BSRV4602 Law for Real Estate Licensees Assessment 2 Questions

Learning outcome

Task 1: Contracts

Judgement

LO2 Explain the laws of contract, agency and land ownership titles in relation to real estate practice

Scenario 1A

Analyse the scenario and answer the following questions.

a.  What is the intention to create legal relations in this scenario and how is it demonstrated by the parties involved?

b.   Identify the offer and acceptance in this scenario.

c.   Explain the concept of contractual capacity and how this was evidenced in this scenario.

d.   Explain the four elements that would prevent either party giving genuine consent in a contract and explain if this was evident in this scenario for both buyer and seller.

e.  What is the legality of purpose in this scenario and why is it significant in a contract?

The response effectively addresses each question, showcasing a good understanding of the concepts of intention to create legal relations, offer and acceptance, valuable consideration, contractual capacity, genuine consent and legality of purpose.

a.        Showcases an understanding of how the intention to create legal relations is inferred from the actions, words or conduct of the parties involved.

b.        Recognises the essential elements of a contract, specifically the meeting of minds through offer and acceptance.

c.         Exhibits a good understanding of contractual capacity as the legal ability of parties to understand and enter into a contract.

d.        Explains four elements that would prevent either party giving genuine consent, emphasising the need for parties to fully understand the terms and voluntarily agree to the contract, while relating it to the scenario at hand.

e.        Displays a good understanding of the requirement for contracts to have a lawful purpose.

Task 2: Ownership

Judgement

Scenario 2A

Analyse the scenario and answer the following questions.

a.        What is the significance of having all registered owners sign an agency agreement and any subsequent sale and purchase agreement, as per the Property Law Act 2007 s.24?

b.        How does the fact that one of the sellers is out of the country affect their ability to sign the agreements?

c.        What options are available to ensure the client can sign the agreements while they are out of the country?

Effectively tackles each question, showcasing a good understanding of the significance of all registered owners signing the agreements, the implications of one of the seller’s being out of the country, available options for remote signing and the relevant documents for the client’s situation.

a.        Demonstrates a good understanding of the legal requirements for property agreements involving multiple owners and highlights the importance of obtaining consent and agreement from all registered owners.

b.        Demonstrates a good understanding of the practical challenges posed by the client’s absence and acknowledges the potential impact on their ability to physically sign the documents.

c.        Demonstrates knowledge of alternative methods for remote signing.

Scenario 2B

What advice would you offer your customers? In your response, make sure that you answer the following questions.

a.        What information on a Record of Title might

suggest the property is on Māori land?

b.        What legislation applies to the possible sale of this land?

c.        Who would be the best person to seek advice from regarding the title and potential purchase of Māori land?

a.        Demonstrates a good understanding of what could be on the title that might suggest the property is on Māori land.

b.        Identifies the relevant legislation that applies to the possible sale of Māori land.

c.        Demonstrates a good understanding of the best person to seek advice from when dealing with Māori land.

Scenario 2C

Demonstrates a good understanding of the AML/CFT Act, its relevance to the scenario, the role of real

Analyse the scenario and answer the following questions.

a.        What is the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 and how does it relate to this scenario?

b.        What role do real estate salespersons play in preventing the flow of illicit funds into the property market?

c.        What could happen if the salesperson or their agency does not report the suspicious transaction to the relevant authorities?

estate salespersons in preventing illicit funds from entering the property market and the potential consequences of failing to report suspicious transactions.

a.        Demonstrates a clear understanding of the AML/CFT Act as legislation designed to combat money laundering and the financing of terrorism.

b.        Exhibits knowledge of the obligations imposed on real estate salespersons under the AML/CFT Act, such as customer due diligence and reporting requirements.

c.        Demonstrates a good understanding of the potential penalties and sanctions that may be imposed on real estate salespersons for failing to fulfil their reporting obligations under the AML/CFT Act.

Task 3: Discharging contracts

Judgement

Scenario 3A

Analyse the scenario and answer the following questions.

a.        How could the purchasers have discharged the contract through performance?

b.        How could the purchasers and salesperson have discharged the contract through agreement?

c.        Did the purchasers’ unwillingness to pay the purchase price by the agreed-upon date constitute a breach of the contract? If so, how could the contract be discharged through breach?

Demonstrates a good understanding of contract discharge mechanisms, including discharge through performance, agreement, frustration and breach. Exhibits proficiency in identifying and explaining how the contract could have been discharged under each of these circumstances.

a.        Demonstrates a good understanding of performance as a means of fulfilling contractual obligations and highlights how the purchasers could have met their obligations under the contract.

b.        Demonstrates a good understanding of the concept of agreement as a means of altering or terminating a contract by mutual consent.

