Practice Test 2(2) Flashcards by Gurpinder Deol

A brokerage can have more than one broker of record for efficiency.

True
False

False

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Petar has recently transferred brokerages to join a friend who is an associate at the new brokerage who described the broker as a “real change agent” in the industry. During his first three months of employment, he notices a variety of systems and processes that could be improved. Petar is concerned about how to approach the situation. Which of the following is the best approach to making the systemic change? (Select one)

Approach the broker with the suggestions, and support the decisions made.

Identify the process owners, create a project charter and manage the process owners to complete the projects.

Make the changes and then announce them.

Talk about the changes in the breakroom, suggesting that if the broker were smart, he’d have already made them.

Approach the broker with the suggestions, and support the decisions made.

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Which of the following is the required action by a brokerage if a trust fund is found to be either negative in balance or short funds? (Select one)

No action is required by the brokerage.

The broker notates the funding difference to the Canada Mortgage and Housing Corporation (CMHC) who will cover the shortage during investigation.

The brokerage must immediately report the incident to RECA

The brokerage must immediately use brokerage funds to cover the negative balance or shortage.

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This license holder is responsible for the brokerage’s compliance with the Real Estate Act (REA) and other legislation that governs privacy, competition, and money laundering. (Select one)

The broker

Assessor

Associate Broker

Associate

The broker

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True or False: The Real Estate Act Rules outline procedures for maintaining and securing electronic records, including maintaining the programs required for viewing and printing electronic records.

True

False

True

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Charles Wellington is a well-established real estate professional who has been conducting residential real estate transactions for 20+ years. In his small community of just 4,000 people, he’s the “go-to-guy” for residential real estate. His son, Connor is interested in moving to Calgary for school, and in the evenings acting as a Commercial Real Estate professional. He has dreams of paying off his university studies and dreams of big commissions on high profile projects. He sees his father complete 10-12 real estate deals each year, and is convinced it’s just a matter of joining a brokerage and letting the money flow in!

Excited about his son’s interest in real estate licensing, Charles pulls Connor aside to have a chat about some things that Connor may not have considered about commercial real estate. From the following list, identify the statements Charles could share that apply to commercial real estate transactions. (Select ALL that apply)

Commercial transactions are usually far less complex than residential, resulting in deal making that happens in a matter of days between interest and closing.

Most client contact is after business hours

Most client contact is usually during business hours.

Most of the agent’s time presenting to a client is spent on the sales process.

Once a transaction is agreed upon, there is often long periods of time between an agreement and receipt of commission.

There is heavy reliance on MLS® services.

There is more reliance on personal networking.

There is often extensive effort leading to the listing and sale of a property.

While there is an opportunity for a range of projects, including high profile projects, buyers and sellers often seek experienced agents for such high-cost transactions.

Most client contact is usually during business hours.

Once a transaction is agreed upon, there is often long periods of time between an agreement and receipt of commission.

There is more reliance on personal networking.

There is often extensive effort leading to the listing and sale of a property.

While there is an opportunity for a range of projects, including high profile projects, buyers and sellers often seek experienced agents for such high-cost transactions.

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Which of the following rights are considered part of Fee Simple Property Rights?” (Select ALL that apply)

To control (allows determining others’ interests or uses for the property)

To dispose of (right to lease, sell, give or hold the property)

To enjoy (use of the property without outside interference)

To enterprise (the freedom to market, sell, or derive income from commercial activity regardless of property type)

To exclude (right to refuse others’ interest or uses for the property)

To jurisdiction (Provincial laws do not apply to any actions on owned property)

To possess (allows the occupation of the property)

To control (allows determining others’ interests or uses for the property)

To dispose of (right to lease, sell, give or hold the property)

To enjoy (use of the property without outside interference)

To exclude (right to refuse others’ interest or uses for the property)

To possess (allows the occupation of the property)

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Which of the following requirements and responsibilities apply to a brokerage? (Select ALL that apply)

The brokerage must have a trust account for the deposit of funds received on behalf of its clients.

The brokerage may allow person(s) registered to another brokerage to conduct transactions on its behalf.

The brokerage must certify they will never make an electronic transfer using internet banking from an account in which money is held in trust.

The brokerage must clearly indicate the name of the brokerage in all transactions, including advertisements.

The brokerage must establish adequate policies and procedures for the maintenance and protection of personal and confidential information.

The brokerage must have a clearly visible sign with the name of the brokerage within 15 meters of the entrance.

The brokerage must have a trust account for the deposit of funds received on behalf of its clients.

The brokerage must clearly indicate the name of the brokerage in all transactions, including advertisements.

The brokerage must establish adequate policies and procedures for the maintenance and protection of personal and confidential information.

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Which of the following real estate markets is characterized by a slowing of sales and prices beginning to level or fall, including rents? (Select one)

Contraction

Expansion

Pek

Trough

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True or False: If information changes have occurred, licensees are only obligated to report the changes to the Registrar at the annual re-licensing period.

True

False

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Joan has recently received her license as a real estate professional in Alberta. She knows she is accountable to both a brokerage and for complying with the legislation as determined by the government and RECA. Joan is curious about what actions may result in the cancellation or suspension of authorization as a result of a conduct proceeding.

Carefully read each of the following statements. Select all statements that could be reasons for a cancelation or suspension of authorization. (Select ALL that apply)

Being completely honest in a licence application.

Denying access to a RECA auditor or investigator.

Failure to file or submit required records or make them available for RECA review.

Failure to pay a required fee, penalty, fine, etc. or failing to comply with an order of a hearing or appeal panel or court of law.

Fully complying with a term, condition, or restriction attached to their licence.

Joan’s personal failure to fund a trust shortage at the brokerage.

Breaking the Education Code of Conduct for learners.

Denying access to a RECA auditor or investigator.

Failure to file or submit required records or make them available for RECA review.

Failure to pay a required fee, penalty, fine, etc. or failing to comply with an order of a hearing or appeal panel or court of law.

Breaking the Education Code of Conduct for learners.

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Alberta became a province in 1905. Since that time, real estate has gone through booms and recessions. The professionalization of real estate in Alberta began in the 1920’s. During the 1920’s, Alberta’s government passed which legislation requiring licences to “act as a real estate agent or real estate salesman in the province?” (Select one)

The Calgary Real Estate Board

The Edmonton Real Estate Association

The Indian Act

The Real Estate Act

The Real Estate Agents Licensing Act

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Joaquim has discovered the trust account for the brokerage is short by $1,800. A quick check of the ledger shows that a $200 disbursement was accidentally charged as a $2000 disbursement. He moves brokerage funds to cover the difference while the money is recovered.

True or False: Joaquim should immediately report the shortage to the Registrar.

True

False

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True or False: To obtain a license, or re-certification of a license, an associate or associate broker must be registered to a brokerage.

True

False

True

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You recently met with a brokerage and made your decision to join but the broker has not completed the registration yet.

True or False: Because you know what brokerage you will be with, it is acceptable to announce yourself as a real estate associate to the public, as long as you do not deal in or trade in real estate transactions.

True

False

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True or False: RECA regulates condominium managers separately from residential property managers.

True

False

True

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Which of the following is NOT a way RECA creates consumer trust and confidence in the real estate industry? (Select one)

Promoting the integrity of the industry.

Providing services that enhance and improve the industry.

Publishing the top brokerages, and their earnings, in the monthly newsletter.

Setting and enforcing standards of conduct and professional development requirements for the industry to protect the consumer.

Publishing the top brokerages, and their earnings, in the monthly newsletter.

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True or False: If a trust shortage occurs, without being immediately covered by the brokerage, the brokerage must report the shortage to RECA.

True

False

True

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Which of the following licences are governed by RECA? (Select ALL that apply)

Commercial driver’s licence

Commercial Landlord

Mortgage associate

Mortgage broker

Property Manager

Real estate associate

Real estate broker

Residential Landlord

Mortgage associate

Mortgage broker

Property Manager

Real estate associate

Real estate broker

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Alaya and Hazeem have consistently been told by their friends that they should start selling their food! Their Chicken and beef Kababs are particular favourites whenever they host. They recently received an inheritance and are interested in finding a location where they can share their passion with people. They do not intend to open a restaurant, but are interested in teaching people to cook the food they love. They believe there is enough demand to create a successful business. At the very least, they think they should find a property with living quarters but has a professional kitchen!

What kind of realtor should Alaya and Hazeem contact to discuss their options? (Select one)

Commercial

Rural

Residential

Property Management

Commercial

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Which of the following characteristics is best described as “different because of its location, features and geography?” (Select one)

Chattel

Distinguished

Immobile

Indestructible

Unique

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Which of the following powers are granted to the Registrar, and investigators appointed by the Registrar, during an investigation? (Select ALL that apply)

Cancel or suspension of authorization of a licensee.

Impose sentencing of jail time.

Require licensees to produce records or make records available for RECA review

Review of compliance to any term, condition, or restriction attached to a licensee’s license.

Submit requests for information to the licensee or investigated party (such as a brokerage or independent contractor).

Cancel or suspension of authorization of a licensee.

