Access and Interpret Ethical Practice in Real Estate

This document explores the importance of ethical practice in the real estate industry. It discusses relevant legislation, case studies, and provides advice for agents and buyers. Topics covered include breaches of the Property and Stock Agent Act, disclosure of information, conflict of interest, and more.

Access and interpret ethical
practice in real estate

Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
CASE STUDY-1 .............................................................................................................................4
Identify the sections of the legislation that have been breached under the relevant Act. You
must refer to the appropriate section...........................................................................................4
What advice would you give Bethany and Chris?......................................................................5
How will any breach of the Act impact on Bethany’s eligibility to obtain her registration
certificate?...................................................................................................................................6
CASE STUDY- 2 ............................................................................................................................6
Should Marissa tell Graham about the church? Discuss the legal and ethical issues relating to
this scenario. What advice would you give Marissa?................................................................6
CASE STUDY- 3 ............................................................................................................................8
Which section of the Act relates to an agent purchasing property/beneficial interest?..............8
Outline the requirements of the section?.....................................................................................8
Do the requirements of this section apply to Rita’s situation? Explain......................................9
Are there any exemptions to the section requirements? If yes, what are they?..........................9
What penalties apply for breach of the section?.........................................................................9
What advice would you give Rita in relation to her actions in this matter?.............................10
CASE STUDY- 4...........................................................................................................................10
In marketing the price, you, as the agent recommend a price range of Interest over $750,000
to attract more buyer interest. ...................................................................................................10
A young couple Mark and Caitlyn Web showed interest in the property and have decided they
would like to go ahead with their final offer at $ 837,000........................................................10
You have referred the buyers to your colleague who is a mortgage broker to help them with
them finance..............................................................................................................................10
As a result of the referral, the mortgage broker pays you a referral fee of 0.03% of the sale
price for the business.................................................................................................................10
You are approached by a potential buyer who wants to buy the property, tear down the house,
build two units and lease them..................................................................................................11

What are the possible consequences if you were to agree to the buyer’s proposal?.................11
You are approached by a potential buyer who makes an offer of $750,000. You believe that
the house will sell for more so you do not pass on the offer to the vendors. No other buyers
come forward to with an interest to make an offer on the property..........................................11
CASE STUDY – 5.........................................................................................................................11
Discuss the legislative and ethical breaches of this scenario referring to the relevant sections
of Acts and regulations for your state/territory and commonwealth legislation.......................11
Qualifications for licence or certificate of registration..................................................................11
Qualifications for licence or certificate of registration..................................................................11
CONCLUSION..............................................................................................................................12
REFRENCES.................................................................................................................................13

INTRODUCTION
Ethical code of conduct is the law that has been used for maintaining of discipline and
order within an organization. Such laws deals with behavioural aspect of an employee at
workplace and also guidelines mentioned under the code has to be followed by all employees
working in an organization. In real estate these laws has a major role to play as they focus upon
making work environment healthy for employees. Also ethical code of conduct provides a
framework which helps in accomplishment of task in appropriate manner. Further this file is
based on various case studies that are related to certain acts like Property and Stock Agent Act
2002, Property and Stock Agents Regulation 2014. This file questions has been given that has to
be answered as per these legislations.
MAIN BODY
CASE STUDY-1
Case scenario: In this case Chris is principal licensee at city real estate and has formed an
agency that is there since last six years. He has also gained strong client base and reputation in
local region. Several Experienced employees are there like sales agent and agents who are
holding registration certificate while working for agency. Bethany has been working as
administration manager for city real estate and has shown keen interest in it. Now she decides to
take training for obtaining registration certificate. Chris was offered a job of teaching recently
at TAFE due to which he was not spending time in office but was confident about staff that they
will provide excellent services. Last week one of the agent responsible for property management
resigned. So, Bethany was approached for rental property inspection and preparation of condition
report (Palm and Pauli, 2018).
Identify the sections of the legislation that have been breached under the relevant Act. You must
refer to the appropriate section.
In the above case the legislation that is applicable is Property and Stock Agent Act 2002
that was formed to monitor activities in real estate. As it can be observed that Chris is licensee
for City Real Estate and has asked Bethany to make report for rental property by doing
inspection . It has been clearly mentioned that she on training period and has not obtained license
to work for agency like other agents. So she has no right to perform inspect and prepare report
for it. Part of legislation that has been violated is

