SQE Code of Ethics question: Government grant prohibits sale

EAA SQECode of Ethics

Salesperson Peter Lai is selling a New Territories village house for Mr Tang. The Government grant prohibits sale within five years of the certificate of compliance, which was issued three years ago. Peter does not mention this to Mr Tang or to the purchaser. Which statement is correct?

A Peter is not responsible, as checking the Government grant is the solicitors' job
B Peter has breached the Code by failing to advise on a restriction he should have known about
C Peter is in breach only if the Lands Department later starts enforcement action
D Peter is in breach only of paragraph 3.7.2, because a failed sale would damage the image of the estate agency trade

Show the answer and explanation

Answer: B. Peter has breached the Code by failing to advise on a restriction he should have known about

Answer: He breached the Code by failing to advise on a restriction he should have known about. Why not the others: - It is only the solicitors' job: Solicitors handle conveyancing, but the Code requires licensees to keep informed so they can advise responsibly and to exercise due diligence. - Only if the Lands Department acts: The breach lies in failing to advise, whatever enforcement follows. - Only paragraph 3.7.2: The direct breach is of the duties to be informed and diligent, not the general disrepute paragraph. Rule: Licensees should keep themselves informed of laws and essential facts so they can advise clients responsibly, and exercise due care and diligence. A restriction on alienation within five years of the certificate of compliance is such an essential fact. Source: EAA Code of Ethics, paragraphs 3.2.2 and 3.5.1; as at Oct 2026

Common mistake

Leaving title restrictions entirely to the solicitors when the Code expects the agent to spot and advise on them.

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An original question written to the published SQE 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.