It suggests potential scenarios where the

parties could have agreed to modify the terms or mutually terminate the contract with the consent of all involved parties.

c.     Showcases an understanding of breach of contract as a failure to perform obligations under the agreed terms. It evaluates the purchasers’ unwillingness to pay the purchase price as a potential breach and discusses the potential consequences.

Task 4: Agency law

Judgement

Scenario 4A

Analyse the scenario and answer the following questions.

a.        What information must you provide to the client in writing before they sign the agency agreement? Reference the Code of Conduct rules that apply.

b.        Is the client required to agree to any additional expenses? Reference the Code of Conduct rule that applies.

c.        Where can the client find further information on agency agreements and contractual documents?

d.        What other questions might the client ask you about the agency agreement or the process of selling their property?

Demonstrates a good understanding of the information that must be provided to the client before signing the agency agreement, the requirement for additional expense agreement, available resources for further information, potential inquiries the client might have and the necessary documentation to be presented before signing the agency agreement.

a.        Demonstrates a clear understanding of the legal obligations and transparency requirements for real estate salespersons.

b.        Demonstrates a clear understanding of whether the client’s agreement is necessary or not.

c.        Demonstrates knowledge of resources that provide information and guidance on agency agreements and contractual documents.

d.        Showcases an understanding of the common concerns and inquiries that property sellers may have.

Task 5: Types of agency agreement

Judgement

Scenario 5A

Analyse the scenario and answer the following questions.

a.        Explain the differences between a general agency, a sole agency and a joint (sole) agency to the client, including a brief explanation of the legal and financial implications of each.

b.        Discuss the advantages and disadvantages of each type of agency in the context of selling the client’s specific property.

c.        Based on your analysis, provide the client with a recommendation on whether to convert to a sole agency, a joint (sole) agency or remain with a general agency for the sale of the property. Justify your recommendation.

Demonstrates a good understanding of general agency, sole agency and joint (sole) agency, including their legal and financial implications. Evaluates the advantages and disadvantages of each type in the specific context of selling the client’s property. The competency statement further analyses the potential risks and benefits of converting to a sole agency, considering factors such as sale price and time on the market. Based on this analysis, a recommendation is provided to the client, accompanied by a well- justified rationale.

a.        Demonstrates a clear understanding of these agency agreement variations, including the scope of representation, exclusivity, commission structure and the rights and responsibilities of the parties involved.

b.        Exhibits knowledge of the factors that may impact the sale. It evaluates how each agency type can influence the property's exposure, likelihood of attracting potential buyers and the level of commitment from the real estate salesperson.

c.        The recommendation is accompanied by a well-justified rationale based on the analysis of the scenario and the advantages and disadvantages of each agency type.

Task 6: The fiduciary relationship

Judgement

Scenario 6A

Analyse the scenario and answer the following questions.

a.        What is a fiduciary relationship in real estate?

b.        What are the duties of a real estate salesperson in

Demonstrates a good understanding of a fiduciary relationship, including its nature and significance in the real estate context. Explains the duties of a real estate salesperson within a fiduciary relationship. The competency statement further provides

a fiduciary relationship?

c.        What are the consequences of breaching a fiduciary duty in a real estate transaction?

d.        What is the importance of a correct price on a listing?

e.        What should the salesperson do to correct their mistake without breaching their fiduciary duty to the client?

recommendations on how to correct a mistake without breaching fiduciary duty and discusses the potential consequences of breaching fiduciary duties in a real estate transaction.

a.        Demonstrates a clear understanding of the fiduciary relationship, emphasising the salesperson's role as a trusted advisor with a legal duty to act in the best interests of their client.

b.        Showcases a good understanding of the responsibilities and obligations that real estate salespersons have towards their clients.

c.        Demonstrates awareness of the potential legal and ethical repercussions associated with breaching fiduciary duties.

d.        Exhibits knowledge of how a listing price impacts the marketability of a property, buyer interest and the likelihood of achieving a successful sale.

e.        Demonstrates a good understanding of the salesperson’s fiduciary obligations and suggests suitable actions.

Scenario 6B

Analyse the scenario and answer the following questions.

a.        Explain the requirement for separate accounts in a real estate transaction.

b.        Explain whether the salesperson has breached their fiduciary duty to the client by depositing their rental income, advertising money and house deposit into the agency’s account?

Demonstrates a good understanding of the requirement for separate accounts, the potential breach of fiduciary duty by the salesperson, the consequences of mixing client funds and the appropriate actions for the client to take if they discover mixed funds.

a.        Demonstrates a clear understanding of the legal and regulatory framework surrounding real estate transactions.