Practice Test 2(2.1) Flashcards by Gurpinder Deol

Under RECA, which of the following criteria determines whether a person’s activities require a license? (Select ALL that apply)

Does the person have business cards?

Is the person being compensated for providing the real estate related activities or services?

Is the person over the age of 22?

Is the person performing a real estate service for someone else?

Is the person under the age of 70?

Is the person being compensated for providing the real estate related activities or services?

Is the person performing a real estate service for someone else?

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The Real Estate Act (REA) requires self-regulation of the real estate industry.

True or False: Self-regulation includes being responsible for consumer protection.

True

False

True

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Yasmin, a real estate professional, has moved to a mid-sized town near a heavily used natural recreation area. The town has recently been undergoing some changes with investment in revitalizing the downtown area to draw more of the tourists from the nearby recreation area. Additionally, a large tire manufacturer has moved to the area, and has been steadily hiring workers for the last several months. They anticipate having created and filled close to 600 jobs by the end of the first year. Many smaller shops, and even service (such as dentists and health care providers) are moving into the area to serve the growing population. In this particular year, Alberta is on a general decline. Generally, wages are falling and housing prices are dropping.

Which of the following information is directly relevant to potential commercial investors in Yasmin’s new town? (Select ALL that apply)

Job growth statistics for the town.

Coincident indicators.

Leading indicators for the province.

Leading indicators for the local area.

Type of cheeses produced by the dairy facilities

Daily average of people visiting the recreational area.

Foot traffic in downtown.

Gross Domestic Product

Job growth statistics for the town.

Coincident indicators.

Leading indicators for the local area.

Daily average of people visiting the recreational area.

Foot traffic in downtown

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The timing for a business cycle is defined by four identifiable phases. Which of the following accurately describes the phase progression starting with expansion? (Select one)

Expansion, contraction, peak, and trough.

Expansion, peak, contraction, and trough.

Expansion, peak, trough, and contraction.

Expansion, trough, contraction, and peak.

Expansion, peak, trough, and contraction.

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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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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.

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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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True or False: A Broker must have ownership interest in the brokerage for which they are responsible.

True

False

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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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Licenses expire yearly. Which of the following statements are true, regarding re-licensing? (Select ALL that apply)

All licenses expire on October 31st of each year.

All licences expire on September 30th of each year.

You must confirm your personal contact information

Your broker must review your re-licensing application before submission.

Your broker is NOT required to review your re-licensing application before submission.

You may have mandatory re-licensing courses to complete.

Re-licensing does NOT require more education courses, only a declaration of experience during the year the re-certification occurs.

Since December 31, 2021, recertification is an affidavit only, and no longer requires a renewal fee.

All licences expire on September 30th of each year.

You must confirm your personal contact information

Your broker must review your re-licensing application before submission.

You may have mandatory re-licensing courses to complete.

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Which of the following items are required to be completed by a Property Manager to receive their license? (Select ALL that apply)

Complete the Fundamentals of Real Estate course.

Complete the Practice of Property Management course.

Pass the relevant RECA exams.

Practice as an apprentice Property Manager for a period of three years.

Complete a certified criminal record check

Complete the Fundamentals of Real Estate course.

Complete the Practice of Property Management course.

Pass the relevant RECA exams.

Complete a certified criminal record check

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Which component of the Real Estate Act (REA) are amendments to or interpretations of the Act and are part of the law? (Select one)

The Act

The bylaws

The rules

The regulations

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As of 2022, RECA is currently in the process of divesting from the delivery of licensing education. The entirety of the RECA Education Code of Conduct principles continues to apply to all licensing courses, including those offered by third-party providers. Which of the following examples breach the principles described in RECA’s Education Code of Conduct. (Select ALL that apply)

Accessing other computer programs, online, windows, external website, emails, texts, or instant messages to secure answers during the examination.

Acting in an abusive manner toward other learners, facilitators, proctors, or RECA staff.

Assisting other learners by providing training and advice to assist the learner’s understanding of content.

Attempting to access RECA online examinations without appropriate permission.

Providing other learners with the answers to pre-licensing or re-licensing courses.

Sharing exam answers on social media or other online real estate chat groups or forums.

Voicing concerns related to RECA’s education programs.

Accessing other computer programs, online, windows, external website, emails, texts, or instant messages to secure answers during the examination.

Acting in an abusive manner toward other learners, facilitators, proctors, or RECA staff.

Attempting to access RECA online examinations without appropriate permission.

Providing other learners with the answers to pre-licensing or re-licensing courses.

Sharing exam answers on social media or other online real estate chat groups or forums.