Require licensees to produce records or make records available for RECA review

Review of compliance to any term, condition, or restriction attached to a licensee’s license.

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When applying for and obtaining a Certified Criminal Record Check (CCRC), to whom is the fingerprint and information sent for the background check? (Select one)

Canadian Mortgage and Housing Corporation (CMHC)

Canadian Real Estate Association (CREA)

Minister of Service Canada

Real Estate Council of Alberta

Royal Canadian Mounted Police (RCMP) in Ottawa

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True or False: Self-regulation in the industry enables the industry to hold its own disciplinary investigations and administer sanctions.

True

False

True

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Which of the following best describes “rent.” (Select one) Consideration provided to a landlord for services including the allowance of occupancy, financial remuneration, and occupational liabilities associated with a property. Payment for services enabling a tenant (occupier) to own all rights, privileges, and powers associated with a parcel of real property and the minerals contained therein. Payment or some other consideration for the right to use and possess the property for a specific period of time. The person occupying a tenancy.

Payment or some other consideration for the right to use and possess the property for a specific period of time.

True or False: A brokerage must make an annual accounting of the trust account to RECA. True False

True

The Real Estate Act requires self-regulation of the real estate industry. From the list below, select the statement that best reflects the government's real estate self-regulation objectives in the province of Alberta. (Select one) Allow those within the industry to use their specialized knowledge to regulate the industry and be responsible for consumer protection. Enable brokerages to manage all disciplinary hearings and authorize licensing to be generated by the broker. Individual licensees self-report their violations to their brokerage, and accept all disciplinary action without complaint. Publish policies to ensure consumers feel that Alberta’s real estate industry provides service in the best interest of the public

Allow those within the industry to use their specialized knowledge to regulate the industry and be responsible for consumer protection.

Which of the following are characteristics of a “real estate bubble?” (Select ALL that apply) Excessive buyer confidence convinces buyers that they will be able to sell at a higher price in the future. Prices are driven up by an increase in demand with a limited supply. Prices are equivalent or lower than they are at a “trough” period of the real estate cycle. Spurred on by emotional buying and the feeling of scarcity. The price of housing rises at a rapid and unsustainable pace.

Excessive buyer confidence convinces buyers that they will be able to sell at a higher price in the future. Prices are driven up by an increase in demand with a limited supply. Spurred on by emotional buying and the feeling of scarcity. Correctly checked The price of housing rises at a rapid and unsustainable pace.

Residential real estate professionals have many primary tasks. Often acting in multiple capacities for their clients. Review each of the following lists, and select the list that contains the most accurate accounting of the “Role of a Residential Licensee”. (Select one) Calculating investment payoff rates, calculating land-use statistics, showing properties, managing offers, and selling real property. Greeting new clients at a brokerage, connecting the client to an available associate, scheduling home visits on behalf of the client and associate, working with Service Alberta to secure documentation, and tracking records. Investigating client listings, connecting clients to mortgage brokers, showing homes, and closing the deal. Marketing the brokerage, qualifying prospects for follow-up, validating licensee applications, managing records, working with Lenders to secure best rates on behalf of the customer. Prospecting, Qualifying, Listing, Showing, Offer Preparation, Offer Negotiation, Follow-up.

Prospecting, Qualifying, Listing, Showing, Offer Preparation, Offer Negotiation, Follow-up.

Which of the following occurs when the demand for properties outweighs the availability of properties? (Select one) Market economy Market equilibrium Market shortage Market surplus

Market shortage

Real estate purchase contracts are legally binding documents between a buyer and a seller with built-in remedies for failure to meet any of their stated terms. For this reason, compensation for any damages resulting from the unexpected collapse of a real estate transaction may be pursued through civil litigation. These claims include which of the following? (Select ALL that apply) Claim of costs associated to restore title or regain possession. Full brokerage compensation during the time of contract. Legal claims on deposits. Monetary provable damages. Payment of reasonable costs to pursue legal redress.

Claim of costs associated to restore title or regain possession. Legal claims on deposits. Monetary provable damages. Payment of reasonable costs to pursue legal redress.

It is important to regulate your professional conduct whether or not you are subject to outside monitoring. Your obligation to behave in a professional manner does not end just because you might think no one is watching you. From the following list of conduct or actions, select all those that are conduct “deserving of a sanction.” (Select ALL that apply) Arrival delays due to construction, accidents, or weather. Completing forms and contracts incorrectly. Depositing trade money into your personal accounts. Disclosure of your political preference. Failing to disclosure your religious beliefs. Failing to provide required documentation to your brokerage in a timely manner. Making errors in professional conduct. Misrepresentation. Offering inducements or incentives personally apart from the brokerage.

Completing forms and contracts incorrectly. Depositing trade money into your personal accounts. Failing to provide required documentation to your brokerage in a timely manner. Making errors in professional conduct. Misrepresentation. Offering inducements or incentives personally apart from the brokerage.

In Alberta, if a person dies and they are the only person on the residential property title, it is possible for the spouse to have a “life estate interest” in the property. Dower interest means they have a legal right to the property as the spouse of the title holder. There are three conditions which ALL must be met for dower rights to apply. Which of the following conditions are requirements? (Select THREE) There is only one name on the property title. The person on the property title is legally married (there is no divorce or common law marriage). The last Will and Testament, commonly known as the "Will", does not designate another party as being an heir to the property. Either of the legally married parties have spent at least one night sleeping in the home, either as a couple or as individuals.

There is only one name on the property title. The person on the property title is legally married (there is no divorce or common law marriage). Either of the legally married parties have spent at least one night sleeping in the home, either as a couple or as individuals.

An indemnification clause states that where the client provides information to the brokerage which the brokerage relies upon as accurate and truthful, the client (rather than the brokerage) bears the liability if that information turns out to be inaccurate or false. A client tells an agent that they are interested in homes between $600,000 and $750,000. The agent inquires about how they will manage the payment for a house (mortgage, cash, etc.). The client explains they have saved enough money, and assures the agent they are qualified for a mortgage as high as $750,000. The agent shows multiple homes in that price range, and the client falls in love with one of them. It is priced at $729,000. They make an offer on the home at $715,000 that is accepted by the sellers. During the mortgage brokerage process, the client does not qualify for the loan, because their income does not support such a high mortgage. Once the client learns this, they are FURIOUS with the agent for showing them a home that is outside of their own capacity to buy, announcing to everyone within earshot at the brokerage that the agent has “led them on, for weeks!” The client says that the brokerage is at fault. The brokerage is NOT liable in this situation, due to the indemnification clause in the written service agreement. Which of the following client obligations were violated, that prevent the brokerage (and agent) from being responsible for the outcome? (Select one) Communicating and cooperating with the agent and brokerage. Discussing with the agent any specific information they want about a property. This may include information the seller does not have to disclose, or issues that may prevent the client from buying a property. An indemnification clause states that where the client provides information to the brokerage which the brokerage relies upon as accurate and truthful, the client (rather than the brokerage) bears the liability if that information turns out to be inaccurate or false. A client tells an agent that they are interested in homes between $600,000 and $750,000. The agent inquires about how they will manage the payment for a house (mortgage, cash, etc.). The client explains they have saved enough money, and assures the agent they are qualified for a mortgage as high as $750,000. The agent shows multiple homes in that price range, and the client falls in love with one of them. It is priced at $729,000. They make an offer on the home at $715,000 that is accepted by the sellers. During the mortgage brokerage process, the client does not qualify for the loan, because their income does not support such a high mortgage. Once the client learns this, they are FURIOUS with the agent for showing them a home that is outside of their own capacity to buy, announcing to everyone within earshot at the brokerage that the agent has “led them on, for weeks!” The client says that the brokerage is at fault. The brokerage is NOT liable in this situation, due to the indemnification clause in the written service agreement. Which of the following client obligations were violated, that prevent the brokerage (and agent) from being responsible for the outcome? (Select one) Communicating and cooperating with the agent and brokerage. Discussing with the agent any specific information they want about a property. This may include information the seller does not have to disclose, or issues that may prevent the client from buying a property. Giving the agent enough personal and financial information so they can assess the client’s ability to buy property that matches their search criteria. Giving the agent or brokerage copies of any offers of which they are not aware, that the client makes or receives for properties that match the search criteria. Unless they sign a buyer representation agreement with another brokerage that begins after their agreement ends. Telling the agent about inquiries the client makes or receives about purchases that affect their agreement. Giving the agent or brokerage copies of any offers of which they are not aware, that the client makes or receives for properties that match the search criteria. Unless they sign a buyer representation agreement with another brokerage that begins after their agreement ends. Telling the agent about inquiries the client makes or receives about purchases that affect their agreement.

Giving the agent enough personal and financial information so they can assess the client’s ability to buy property that matches their search criteria.

