Lesson 1 - Chapter 2 - Real estate Services Act Flashcards Preview

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Flashcards in Lesson 1 - Chapter 2 - Real estate Services Act Deck (45):
1

In May 2004, the legislature introduces two new statutes that govern the sale or real estate in BC, what are they?

RESA - Real Estate Services Act

REDMA - Real Estate Development Marketing Act

2

_______ imposes licensing requirements on persons who provide trading services related to real estate, rental management services, and strat management services.

RESA

3

__________ imposes disclosure requirements on developers marketing various forms of real estate developments, such as strata lots, cooperatives, timeshares, and shared interests. 

REDMA

4

Who is responsible for real estate representatives licensing, licensee and public education, investigations of licensee conduct, and licensee discipline

The Real Estate Council

5

The Real Estate Services Regulations 

What do they deal with? (7)

  1. exemptions from licensing,
  2. fees payable by licensees,
  3. trust account issues
  4. disciplinary proceedings
  5. administrative penalties
  6. required standard terms in certain contracts
  7. personal real estate corporations

6

The Rules under the Real Estate Services Act 

What kind of issues do the Rules address? (8)

  1. licensing
  2. general responsibilities of licensees
  3. business practices,
  4. relationships with principals and parties
  5. dealing with other licensees and unlicensed persons
  6. brokerage accounts and financial requirements
  7. brokerage records
  8. licensee exemptions

7

What are the 3 purposes of RESA?

  1. Realtors meet minimum reasonable competency requirements in order to obtain a license
  2. setting certain standards to ensure the licensees conduct themselves appropriately while licensed
  3. Establishing the Real Estate Council of BC to administer, subject to the oversight and direction of the Superintendent, RESA, the Regulations, the Rules and the Bylaws

8

According to RESA, what is the definition of Real Estate services?

  1. rental property management services
  2. strata managment services
  3. trading services

9

RESA defines "trading services" to mean any of the following services provided, list them = 8 

  1. advising on the appropriate price for the real estate
  2. making representations about the real estate
  3. finding the real estate for a part to acquire
  4. finding a party to acquire the real estate
  5. showing the real estate
  6. negotiating the price of the real estate or the terms of the trade in real estate
  7. presenting offers to dispose of or acquire the real estate
  8. receiving deposit money paid in respect of the real estate

10

What does the RESA define "real property" to mean = 3

  1. real property
  2. regardless of whether it is or is not an interest in real property, a cooperative interest in land or timeshare interest, as these are defined in the Real Estate Development Marketing Act
  3. a right in relation to real property that is defined by regulation to be real estate

11

The RESA defines "trade in real estate" to mean (3)

  1. a transaction for the purchase or sale or real estate, for the leasing of real estate or for any other form or acquisition or disposition of real estate
  2. an assignment of a contract for purchase, sale or lease of real estate, or a transaction in relation to such an assignment, or
  3. a prospective trade in real estate within the meaning of paragraph (1) or (2)

12

are trading services also inclusive of lease of real estate?

yes

13

is the collection of rent considered an activity required for licensing?

No

Although under the Former Estate Act is was

14

List all of the services provided on behalf of an owner of a rental real estate which would consider being a rental property service

  1. Trading services in relation to the rental of the real estate
  2. collecting rent or security deposits for the use of the real estate
  3. Managing the real estate on behalf of the owner by:
    1. making payments to third parties
    2. negotiating or entering into contracts
    3. supervising employees or contractors hired or engaged by the owner, or
    4. managing landlord and tenant matters. 

15

List all of the services provided on behalf of an owner of a strata management services which would consider being a rental property service

  1. Collecting or holding strata fees, contributions, levies or other amounts levied by, or due to, the strata corporation under the Strata Property Act;
  2. Exercising delegated powers and duties of a strata corporation or strata council, including
    1. making payments to third parties on behalf of the strata corporation
    2. negotiating or entering into contracts on behalf of the strata corporation,
    3. supervising employees or contractors hired or engaged by the strata corporation, or
    4. enforcing bylaws or rules of the strata corporation.

16

RESA exempts the following (6) for the requirements to be licensed under RESA:

  1. a person acting under the authority of a court;
  2. a trustee in bankruptcy, custodian, receiver, receiver manager or liquidator who is appointed under a provincial or feral enactment, in respect of real estate services undertaken by the person in that capacity;
  3. an executor or administrator of an estate, in respect of real estate services provided in relation to real estate owned or held by the estate;
  4. a trustee, in respect of real estate services provided under the terms of a will, marriage settlement or deed of trust;
  5. a financial institution that has a trust business authorization under the Financial Institutions Act, in respect of real estate services  provided in relation to real estate that it owns, holds or administers; and 
  6. a practicing lawyer as defined in section 1 of the Legal Profession Act, in respect of real estate services provided in the course of the person's practice

17

What are the 4 general exemptions to real estate services?

  1. employees of a principal who are providing real estate services to or on behalf of that principal
  2. collection agents acting the course of their business;
  3. individuals involved in various mining and oil and gas activities; and
  4. government and government corporations.

18

List the 8 categories for those who are exempted from having a license with respect to trading services

  1. employees of developers
  2. notaries
  3. accountants in relation to the purchase and sale of a business
  4. appraisers and property inspectors
  5. auctioneers;
  6. individuals who provide information of a general nature to assist owners to sell or otherwise depose of their own real estate or who publish information contained in a an advertisement of specific real estate
  7. individuals who refer others to a licensee or exempt party; and 
  8. agents or expropriating authorities.