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The range of property types that can be considered as part of commercial real estate is broad and include three groups: Industry, Business, and Investment. Review each of the following items, and select the ones that belong to the industry group. (Select ALL that apply)

Business brokerage

Integrated office space

Manufacturing

Office space

Retail facilities

Warehousing

Yard storage

Business brokerage

Integrated office space

Manufacturing

Office space

Retail facilities

Warehousing

Yard storage

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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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At a brokerage, the real estate broker, and an associate have different responsibilities. While many of the responsibilities are shared, such as monitoring if the brokerage name is properly used and applied in advertising, the broker has specific duties to the brokerage. While these duties may be delegated (which requires them to be communicated as delegated), the broker still has the responsibility for them. The following list contains broker-specific duties and responsibilities. Review each item, and identify the duties for which the broker is the responsible party. (Select ALL that apply)

Comply with written policies and procedures.

Comply with brokerage policies and procedures for their personal trades.

Ensure proper management and control of documents or records related to licensing, registrations, and related regulatory requirements.

Ensure all documents related to trades are maintained or made available for the purposes of a RECA review.

Ensure all trust monies are properly maintained.

Ensure proper management and control of documents or records related to licensing, registrations, and related regulatory requirements.

Ensure all documents related to trades are maintained or made available for the purposes of a RECA review.

Ensure all trust monies are properly maintained.

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True or False: RECA may deny an authorization and issue an Administrative Penalty up to $25,000 for learners who are not industry professionals and who breach the Education Code of Conduct.

True

False

True

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Real estate education takes many forms. Pre-licensing education, ongoing education, and mandatory courses are just a few key learning points in the journey to obtain and maintain a real estate license. Which of the following are reasons why real estate education is required? (Select ALL that apply)

Pre-licensing education ensures licensees have sufficient knowledge to perform their duties with integrity.

Pre-licensing education ensures clients know you have the required knowledge to adequately support their needs.

Ongoing education ensures the Trust Fund at a brokerage is fully funded.

Ongoing education enables professionals to become licensed in multiple industries.

Education guarantees licensees will have professional conduct and never make mistakes.

Mandatory courses ensure everyone is brought up to a certain level of education on a specific topic by a certain date

Pre-licensing education ensures licensees have sufficient knowledge to perform their duties with integrity.

Pre-licensing education ensures clients know you have the required knowledge to adequately support their needs.

Ongoing education ensures the Trust Fund at a brokerage is fully funded.

Mandatory courses ensure everyone is brought up to a certain level of education on a specific topic by a certain date

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Which component of the Real Estate Act (REA) are administrative guidelines that specify how RECA conducts and operates its business, and are amended only by RECA’s Board or Directors? (Select one)

The Act

The bylaws

The rules

The regulations

The bylaws

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Real estate organizations are valuable since they help you to better serve your clients. An awareness of these organizations in their current form will be an important part of developing your real estate career. Which of the following organizations are national and provincial government organizations that provide resources and information for real estate professionals? (Select ALL that apply)

The Alberta Real Estate Association (AREA)

Canadian Mortgage and Housing Corporation (CMHC)

Service Alberta

The Canadian Real Estate Association (CREA)

The Alberta Real Estate Association (AREA)

Canadian Mortgage and Housing Corporation (CMHC)

Service Alberta

The Canadian Real Estate Association (CREA)

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As a real estate professional, you have responsibilities to your clients and to your brokerage and for complying with the legislation as determined by the government and RECA. While RECA’s role may appear to just be the governing body of the real estate council of Alberta, a key responsibility is primarily to protect consumers. Which actions does RECA take to protect the consumers in Alberta? (Select ALL that apply)

Addressing any complaints consumers may have about real estate licensees.

Establish the Prime Rate for lending.

Inspecting brokerages to ensure compliance with legislation and regulations.

Manage MLS® listings for Real estate professionals

Providing a list of top brokerages monthly at https://www.reca.ca

Responsible for services including registries, land titles, and the Alberta King’s Printer.

Set guidance on commission distributions among brokerages and their associates.

Addressing any complaints consumers may have about real estate licensees.

Inspecting brokerages to ensure compliance with legislation and regulations.

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Which of the following administrative penalties (issued by the Registrar or by a court) may apply to a person involved in unlicensed activities? (Select TWO)

Fines up to $25,000

Fines up to $35,000

Fines up to $50,000

All remuneration earned during the unlicensed period may be required to be returned.

Treble Damages: Triple the remuneration earned during the unlicensed period may be required to be returned.

Fines up to $25,000

All remuneration earned during the unlicensed period may be required to be returned.

