Part 2: Part 2: Estate Agents Ordinance and Estate Agency Practice
Estate Agency Qualifying Examination · Part 2: Part 2: Estate Agents Ordinance and Estate Agency Practice
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Kin-kwok is an estate agent and the sole proprietor of Wang Fat Estate Agency. In the course of his day-to-day estate agency business, he occasionally receives various monies on behalf of or for clients. In order to comply with the relevant provisions of the Estate Agents Ordinance and the Practice Regulations, which of the following must Kin-kwok do in respect of such monies received? (i) Deposit the monies into a trust account opened in the name of the client at an authorised institution (ii) Apply the monies to make payment to the relevant client (iii) Make the appropriate payment in accordance with prior written authorisation instructions provided by the client (iv) Issue a written receipt to the client within fourteen days of receiving the monies (v) Retain a copy of the receipt for at least three years after issuing it
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Correct Answer: A
- Any monies received on behalf of a client must be deposited into a trust account opened at an authorised institution (Practice Regulations, reg. 12(3)).
- Such monies may only be applied to: (a) make payment to the relevant client, or (b) make payment in accordance with prior written instructions given by the client (Estate Agents Ordinance, s. 43(3)(c)).
- An agent must issue a written receipt to the client 'immediately' upon receipt — there is no fourteen-day grace period (Practice Regulations, reg. 12(2)(a)).
- A copy of the receipt must be retained for at least three years (Practice Regulations, reg. 12(2)(b)).
Where a complaint against a licensee is found to be substantiated, which of the following disciplinary sanctions may the Estate Agents Authority impose on that licensee under the Estate Agents Ordinance? (i) Admonish or reprimand the licensee (ii) Fine the licensee HK$100,000 (iii) Suspend the licensee's licence for three years (iv) Revoke the licensee's licence (v) Attach specified conditions to the licensee's licence
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Correct Answer: A
- Under s. 30(1) of the Estate Agents Ordinance, the disciplinary sanctions available to the Authority include: admonition/reprimand, attachment of conditions to the licence, suspension of the licence (not exceeding 2 years), revocation of the licence, and a fine (up to a maximum of HK$300,000).
- The statutory maximum period of suspension is 2 years, not 3 years; accordingly, the three-year suspension in option (iii) does not conform with the Ordinance and is incorrect.
- A fine of HK$100,000 does not exceed the statutory maximum of HK$300,000; option (ii) is therefore correct.
Where the Estate Agents Authority appoints an investigator under s. 28 of the Estate Agents Ordinance to conduct an investigation into a licensee, which of the following constitute statutory obligations of the licensee under investigation? (i) If reasonably required by the investigator, the licensee must produce to the investigator records that the licensee considers relevant to the investigation (ii) The licensee must permit the investigator to enter and search his/her private residence at a reasonable time (iii) If reasonably required by the investigator, the licensee must provide the investigator with an explanation of any documents produced (iv) If required by the Estate Agents Authority, the licensee must pay the Authority the reasonable costs and expenses incurred in connection with the investigation
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Correct Answer: B
- A licensee is obliged to produce to the investigator records that the investigator considers relevant to the matter under investigation (s. 28(5)(a)).
- A licensee must provide the investigator with an explanation of any documents produced (s. 28(5)(b)).
- Searching a licensee's private residence is not a requirement prescribed under the investigation procedures in the Estate Agents Ordinance.
- Only a court or magistrate (and not the Authority itself) may order a convicted licensee to bear the costs of the investigation (s. 28(8)(a)).
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