Part 2 Licences and certificates of registration under which section 8 has been violated which
are explained as follows:
Section 8 talks about agents required to be licensed in this an individual should not act or
carry business or advertise, notify or state that a individual act has been carrying on business,
willing to act on business of:
 Real estate agent, unless individual is holder of real estate agent's licence.
 Strata managing agent unless the person is the holder of license for strata management.
Maximum penalty that has to be paid is of 100 penalty units
Further in this section no entitle is there to bring any proceeding in a court or
tribunal for recovering commission, fee, gain rewards for any services performed by
individual and they are as follows:
 An real estate agent should be holder of license at the time service that is been given by
him.
 As a stock and station agent should hold licence also employee should have license of
performing services.
Strata managing agent and individual is the holder of managing agent's license at
time of performing services. Further this section is applicable to an individual that is member of
partnership. The fact that a particular activity is an activity for which more than one type of
licence may be appropriate does not require the holding of more than one type of licence so long
as at least one of the licences that is appropriate to the activity is held (Kalu, Buang and Aliagha,
2016).
What advice would you give Bethany and Chris?
Advice that is going to be useful for Bethany and Chris is that license should be given to
Bethany and then only she should be allowed to work for agency. This should be followed to
avoid any legal issues.

How will any breach of the Act impact on Bethany’s eligibility to obtain her registration
certificate?
An breach is going to impact on Bethany's eligibility to obtain her certificate has been
explained under Section 10 that talks about assistant agents require certificate of registration.
This section says that a person should not do any such thing unless having certificate of
registration:
 Assistant agent in employment should be licensed.
 Represent, whether expressly or impliedly, that the person is an assistant agent.
Maximum penalty that has to be paid in this breach is 100 penalty units. Also an person
who is licensed is not required to hold certificate of registration and gives licensee authority to
perform work in lawful manner. Assistant agent who holds a certificate of registration may be
known as a registered agent.
CASE STUDY- 2
Case scenario: Marissa is an agent holding her registration certificate with ABC Real Estate.
Graham is looking to purchase an apartment in an inner-city suburb and has shown keen interest
in a small apartment that Marissa has listed. Graham tells Marissa that he is “looking for an
apartment in a quiet area” as he works night shift and needs to sleep during the day, especially on
weekends. Marissa is excited because this apartment has been listed for over two months and
she really wants to close the sale before she goes on holiday next month. However, she knows
that the apartment block backs on to a street that has a church. Each Sunday morning, church
bells are rung, and the area can become quite noisy as people come and go.
Should Marissa tell Graham about the church? Discuss the legal and ethical issues relating to this
scenario. What advice would you give Marissa?
From the above scenario it can be observed that the apartment that has to be sold is
having church in that area and bell rings every morning that makes it noisy and people come and
go. In this certain issue can rise that is related to conflict of interest and has been explained under
Property and Stock Agent Act 2002. Division 4 conflict of interest covers information about it
and has been explained as follows:

Under section 46 financial and investment advice by real estate agent has been explained.
In this regulation provisions with respect is there to require real estate agent that has been
providing financial or investment advice to an person in relation to sale or purchase of land that
has been providing specific information or warnings. Further An real estate agent has failed to
comply over requirements regulations under the section and is guilty of the offence and penalty
that has to be paid is guilty of offence (Gyamf-Yeboah and Awuah, 2020).
In the above case scenario section 47 is going to be applied that is based on disclosure of
client and prospective of buyer of land. Under this section both buyer or seller of the property is
required to disclose all information regarding the property under three condition and they are as
follows:
 Any relationship and nature of it weather commercial or personal the agent should have
anyone agent that is referred to client's perspective over professional services associate
with sales.
 An agent derives or expects over making consideration in monetary terms from a person
to whom agent should keep in mind perspective of buyer and amount of consideration.
 Value over any benefit under which an agent has to be aware about person agent is
referred with client and receives connection of sales that is there for providing services in
relation to sales.
As per section 48 of the act duty not to act for both buyer and seller of land says that
licensee should not act in his or her capacity on behalf of buyer and seller at same time. This
means that licensee cannot act for bot parties at same time. Further no agency agreement cannot
be formed regarding sales or purchase of land if services has been provided by licensee. It is
going to result into causing penalty of 200 units in case of corporation and 100 units within other
case to be considered.
All sections that has been mentioned above is applicable to case in a way that purchase
and sales of apartment has to be done between Marissa and Graham for this purpose sections
mentioned above can be used fro making the purchase to be done in legal manner. Also ethical
code of conduct should be kept in mind before selling the flat to Graham by Marissa.