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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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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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The Real Estate Council of Alberta regulates the province’s real estate industry. RECA protects the public interest by which of the following? (Select ALL that apply) Determining certain minimum levels of conduct Licensing practitioners Providing a mechanism to discipline members who fail to meet those standards Providing mandatory training courses upon the completion of which guarantee licence authorization Prevention of conflicts of interest by allocating investigative resources known as "the Fund". Promotion of top brokerages to potential clients Setting standards of competency

Determining certain minimum levels of conduct Licensing practitioners Providing a mechanism to discipline members who fail to meet those standards Setting standards of competency

The Rules outline the management responsibilities of a broker. Select all of the following that are broker responsibilities. (Select ALL that apply) Ensure proper management and control of documents or records related to licensing, registrations, and related regulatory requirements. Ensure all documents related to trades are maintained or made available for the purposes of a RECA review. Ensure the brokerage name is clearly indicated in all marketing and advertising. Ensure all trust monies are properly accounted for. Provide licensees and personnel of the brokerage with written policies and procedures. Provide licensees with brokerage policies and procedures for their personal trades.

Ensure all documents related to trades are maintained or made available for the purposes of a RECA review. Ensure the brokerage name is clearly indicated in all marketing and advertising. Ensure all trust monies are properly accounted for. Provide licensees and personnel of the brokerage with written policies and procedures. Provide licensees with brokerage policies and procedures for their personal trades.

True or False: The difference between Real Estate and Real Property is that Real Property includes Real Estate AND Common Law Rights. True False

True

A hearing panel may order a cancellation or suspension of an authorization as a result of a conduct proceeding, or the registrar may cancel or suspend an authorization for a variety of reasons. Read each of the following licensee actions and identify which of them could result in cancellation or suspension of authorization? (Select ALL that apply) Failure to file or submit required records or failure to make records available for RECA review. A brokerage fails to fund a trust shortage. Access is denied to a RECA auditor or investigator, or they are otherwise prevented from carrying out duties. Providing false or misleading information in a licence application. Failure to comply with a term, condition, or restriction attached to their licence Failure to pay a required fee, penalty, fine, etc., or failure to comply with an order of a hearing or appeal panel or court of law. Non-compliance with a request for information made by the registrar or the relevant Industry Council. Failure to maintain the appropriate vehicle insurance coverage as required. Breach of the Education Code of Conduct for Learners.

Failure to file or submit required records or failure to make records available for RECA review. A brokerage fails to fund a trust shortage. Access is denied to a RECA auditor or investigator, or they are otherwise prevented from carrying out duties. Providing false or misleading information in a licence application. Failure to comply with a term, condition, or restriction attached to their licence Failure to pay a required fee, penalty, fine, etc., or failure to comply with an order of a hearing or appeal panel or court of law. Non-compliance with a request for information made by the registrar or the relevant Industry Council. Breach of the Education Code of Conduct for Learners.

True or False: If a brokerage discovers a trust fund balance shortage, and the shortage is an error that is understood and corrected, the brokerage does NOT have to report the incident to RECA. True False

True

Which residential property type that is used as a primary residence are called “acreages,” regardless of their actual size, and often include considerations of environmental issues, utility services, and the adequate supply of water? (Select one) Condominium Sales Mobile Home Sales New Residential Sales Residential Sales Recreational Property Sales Rural Residential Sales

Rural Residential Sales

Which of the following requests by clients are “lawful instructions” that must be followed by the licensee, even when the licensee disagrees? (Select ALL that apply) A seller instructs you to not disclose a material latent defect with a residential property to a buyer. Buyer clients decide not to get a home inspection against your advice The client instructing you to adjust an offer amount in a counter offer. Your client instructs you NOT to show them offers below a certain value.

Buyer clients decide not to get a home inspection against your advice The client instructing you to adjust an offer amount in a counter offer. Your client instructs you NOT to show them offers below a certain value.

Identify all of the following that apply to designated agency relationships. (Select ALL that apply) The client is a client of the brokerage but the brokerage designates a specific associate(s) to the specific transaction. The real estate brokerage shares client information among associates. The real estate brokerage puts barriers in place to isolate client information to only their own appointed associate (agent). An individual real estate professional works exclusively as the client’s agent. Clients are individuals that are being helped by an agent specifically named under a written service agreement with the brokerage. Clients receive support for buying and selling real estate.

The client is a client of the brokerage but the brokerage designates a specific associate(s) to the specific transaction. The real estate brokerage puts barriers in place to isolate client information to only their own appointed associate (agent). An individual real estate professional works exclusively as the client’s agent. Clients are individuals that are being helped by an agent specifically named under a written service agreement with the brokerage. Clients receive support for buying and selling real estate.

