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RECA Fundamentals > Introduction to Real Estate > Flashcards

Introduction to Real Estate Flashcards

1
Q

What is Real Estate

A

Physical land and the structures attached to it.

The land includes the waters and the minerals below it, the airspace above.

Structure includes any building or improvements.

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2
Q

What are chattels?

A

Items not securely affixed to the land or buildings.

Furnishings
Appliances

Also referred to as private property

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3
Q

What is a fixture?

A

Items that cannot be easily removed from the property without causing damage to the property

Wells
Fences

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4
Q

What is Real Property

A

Consists of both physical objects and common law rights

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5
Q

What rights are associated with Real Property

A
  1. The right to possess
  2. The right to control
  3. The right to enjoy
  4. The right to exclude
  5. The right to dispose of
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6
Q

What is Fee Simple?

A

The Crown (government) own most land in Canada. The government allows people to purchase land titles (interest) interest in the land.

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7
Q

There are three types of land ownership. What are they?

A

Sole owner
Joint Tenancy
Tenancy-in-common

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8
Q

What is Sole ownership

A

The land or property is owned by one person or entity.

If the owner is married, dower rights may apply if the spouse’s name is not on the title

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9
Q

What is Join tenancy

A

Owner with two or more owners on the title.
If one of them passes away, the property remains in possession of the surviving joint tenant.

In Alberta joint tenancy must be specified, the default is tenant in common

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10
Q

What is tenancy in common

A

Two or more owners own proportional shares of the property. If one owner passes away, their share of the land goes to their estate, not to the other owners.

Tenants in common can sell their shares or transfer their shares to another party.

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11
Q

What is a life estate

A

The ownership of the property exists for the duration of the life of a person and will then revert to another person.

If the life tenant sells the property, the purchaser would be forced to leave upon the life tenant’s death.

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12
Q

What document in Alberta shows legal ownership to a property or asset?

A

the title

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13
Q

What is “interest in land”?

A

A right of ownership in land or in an encumbrance against it, such as a mortgage

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14
Q

What is an encumbrance?

A

A claim against the property

Mortgage
easement

Each encumbrance has a registration number which will appear of the certificate of title

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15
Q

Easement

A

Easments gives a person or company other than the property owner the right to access a portion of the land. Easements stay on the title regardless of a change in ownership.

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16
Q

Encroachments

A

Where an item on a property encroaches or is built on or over an adjoining property.

If a homeowner build a fence that does not stay within their property line, this maybe an unintentional encroachment.

An encroachment agreement can registered. The agreement sets the terms which will allow the encroachment to remain.

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17
Q

Restrictive Covenants

A

Places restrictions on what can and can not be done with a property. Can be related to architecture, land use etc.

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18
Q

Can leases in excess of three years be registered against a title?

A

Yes

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19
Q

Lien

A

When a party has a financial interest in a property.
E.g. a person owning taxes

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20
Q

Caveat

A

A notice that someone has a interest in the propery.

  • Only a notice, just because a caveat exists doesn’t mean it’s valid.

e.g. condominium fees

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21
Q

Which interests have priority over mortgages

A

Property taxes & condo fees

22
Q

Who creates and amends the rules of The Real Estate Act

A

The various industry councils

23
Q

When is a real estate license required in Alberta

A

If you are acting on someone else’s behalf, or if you’re being compensated.

24
Q

How does the Real Estate Act define residential real estate in Alberta

A

real estate used for residential purposes, or intended to be used for residential purposes, comprising of or to be comprised of not more than four residential premises

25
Q

How does the Real Estate Act define commercial real estate

A

real estate used or intended to be used to generate income and includes real estate used for retail, office, industrial, investment, institutional purposes and residential real estate comprising of more than four residential premises

26
Q

What are the three groups of commercial real estate?

A

Industry

Business

Investment

27
Q

Is a brokerage a company or a person?

A

Person

28
Q

Can a brokerage pay a unlicensed person?

A

If they completed a service for which no licensing is required, yes.

If they completed a service for which licensing is required, no.

29
Q

For how many years must a brokerage keep records pertaining to a real estate trade?

A

3 years

30
Q

What is the purpose of Alberta Real Estate Foundation (AREF)?

A

The education of professions working in real estate and public regarding real estate

Law reform and research for the real estate industry

Other projects to improve the real estate industry

31
Q

What is the Real Estate Assurance Fund (REAF)?

A

A fund that compensates consumers who suffer a financial loss resulting from fraud, or breach of trust. Consumers can claim a maximum of $35,000 per application.

32
Q

Who is insured by Real Estate Insurance Exchange (REIX)

A

Real estate agents. REIX provides errors and omissions insurance for real estate professionals.

It is a mandatory program for licensees in Alberta & Saskatchewan.

33
Q

What act governs real estate professionals in Alberta?

A

The Real Estate Act

34
Q

Associate broker

A

Someone licensed as a broker, but not authorized to operate a brokerage

35
Q

What must the registrar be notified of immediately?

A

Name changes

Brokerage changes

Disciplinary matters

Judgement relating to the provisions of goods and services to the public

36
Q

Real property bundle of rights

A

The right to dispose of

The right to enjoy

The right to possess

The right to control

37
Q

Joint tenancy and tenancy in common

A

Joint tenancy is best for married couples

tenancy in common is best for individuals residing together, who want their own ownership stake

38
Q

Sole ownership

A

Best used if you are paid for the entire purchase yourself

39
Q

Governing body responsible for registering land ownership rights in Alberta?

A

Service Alberta

40
Q

What is a caveat?

A

A notice or warning that someone is declaring they have an interest in a specific property

41
Q

Define a housing bubble

A

When the price of housing rises rapidly

42
Q

What are the four components of the Real Estate Act?

A

The act

The Bylaws

The rules

The regulations

43
Q

How does RECA protect the public

A

Licensing practitioners

Setting standards of competency

Providing mechanisms to discipline members who fail to meet standards

44
Q

RECA leadership titles

A

Board of Directors

Executive Director

Registrar

Industry Councils

45
Q

A hearing panel finds a licensee deserving of sanction. What are the possible penalties?

A

A letter of reprimand

Fines of up to $25,000

Suspensions or cancellation of license

46
Q

If a unlicensed individual commits an error which harms a client, does that client have recourse under the Real Estate Act?

A

No

47
Q

Do you need a license to be compensated for completing a real estate transaction?

A

Yes

48
Q

Items required for brokerage to operate according to RECA

A

A licensed broker

A registered business office

A trust account

49
Q

What is the REALTOR code

A

A code of conduct set up by the National

50
Q

What does the Real Estate Assurance Fund do

A

Provides up $35,000 of compensation in a single claim for consumers that have suffered a loss as a result of fraud

51
Q

What is Real Estate Insurance Exchange (REIX)

A

A mandatory program for all licensees in Alberta & Saskatchewan

Provides Errors & omissions insurance for licensed industry professionals

52
Q

Is a brokerage a person

A

Yes

RECA Fundamentals (27 decks)

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