CASE STUDY- 3
Case scenario: In this case Rita has engaged for selling of property to Rita's brother Marco. As
he was looking for house in the area and after taking a look over the house it is believed that the
house is exactly what Marco is looking for. She calls Marco to tell him about the house.
Which section of the Act relates to an agent purchasing property/beneficial interest?
Section 63 of Property and Stock Agent Act 2002 explains about proposed contract for
sales of residential property and covers purchaser including grantee of an opinion. An real estate
agent should not offer residential property for sales unless required document is available for
inspection at real estate agent's registered office by an prospective purchaser or agent at all time
so as to make purchase of property as per the regulation (Goubran, Masson and Caycedo, 2019).
An residential property for sales can be made by real estate agent in expressed or implied manner
only when:
 Indication of residential property and auctioned has to be taken place in future.
 Offer to sell a residential property has been made.
 Invites an offers to purchase of property
 Indication of an person that has been willing to grant opinion for purchasing residential
property.
Outline the requirements of the section?
Section 64 of the act talks about contract for sales of residential property. An real estate
agent may do any of the following that has been given below:
 Filling up of purpose that is related to contract of sales through residential property which
can be achieved by inserting details of purchaser's name, address, description. Name and
address of Australian legal practitioner has been acting for purchaser to get price and date
of sales (GHEORGHIU, 2020).
 Insert or delete from contract of sales over residential property with description of any
sales of property.
 Participating in exchange or marketing sales of residential property.
If a prospective party to a proposed contract for the sale of residential property for whom
a real estate agent acts in relation to the exchange or making of the contract notifies the real
estate agent, or it is apparent from the proposed contract, that an Australian legal practitioner is

or will be acting for the party, the real estate agent may not participate in the exchange or making
of the contract unless expressly authorised to do so by the party or the Australian legal
practitioner. A contract is not invalid merely because of the failure of a real estate agent to
comply with this subsection. An real estate agent is the person who can exercise function in
pursuant of the section on behalf of any person having perspective over any contract that has
been proposed and is liable for compensating persons for any loss, damage or expenses that has
to be beard by the person getting into contract. This results into negligence or omission over an
unauthorised action while performing the function. An real estate agent may not charge fee over
anything that has to be done as per the section. Section that does not affect existence or nature of
any function of licensee that exists apart from the section.
Do the requirements of this section apply to Rita’s situation? Explain
Yes the requirements of this section is applicable to Rita's situation in a way that she has
selected a house for Marco. This means Marco has to from contract for the house and it is
residential property also. So, sale for residential property is going to be done and there is
existence of beneficiary interest is done.
Are there any exemptions to the section requirements? If yes, what are they?
In section 49 restriction on licensee obtaining beneficial interest in property has been
explained and it says that an real estate agent has to retained by the client because agent for sales
of property is not required to be gained under any beneficial interest within the property that is
hold by licensee (Fewell, 2019). Further in this section a person does not contravene section in
any manner for making beneficial interest in property and is given as follows:
 Before person has to obtain interest and consent of client that is in writing has been
approved by secretary to gain interest.
 Person acts fairly and reasonable relation has to be obtained of interest.
 No commission reward is payable over person in relation over transaction under which
an interest has to be obtained and client consents is in writing has been approved through
Secretary commission or reward that has been paid.
What penalties apply for breach of the section?
For this maximum penalty is of 200 units and imprisonment of 2 years has to be bear by party.

What advice would you give Rita in relation to her actions in this matter?
Legal advice that cane be helpful for Rita is that she should form sales of property
agreement in order to have valid proof for purchase of property.
CASE STUDY- 4
Case scenario: A property is having price of $ 850,000 and agency agreement has been signed
to reflect the price. Explain any legal and ethical requirements in relation to property sales.
In marketing the price, you, as the agent recommend a price range of Interest over $750,000 to
attract more buyer interest.
Section 73 of the act explains that advertisement for residential property has to be done in
this an real estate agent cannot publish an advertisement in relation to sales of residential
property or sells property that is less then estimated price. Penalty of 200 unit has to be paid.
A young couple Mark and Caitlyn Web showed interest in the property and have decided they
would like to go ahead with their final offer at $ 837,000
Section 72A that explains about estimation selling price in agency agreement over sales
of residential property. In this an real estate agent cannot enter into agency agreement unless
agents estimation is included in it (Dunning and Keskin, 2019).
You have referred the buyers to your colleague who is a mortgage broker to help them with them
finance.
Section 73A that talks about underquoting of representation by real estate agents under
this real estate agent should not in course of marketing a residential property suggest in the
statement that property has to be sold if value is less.
As a result of the referral, the mortgage broker pays you a referral fee of 0.03% of the sale price
for the business
An real estate agent is required to ensure person that has been engaged by real estate
agent. In course of marketing of residential property cannot make statement to sell it if price is
low then estimated price.

