SQE Practice Regulation and Practice Circulars question: contractor pays Tiffany’s agency HK$3,000

EAA SQEPractice Regulation and Practice Circulars

Salesperson Tiffany Choi recommends a renovation contractor to her purchaser client, Mr Lai. The contractor pays Tiffany’s agency HK$3,000 for every client referred. Under the Practice Regulation, what must Tiffany do?

A Disclose the agency’s interest to Mr Lai when she makes the recommendation
B Disclose the referral fee only if Mr Lai asks whether she benefits from the recommendation
C Disclose the referral fee in writing within 7 days after Mr Lai engages the contractor
D Stop recommending the contractor, since referral fees from contractors are prohibited

Show the answer and explanation

Answer: A. Disclose the agency’s interest to Mr Lai when she makes the recommendation

Answer: Disclose the interest to Mr Lai at the time she makes the recommendation. Why not the others: - Only if he asks: Disclosure must come first, not on request. - Within 7 days after he engages the contractor: The disclosure must be made at the time of the recommendation, before the client decides. - Referral fees are prohibited: The Regulation permits the recommendation if the interest is disclosed. Rule: A licensee shall not recommend to a client the use of services of any other person where a pecuniary or other beneficial interest may accrue to the licensee as a result, without first disclosing that interest to the client at the time of the recommendation. Source: Practice Regulation (Cap. 511C), section 14(2); as at Oct 2026

Common mistake

Thinking disclosure can wait until the client actually uses the service.

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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.