19

Licensees may employ unlicensed assistants, what activities can that unlicensed assistant not perform? (5)

  1. hosting an open house or soliciting sellers or buyers in any manner;
  2. providing advice or guidance to a consumer with regard to any real estate contract;
  3. obtaining or renewing listings contract, property management contracts, or rental contracts on behalf of the agent;
  4. presenting or negotiating an offer; or
  5. communicating with consumers about any real estate transaction

20

Licensees may employ unlicensed assistants, what activities can that unlicensed assistant perform? (6)

  1. unlock a property in order to let prospective buyers and their representative enter;
  2. perform office filing and bookkeeping
  3. draft documents and correspondence for approval and signature by the licensee;
  4. place or remove signs;
  5. witness signatures; or
  6. arrange for repairs on a rental property.

21

list the six things a fiduciary must do

  1. act honestly
  2. act in good faith for the beneficiary
  3. act in the best interests of the beneficiary
  4. must not place themselves in a conflict of interest with the beneficiary
  5. must not earn a secret profit in the course of acting for the beneficiary
  6. must maintain the confidentiality of all of the beneficiary's information and affairs

22

What are the objectives of the Real Estate Council

  • administering, subject to the oversight and direction of the Superintendent, RESA, the Regulations, the Rules and the Bylaws;
  • maintaining and advancing the knowledge, skill, and competency of its licensees; and
  • upholding and protecting the public interest in relation to the conduct and integrity of its licensees

23

The Superintendent oversees and directs the operations and activities of the Council, including requiring that the Council do one or more of the following 7 things

  1. investigate a particular matter;
  2. issue a notice of discipline hearing to a licensee believed to have committed professional misconduct or conduct unbecoming a licensee
  3. establish committees for certain purposes;
  4. make a new bylaw or amend or repeal and existing bylaw;
  5. require certain information be included in discipline orders and other communications by the Council;
  6. provide reports to the Superintendent to provide assessments of the operations and activities of the Council; and
  7. engage independent third parties on the operations and activities of the Council

24

The ___________ determines whether a person who does not hold a license has engaged in any activity for which a license under RESA is required. 

Superintendent

25

The Superintendent determines whether a licensee has, in any way that is seriously detrimental to the public interest, what are these three things?

  1. contravened RESA, the Regulations or the Rules;
  2. Breached a restriction or condition of his or her license; or
  3. done anything that constitutes wrongful takin or deceptive dealing

26

If the Superintendent were to find that a licensee has breached a restriction of their license, what would have to happen in order for the Superintendent to act? 

Only if the Council has not issued a notice of discipline hearing or urgent order.

27

Are the disciplinary powers for the Council and the Superintendent that same for a licensee who is found guilty of a serious detriment to the public interest.

Yes, but the Superintendent cannot discipline a licensee by way of a reprimand, require the licensee to complete a specific course or study or training, or prohibit the licensee from applying for a license for a period of time.

28

T/F

The Superintendent can make an urgent order or an order freezing property is the circumstances warrant

True

29

The Superintendent may make rules relating to the following 6 things

  • licenses and the issuing of licenses, 
  • conditions and restrictions applicable to licenses
  • relationships between and among brokerages and their related licensees;
  • continuing education requirements for licensees;
  • standard of conduct and business practice standards for licensees; and
  • disclosure and reporting by licensees to the Council and related record-keeping.

30

RESA outlines the purposes of the Foundation as being:

  1. to undertake and carry out real estate public and professional education, real estate law reform, real estate research and other projects intended for the public or professional good in relation to real estate activities; and 
  2. on written directions of the Minister of Finance, to undertake and carry out projects and activities the minister designates as being in the public interest.

31

How many members on the board of the Real Estate Foundation of BC?

5

32

where are the members on the board of the Real Estate Foundation of BC appointed from?

One from each the British Columbia Real Estate Association, the Council and the Real Estate Institue of BC

Two from the Minister of Finance

33

How long can a member of the Board of Governors on the Foundation serve?

3 year term and cannot serve for more than 6 consecutive years.

34

is the E&O Insurance mandatory for licensees?

Yes

 

35

How many directors on the E&O Insurance Corporation?

7

36

Where are the directors on the E&O Insurance Corporation appointed from?

4 = by the Council

3 = British Columbia Real Estate Association

 

37

What is the coverage amount for errors and omissions indemnity plan

limit per license of $1 million.

38

When damages are paid for E&O, how much of a deductible is payable by each licensee

$2000 for a licensee

plus (if both sued together)

$2000 for the brokerage employer

39

If a claim is dismissed at trial for E&O Insurance claim, how much would the licensee have to pay

The Indemnity Plan features first dollar defense costs, which means that there is no deductible payable if defense costs are incurred but he E&O Insurance Corp. but no indemnification is paid to the claimant.

40

What is the annual premium for E&O insurance

$350 per year

41

As with all insurance plans, where are exclusions to coverage. With respect to errors and omissions coverage, some of the more important exclusions are: (8)

  1. claims arising from acts or omissions which occurred prior to March 1, 1988;
  2. acting as an insurance agent or broker, builder, contractor, property developer, mortgagee, notary public or property appraiser, or court-appointed administrator;
  3. claims arising from providing real estate services in a transaction where an insured has or may acquire an ownership interest;
  4. disputes concerning commissions or fees;
  5. bodily injury to, or sickness, disease or death of, any pers;
  6. dishonesty, fraudulent, criminal or malicious acts or omissions;
  7. claims for discrimination arising from complaints of breaches of the Human Rights Code; and
  8. claims pursuant to the Residential Tenancy Act

42

Does E&O Indemnity Plan cover fines, sanctions, or penalties imposed on a licensee by the Real Estate Council?

NO

43

What is set up in the event that trust funds were misappropriated

The Compensation Fund Corporation

44

How is the Special Compensation Fund funded?

Initially, from a grant for the Council / Real Estate Foundation

and will also be funded by assessments for licensees

45