There are a number of situations in which an agency agreement is automatically terminated, and may not have conditions placed upon it by the brokerage. Review each of the conditions and determine if the situation automatically results in the agency agreement being automatically terminated. (Select ALL that apply) A brokerage’s license to trade in real estate or manage property is suspended or canceled. A brokerage is insolvent, bankrupt, or in receivership. The agent and client agree in writing to an earlier end date, and the end date has arrived. The buyer decides their friend, who recently received a license as a real estate professional, should represent them instead. The client completes a purchase of a property matching the search criteria. The seller becomes unwilling to sell the property. The seller decides to increase the price after the negotiated sales price has been agreed upon and contractually signed. The service agreement expires. There is evidence that the brokerage or associate has committed fraud.

A brokerage’s license to trade in real estate or manage property is suspended or canceled. A brokerage is insolvent, bankrupt, or in receivership. The agent and client agree in writing to an earlier end date, and the end date has arrived. The client completes a purchase of a property matching the search criteria. The service agreement expires. There is evidence that the brokerage or associate has committed fraud.

Consumers and real estate professionals have working relationships that provide value to both parties. Real estate professionals are compensated in the form of monetary compensation paid to the brokerage. The consumer receives value in the form of services largely determined by what the consumer wants to get out of the relationship. From the below list, select all the items which apply to the value of the real estate relationship from the consumer’s standpoint. (Select ALL that apply) Determining the appropriate value for a property on the open market. Determining what action can be taken that will enhance the perceived value of their property. Following the client’s legal instructions. Explaining the impact of key economic indicators on the market and pricing. Securing funding sources for down payments that do not need to be reported to the government or documented for insured loans. Finding a property within their price range in the area they wish to buy. Managing and creating all required legal documentation. Signing documentation with their signature when they cannot be easily reached. Being liable for the full price of a property if the deal falls through. Managing the transaction process from start to finish Listing a home on the MLS® system.

Determining the appropriate value for a property on the open market. Determining what action can be taken that will enhance the perceived value of their property. Following the client’s legal instructions. Explaining the impact of key economic indicators on the market and pricing. Finding a property within their price range in the area they wish to buy. Managing and creating all required legal documentation. Managing the transaction process from start to finish Listing a home on the MLS® system.

Nelly and Grace are selling a small retail shop in a commercial condo they own. They have signed on with Boutique Brokerage with the commercial real estate professional Henrietta to sell the property. Knowing that commercial deals can take a while, Nelly and Grace sign a written service agreement that lasts six months. During the first three months, the brokerage actively advertises the property, shows it to many potential buyers and has a total of four different offers just shy of their asking price, which Nelly and Grace decline. In the fourth month, they have a commercial investor come directly to the shop itself and inquire about the “For Sale” sign in the window. The investor is very interested in the property but not the business, so he discusses leasing the property back to Nelly and Grace for a period of time, to allow them to finalize or move their business. He comes back the next week and makes a full price verbal offer with very favorable terms on the future lease. Nelly and Grace have not told Henrietta about the offer. They are considering asking the investor to wait a couple of months, which is when the contract with Greatness Brokerage is finished and they are free of having to pay Henrietta any commissions. True or False: Because it is only a verbal offer, Nelly and Grace have no obligation to tell Henrietta about the inquiry and offer on the property. TRUE FALSE

False

True or False: In order to facilitate each transaction fairly, a licensee in a transaction brokerage situation should provide copies of any documents or information requested by one side to the other side as well, so that each receives equal level of service. TRUE FALSE

True

When comparing Fee Simple ownership to a Leasehold, Leasehold rights confer the same rights as a Fee Simple estate, except for which right? (Select one) The right to enjoy. The right to exclude. The right to posses. The right to sell. The right to use.

The right to sell.

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: In a Judicial Sale, the courts generally only offer the property at an amount sufficient to cover the writs on the title since the court is NOT obligated to sell the property for the maximum amount possible, based on the current market. TRUE FALSE

False

True or False: An individual enters into an agency relationship by reaching out to the brokerage or one of the associates. Once contact has been made, agency relationship is established. TRUE FALSE