True or False: one of the ways Joint tenants and tenants-in-common differ is in who receives the property rights if one of the persons on the title dies. TRUE FALSE

True

Jeffrey is looking into hiring a real estate professional to sell several of his properties. Jeffrey is a very private person, and really doesn’t like anyone learning about his personal information. He works very hard to keep his “digital footprint” at near zero. He understands he’ll have to provide some information to sell his properties, but wants to keep the distribution of his information to an absolute minimum, preferably, with just one person. Which type of agency contract allows Jeffrey to have a single real estate professional act as his agent, with protections in place to prevent his personal information from being accessed by other agents at the brokerage? (Select one) Common law agency relationship. Customer relationship. Designated agency relationship. Designated customer relationship. De facto agency relationship.

Designated agency relationship.

Which of the following events would result in a breach of an agency relationship by the agent? (Select ALL that apply) Failure to disclose a conflict of interest. The agent fraudulently presents information making it look like the deal is a bargain. The fees and commissions earned are not fully disclosed in the written service agreement. The real estate professional requests general advice from the broker on how to legally proceed with a financial situation the client has found themselves in. The real estate professional shares consented to private information to a lender about client in order to secure the best possible rates for the client. The real estate professional shares the client’s property information with prospective buyers. Favoring a customer over a client in a transaction

Failure to disclose a conflict of interest. The agent fraudulently presents information making it look like the deal is a bargain. The fees and commissions earned are not fully disclosed in the written service agreement. Favoring a customer over a client in a transaction

Identify all of the following that apply to common law agency relationships. (Select ALL that apply) The client is represented by the real estate brokerage and by extension all associates of the brokerage. Associates of the brokerage are assumed to have deemed knowledge of all brokerage clients. The real estate brokerage puts barriers in place to isolate client information to only their own signed-associate (agent). An individual real estate professional can act as the client’s agent. Clients receive support for buying and selling real estate.

The client is represented by the real estate brokerage and by extension all associates of the brokerage. Associates of the brokerage are assumed to have deemed knowledge of all brokerage clients. Clients receive support for buying and selling real estate.

Trust and confidence helps to ensure a client that you are doing everything you can to put their interests first. Which of the following helps to build trust or confidence between you and your client? (Select ALL that apply) Being available when needed. Being open and approachable. Supplying their name to third-party advertisers as a surprise value to the customer. Supporting the client's best interests through the process of buying or selling a home. Sharing another client’s humiliating experience to build rapport. Taking time to answer their questions and support them with your expertise. Talking about all the bad clients you’ve ever had, so they know you are open with your communication. Giving best advice for the client, even when it is against the brokerage ir agents interests

Being available when needed. Being open and approachable. Supporting the client's best interests through the process of buying or selling a home. Taking time to answer their questions and support them with your expertise. Giving best advice for the client, even when it is against the brokerage ir agents interests

Self-regulation in the industry means that industry professionals have an obligation to monitor and report issues that are found. Reporting these issues to your broker and, when necessary, to RECA can help protect the industry. Issues can include, but are not limited to which of the following? (Select ALL that apply) Dishonest transactions, language, or dealings. Fraudulent actions by licensees. Individuals acting as licensees without a licence. Documenting written service agreements (WSAs) Creating brokerage policies and procedures.

Dishonest transactions, language, or dealings. Fraudulent actions by licensees. Individuals acting as licensees without a licence.

True or False: RECA has the authority to recommend the prosecution of licensees in the courts. TRUE FALSE

True

Krystal, the client, has been talking with Jonathan about listing her house. She decides to hire Jonathan as her real estate agent and will list through him. Jonathan has made it clear to Krystal that he works in a designated agency brokerage, and while he is affiliated with the brokerage, only Jonathan will be supporting Krystal and her listing. Under this agreement, the brokerage has certain responsibilities to practice designated agency. Which of the following requirements must be met by the brokerage? (Select ALL that apply) Use of specific forms designed for designated agency. All agents within the brokerage must be licensed in all four areas authorized by RECA. Information barriers must be in place between real estate professionals within the same brokerage, as it is between brokerages. Brokerage must advise clients that it operates on a designated agency model. None of the above.

Use of specific forms designed for designated agency. Information barriers must be in place between real estate professionals within the same brokerage, as it is between brokerages. Brokerage must advise clients that it operates on a designated agency model.

What are the ways that licensees protect and promote public confidence in the industry? (Select ALL that apply) Acting with professionalism. Behaving ethically. Consistently working with clients to meet their needs and close transactions. Donating a portion of your commissions to RECA’s public campaign for advertising top brokerages. Follow the policies and procedures provided by the brokerage with whom the licence holder is associated. Follow the requirements and responsibilities for licensees, as found in the Real Estate Act Rules. Funding AREF with personal contributions.

Acting with professionalism. Behaving ethically. Consistently working with clients to meet their needs and close transactions Follow the policies and procedures provided by the brokerage with whom the licence holder is associated. Follow the requirements and responsibilities for licensees, as found in the Real Estate Act Rules.

True or False: Real estate professionals have a fiduciary obligation to customers. TRUE FALSE

False

In a Judicial Sale, there are some distinct differences that can either be an advantage or disadvantage to potential buyers. For example, it is true that access to the property is typically limited in a judicial sale. The following list contains statements about judicial sales that are either true or false. Select all the TRUE statements. (Select ALL that apply) A clear title and estoppel are granted. Condominium documents are readily provided. The arrears and special assessment levies are paid. The buyer has a choice of possession date. The condition of property is typically less than optimal, due to occupier neglect. The property has all potential problems disclosed.

A clear title and estoppel are granted. The arrears and special assessment levies are paid. The condition of property is typically less than optimal, due to occupier neglect. The property has all potential problems disclosed.

Nancy has signed a service agreement with you to provide detailed local listings to them in return for a fee. As part of the agreement, you will also provide your opinion on which of the listings is likely to be overpriced for the area, and which represents a bargain. True or False: Nancy is considered a “Customer” (You are NOT her agent). TRUE FALSE

False

Which of the following circumstances require probate to facilitate the sale of real estate? (Select ALL that apply) A will has not yet been validated or finalized. In cases where the individual died intestate (meaning without a will), the administrator is working to prove their authority to administer the estate. When the agent listing the property is currently on probation. Where the deceased has a living, legally married spouse, who also lived in the home. Verification that the maker of the will has died, that they were the author of that will, and the document is legally valid.

A will has not yet been validated or finalized. In cases where the individual died intestate (meaning without a will), the administrator is working to prove their authority to administer the estate. Verification that the maker of the will has died, that they were the author of that will, and the document is legally valid.

What is the primary way RECA interfaces with the licensees to protect and promote public confidence in the industry? (Select one) Brokerage conferences hosted by RECA. RECA investigations. RECA mandated pre-licensing training courses. RECA newsletters.

RECA investigations.

True or False: A Judicial Sale is forced by the courts as an act towards financial recovery for a third party. TRUE FALSE

True

Evaluate each of the following fiduciary obligations, and determine if it applies to a Sole Agency relationship with a BUYER. (Select ALL that apply) Confidentiality. Full accounting. Full disclosure. Hold funds in a private account for the buyer. Obedience to lawful instructions. Reasonable care and skill. Signatory authorization for all real estate related transactions Undivided loyalty.

Confidentiality. Full accounting. Full disclosure. Obedience to lawful instructions. Reasonable care and skill. Undivided loyalty.

Anita and Jorge are working on a new marketing strategy for the brokerage. The broker comes by the conference room and reminds them to be particularly aware of Canada’s Anti-Spam Legislation (CASL), when considering their marketing strategy. Consent is NOT required to send marketing materials for which of the following groups? (Select the BEST answer) Potential Clients Active Clients Former Clients All of the above require consent. None of the above require consent.

All of the above require consent.

Theodora is working as an associate at ABBA Brokerage. She has been tasked by the broker to go through and alphabetize all the prior clients in a category of clients that is listed “Consent only for transaction”. She notices that each of the clients has a signature page that authorizes the brokerage to ONLY use the client’s information for the purposes of the transaction. Theodora has a great idea that she could call each of the clients (some of whom haven’t worked with the brokerage in several years), and ask for referrals. She approaches her broker to ask permission. The broker tells her, “No, the clients have not authorized that. Under PIPEDA’s Fair Information Principles we cannot contact them for referrals.” Theodora asks which part of PIPEDA restricts the contact. The broker should inform Theodora the appropriate principle. Which principal prevents Theodora from using the customer contact information for referrals? (Select one) Accountability Challenging Compliance Identifying purposes Individual Access Limiting Collection Limiting Use, Disclosure, Retention

Limiting Use, Disclosure, Retention

The Competition Act is legislation that is designed to ensure small and medium-size businesses have an equitable opportunity to participate in real estate transactions. TRUE FALSE

True

Which of the PIPEDA’s Fair Information Principles is described as when a person gives permission to an organization to possess personal information? (Select one) Accountability Accuracy Consent Challenging Compliance Identifying purposes Individual Access Limiting Collection Limiting Use, Disclosure, Retention Openness Safeguards

Consent

The Office of the Information and Privacy Commissioner (OIPC) is responsible for monitoring how PIPA, HIA, and FOIP are administered. The OIPC has a 3-pronged approach, which defines the roles of OIPC. The list below contains both the roles and the powers of OIPC. From the list, select the three roles. (Select THREE) Advising an organization to provide or update information. Advocating for Albertans regarding access to information and privacy rights. Educating and engaging the public about PIPA. Ensuring the relevant organizations and bodies uphold their respective privacy legislations, PIPA, FOIP, and Health Information Act (HIA). Hiring someone to research issues about the purposes of PIPA and implement them. Making an order to an organization to process personal information that complies with PIPA. Providing fair, independent, and impartial reviews on privacy matters. Reviewing an organization’s privacy impact assessment.

