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HK real estate exam.
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Question 1 of 30
1. Question
Which of the following statements are correct in relation to the Guide to Estate Agents Ordinance(EAO)?
I. This guide includes all the provisions of the EAO and is promulgated as a guide for all companies who are engaged in the business of estate agency.
II. This guide is promulgated by the Estate Agents Ordinance as a guide and directions in the conduct of estate agency work.
III. The guide supersedes the Practice Directions which was issued on 1 January 2002 by Estate Agents Authority(EAA).
IV. It includes some of the main provisions of the Estate Agents Ordinance(EAO), the Estate Agents Practice(General Duties and Hong Kong Residential Properties)Regulation(PR), and the Estate Agents(Licensing) Regulation (LR).
V. The guide encourages all practitioners to refer to the EAO, the PR, and the LR for the exact provisions because all of these shall prevail over the guide.Correct
The Guide to the Estate Agents Ordinance is a guide which is formulated to provide an easy understanding of the main provisions of the following: Estate Agents Ordinance(EAO), the Estate Agents Practice(General Duties and Hong Kong Residential Properties)Regulation(PR) and the Estate Agents(Licensing) Regulation (LR). However, practitioners though are encouraged to refer to the exact provisions since these shall prevail at all times. It supersedes the Practice Directions issued on 1 January 2002.
Incorrect
The Guide to the Estate Agents Ordinance is a guide which is formulated to provide an easy understanding of the main provisions of the following: Estate Agents Ordinance(EAO), the Estate Agents Practice(General Duties and Hong Kong Residential Properties)Regulation(PR) and the Estate Agents(Licensing) Regulation (LR). However, practitioners though are encouraged to refer to the exact provisions since these shall prevail at all times. It supersedes the Practice Directions issued on 1 January 2002.
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Question 2 of 30
2. Question
Which are examples of demonstrating a good understanding of related legislation and requirements?
I. Promoting good working relationships with other agents.
II. Full understanding of the EAO, its subsidiary legislation, and the Code of Ethics.
III. Being updated with the developments in the real estate market.
IV. Protecting clients against frauds and any other unethical practices in relation to real estate.
V. Providing services and opinions based on knowledge, training, qualification as well as experience in the real estate business.Correct
Estate agents and salespersons as stated in the Code of Ethics are expected to have a full understanding of all the related legislations and requirements estate agency work. They should be well informed and updated on changes in the real estate market and must use their knowledge, training, qualification, and experience to provide services and opinions to their clients.
Incorrect
Estate agents and salespersons as stated in the Code of Ethics are expected to have a full understanding of all the related legislations and requirements estate agency work. They should be well informed and updated on changes in the real estate market and must use their knowledge, training, qualification, and experience to provide services and opinions to their clients.
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Question 3 of 30
3. Question
Which of the following situations are examples of fraud?
I. A purchaser who backed out from a scheduled viewing and inspection of the property.
II. A buyer misrepresenting his financial status in order to injure the seller to enter into a contract with him.
III. Using a different name from the name indicated in the license.
IV. An estate agent who explains to the client the details of the estate agency agreement so the client can have a full understanding of the agreement.
V. A vendor providing fake identification.Correct
Estate agents and salespersons should do their best to be able to protect their clients against fraud, misrepresentation or any unethical practices. Examples of such are not disclosing the real financial status of the buyer and using fake identification documents.
Incorrect
Estate agents and salespersons should do their best to be able to protect their clients against fraud, misrepresentation or any unethical practices. Examples of such are not disclosing the real financial status of the buyer and using fake identification documents.
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Question 4 of 30
4. Question
Estate agents and salespersons are required to observe ethical and moral standards in conducting their estate agency work. Which are examples of this?
I. Protecting and promoting the interests of clients.
II. Carrying out only the instructions of clients that are stated in the estate agency agreement.
III. Being impartial and just to all the parties involved in the transaction.
IV. Being knowledgeable with all the relevant laws in estate agency work.
V. Keeping updated with the developments in real estate.Correct
Observing ethical and moral standards in the practice of estate agency work is very crucial. Examples of such are the protection and promotion of the client’s interest, following the instructions only that are within the estate agency agreement, and being fair and just to all parties involved.
Incorrect
Observing ethical and moral standards in the practice of estate agency work is very crucial. Examples of such are the protection and promotion of the client’s interest, following the instructions only that are within the estate agency agreement, and being fair and just to all parties involved.
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Question 5 of 30
5. Question
Which of the following should be observed and complied with by all licensees?