False

Clark is living in Manitoba currently, but will be moving to Alberta as soon as he secures a home to live in. He will be paying in cash for the home (no mortgage). It is currently a “seller’s market” and properties are going fast. Clark has employed you to look into several properties he has found on the MLS®. You look at the properties and all of them have serious problems. In fact, Clark’s “favourite” home has a roof leak that is so serious it has caused flooding inside. While the current owner tells you it is now patched and “works fine,” you have doubts about the condition of the roof. You share these doubts with Clark via email and he tells you that he wants you to make a cash offer on the home immediately, and to notify the seller that he is waiving the condition to have a home inspection. You pick up the phone and call Clark. You again advise Clark that you think this is a bad idea, and provide reasons why. He thanks you, but insists that he wants you to make the offer. Which of the following General Obligations represents why you will submit the offer on Clark’s behalf, even though you disagree? (Select one) Act honestly. Act in person. Disclose information. Exercise care and skill. Maintain confidentiality. Negotiate favourable terms. Obey lawful instructions

Obey lawful instructions

The licensee is expected to have the professional skill and capacity to know and address certain issues in a transaction before they arise. True or False: The licensee should NOT wait for clients to ask specific questions or request specific services if they already know what would be required to prevent harm to client interests. TRUE FALSE

True

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.

To fulfill their fiduciary obligation of full disclosure to a client, licensees are obligated to certain disclosure requirements, as set out in the Real Estate Act Rules. The following list contains statements of requirements. Identify the statements that are genuine disclosure requirements defined in the Real Estate Act Rules. (Select ALL that apply) Any conflict of interest that may exist. Any facts that may be likely to influence the client'sdecision. Any material change in facts previously disclosed. In a transaction brokerage, that advice or opinions that are authorized on behalf of the buyer only. The nature of the services the licensee will provide. The storage location and medium where the client’s electronic records are to be stored. Whether the licensee is acting in the trade or anticipated trade on their behalf.

Any conflict of interest that may exist. Any facts that may be likely to influence the client'sdecision. Any material change in facts previously disclosed. The nature of the services the licensee will provide. Whether the licensee is acting in the trade or anticipated trade on their behalf.

The following list contains duties owed to clients in representation relationships and customers in non-representation relationships. Select the duties owed to customers in non-representation relationships (Select ALL that apply) Giving them names of real estate service providers without recommending any specific service provider. Giving them statistics and information on property, including comparable property information from listing services or other local databases. Representing the client in a negotiation. Presenting all offers and counter-offers to and from a customer, even if a seller may have accepted another purchase contract. Providing a purchase contract document and other relevant forms, and helping them to complete them without advice. Providing opinions of trending prices in the market for a specific area of town.

Giving them names of real estate service providers without recommending any specific service provider. Giving them statistics and information on property, including comparable property information from listing services or other local databases. Presenting all offers and counter-offers to and from a customer, even if a seller may have accepted another purchase contract. Providing a purchase contract document and other relevant forms, and helping them to complete them without advice.

Orel has approached a brokerage about property management services. Orel has worked with several brokerages in the past, and is quite familiar with the process. Which of the following is correct? (Select one) Brokerages cannot act as property management services, but they can recommend one. Orel knows that only a verbal agreement is required for the brokerage to act as his property management service. Orel should expect to have the licensee supporting the property management service document the representation relationship (written service agreement) before acting on behalf of Orel’s businesses. The brokerage should expect Orel to provide a written service agreement before agreeing to work with him as a property management service.

Orel should expect to have the licensee supporting the property management service document the representation relationship (written service agreement) before acting on behalf of Orel’s businesses.

Clients often don’t know what concerns they should have in the real estate process. This is why they seek advice and counsel from real estate professionals. Which of the following ways are used to uncover client concerns? (Select ALL that apply) Give them a list of services offered. Give your clients a chance to speak and encourage them to ask questions. Interview potential clients to get a sense of what they’re looking for in an agent relationship and their personalities. Provide to them the brokerage address and contact points. Ask open ended questions and be an active listener.

Give your clients a chance to speak and encourage them to ask questions. Interview potential clients to get a sense of what they’re looking for in an agent relationship and their personalities.

There are multiple types of authority in representation relationships. In this type of authority, in real estate, this person acts as though they are the seller, but the name on the property title is that of a deceased individual. (Select one) Assignee. Assignor. Dower. Executor. Power of Attorney. Probate. Trustee.

Executor.

Regarding common law brokerages, which of the following statements are TRUE? (Select ALL that apply) Able to represent both buyer and seller on the same transaction. Any other agent at the brokerage is deemed to have knowledge of the client information. Brokerage liability removed for agent actions. Reduces conflict of interest between agents.

Able to represent both buyer and seller on the same transaction. Any other agent at the brokerage is deemed to have knowledge of the client information.