Advocating for Albertans regarding access to information and privacy rights. Ensuring the relevant organizations and bodies uphold their respective privacy legislations, PIPA, FOIP, and Health Information Act (HIA). Providing fair, independent, and impartial reviews on privacy matters.

Real estate associates have a responsibility to keep client information protected. Which of the following are included in the individual real estate associate’s responsibilities? (Select ALL that apply) Make a reasonable effort to ensure the information is accurate. Notify the Privacy Commissioner of any incident involving loss, unauthorized access, or disclosure of personal information (breaches)where a reasonable person would consider there is a real risk of significant harm to an individual because of that breach. Prepare and implement a compliance program consisting of appointing a compliance officer, maintaining current written compliance policies and procedures, training, and risk assessment. Protect personal information by making sure they have reasonable security measures against risks.

Make a reasonable effort to ensure the information is accurate. Notify the Privacy Commissioner of any incident involving loss, unauthorized access, or disclosure of personal information (breaches)where a reasonable person would consider there is a real risk of significant harm to an individual because of that breach. Protect personal information by making sure they have reasonable security measures against risks.

The Competition Act prohibits representations made to promote a product, service, or business interest that are false or misleading. Which of the following does this apply? (Select ALL that apply) Marketing Advertising Social Media Oral Claims

Marketing Advertising Social Media Oral Claims

When an organization no longer needs personal information for legal or business purposes, what should the organization do with the personal information? Destroy or render the records as non-identifying. Move the records to a permanent archive with secure access only. Nothing. There is no requirement regarding personal information that no longer has a purpose. Take the personal identification and make contact, to indefinitely require the data.

Destroy or render the records as non-identifying.

A false or misleading claim is in violation without regard to whether or not it was given knowingly. TRUE FALSE

True

A false or misleading claim is in violation without regard to whether or not it was given knowingly. TRUE FALSE

True

All electronic newsletters and marketing material need to have a clear "unsubscribe" capability. TRUE FALSE

True

Which of the following are common information barriers that brokerages use to protect client information? (Select ALL that apply) Areas with sound mitigation where private phone conversations can be made Dedicated server room with limited physical access. Limiting access by associates to client information without a demonstrated need. Locking cabinets for physical access. Point of Sale terminals (debit machines) left in plain sight at all times, day or night. Regular destruction plans for personal information that is no longer required to be retained.

Areas with sound mitigation where private phone conversations can be made Dedicated server room with limited physical access. Limiting access by associates to client information without a demonstrated need. Locking cabinets for physical access. Regular destruction plans for personal information that is no longer required to be retained.

Section 45 of the Competition Act states that it is a criminal offense to conspire, agree, or arrange with a competitor in regard to a variety of business practices that are “anti-competitive.” All but one of the following business practices are prohibited by Section 45 as criminal offenses. From the list below, select the action that is NOT prohibited by Section 45 as a criminal offense. (Select one) Allocate sales, territories, customers or markets for the production or supply of the real estate services or products. Fix, maintain, increase or control the price for the commission splits, discounts, and rebates (not including negotiations on a particular sale). Fix, maintain, control, prevent, lessen or eliminate the production or supply of the real estate services or products. Independently determine commission rates and services, including discounts (pricing), the area worked, the clients served, and what services offered. Limitations on advertising, access to services, boycotting competitors, customers, or other participants.

Independently determine commission rates and services, including discounts (pricing), the area worked, the clients served, and what services offered.

To determine if the claim was false or misleading material, a court would consider whether an average consumer would likely be influenced into obtaining the product or service. TRUE FALSE

True

Which of the PIPEDA’s Fair Information Principles indicates that a person has the right to know how the organization collects and protects their information, AND has the right to address any questions or concerns and understand the organization’s policies and procedures? (Select one) Accountability Accuracy Consent Challenging Compliance Identifying Purposes Individual Access Limiting Collection Limiting Use, Disclosure, Retention Openness Safegaurds

Accountability

A municipality has zoned an area as commercial-urban renewal, with the goal of bringing in more business to the city center. Which of the following land use planning reason is met with this type of designation? (Select the BEST answer) Aesthetics. Economic development. Environmental sustainability. Providing adequate infrastructure for properties. Public health. Reduction of conflicts between property owners.

Economic development.

Reginald is working with a client to build a property on a parcel of land that has recently been zoned for commercial development. The client is looking to secure a permit that confirms that the use of the property complies with the municipalities land use plan and the associated land use bylaws. What type of permit does Reginald’s client need? (Select one) Building permit. Development permit. Improvement authorization permit. Property construction permit. Setbacks and easements permit.

Development permit.

Secondary suites (self-contained units within other units) that do not have a secondary occupancy permit are considered illegal suites. Which of the following reasons are why a property manager should not be involved with illegal secondary suites? (Select ALL that apply) Conform to current zoning bylaws. Constructed without proper permits or inspections. Is in an area where secondary suites are NOT allowed in the land use zoning. Meets current building codes. Cannot be legally rented or advertised since a licensed property manager cannot participate in illegal activity

Constructed without proper permits or inspections. Is in an area where secondary suites are NOT allowed in the land use zoning. Cannot be legally rented or advertised since a licensed property manager cannot participate in illegal activity

Which of the following is described as “the smallest level of government in the Canadian political system, serving local populations.” (Select one) Dormer. Municipality. Oriented Strand Board (OSB). Township. Settlement.

Municipality.

Candace has been operating a small boutique in the downtown area for about 3 years. The back room of the boutique has a door accessible to the outside alleyway, and connects to the bathroom, office with a window, and break area with kitchen facilities. Candace notices that it has all the amenities required to be a functional “apartment,” without even having to alter the property. The backspace even has its own fire suppression system, air conditioning, and heating! She puts up a lock on the backroom door and contacts a property management company to rent out the apartment to local college students. The property management company inspects the property and declines to service Candice with the statement, “your ‘apartment’ is not legal, because it’s part of the boutique. Given the information above, why is the apartment not a legal secondary suite? (Select the BEST answer) The boutique is not zoned for residential use. Does not meet building codes. Does not have enough bedrooms. Does not have separate ventilation systems. Shares a wall with the boutique.

The boutique is not zoned for residential use.

Situational awareness includes which of the following? (Select ALL that apply) Knowing what areas of a property you are showing are potential safety hazards. Knowing what items in the immediate area are safety hazards. Knowing what day of the month commissions are paid. Monitoring who is around you, and where they are in location to you. Paying attention to who you are talking to, what irritates them, and what calms them. Reading at least one business book a month. Recognizing body language of others. Securing insurance to reduce risk.

Knowing what areas of a property you are showing are potential safety hazards. Knowing what items in the immediate area are safety hazards. Monitoring who is around you, and where they are in location to you. Recognizing body language of others.

Illegal Cannabis grow-operations, or "illegal grow-ops", create an indoor nursery for illegally cultivating cannabis. This is not the same as a resident owning and cultivating four or less cannabis plants, which is legal in Canada. To establish an illegal grow-op, a building's systems may have been altered, compromising the integrity of the building and creating safety, health, and fire hazards. Which of the following are signs or characteristics that a property may have been used as a grow-op? (Select ALL that apply) Condensation on the inside of windows. Equipment either discarded or hauled away, including fertilizers, containers, pots, wiring, PVC pipe, C02 tanks, and fuel tanks. Hardwood flooring. Odour similar to rotten cabbage or skunk. Primary bedroom on the main floor. Roof free from snow, when surrounding properties are still snow covered. Unusual electrical hookups. Windows covered with black plastic, foil, or dark, heavy curtains. Windows with vertical blinds.

Condensation on the inside of windows. Equipment either discarded or hauled away, including fertilizers, containers, pots, wiring, PVC pipe, C02 tanks, and fuel tanks. Odour similar to rotten cabbage or skunk. Roof free from snow, when surrounding properties are still snow covered. Unusual electrical hookups. Windows covered with black plastic, foil, or dark, heavy curtains.

Julie and Patrick are looking to sell their home through Abbot Brokerage. They have signed a seller agreement with Paul, a real estate agent. When preparing to sell their home, Julie and Patrick know they will need to leave the premises when Paul is showing the property to potential buyers. Paul knows that Julie and Patrick have never sold a home before (this is their first house), and he provides to them a list of actions they can take to improve the safety of the showing. Review the following list and select each item that is appropriate to share as a best practice safety precaution. (Select ALL that apply) Advise to never show the home alone (especially if someone comes to the door asking to see the property). Not all individuals are actually interested in the property. Always let someone know where you are going and when you will be back when showing the home. Do not leave out materials that could contribute to identity theft. Put away any extra keys or garage openers Leave all computers, tablets, and phones unlocked for full access, in case the person viewing the home needs to look something up. Provide the person viewing the home with your name, address, phone number, a copy of each utility bill, your mother’s maiden name, and your T-4 statements from the prior 3 years. Secure or remove all valuables.