I. Employing at least one director.
II. Appointing a manager to manage the office.
III. Notifying EAA within 14 days of changing registered address.
IV. Applying as soon as practicable for replacement of license if it is stolen, damaged, or lost.
V. Sending notification to EAA within 31 days of stopping from estate agency work using Form 8 in the Schedule of the PR.Correct
All licensees are demanded to notify EAA by completing Form 8 in the Schedule of the PR within 31 days of stopping estate agency work. Also, all licensees should notify EAA if there is any change in the registered address within 14 days of such changes and to apply for replacement of license as soon practicable if it is not in his possession or maybe it is damaged.
Incorrect
All licensees are demanded to notify EAA by completing Form 8 in the Schedule of the PR within 31 days of stopping estate agency work. Also, all licensees should notify EAA if there is any change in the registered address within 14 days of such changes and to apply for replacement of license as soon practicable if it is not in his possession or maybe it is damaged.
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Question 6 of 30
6. Question
Which of the following are the repurcussions of not observing and complying with the Code of Ethics for the conduct of estate agency work?
I. Disciplinary action may be taken against the individual.
II. Suspension or revocation of license.
III. The individual concerned will be considered as a not fit and proper person under the EAO.
IV. The person concerned will be subjected to warning only since it is on the Code of Ethics that is violated and not government laws.
V. Violation of Code of Ethics will result in only suspension of license.Correct
Estate agents and salespersons who do not comply with the Code of Ethics will be subjected to disciplinary action. This will in effect make them not fit and proper person and their licenses may be suspended or revoked.
Incorrect
Estate agents and salespersons who do not comply with the Code of Ethics will be subjected to disciplinary action. This will in effect make them not fit and proper person and their licenses may be suspended or revoked.
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Question 7 of 30
7. Question
Which of the following statements are correct as stated in the Guide to Estate Agents Ordinance (EAO)?
I. All licensees can apply for renewal of a license after the expiration of 12 months from the date of refusal or revocation.
II. All licensees are required to notify EAA within 31 days of stopping to be engaged in estate agency work.
III. All licenses should be holders of both the estate agent’s license and the salesperson’s license in order to be appointed as a director.
IV. A licensed estate who carries on the business of estate agency work should appoint a manager to each of his offices for separate control and management.
V. A licensed estate agent cannot in all circumstances allowed to act for both the vendor and the purchaser.Correct
Application of renewal of the license in case of refusal or revocation should not be done before the expiration of 12 months after such refusal or revocation is applicable to all licensees as well the notifying the EAA upon ceasing to be engaged in estate agency within 31 days of such event. Also, a licensed estate agent when he has more than one office, he should appoint a manager for each of these offices.
Incorrect
Application of renewal of the license in case of refusal or revocation should not be done before the expiration of 12 months after such refusal or revocation is applicable to all licensees as well the notifying the EAA upon ceasing to be engaged in estate agency within 31 days of such event. Also, a licensed estate agent when he has more than one office, he should appoint a manager for each of these offices.
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Question 8 of 30
8. Question
Which of the following situations that a notification to the EAA is required?
I. When a licensed estate agent appoints manager.
II. When a licensed estate agent ceases to be a partner of a partnership engaged in estate agency work.
III. When a company holding an estate agent’s license appoints a person as a director.
IV. When a licensed estate agent receives a commission paid by the client.
V. When a licensed estate agent was able to close a deal for the sale of a property.Correct
EAA should be notified within 31 days when appointing or terminating the appointment of a manager as well as when ending a partnership engaged in estate agency work by Completing Form 12 in the Schedule of the PR.
Incorrect
EAA should be notified within 31 days when appointing or terminating the appointment of a manager as well as when ending a partnership engaged in estate agency work by Completing Form 12 in the Schedule of the PR.
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Question 9 of 30
9. Question
Which is TRUE about a salesperson who is engaged in estate agency work?
I. Before conducting any kind of estate agency work, a licensed salesperson should inform the client that he is indeed a licensed salesperson and his license number.
II. A holder of a salesperson’s license who has passed a qualifying examination for estate agents may apply for the grant of an estate agent’s license.
III. A holder of a salesperson’s license cannot switch to another type of license.
IV. An ex-holder of a salesperson’s license can apply for the same type of license provided the application is made within the relevant period as stated in the EAO.