True or False: You can build trust with your clients and customers by being consistent in your duty to follow rules and to set expectations about both your business practices and the types of services you are permitted to provide. TRUE FALSE

True

Consent is NOT required when contacting former clients with electronic marketing materials. TRUE FALSE

False

Charlie, a licensee compiles a list of names, addresses, and emails of recent listing clients to see which areas of the city are generating the most clients to his brokerage. Charlie’s brokerage has consent, signed by each of the individuals, allowing the compilation of data for statistical purposes. Charlie has written each of the client’s information on a sticky-note and placed it in the corresponding point on a large map that covers his desk. Charlie is interrupted in his research by a new client at the door of his office. Charlie stands up and introduces himself, leaving the materials spread out on the desk. Charlie invites the client to sit in front of the desk, and he takes his chair behind it. Which principle of provincial and federal privacy legislation has Charlie violated? (Select one) Accuracy Challenging Compliance Identifying purposes Individual Access Limiting Use, Disclosure, Retention Openness Safeguards

Safeguards

Which of the following criminal offenses is described when a real estate professional does not inform their client of additional offers on the property because a potential buyer has offered them a cash payment directly to the agent if they convince their seller to take the offer. (Select one) Criminal interest rate De facto enterprise Secret commissions Fraud

Secret commissions

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 following groups have the right to have their personal information held as confidential and the right to choose what information to make available to others? (Select ALL that apply) Client Guest Employee Colleagues

Client Guest Employee Colleagues

More properties are being fitted with security cameras and nanny cams, often directly accessible through the internet. While it is illegal for a third party to record a conversation secretly in Canada, the lines are blurred with what you can do in your own home and the intent of security device. Client conversations that might reveal negotiation strategies, prices, or other transaction related details should be communicated outside of the home for optimal protection of the client’s best interest. TRUE FALSE

True

The Real Estate Act and RECA address fraud committed by real estate professionals with a disciplinary process that addresses their professional liability. Even though fraud is a criminal offense, if RECA has punished a licensee, the courts will not pursue criminal charges. TRUE FALSE

False

When your clients ask you to facilitate a real estate sale or purchase for them, you will need a signed representation agreement with them. In order to have a binding contract, you will need the client’s name on the contract. Which of the following statements are TRUE? (Select ALL that apply) Collecting the information on the client for the contract is considered a “legitimate business purpose,” because they want you to represent them. The brokerage can give their personal information to a 3rd party advertising agency, because the contract places your organization in an “affiliated” relationship. The client has the right to expect that their information is solely to facilitate the sale or purchase. The client has the right to have their information protected. Their name on the representation agreement is “personal information” and must be protected under PIPA.

Collecting the information on the client for the contract is considered a “legitimate business purpose,” because they want you to represent them. The client has the right to expect that their information is solely to facilitate the sale or purchase. The client has the right to have their information protected. Their name on the representation agreement is “personal information” and must be protected under PIPA.

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

Which of the following criminal offenses is described as when someone receives something valuable (money or gifts) for doing, or not doing, something connected with the business or affairs of the principal without transparency to all parties? (Select one) Criminal interest rate De facto enterprise Fraud Secret commissions

Secret commissions

Which of the following situations are examples of anti-competitive conduct by real estate professionals? (Select ALL that apply) Advising a landlord to reject a tenant on the basis of their business being a competitor to your own. An agreement between the three largest firms in the city to show properties listed only by those of the largest firms. Confirming with a client that another brokerage has listings they can be shown. Suggesting to other brokerage associates that they avoid doing business with ABBA brokerage’s associates. Two brokers, talking over lunch together, decide to set their brokerage’s commissions 1% lower than the other brokerages in town.

Advising a landlord to reject a tenant on the basis of their business being a competitor to your own. An agreement between the three largest firms in the city to show properties listed only by those of the largest firms. Suggesting to other brokerage associates that they avoid doing business with ABBA brokerage’s associates. Two brokers, talking over lunch together, decide to set their brokerage’s commissions 1% lower than the other brokerages in town.

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

Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) differs from the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) in which of the following ways? (Select one) PCMLTFA has an extensive website that provides numerous guidelines and notices for businesses that are mandated to use their system. PCMLTFA is an independent agency, whereas FINTRAC is legislation. PCMLTFA is legislation, whereas FINTRAC is an agency governed by the PCMLTFA. There is no substantial difference, both are legislations that deal with money laundering.

PCMLTFA is legislation, whereas FINTRAC is an agency governed by the PCMLTFA.

Failure to comply with the PCMLTFA may result in criminal or administrative monetary penalties. Criminal penalties can range from $500,000 to $2,000,000 dollars in fines and or imprisonment for up to five years. In addition to criminal penalties, administrative monetary penalties can range up to $500,000 depending on the severity of the violation. TRUE FALSE

True

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.

