temperance to guide
us through vitality. This code is intended as a guide for property agents to address and
overcome customer and local area problems by being seen as a trustee in the call. This
commitment to customers and the region goes beyond personal responsibility and, through
the support of the nation, communicates the purpose of a real call. This Code of Ethics and
Practice sets out minimum norms, standards, norms and ideologies that apply to words that
should not be used by property representatives. This Code of Ethics and Practice establishes
public affirmation of the high requirement of moral practice and standards that should be
upheld by all professional members, just as their organizations and representatives, when
they deal with various members, other property representatives, their employees and
individuals of the general population.
5. If the agent was a member of the REINSW, would they have breach their code of
practice, include the sections they would have breached.
6. Explain how the unethical practice committed by the agent relates to Federal
consumer protection legislation. (100 words)
The term "unfair trade practice” refers to the use of deceptive, misleading or misleading
strategies to gain a business advantage or harm a buyer. Unreasonable trading exercises are
considered illegal under the Consumer Protection Act. The purpose of the law is to ensure
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that consumers have the opportunity to make informed and informed choices about work
and the products they buy. Section 5 (a) of the Federal Trade Commission Act forgets
"demonstrations or practices that are unreasonable or vexatious in business or that affect
business". the article or administration does not overcome the wrong.
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7. Identify the legislation which sets out the monetary value of penalty unitsand 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
8. 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)
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Assessment Feedback
This section is to be completed by the assessor. Once feedback has been provided by the
assessor you will be given the opportunity to respond.
Additional evidence for verification of assessments
Additional questions asked by assessor
Assessors may ask additional questions to clarify student understanding. List here any
additional questions that were asked during this assessment event.
Student responses to additional questions
Record the student responses to any additional questions that were asked during this
assessment event.
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Assessment outcome
☐ Satisfactory
☐ Unsatisfactory
Assessor Feedback
☐ Has the Assessment Declaration been signed and dated by the student?
☐ Are you assured that the evidence presented for assessment is the student’s own work?
☐ Was the assessment event successfully completed?
☐ If no, was the resubmission/re-assessment successfully completed?
☐ Was reasonable adjustment in place for this assessment event?
If yes, ensure it is detailed on the assessment document.
Comments:
Assessor name, signature and date:
Student acknowledgement of assessment outcome
Would you like to make any comments about this assessment?
Student name, signature and date
NOTE:Make sure you have written your name at the bottom of each page of your
submission before attaching the cover sheet and submitting to your assessor for marking.
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