V. A ex-holder of a salesperson’s license cannot apply if his license has been expired for 3 months.Correct
A salesperson should ensure to provide his clients with his license number to show proof of authenticity. A licensed salesperson as well can apply for a switching license as an estate agent if he passed at any time a qualifying examination for estate agents. As an ex-holder as well he is allowed to re-enter the trade as long as he applies within the relevant period.
Incorrect
A salesperson should ensure to provide his clients with his license number to show proof of authenticity. A licensed salesperson as well can apply for a switching license as an estate agent if he passed at any time a qualifying examination for estate agents. As an ex-holder as well he is allowed to re-enter the trade as long as he applies within the relevant period.
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Question 10 of 30
10. Question
In relation to holders and ex-holders of an individual agent’s license or a salesperson’s license, which of the following situations are applicable?
I. An ex-holder of an estate agent’s license is not allowed to apply for a salesperson’s license.
II. An ex-holder of an estate agent’s license whose license has been expired for 3 months may apply for the grant of the same type of license.
III. Cris is a holder of a salesperson’s license and has completed a training course for the estate agent’s license is allowed to apply for an estate agent’s license.
IV. Switching from an estate agent’s license may be granted but not vice-versa.
V. Mark is a licensed estate agent is permitted to apply for the grant of a salesperson’s license.Correct
Ex-holders of both types of licenses can apply for the same type as long as it is within the relevant period. A holder of both types of licenses as well can apply for switching of license. A licensed estate agent can switch to a salesperson’s license without any criteria or requirements. However, a holder of a salesperson’s license can switch to an estate agent provided he passed a qualifying examination for estate agents or he may have completed a training for estate agents on or before 31 December 2001.
Incorrect
Ex-holders of both types of licenses can apply for the same type as long as it is within the relevant period. A holder of both types of licenses as well can apply for switching of license. A licensed estate agent can switch to a salesperson’s license without any criteria or requirements. However, a holder of a salesperson’s license can switch to an estate agent provided he passed a qualifying examination for estate agents or he may have completed a training for estate agents on or before 31 December 2001.
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Question 11 of 30
11. Question
Keeping of accounts and records is very crucial for all licensed estate agents. How does a licensed estate agent demonstrate compliance in relation to this?
I. Requiring the clients to sign an acknowledgment letter for any commissions paid by the client.
II. Keeping a copy of receipts issued to clients for not less than one year when the receipt was issued.
III. Maintaining an organized record of accounts in relation to money received or held, or paid by him, for or on accounts of clients.
IV. Retaining a record of all receipts issued to clients for not less than three years from when the receipt was issued.
V. Retaining a copy of all the deposit slips made for not less than three years from when the deposit occurred.Correct
Licensed estate agents are required to maintain a record for all receipts as well as deposit slips for not less than three years from the date of such transaction.
Incorrect
Licensed estate agents are required to maintain a record for all receipts as well as deposit slips for not less than three years from the date of such transaction.
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Question 12 of 30
12. Question
When handling money related transactions while conducting estate agency work, which of the following should be observed and complied with by a licensed estate agent?
I. A licensed estate agent should withdraw money from a trust account by a cheque or by an electronic transfer and only with the client’s instructions.
II. A licensed estate agent should immediately deposit all money received to the proper account and should keep a copy of the deposit slip.
III. A licensed estate agent can withdraw money from a trust account by cash with the client’s instructions.
IV. A licensed estate agent should immediately issue a written receipt to the client upon receiving any money.
V. A licensed estate agent can release deposit money based on his decision if he finds that by doing so it will be beneficial to his client.Correct
A licensed estate agent upon receiving money from the client is required to issue a written receipt. If he is instructed to deposit money, he should keep a copy of such deposit slips. Withdrawal of money from a trust account should only be through cheque or by an electronic transfer with the client’s instructions.
Incorrect
A licensed estate agent upon receiving money from the client is required to issue a written receipt. If he is instructed to deposit money, he should keep a copy of such deposit slips. Withdrawal of money from a trust account should only be through cheque or by an electronic transfer with the client’s instructions.
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Question 13 of 30
13. Question
What is expected from a licensee in relation to commissions in the conduct of estate agency work?
I. Any commission should not be demanded from clients when a licensee is acting as a sub-listing agent.
II. A written receipt is required to be issued when a licensee receives any commission paid by a client.
III. A licensee may demand a commission from a client in all circumstances.
IV. A licensee is not allowed to recommend for services of another person to protect the client from incurring additional cost.
