EAQE Agency management and supervision question: debt-collection company appointed by Bayview Realty to recover unpaid commission writes

EAA EAQEAgency management and supervision

A debt-collection company appointed by Bayview Realty to recover unpaid commission writes the debtor's name and the amount owed on the wall outside his flat. Which statement is most accurate?

A Bayview may be liable for torts the collector commits within its authority, and poor supervision may breach section 15 of the Practice Regulation
B Bayview is not liable for anything the collector does, because a debt-collection company is an independent business with its own licence
C Only the collector can be disciplined by the EAA for the conduct, because it alone carried out the act complained of
D Bayview is liable only if it paid the collector a fixed fee rather than a percentage of the amount recovered

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Answer: A. Bayview may be liable for torts the collector commits within its authority, and poor supervision may breach section 15 of the Practice Regulation

Answer: Bayview may be liable for the collector's torts within the scope of its authority, and failing to control the collector may breach section 15 and lead to EAA discipline. Why not the others: - Independent business: The circular says the relationship is principal and agent, so the agency may be liable for the collector's tortious acts within its authority; the agency also owes the debtor a duty of reasonable care in selecting the collector. - Only the collector is disciplined: The EAA disciplines licensees; the collector is not a licensee, and the agency remains accountable for complaints arising from the collection. - Fee structure: How the collector is paid does not decide liability. Rule: Practitioners must select and supervise collectors carefully, monitor their conduct, handle complaints, terminate agreements on discovering illegal conduct and report it to the Police; assisting or encouraging offences may make them criminally liable as secondary parties. Source: EAA Practice Circular No. 08-04 (CR), Using Debt-Collection Companies (May 2008), paras 5, 6 and 10 and closing notes; EAA, A Study Guide to Estate Agency Law and Practice, Part 8, para 84; Practice Regulation (Cap. 511C), section 15; as at Oct 2026

Common mistake

Believing that outsourcing collection removes the agency's own liability.

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An original question written to the published EAQE syllabus. Figures in the explanation carry their effective dates; check them against the current law before relying on them. Independent exam practice. Not affiliated with or endorsed by the Estate Agents Authority (EAA) or the examination administrator.