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

Reese has recently inherited several properties from his uncle. These properties are commercially zoned, but Reese was told several also had “discretionary uses” that were approved by the development authority. What are the responsibilities a licensee has, with regard to due diligence on the properties before sale? (Select ALL that apply) Conduct property inspections on each property to identify all potential areas of concern for the buyers. Investigate each property’s zoning classification and authorized uses. Investigate whether or not the sale of the property will impact the discretionary use authorization. Provide detailed descriptions of the properties as they are classified by the municipality to the client.

Investigate each property’s zoning classification and authorized uses. Investigate whether or not the sale of the property will impact the discretionary use authorization. Provide detailed descriptions of the properties as they are classified by the municipality to the client.

Several years ago, Thea contracted with a construction company to expand her home by turning a garage into a spare bedroom and bathroom. Thea recently put the home on the market, and Frank, her real estate agent has asked Thea to show the permits demonstrating the construction complies with the applicable building codes. Thea remembers that the construction company told her they “got all the correct permits.” What permit type is Thea looking for that will demonstrate the new construction complies with the applicable building codes? (Select one) Building permit. Development permit. Improvement authorization permit. Property construction permit. Setbacks and easements permit.

Building permit.

What is a primary impact of land use classification? (Select one) Enables utility easements and public rights-of-way. Ensures the highest amount of taxes are collected from each landowner. Is the primary driver of interest rates in the lending market. Land cannot be used in any way the property owner decides, it must conform to the municipalities land use policies.

Land cannot be used in any way the property owner decides, it must conform to the municipalities land use policies.

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.

Which of the following features of a home would be considered “green” real estate features? (Select ALL that apply) 110-volt and 220-volt receptacles (outlets). Alarm systems. Geothermal heat pumps. On-premises CCTV. Passive heating and cooling. Recycled building materials. LED lighting. Solar panels. Wastewater treatment and reuse. Wind turbines. Window-mounted air conditioners.

Geothermal heat pumps. Passive heating and cooling. Recycled building materials. LED lighting. Solar panels. Wastewater treatment and reuse. Wind turbines.

Suzie is a rural real estate professional, and often works with clients who are quite far away from the local towns. She often has to drive an hour or more to show properties, and some of the properties are located in areas without cellular coverage. Suzie likes to be as safe as possible, and relies heavily on technology to support her business. Which of the following safety protocols and tools could be used by Suzie to decrease the likelihood of problems while visiting the rural properties? (Select ALL that apply) Carry basic tools in the vehicle, in case it breaks down, such as jumper cables, a tire air compressor, tire jack and road flares. Carry emergency supplies (water, food, blankets). Have a satellite phone for emergencies. Pay for a gym membership. Subscribe to a roadside emergency assistance service. Wash and vacuum the vehicle regularly.

Carry basic tools in the vehicle, in case it breaks down, such as jumper cables, a tire air compressor, tire jack and road flares. Carry emergency supplies (water, food, blankets). Have a satellite phone for emergencies. Subscribe to a roadside emergency assistance service.

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.

Which phase of an Environmental Site Assessment is the phase where the remediation is implemented? (Select one) ESA Phase I. ESA Phase II. ESA Phase III. Remediation Point-Acquisition Phase I. Remediation Point-Acquisition Phase II.

ESA Phase III.

Which of the following reduces risk to a broker, customer, or community? (Select ALL that apply) Building in flood zones. Education programs. Inspections (property and environmental). Insurance. Policies and Procedures Manual adherence Purchasing remediated sites with the expectation of future changes in legislation. Utilizing cybersecurity technology.

Education programs. Inspections (property and environmental). Insurance. Policies and Procedures Manual adherence Utilizing cybersecurity technology.

Which of the following are strategies that are common mistakes in negotiating? (Select ALL that apply) Confirming details of verbal agreements in writing. Emotionally investing in the successful outcome of the deal; passionately ruling out logic. Ensure you are doing most of the talking, and only listen when you ask a question. Informing the client using subtle intimidation to close a deal, such as “If you counter this offer, you will lose them.” Intentionally creating tension between agents to make clients feel uncomfortable. Remembering that clients sometimes make statements that are not as definite as they seem, such as “this is my final price.” Use a cooperative approach in dealing with people, remembering that winning an argument may lose a sale.

Emotionally investing in the successful outcome of the deal; passionately ruling out logic. Ensure you are doing most of the talking, and only listen when you ask a question. Informing the client using subtle intimidation to close a deal, such as “If you counter this offer, you will lose them.” Intentionally creating tension between agents to make clients feel uncomfortable.