V. When recommending the services of another person to a client, a licensee may not disclose any form of commission that will be received as long as it is not detrimental to the client.Correct
If a client receives any commission paid by the client, a written receipt should be issued. A licensee should also not demand any commission while acting as a sub-listing agent from the client concerned with the principal-agent. The licensee may recommend the services of another person but any beneficial interest that he may receive should be disclosed to the client.
Incorrect
If a client receives any commission paid by the client, a written receipt should be issued. A licensee should also not demand any commission while acting as a sub-listing agent from the client concerned with the principal-agent. The licensee may recommend the services of another person but any beneficial interest that he may receive should be disclosed to the client.
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Question 14 of 30
14. Question
What are the responsibilities of a licensee when handling agreements for sale and purchase and lease of a property?
I. A licensee should notify EAA before entering into an agreement.
II. A licensee should ensure that the client understands all the details of the agreement if the client is not legally represented.
III. A licensee should ensure that fraudulent misrepresentation of identity is prevented by making sure that the name of the vendor is correct.
IV. A licensee should provide his opinion as an expert to influence his client to enter into an agreement.
V. A licensee should conduct an up-to-date land search of the property before entering into an agreement.Correct
A licensee should make sure that the identity of the clients is verified before entering into an agreement. He should make sure that the client understands fully the details of the agreement and before entering into an agreement, he should conduct an up-to-date land search of the property.
Incorrect
A licensee should make sure that the identity of the clients is verified before entering into an agreement. He should make sure that the client understands fully the details of the agreement and before entering into an agreement, he should conduct an up-to-date land search of the property.
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Question 15 of 30
15. Question
If a licensee receives offers for a property, a licensee should:
I. Present the offers according to the best offer to the least offer.
II. Select the best offer and present it to the client.
III. Inform the client according to the order the offers were received.
IV. Present the offers in a fair and objective manner.
V. Keep a record of the offers received.Correct
When a licensee receives offers for a property on behalf of a client, the licensee should make sure that all the offers are presented to the client in the order as it is received and in the most objective and fair manner.
Incorrect
When a licensee receives offers for a property on behalf of a client, the licensee should make sure that all the offers are presented to the client in the order as it is received and in the most objective and fair manner.
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Question 16 of 30
16. Question
What is the reason why a licensed estate agent is required to submit to EAA a certificate issued by a practicing certified public accountant?
Correct
A licensed estate agent may be required by EAA certified to certify that proper accounts have been maintained in accordance with section 12(1) of the PR.
Incorrect
A licensed estate agent may be required by EAA certified to certify that proper accounts have been maintained in accordance with section 12(1) of the PR.
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Question 17 of 30
17. Question
What should not be done by a licensee in relation to accepting offers for a property?
Correct
A licensee should present all the offers received to the client and not only selecting the offers which he deemed as best offers.
Incorrect
A licensee should present all the offers received to the client and not only selecting the offers which he deemed as best offers.
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Question 18 of 30
18. Question
Prior to the signing of an agreement for sale and purchase or a lease, what is an important action that a licensee should do?
Correct
A licensee should prepare written inventory before proceeding with the signing of the agreement for sale and purchase or a lease of property. This written inventory will state what is to be included in the agreement.
Incorrect
A licensee should prepare written inventory before proceeding with the signing of the agreement for sale and purchase or a lease of property. This written inventory will state what is to be included in the agreement.
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Question 19 of 30
19. Question
What should be included in the records kept by a licensed estate agent relevant to his conduct of estate agency work?
Correct
A licensed estate agent is required to keep a copy of receipts, deposit slips, listings of properties, and estate agency agreement.
Incorrect
A licensed estate agent is required to keep a copy of receipts, deposit slips, listings of properties, and estate agency agreement.
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Question 20 of 30
20. Question
What should a licensed estate agent do after the execution of an estate agency agreement?
Correct
A licensed estate agent is required to give a copy to the client of the estate agency agreement within seven days from when the agreement was executed.
Incorrect
A licensed estate agent is required to give a copy to the client of the estate agency agreement within seven days from when the agreement was executed.
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Question 21 of 30
21. Question
In situations wherein a licensee is subjected to an investigation by EAA, what could be some possible events that will occur during the investigation process?
Correct
During an inquiry or investigation, the licensee will be requested by EAA to submit all records and other documents that relevant to the investigation and the licensee should be able to exude a full understanding of these documents.
Incorrect
During an inquiry or investigation, the licensee will be requested by EAA to submit all records and other documents that relevant to the investigation and the licensee should be able to exude a full understanding of these documents.