You are approached by a potential buyer who wants to buy the property, tear down the house,
build two units and lease them
Section 73 explains about agents to keep records of quotes this means that if an real estate
agent make statement regarding course of marketing residential property of buyer through
prospective of selling property that has to be sold with specific price range should be written
(Costa and et. al., 2018).
What are the possible consequences if you were to agree to the buyer’s proposal?
Residential property or rural land auction and last bid accepted accepted at auction was
vendor bid and person engaged by such agent should not be made in course of marketing
residential property that has been accepted by auction with vendor's bid.
You are approached by a potential buyer who makes an offer of $750,000. You believe that the
house will sell for more so you do not pass on the offer to the vendors. No other buyers
come forward to with an interest to make an offer on the property
Section 53 of the act explains about damages and misrepresentation or concealment in
terms of provision agreement for sale and purchase of land with interest over preventing
purchase in order to claim awards damages with sales and purchase of land and interest.
CASE STUDY – 5
Discuss the legislative and ethical breaches of this scenario referring to the relevant sections of
Acts and regulations for your state/territory and commonwealth legislation
Qualifications for licence or certificate of registration
(1) The qualifications required for the issue of a licence or certificate of registration are such
qualifications as the Minister may approve from time to time by order published on the NSW
legislation website (Abatecola, Mari and Poggesi, 2020).
(2) Without limiting the Minister’s power to approve qualifications, the Minister may approve
qualifications by reference to any one or more of the following:
 The completion of a course of study,
 The completion of a period of training in a particular activity,
 The attainment of a standard of competency in a particular activity,
 Satisfaction of professional development requirements,
 Specified working experience.

CONCLUSION
From the above file it can be concluded that an real estate organization is required to
develop ethical code of conduct that has to be followed in order to maintain discipline and order
at workplace. Further in this file various sections has been explained as per there applicability in
particular scenario.

REFRENCES
Books and journals
Abatecola, G., Mari, M. and Poggesi, S., 2020. How can virtuous real estate public-private
partnerships be developed? Towards a co-evolutionary perspective. Cities. 107.
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Costa, O and et. al., 2018. Green label signals in an emerging real estate market. A case study of
Sao Paulo, Brazil. Journal of Cleaner Production. 184. pp.660-670.
Dunning, R. and Keskin, B., 2019. Introduction: Contesting Public Valuations of Land and
Development. The Town Planning Review, 90(4), p.329.
Fewell, D., 2019. A Study of a Mindfulness-Based Intervention on a Group of Real Estate Sales
Agents (Doctoral dissertation, Pepperdine University).
GHEORGHIU, C.I., 2020. A TAXONOMIC ANALYSIS PROPOSAL FOR RESEARCH IN
DIPLOMATIC INTERPRETING. Across Languages and Cultures. 21(1). pp.23-41.
Goubran, S., Masson, T. and Caycedo, M., 2019. Evolutions in sustainability and sustainable real
estate. In Sustainable real estate (pp. 11-31). Palgrave Macmillan, Cham.
Gyamf-Yeboah, F. and Awuah, K.G.B., 2020. 2 Variation in Property Valuation and Market
Data Sources in Ghana. Responsible and Smart Land Management Interventions: An
African Context. p.11.
Kalu, J.U., Buang, A. and Aliagha, G.U., 2016. Determinants of voluntary carbon disclosure in
the corporate real estate sector of Malaysia. Journal of environmental management. 182.
pp.519-524.
Palm, P. and Pauli, K.S., 2018. Bridging the Gap in real estate education: higher-order learning
and industry incorporation. Journal of Real Estate Practice and Education. 21(1).
pp.59-75.
Salzman, D. and Zwinkels, R.C., 2017. Behavioral real estate. Journal of Real Estate
Literature. 25(1). pp.77-106.'
Sukaryavichute, E. and Prytherch, D.L., 2018. Transit planning, access, and justice: Evolving
visions of bus rapid transit and the Chicago street. Journal of Transport Geography. 69.
pp.58-72.

Verstraete, J. and Verhaeghe, P.P., 2019. Ethnic discrimination upon request? Real estate agents’
strategies for discriminatory questions of clients. Journal of Housing and the Built
Environment. pp.1-19.