Advise to never show the home alone (especially if someone comes to the door asking to see the property). Not all individuals are actually interested in the property. Do not leave out materials that could contribute to identity theft. Put away any extra keys or garage openers Secure or remove all valuables.

True or False: Foamed-in-place insulation has a higher insulating value (R-value) than fiberglass batting. TRUE FALSE

True

Henry is known for his willingness to show homes late into the evenings; in order to give potential clients a chance to see the property at a time that is convenient to their work and home-life schedules. Which of the following best practices are recommended for Henry when he is showing a home? (Select ALL that apply) Be onsite with another person or friend. Wear driving gloves. Carry a cell phone at all times. Only show homes whose owners have pet dogs or cats. Do not enter rooms or spaces that could result in Henry being trapped. Keep all interior and exterior lighting on. Let someone know the schedule of the showing, and check in regularly. Wear a winter coat while inside.

Be onsite with another person or friend. Carry a cell phone at all times. Do not enter rooms or spaces that could result in Henry being trapped. Keep all interior and exterior lighting on. Let someone know the schedule of the showing, and check in regularly.

Consumers hold industry professionals to a high standard of professionalism. Which of the following statements BEST describes “acting with professionalism?” (Select one) Behaviours that are always in the client’s best interest. A standard of conduct based on ethics to produce a high quality of work and communication with any party when providing services. A strong sense of self-identity that enables real estate professionals to have “grit” when working, and put aside personal obligations on behalf of the client. Actions that are legal and are in the best interest of the licensee.

A standard of conduct based on ethics to produce a high quality of work and communication with any party when providing services.

Which of the following is NOT considered part of the Information Technology (IT) systems at a brokerage? (Select one) Client Relationship Management (CRM). Electronic Signing platforms. Forms Software. MLS® Systems. Mobile phones and devices. Office furniture. Office suite software. Showing Software.

Office furniture.

What information must be discussed with clients who receive multiple offers? (Select ALL that apply) Amount (Price) of the offer. Personal letters or information supplied by the potential buyer. The buyer’s bottom-line price. The buyer’s nationality. The buyer’s terms and conditions. Timing of the offer (time condition on acceptance). Options available to them (accept, reject, counter-offer)

Amount (Price) of the offer. Personal letters or information supplied by the potential buyer. The buyer’s terms and conditions. Timing of the offer (time condition on acceptance).

Hank and Otto have been watching some of their colleagues use rather non-inclusive language in the workplace and it has happened multiple times around clients. Once or twice, they’ve seen the clients glance over when the language is particularly noticeable. Which of the following are steps that Hank and Otto might take to proactively address the behaviors that might be excluding others? (Select ALL that apply) Bring the issue to the attention of the broker at the brokerage. Ignore the problem and hope it goes away. Note the problem to the other colleagues in a professional and non-confrontational way. Plan a team meeting and cover the inclusive language portion of the real estate professionals training. When the colleagues do it again, call them out abruptly and with vigor to shame them into inclusiveness.

Bring the issue to the attention of the broker at the brokerage. Note the problem to the other colleagues in a professional and non-confrontational way. Plan a team meeting and cover the inclusive language portion of the real estate professionals training.

RECA’s Good Character Policy references five key areas: Respect for the Rule of Law, Honesty, Governability, Financial Responsibility, Professionalism. Which area is failed by a professional who intentionally withholds disclosures? (Select one) Respect for the Rule of Law Honesty Governability Financial Responsibility

Honesty

A real or apparent incompatibility between a licensee’s interests and the interests of the client or potential client Which of the following is described above? (Select one) Agency Interest. Agency Conflict. Conflict of Agency. Conflict of Interest. Designated Agency. Designated Conflict.

Conflict of Interest.

Which of the following is NOT an order the hearing panel may issue for conduct deserving of a sanction (Select one) Any order agreed to by both sides. Costs (for the Professional Conduct Review or hearing panel costs). Education courses. Fine (up to $25,000.00for each finding of conduct deserving of sanction). Sentencing of jail time. Suspension, cancellation, or conditions upon the licensee’s license.

Sentencing of jail time.

Which of the following outline the importance of the Real Estate Insurance Exchange (REIX) for real estate professionals? (Select ALL that apply) An individual licensee does NOT have to attempt to personally come up with the full amount of damages required to be paid. By exchanging insurance contracts, licensees (including brokerages) spread the associated risks between themselves. REIX allows the real estate industry to determine how best to manage risk, resolve claims, and compile statistics on losses REIX assures licensees that the injured party will receive at least a portion of the damages. The program is depended on the commercial insurance market to ensure the costs are equivalent. The rates are exactly the same regardless of the activities of the subscribers within their specific environment. There is potential to save on insurance costs over the long run as the REIX is NOT in business to make a profit (savings benefit the subscribers).

An individual licensee does NOT have to attempt to personally come up with the full amount of damages required to be paid. By exchanging insurance contracts, licensees (including brokerages) spread the associated risks between themselves. REIX allows the real estate industry to determine how best to manage risk, resolve claims, and compile statistics on losses REIX allows the real estate industry to determine how best to manage risk, resolve claims, and compile statistics on losses REIX assures licensees that the injured party will receive at least a portion of the damages.

Barbara and Doris are working at the same brokerage. It is a designated brokerage. Barbara and Doris commonly eat lunch together and occasionally share funny stories about situations their clients have been in. They do not and have not ever shared client information or revealed who the clients are. They absolutely do not share information or even stories about current clients. Barbara is approached by Doris that Doris’s client is interested in a property Barbara has listed. Does a conflict of interest exist? (Select one) No Only if the client is informed the designated broker of the seller is in the same brokerage. Only if Barbara has shared a story that is similar to something that is happening with Doris’s current client. Yes Who pays for lunch?

Following a RECA investigation, who receives the written report from the investigators? (Select one) The broker of record of the brokerage or associate under investigation. The Minister of Service Alberta. To the brokerage or associate under investigation. To the head of the respective industry council. To the RECA Registrar.

To the RECA Registrar.

Which of the following parts of the process required to create an amendment to the Real Estate Act is incorrectly described? (Select one) A first draft of the amendment is prepared. The bill is introduced in the Legislature (First Reading). The Members of the Legislative Assembly (MLAs) debate the contents of the draft. The Committee of the Whole discuss specific clauses and possible amendments. If the bill passes the final vote, the legislature sends it to the Minister for Service Alberta for Royal Assent. The amendment becomes in force once it receives Royal Assent.

If the bill passes the final vote, the legislature sends it to the Minister for Service Alberta for Royal Assent.

Errors and Omissions insurance’s purpose to cover a licensee for which of the following? (Select ALL that apply) Agency (negative results from an action in which a licensee acts as an agent for lawful instructions of a client.) Any errors (mistakes) Consequences (any negative results even when all professional standards have been correctly applied) Intentional disregard (knowingly doing something wrong or illegal). Negligence (failing to do something you were supposed to do, but without intending to) Omissions (things they didn’t do or say that they were supposed to do or say)

Agency (negative results from an action in which a licensee acts as an agent for lawful instructions of a client.) Any errors (mistakes) Consequences (any negative results even when all professional standards have been correctly applied) Negligence (failing to do something you were supposed to do, but without intending to) Correctly checked Omissions (things they didn’t do or say that they were supposed to do or say)

True or False: A conflict of interest can be either real (a real conflict exists) or perceived (the perception of conflict exists). True. False.

True

The Real Estate Act (REA) is legislation developed by the Government of Alberta. The government has delegated much of the responsibility for overseeing the REA to the Real Estate Council of Alberta (RECA). Who oversees RECA? (Select one) Chair of the Board of RECA. Minister for Service Alberta. The Prime Minister. RECA board members. The Registrar.

Minister for Service Alberta.

RECA can conduct its own investigations and make any rules it considers appropriate, with certain limitations. Which of the following are the limitations that limit the RECA’s rules? (Select ALL that apply) RECA’s rules must NOT impact the public. The rules must NOT contradict the Real Estate Act. The rules must be ratified by 67% of all licensees. The rules must NOT contradict the regulations put in place by the government

The rules must NOT contradict the Real Estate Act. The rules must NOT contradict the regulations put in place by the government

True or False: The registrar can conduct an inspection of a licensee’s business without first receiving a complaint. True. False.

True

Which of the following options are professionally acceptable when dealing with a conflict of interest? (Select ALL that apply) Create a common law agency relationship Decline to take the client Direct the client to another brokerage Disclose the conflict of interest and proffer to facilitate the transaction via a transaction brokerage relationship Do not inform the client, and do not violate the relationship to act in best interest of the client.

