RES421 Law for Real Estate Licensees Assessment 2 2026 | Open Polytechnic of New Zealand

RES421 Law for Real Estate Licensees Assessment 2  

Learning outcomes

5 Explain the law of contract as it governs real estate transactions.
6 Explain the provisions of the law of agency and determine appropriate signatories for different entities for given contracts.

Instructions

Complete and submit your assessment according to the Open Polytechnic's
Assessments webpage.

This includes information on academic integrity, formatting, word limits and referencing.

• Include your name, student number and the assessment number. 
• Number your pages.

Submission

• Submit your assessment in one file.
• Submit your work through your iQualify course.

Emailed assessments will not be accepted.

You will receive an automated notice advising you of your successful submission.

By submitting your assessment, you confirm that it is your own, original work.

Task 1: Contracts

Scenario

Sarah Gillman has been looking at properties to buy in Whanganui and has found the ideal house in the suburb of Tawhero, which is being sold by Thomas Davies being the legal owner of the property. Both Sarah and Thomas are over 18. The property was listed for $875,000 and Sarah made an offer of $825,000, conditional on her getting a mortgage approved. Thomas had seen that property prices were rising in Whanganui and was keen to get the best price he could and had been confused about what Sarah was offering and wondered if he should wait and see if he could get a better offer from someone else. After discussions with his agent Colin Taylor, however, Thomas had agreed that he should accept Sarah's offer.

Colin has prepared a contract of sale that he wants Sarah to sign, but she is hesitant and unsure about the contract's contents and their implications and wants them explained.

Referring to the scenario above 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 whether this was or was not evident in this scenario for both Sarah and Thomas.
e. What is the legality of purpose in this scenario, and why is it significant in a contract?

(Total word count guideline: 250 words)

Task 2: Ownership

Scenario 1

David and Nicole Anthony are registered co-owners of a property they purchased together a few years ago. They have decided to sell the property and have engaged a real estate agency to handle the sale. The agency has prepared an agency agreement and a sale and purchase agreement for the property. However, David has had a work emergency and has had to travel overseas for three weeks and is unable to sign the agreements in person.

Analyse the scenario above 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 $. 242
b. How does the fact that David is currently out of the country affect his ability to sign the agreements?
c. What options are available to ensure David can sign the agreements while he is out of the country?

(Word count guideline: 100 words)

Scenario 2

John, a real estate agent, has just completed a deal to sell a luxury apartment to a client, Mark. However, he notices that Mark is making an unusually large payment in cash. John decides to conduct some research on Mark and his source of funds. He discovers that Mark has no visible means of income that would justify his ability to make such a large cash payment.

Analyse the scenario above 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 agents play in preventing the flow of illicit funds into the property market?
c. What could happen if John does not report the suspicious transaction to the relevant authorities?

(Word count guideline: 100 words)

Task 3: Discharging Contracts

Cristina Murray, a real estate agent, helped Paul and Sue Owens purchase a property. The contract they signed stated that Paul and Sue would pay the purchase price by a specific date and Cristina would facilitate the transfer of ownership. However, Paul and Sue decided to buy a different property, and they didn't pay the purchase price by the agreed-upon date. As a result, the contract was terminated.

Analyse the scenario above and answer the following questions:

a. How could Paul and Sue have discharged the contract through performance?
b. How could Paul and Sue and Cristina have discharged the contract through agreement?
c. Did Paul and Sue's 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?

Task 4: Agency Law

(Word count guideline: 150 words)

You are a real estate licensee, and you are meeting with a prospective client, Aaron Harmon, who is interested in selling his property. During the meeting, you explain the terms of the agency agreement that he would need to sign if he decided to engage your services. You explain that the Code of Conduct Rules require you to provide specific information in writing before he signs the agreement. You provide Aaron with a copy of the agreement and explain more about the agency agreement.

After you have provided Aaron with this information, he asks you several questions about the agreement and the process of selling his property.

Please answer the following questions based on the scenario:

a. What information must you provide to Aaron in writing before he signs the agency agreement? Reference the Code of Conduct Rules that apply.
b. Is Aaron required to agree to any additional expenses? Reference the Code of Conduct Rule that applies.
c. Where can Aaron find further information on agency agreements and contractual documents?
d. What other questions might Aaron ask you about the agency agreement or the process of selling his property?

Task 5: Types of agency agreement

You have been hired as a real estate agent by Arnold Jonga who is selling his beachside property in Paraparaumu. Arnold has expressed interest in converting the general agency you have to a sole agency with your real estate company for the sale of his property. He is also interested in having two real estate agencies market the property, if possible, under a joint (sole) agency.

Your task is to assess the potential benefits and drawbacks of making this change, and to provide recommendations based on your analysis.

a. Explain the differences between a general agency, a sole agency and a joint (sole) agency to Arnold, including the legal and financial implications of each
b. Discuss the advantages and disadvantages of each type of agency in the context of selling Arnold's specific property in Paraparaumu.
c. Based on your analysis, provide Arnold 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

(Word count guideline: 200 words)

Task 6: The fiduciary relationship

Scenario 1: Information relevant to the nature of the agency

Vincent is a real estate agent who has been hired by Chelsea to sell her house. Chelsea trusts Vincent to act in her best interests and to handle the sale professionally. Vincent agrees to act as Chelsea's agent and sign an agency agreement, which states that he must act in good faith and with Chelsea's best interests in mind.

One day, Vincent is in a rush and accidentally lists the wrong price for Chelsea's house on the listing website. He realizes his mistake soon after and wants to correct it. However, he is worried about how this mistake will affect his fiduciary relationship with Chelsea.

Answer the following questions based on the scenario:

a. What is a fiduciary relationship in real estate?
b. What are the duties of a real estate agent in 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 Vincent do to correct his mistake without breaching his fiduciary duty to Chelsea?

(Word count guideline: 150 words)

Scenario 2: Bank accounts

Vincent has also been working with Jennifer to sell her rental property and to buy a new house in a nearby suburb. Vincent’s real estate agency manages the property on behalf of Jennifer and collects rent which the property management fees are taken out of. Jennifer has paid for an advertising campaign to help sell her rental property and has given the agency a sum of money to be used as a deposit on a new house.

Vincent has been depositing Jennifer's money into the agency’s bank account like it does with all client funds because it’s easier to just have one account. 

Answer the following questions  based on the  scenario: 

a. Explain the requirement for separate accounts in a real estate transaction. 
b. Explain whether Vincent has breached his fiduciary duty to Jennifer by depositing her rental income, advertising money and house deposit into the agency’s account? 
c. What are the consequences of mixing client funds with the agency’s funds in a real estate transaction? d. What should  Jennifer do if she discovers that her agent has mixed her funds in with agency funds?

(Word count guideline: 150 words)