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Question 22 of 30
22. Question
What is required to do by a licensed estate agent who carries on the business of estate agency work regarding the relevant statement of particulars of business?
Correct
The statement of particulars of business for all licensed estate agent who carries on the business of estate agency work should make sure this displayed in an area in the business location where it is visible for everybody.
Incorrect
The statement of particulars of business for all licensed estate agent who carries on the business of estate agency work should make sure this displayed in an area in the business location where it is visible for everybody.
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Question 23 of 30
23. Question
What is the required consequential action of a licensed estate agent after arriving at a decision to stop engaging in a partnership which is involved in estate agency work?
Correct
If a licensed estate agent engages in a partnership engaged in estate agency work as well when ending the partnership, he should notify EAA in both instances by completing Form 12 in the Schedule to the PR within 31 days for such an event.
Incorrect
If a licensed estate agent engages in a partnership engaged in estate agency work as well when ending the partnership, he should notify EAA in both instances by completing Form 12 in the Schedule to the PR within 31 days for such an event.
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Question 24 of 30
24. Question
What is the qualification required for an individual to be appointed as a director for a company holding an estate agent’s license?
Correct
Companies holding an estate agent’s license are required to have at least one director who should be holding a valid estate agent’s license and must be a fit and proper according to section 20(3) of the EAO.
Incorrect
Companies holding an estate agent’s license are required to have at least one director who should be holding a valid estate agent’s license and must be a fit and proper according to section 20(3) of the EAO.
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Question 25 of 30
25. Question
Which of the following is true in relation to the use of forms as a requirement for an estate agency related transaction?
Correct
A licensed estate agent when dealing with transactions with prescribed forms should obtain the information required and importantly ensure that these are accurate.
Incorrect
A licensed estate agent when dealing with transactions with prescribed forms should obtain the information required and importantly ensure that these are accurate.
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Question 26 of 30
26. Question
What is expected of a licensed estate agent when sending an unexecuted estate agency agreement to a client for signature?
Correct
A licensed estate agent when sending an unexecuted estate agency agreement to a client for signature should send a copy to the client of the unexecuted estate agency agreement and together with it are any documents referred to in the agreement.
Incorrect
A licensed estate agent when sending an unexecuted estate agency agreement to a client for signature should send a copy to the client of the unexecuted estate agency agreement and together with it are any documents referred to in the agreement.
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Question 27 of 30
27. Question
When handling a transaction of the first sale of undivided share in land in which residential property forms part, the vendor shall supply the agent with Part 2 of Form 1. Under circumstances that this will not be the case?
Correct
In handling a transaction of the first sale of undivided share in land in which residential property forms part, the agent will be supplied by the vendor with Part 2 of Form 1 except in cases where the property is a unit in an uncompleted building.
Incorrect
In handling a transaction of the first sale of undivided share in land in which residential property forms part, the agent will be supplied by the vendor with Part 2 of Form 1 except in cases where the property is a unit in an uncompleted building.
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Question 28 of 30
28. Question
Which of the following is true for a vendor of a property?
Correct
A vendor of a property should have the authority to sell if the name of the owner of the property concerned is not the same as the vendor.
Incorrect
A vendor of a property should have the authority to sell if the name of the owner of the property concerned is not the same as the vendor.
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Question 29 of 30
29. Question
What is a protocol for a licensee when a purchaser shows interest in a property and requested for inspection and viewing of the property?
Correct
Inspection and viewing of a property by a purchaser should be arranged by the licensee by acquiring first the vendor’s consent. If the vendor agrees, the licensee should accompany the purchaser except instructed by the purchaser not to do so.
Incorrect
Inspection and viewing of a property by a purchaser should be arranged by the licensee by acquiring first the vendor’s consent. If the vendor agrees, the licensee should accompany the purchaser except instructed by the purchaser not to do so.
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Question 30 of 30
30. Question
What should be done by a licensee when a purchaser’s offer to purchase or lease property is not accepted by the vendor?
Correct
f situations where a purchaser has already paid deposit money or have issued a purchaser’s cheque for a property but for some reason the vendor refused the offer, the licensee should make sure that the deposit money or the purchaser’s cheque is returned as soon as practicable to the purchaser.
Incorrect
f situations where a purchaser has already paid deposit money or have issued a purchaser’s cheque for a property but for some reason the vendor refused the offer, the licensee should make sure that the deposit money or the purchaser’s cheque is returned as soon as practicable to the purchaser.