Decline to take the client Direct the client to another brokerage Disclose the conflict of interest and proffer to facilitate the transaction via a transaction brokerage relationship

Certain conditions or actions taken by professionals may compromise their REIX coverage. Which actions will create an exclusion situation, where REIX does NOT cover the professional? (Select ALL that apply) A claim by a business enterprise in which you or your spouse have a controlling interest, are a controlling shareholder, or are a directing mind. Honest mistakes made by licensees during the course of regular business. When the professional is commissioned by a brokerage to work with specific mortgage lenders. Writing a contract that assumes liability for a specific outcome. (The outcome would NOT be covered) A claim results from dishonesty or fraudulent misrepresentation on behalf of the licensee

A claim by a business enterprise in which you or your spouse have a controlling interest, are a controlling shareholder, or are a directing mind. Writing a contract that assumes liability for a specific outcome. (The outcome would NOT be covered) A claim results from dishonesty or fraudulent misrepresentation on behalf of the licensee

Santiago is working with ABBA Brokerage to buy a new home for his aging parents. Santiago will be paying cash for the home and shows the funds in a bank statement that are earmarked for the purchase. With his parent’s complete agreement, Santiago has requested the agents primarily search for homes in neighborhoods near his own, and if possible, ones that have a shared pool! During the first meeting with the agent, himself and his parents, Santiago tells the agent that he wants the agency written service agreement to be with the parents only, as he is only providing the funds. Santiago insists, however, that he be involved in all communications with the parents, “to make sure they’re not being taken advantage of.” During the meeting, several specific items are requested by the parents for the new home, but Santiago tells the agents later, “they don’t really need that… I’m the one paying for it, anyway!” The associate explains the exact situation above to the broker. The broker says, that there are risks that need to be mitigated. Which of the following are risks that need mitigation? (Select ALL that apply) Funding may be conditional upon Santiago’s approval of the house, rather than the parent’s wants and needs. Santiago is paying cash for the home, with no financial statements showing proof of funds. Santiago is requiring the agency relationship be between the parents and the agent but wants to be the decision maker. Santiago has revealed that he believes the brokerage might take advantage of his parents. Santiago may want the agents to act in his own best interests, not the parents, even though the written service agreement is with the parents. The home search area has been requested to be limited to nearby neighborhoods to Santiago’s own home.

Funding may be conditional upon Santiago’s approval of the house, rather than the parent’s wants and needs. Santiago is requiring the agency relationship be between the parents and the agent but wants to be the decision maker. Santiago has revealed that he believes the brokerage might take advantage of his parents. Santiago may want the agents to act in his own best interests, not the parents, even though the written service agreement is with the parents.

True or False: The registrar may refuse to grant a license to an applicant, even if they have passed all the required education and training. True. False.

True

One of the ways RECA fulfills its purposes, particularly those around administering the Real Estate Act, is by creating bylaws. The Real Estate Act states that the Board may make bylaws regarding which of the following? (Select ALL that apply) Authorizing the board to set up and administer the licensee insurance plan. Exempting people from the bylaws. How officers and members of the board and industry councils are elected or appointed. Management of money received by RECA, the board, or industry councils. Overseeing education of Alberta citizens and the associated selection, delivery, and distribution of content to the same. The duties of officers and members of Parliament, and how much they are paid. What services and materials the board may provide to licensees or the public.

Authorizing the board to set up and administer the licensee insurance plan. Exempting people from the bylaws. How officers and members of the board and industry councils are elected or appointed. Management of money received by RECA, the board, or industry councils. What services and materials the board may provide to licensees or the public.

Not only do licensees have the responsibility of behaving properly themselves, but they are also responsible for supporting the proper function of their profession. Under the Real Estate Act Rules, certain behaviors (unethical, unsafe, illegal, incompetent) should be reported. From the following list, select to whom and what order the actions should be reported? (Select one) Law enforcement (when appropriate), the person being complained against, then RECA. RECA first, then the broker, then law enforcement (when appropriate). The broker first, then RECA or law enforcement (when appropriate). The broker only. The broker reports anything further to RECA and/or other authorities. To the person being complained against first, then RECA, then the broker, then law enforcement (when appropriate).

The broker first, then RECA or law enforcement (when appropriate).

Which of the following actions would reduce risk or be a risk-reduction practice? (Select ALL that apply) Amending documentation. Securing insurance. Submitting paperwork on time. Using checklists to ensure all actions are taken. Using your personal vehicle to carry clients to and from appointments. When unsure make a quick call to the broker.

Securing insurance. Submitting paperwork on time. Using checklists to ensure all actions are taken. When unsure make a quick call to the broker.

While insurance coverage helps manage the risk of damages, a brokerage may also reduce risk by creating policies and procedures. How do brokerage policies and procedures serve to manage risk? (Select ALL that apply) Anticipation of situations allows brokerages to put in policies and procedures to prevent the situations from occurring. Policies and procedures cover all the situations where things can go wrong. Policies and procedures around communication help keep the broker involved in critical decisions that can mitigate risk. The trust fund provided by the brokerage spreads the cost of damages and failed contracts across the agents.

Anticipation of situations allows brokerages to put in policies and procedures to prevent the situations from occurring. Policies and procedures around communication help keep the broker involved in critical decisions that can mitigate risk.

The Real Estate Council of Alberta (RECA) is established as an industry council by the Real Estate Act (REA). RECA is responsible for producing the content of the rules governing licensee conduct for the real estate industry. Which of the following is NOT something created or produced by RECA? (Select one) Bylaws. Policies and procedures of conduct for the licensees. Real Estate Act Regulations. Real Estate Act Rules.

Real Estate Act Regulations.

The Real Estate Act requires anyone trading in real estate as a real estate broker, dealing as a mortgage broker, acting as a property manager, or acting as a real estate appraiser to have the authorization to carry out these activities. In each industry sector, the preliminary factors in determining whether a person's activities require a license are which of the following? (Select ALL that apply) Whether the person is being compensated for undertaking these activities or providing these services. Whether the person is performing a real estate, mortgage, property management, or appraisal activity or service for someone else. Whether the person is trading in real estate as the buyer or seller. Whether the person works for a brokerage, regardless of whether or not they trade in real estate.

Whether the person is being compensated for undertaking these activities or providing these services. Whether the person is performing a real estate, mortgage, property management, or appraisal activity or service for someone else.

True or False: A condominium can be just about any type of building or structure, or even bare land. TRUE FALSE

True

Lucy and Jac are interested in a variety of services following their new home purchase. They tell Thelma, who has been in business for 10 years, that she has been “so wonderful through the process, we absolutely trust you to make these decisions for us,” and hand Thelma a list of services they want. They ask Thelma to just tell them who to hire. Thelma immediately sees this as a potential point of liability, and actually shares with Lucy and Jac that she is only comfortable making recommendations on a few. Lucy and Jac insist she choose for them. Before Thelma makes any recommendations, she returns to the brokerage and chats with the broker who offers her the following advice, “Thelma, the safest thing to do is to follow the advice of RECA to minimize your liability when making the recommendations.” Which of the following advice is offered by RECA? (Select ALL that apply) Be sure to know enough about who you are recommending to know their qualifications and competence (you should only recommend the best service providers you know). Do not directly endorse anyone, unless there is a commission involved. The commission protects you from liability. Ensure that any person you want to recommend is licensed (if necessary) in their industry. The client should be told up front that the brokerage will not be held responsible for any recommendations. Then the licensee can recommend any number of people, or direct the client to a single recommendation. To prevent liability ensure you give a list of at least several individual recommendations, and inform the client they must choose and be liable for the choice.

Be sure to know enough about who you are recommending to know their qualifications and competence (you should only recommend the best service providers you know). Ensure that any person you want to recommend is licensed (if necessary) in their industry. To prevent liability ensure you give a list of at least several individual recommendations, and inform the client they must choose and be liable for the choice.

Frank, who has a commercial real estate license, has been approached by a former client, Jorge, to perform condominium management services to the client’s condominium corporation. Jorge tells Frank that he knows he is a perfect fit because of his amazing diligence in commercial transactions. Frank reminds Jorge that he holds a commercial license, and Jorge insists Frank take on condominium management services, while Frank pursues the licensing. True or False: Because Frank has a license issued by RECA, he can perform the condominium management services while he pursues the condominium management service license. TRUE FALSE

FALSE

Determining when to refer a client to another expert, third-party service, or licensed agent is part of the real estate professional’s responsibilities. From the following list, select all those items which describe conditions under which a licensee will refer a client to professionals or experts. (Select ALL that apply) The scenario falls within the limitations of your license. The scenario falls outside the scope of your knowledge, skill or expertise. The brokerage can support you in the situation. Your client specifically asks if you have referrals for a specific service. You are called upon to offer advice outside the scope of your qualifications.

The scenario falls within the limitations of your license. Your client specifically asks if you have referrals for a specific service. You are called upon to offer advice outside the scope of your qualifications.

An estoppel certificate is a signed statement from the condominium corporation that includes information about the financial situation of a unit and certifies that the information is correct. Who is normally charged the estoppel certificate fee? (Select one) The buyer The buyer’s agent The condominium corporation The seller The seller’s agent

The seller

There are many condominiums management companies that provide immense value to the board and owners they serve. They bring knowledge of the CPA and Regulation, proven systems to structure financial and governance requirements, and storage solutions for the corporation’s required documents. Management companies can have a negative impact on buyers and seller due to poor communication and internal company policies and procedures that limit access to vital information buyers rely on and sellers provide. TRUE FALSE

True

Any part of the lands covered by the condominium plan is considered common property to all condominium owners (including all units). TRUE FALSE

FALSE

Some self-managed corporations are ignorant or willfully blind to the CPA and Regulations. They do not maintain a reserve fund, prepare a yearly budget, or hold annual general meetings. In these situations, buyers and sellers are forced to make decisions with incomplete information. The consequence of being a seller in this situation is that they are often forced to take values below market value to compensate for the risk. TRUE FALSE

TRUE

Section 25 of the Condominium Property Act (CPA) outlines how the condominium is to prepare financial statements for the preceding fiscal year. What do “notes” provide in terms of value to the preparation of the financial statements? (Select one) Notes indicate the source of funds of the cash flow statement. Notes may raise issues that should be dealt with as part of the current operations and budget. Notes provide a balance sheet for the preceding fiscal year. Notes provide a statement of profit and loss with respect to the activities in the preceding fiscal year.

Notes may raise issues that should be dealt with as part of the current operations and budget.

True or False: Mortgage fraud is intentionally providing misinformation or misrepresenting a situation to an underwriter, lender, or real estate professional to fund, purchase, or insure a loan secured by a property. TRUE FALSE

True

Which of the following mortgage types provides the borrower with access to capital without making standard principal and interest payments? (Select one) Acreage lending mortgage. Construction draw mortgage. Cashback mortgage. Home Equity Line of Credit. Residential mortgage. Reverse Mortgage.

Reverse Mortgage.

How can you determine that your client is buying the home that is described and that the seller is, in fact, the seller? Ask to see a utility bill for the property, and validate the seller is listed as the payee. Check the phone and address listings for the seller, and make sure the seller’s name matches the address listing. Investigate the property’s title, and validate the seller’s name on valid ID matches the title holder. Validate the seller lives at the property being sold.

Investigate the property’s title, and validate the seller’s name on valid ID matches the title holder.

Real estate professionals, especially mortgage brokers and mortgage agents, need to be aware of applicable provincial and federal legislation and how this impacts the consumer, the lender, their brokerage, and mortgage documents. Which of the following developments in legislation have affected mortgage financing in Canada? (Select ALL that apply) Interest Act. Law of Property Act. National Housing Act (NHA). Office of the Superintendent of Financial Institutions (OFSI)

Interest Act. Law of Property Act. National Housing Act (NHA).

True or False: Money laundering is a legal process used to disguise the source of money or assets that come from illegal means. TRUE FALSE

False

True or False: Prior to foreclosure proceedings beginning on a property, the buyer is given every opportunity to redeem or get back the mortgaged property. TRUE FALSE

True

Which of the following are used to determine mortgage affordability for buyers? (Select one) Capacity. Gross debt service ratio (GDSR). Capital. Character. Collateral. Total debt servicing ratio (TDSR). Credit. Loan-to-value (LTV).

Gross debt service ratio (GDSR). Total debt servicing ratio (TDSR). Loan-to-value (LTV).

What is the difference between a high-ratio mortgage and a conventional mortgage? (Select one) The conventional mortgage is insured, but high-ratio is not. The high-ratio mortgage has a 20% down-payment or more; the conventional mortgage has 20% or less (5% to 19.99%). The high-ratio mortgage has a less than 20% down-payment (5% to 19.99%); the conventional mortgage has 20% or more. The high-ratio mortgage has significantly lower interest rates, due to high income to loan ratio. The high-ratio mortgage is insured, but conventional mortgage is not.

The high-ratio mortgage has a less than 20% down-payment (5% to 19.99%); the conventional mortgage has 20% or more.

Amortization and term both refer to key time periods in a mortgage. Which of the words means the length of time a mortgage (at an agreed interest rate) is in effect? (Select one) Amortization. Term. All of the above. None of the above.

Term

Which of the following is known for initiating mortgage insurance (also known as default insurance) for loans made by approved lenders? (Select one) The Interest Act. Service Alberta. The Law of Property Act. The National Housing Act.

The National Housing Act.

Which of the following best describes financial risk? (Select one) The cost of doing business. The factors associated with a credit score. The financial factors involved in assigning a value to a credit applicant. The possibility of losing money as a result of default, loss of income, or costs outweighing profits. The probability of loss due to economic forces outside of the control of the lender.

The possibility of losing money as a result of default, loss of income, or costs outweighing profits.

Mortgage fraud can have drastic effects on the country’s real estate market. Which of the following are the impacts of mortgage fraud on society? (Select ALL that apply) It can make it more challenging for everyday citizens to attain a mortgage and purchase a property. It creates unnecessary supply and inventory issues. It prevents government intervention on mortgage and housing regulations. There is a financial loss component to banks, professionals, and everyday people.

It can make it more challenging for everyday citizens to attain a mortgage and purchase a property. It creates unnecessary supply and inventory issues. There is a financial loss component to banks, professionals, and everyday people.

The title of the land contains all registered interests. What does the priority order of registered mortgages mean? (Select one) The claim upon the chattel of the property in the event of default. The order in which the lenders will be paid upon the sale of property. The higher the order, the greater percentage of property tax the mortgage provider is required to pay. The higher the order, the more the mortgage provider assumes loss in the event of default.

The order in which the lenders will be paid upon the sale of property.

When writing an offer to purchase, and a client is securing a mortgage for financing, why is it always recommended that you have a conditional offer in place? (Select one) Ensures the mortgage loan will be fully funded. Guarantees to the seller, that the buyer will secure funding by the date on the conditional offer. Informs the seller the offer price is flexible, depending on qualification of the client. Provides protection to the client while they and their mortgage professional obtain the mortgage financing required for the new home purchase.

Provides protection to the client while they and their mortgage professional obtain the mortgage financing required for the new home purchase.

Penny and William are seeking a loan for a new home. They both understand the lender will ask them a series of questions designed to help the lender understand the financial risk the lender would be taking on, if they choose to loan funds to Penny and William. Which of the following are ways Penny and William could reduce financial risk to the lender? (Select ALL that apply) Co-sign on the loan, both acting as guarantors of the loan. Decrease their down payment toward the purchase price of the property. Increase their down payment toward the purchase price of the property. Pay down other debt before securing the loan. Request a loan for a property that appraises below the loan value. Request a loan for a property that appraises above the loan value. Secure higher paying jobs to increase the “affordability” of the property. Secure multiple credit cards expanding their available credit.

Co-sign on the loan, both acting as guarantors of the loan. Increase their down payment toward the purchase price of the property. Pay down other debt before securing the loan. Request a loan for a property that appraises below the loan value.

Which of the following broad categories of fraud is generally carried out by the borrower misrepresenting facts of their financial situation to gain a mortgage approval, resulting in the fraudulent activities enabling the buyer to secure the property for their own use? (Select one) Fraud for homelessness. Fraud for housing. Fraud for private enterprise. Fraud for profit.

Fraud for housing.

Riley has a client listing on MLS® that is generating a lot of calls about the property. One of the callers asks Riley if he would be willing to represent him as the buyer for the property, and suggests that by doing so, Riley should be extra grateful for the additional commission. Riley appreciates the idea of making more money, but also understands that he needs to talk with the seller client before he can proceed with a transaction. Which of the following would reduce the professional risk to Riley in this situation? (Select ALL that apply) Riley could suggest the buyer work out a deal with him “under the table” to secure the information the buyer wants. Riley could suggest another agent from the brokerage to the buyer to avoid any conflict of interest with his current client. Riley must allow the seller to determine if Riley representing both parties in the deal is acceptable. Riley should inform the buyer that if he represents both parties in the deal, he cannot offer any details about the seller or offer advice or counsel as a regular agent could, due to the need to remain impartial. Riley should suggest to the seller that this type of deal will result in a higher sales price for the seller.

Riley could suggest another agent from the brokerage to the buyer to avoid any conflict of interest with his current client. Riley must allow the seller to determine if Riley representing both parties in the deal is acceptable. Riley should inform the buyer that if he represents both parties in the deal, he cannot offer any details about the seller or offer advice or counsel as a regular agent could, due to the need to remain impartial.

Which of the following are likely to be required documentation for your client by a mortgage lender? (Select ALL that apply) Paystubs. Cumulative GPA. Educational transcripts. Financial Statements. ID verification. T-4 Statement. Vehicle registration(s). Notice of Assessment from CRA

Paystubs. Financial Statements. ID verification. T-4 Statement. Notice of Assessment from CRA

When looking at a title for the property. What does it mean if there are multiple registered mortgages? (Select one) The property has been refinanced. The property has multiple lenders who have first claim on the proceeds of a sale. There is joint-tenancy on the title. There is more than one property owner, and each mortgage listing represents a different owner.

The property has multiple lenders who have first claim on the proceeds of a sale.

True or False: A down payment can be gifted from an immediate family member. TRUE FALSE

True

Which of the following remedies for a breach of contract is only available if there is evidence an actual loss occurred due to the breach? (Select one) Injunction. Monetary damages. Negotiation. Quantum meruit. Rescission. Specific performance.

Monetary damages.

Privacy legislation requires that real estate professionals must not disclose personal information about Jonny and his partner Bonnie who have come into Abbot Brokerage to sell their home. They are very concerned about their privacy and refuse to provide any information about themselves until a written service contract is in place. During the conversation about the services which can be offered, the real estate agent assures Jonny and Bonnie that legislation prevents their information from being disclosed without written permission. Bonnie asks, “what information does that include?” Which of the following should the real estate professional tell Jonny and Bonnie that are included in the protections? (Select ALL that apply) Private information about the client. Personal information about the client. Property information. Transaction information.

Private information about the client. Personal information about the client. Property information. Transaction information.

Which of the following additional documents indicates that the signer understands that the real estate professional does not owe them any agency obligations, including fiduciary duties and awareness that the real estate professional will not provide any services that require discretion, judgement, or the provision of confidential information? (Select one) Alberta Real Estate Association (AREA)’s standard purchase contract. Customer Acknowledgement form. Sale of Buyer’s Property Schedule. Seller Customer Acknowledgement and Fee Agreement. Tenancy Schedule. Addendum.

Customer Acknowledgement form.

Which of the following are advantages of stipulating a deposit be provided? (Select ALL that apply) Deposit money forms part of the eventual down payment on the property, helping assure the seller that the buyer can secure financing. Provides the seller with immediate cash to upgrade the property, or use as a down payment on another property. Indicates good faith in the contract. Protects the seller from the buyer backing out of the deal without a contractually valid reason.

Deposit money forms part of the eventual down payment on the property, helping assure the seller that the buyer can secure financing. Indicates good faith in the contract. Protects the seller from the buyer backing out of the deal without a contractually valid reason.

Recently, you represented a client who, when attempting to close a real estate transaction, disputed with the other party about verbally agreed-upon actions that were to be taken before the close of the deal. The deal ended up collapsing, and both parties were very angry at the situation. What could you advise the next client to help prevent such a breakdown? (Select ALL that apply) Any changes to the terms of the contract require written amendment signed by both parties. Any stipulations or agreements must be in writing in the contract to be enforceable. Negotiations should occur prior to the contract signing. Negotiating verbally is acceptable as long as both parties are in complete alignment of what is being agreed upon. Negotiating verbally is acceptable as long as the parties agree to the requirements (of what was negotiated) in a written and signed document.

Any changes to the terms of the contract require written amendment signed by both parties. Any stipulations or agreements must be in writing in the contract to be enforceable. Negotiations should occur prior to the contract signing. Negotiating verbally is acceptable as long as the parties agree to the requirements (of what was negotiated) in a written and signed document.

True or False: Land within the bounds of the municipality is assigned zoning, which controls the type of development permitted in a specific area. TRUE FALSE

True

The records, books, accounts and supporting documentation in relation to each trade should identify each trade or potential trade by a coding system and must contain which of the following? (Select ALL that apply) A description of the real estate. All handwritten notes taken about the transaction. The names of the parties to the trade or potential trade The nature of the trade or potential trade. The true consideration for the trade or potential trade The value of the commissions projected and the estimated taxes to be paid.

A description of the real estate. The names of the parties to the trade or potential trade The nature of the trade or potential trade. The true consideration for the trade or potential trade

Regarding the Land Titles Act, which of the following statements is TRUE? (Select one) A mortgage must be registered on all titles at the land titles office, including the name of the mortgagor(s), a description of the estate, property legal description of the land charged, evidence of attestation in the form of an affidavit of execution. Enables the claims or liens on a title to be registered with the owner, ensuring payment to the owner of the claims. Permits the registration of a variety of instruments or encumbrances on a property’s title, each indicating some type of interest in the land. Requires all titles be free or clear of all other interests before being registered with Service Alberta.

Permits the registration of a variety of instruments or encumbrances on a property’s title, each indicating some type of interest in the land.

Which of the following is described when a contract is one which cannot be enforced by the courts? (Select one) Circumstantial. Unenforceable. Void. Voidable.

Unenforceable

True or False: A licensee must disclose to a client all fees, compensation, and remuneration received for the client’s transaction. TRUE FALSE

True

Edward is working with his client who has signed on with Edward in an agency relationship to sell his rural property. During the course of the conversation, the client tells Edward the piping for the in-ground septic system in the property is probably cracked in multiple places and backs up into the house regularly. The client tells Edward, “It’s a good thing it’s underground, or buyers would see it and know they’d have to replace the septic system.” This information was told to Edward in a confidential setting. What is Edward’s obligation? (Select one) Because it is confidentially disclosed, even though it is material information, Edward cannot disclose the information to potential buyers. Because it is material information, and confidential, it must be disclosed to potential buyers only if the buyers ask about the septic system. Because it is material and latent the knowledge of this defect, even though it is confidential, must be disclosed to potential buyers. It is not material information, and it is confidential. Edward should never disclose this.

Because it is material and latent the knowledge of this defect, even though it is confidential, must be disclosed to potential buyers.

Every valid and enforceable contract must include which of the following essential elements (Select FIVE) Addendums. Conditions Precedent. Consideration. Privation. Capacity. Consent. Legality. Misrepresentation. Notices. Offer and Acceptance.

Consideration. Capacity. Consent. Legality. Offer and Acceptance.

From the following list, identify the TRUE statement regarding contract law. (Select one) Addendums are NOT contractually bound inclusions. All agreements for the purchase and sale of property must be in writing to be legally enforceable. The Alberta Real Estate Association’s (AREA’s) standard forms regarding purchase and sale of property can be used without any modification, inclusion of language, or party identification. Verbal agreements witnessed by agents are enforceable as contract provisions.

All agreements for the purchase and sale of property must be in writing to be legally enforceable.

Where are the terms of trust negotiated and codified by the buyer/tenant, seller/landlord, and the trustee? (Select one) In a separate “trust contract” provided by Service Alberta. In a separate “trust contract” provided by the Real Estate Council of Alberta (RECA). In the brokerages written service agreement (WSA) with the seller. In the brokerage’s written service agreement (WSA) with the buyer. In the real estate contract signed by the parties.

In the real estate contract signed by the parties.

Documentation best practices include documenting questions that clients ask, as well as the response provided. In such situations, which of the following is the best practice? (Select one) Document the question and response in your own notes only. Document the question and response in your own notes, and include it in the trade record file. Document the question and response in your own notes, send a copy to the client, and include it in the trade record file. None of the above.

Document the question and response in your own notes, send a copy to the client, and include it in the trade record file.

Jackie is representing a buyer, Henrietta, who is very much interested in a residential property that is located near her parent’s home. Henrietta makes an offer that is accepted, but there is a condition that requires an $8,000 cash deposit. Henrietta has $6,000 in cash, and needed to come up with another $2,000 by tomorrow. Henrietta decides to sell an ATV to make up the difference. She sells the ATV to her neighbor who provides a cheque to her, which she deposits. While at the bank Henrietta attempts to withdraw the $8,000, but she discovers that the funds for the $2,000 cheque have not cleared yet. Henrietta knows the deal is in jeopardy and approaches Jackie for advice. Knowing that she must provide the best advice she can on behalf of her client, Jackie should provide which of the following as advice to the buyer? (Select TWO) Provide the balance of the money in $6,000, and pretend it was a misunderstanding when the amount doesn’t match. Promise the money the next day and see if the seller agrees. If the deposit is not paid or delivered on time, or in the manner specified, the seller has the right to void the contract by notice in writing. Henrietta can explain the situation to the seller, and ask for an amendment to change the terms of the deposit, which must be agreed upon in writing. Write a cheque to the seller, and hope the cheque doesn’t clear before the ATV cheque does.

If the deposit is not paid or delivered on time, or in the manner specified, the seller has the right to void the contract by notice in writing. Henrietta can explain the situation to the seller, and ask for an amendment to change the terms of the deposit, which must be agreed upon in writing.

In which of the following types of ownership, does an individual owner hold a specific percentage of ownership that passes to the estate of the person if they die? (Select one) Conjoined ownership. Investor deemed. Joint tenants. Survival ownership. Tenants in common.

Tenants in common.

True consent to a contract may not have occurred for several reasons. Which of the following reasons make a contract unenforceable, due to lack of informed consent? (Select ALL that apply) Duress. Legality. Misrepresentation. Mistake. Privity of Contract. Reliance. Undue influence. Capacity

Duress. Misrepresentation. Mistake. Undue influence.

True or False: Zoning classifications are guidelines only. (e.g. retail space can be built in residential classifications, or vice-versa). TRUE FALSE

False

With regard to a service contract between a client and a real estate professional, who is the service contract between? (Select one) The brokerage of the real estate professional and the client. The brokerage of the real estate professional and the real estate professional. The client and the Real Estate Association of Alberta (RECA). The real estate professional and the client.

The brokerage of the real estate professional and the client.