There are a variety of emotions that occur during conflict and disputes, but the number of common ways of dealing with the conflict or dispute is more limited. Which of the following ways of dealing with conflict is best described when one party tries to meet the needs of the other party to the neglect of their own needs and concerns? (Select one) Accommodating. Avoiding. Competing. Compromising.

Accommodating.

True or False: Forming relationships that will result in professional contacts for future problems is valuable use of your time only when there is immediate payment for a referral. TRUE FALSE

FALSE

Eli has been working as an associate at a brokerage for 13 years. He absolutely loves his job, especially the element of helping people. As a result, he’s the go-to mentor at the brokerage for new employees. One employee asks him to explain the difference between acting ethically, and acting professionally. Eli explains that “an associate can act professionally while not acting ethically, and that is not ok.” Which of the following would be an example that Eli could give to a new employee that would illustrate this concept? (Select one) An associate holds an open house for a client. During the day, a potential buyer comes into the home and asks if the associate would represent them during the transaction. Knowing the seller has expressed that they are not interested in losing agency relationship with the associate, the associate passes this information along to the buyer. An associate treats a visible minority client with great respect and deference, but only shows houses to the client of neighborhoods that are predominantly populated by the clients own ethnicity despite the client’s declared preference to look into other neighborhoods. An associate treats the broker to lunch, to celebrate the brokerage’s 10-year anniversary. A broker is informed that one of the recently hired associates is sexually harassing the front-desk assistant. The broker brings the associate into a room and explains to her how her actions are making the young man at the front uncomfortable, and that the behavior must stop immediately. The next day, the broker sees the associate treating the young man the same way, and watches the young man cringe. The broker terminates the associate’s relationship with the brokerage on the spot.

An associate treats a visible minority client with great respect and deference, but only shows houses to the client of neighborhoods that are predominantly populated by the clients own ethnicity despite the client’s declared preference to look into other neighborhoods.

From the following list, which are the advantages provided by having a professional group of peers govern the same body of professionals? (Select ALL that apply) A professional’s peers also have insight into whether a negative outcome in a transaction is beyond the control of the professional, or due to their negligence. Conversations of both problems and advances are easier with someone of the same professional background. Members prefer all other members be just like themselves in nationality, race, creed, religion, gender, and other preference. Members of these groups want to be judged, at least in part, by other people who understand the pressures and difficulties of that profession.

A professional’s peers also have insight into whether a negative outcome in a transaction is beyond the control of the professional, or due to their negligence. Conversations of both problems and advances are easier with someone of the same professional background. Members of these groups want to be judged, at least in part, by other people who understand the pressures and difficulties of that profession.

Improper conduct results in a conduct review, leading to regulatory or disciplinary actions. In a Court Remedy, the decision maker is a judge. Which of the following are NOT decisions made by a judge. (Select ALL that apply) Order equitable remedies (what is fair) such as specific performance. Order the licensee to pay a fine or other penalty to RECA. Order the licensee to pay damages and costs directly to the person who was harmed. Order the licensee to take additional training. Suspend the licensee’s license.

Order the licensee to pay a fine or other penalty to RECA. Order the licensee to take additional training. Suspend the licensee’s license.

The Real Estate Act Rules define an “agent” as “a licensee who is expressly or implicitly authorized to act for or represent another person.” When acting for or representing another person a conflict of interest may arise. How do the Rules define “conflict of interest?” (Select one) A disagreement between an agent and a client, regarding the standards of business conduct of the agent or client. An incompatibility between an agent and a client arising from real or perceived disagreements of procedural applications. An incompatibility between an agent and a client arising from real or perceived disagreements of best intention actions. A real or apparent incompatibility between a licensee’s interests and the interests of the client or potential client.

A real or apparent incompatibility between a licensee’s interests and the interests of the client or potential client.

Ahatia has begun working for ABBA Brokerage. During her training, Ahatia is informed of not only all the brokerage’s policies and procedures but provided additional training on the standards of professional conduct outlined by the Real Estate Act. Ahatia’s first client for a real-estate transaction hands her a cheque for the deposit on a property. The cheque is made out directly to Ahatia. Ahatia tells the client this is incorrect, but the client informs Ahatia that it’s the “last cheque I have,” and requests that she personally cash the cheque and deposit it on the client’s behalf. Ahatia does so. There is no problem with the transaction, and the deal closes without issue. Later, Ahatia’s broker discovers what she has done. Even though the situation worked out well, the broker informs Ahatia that what she did was not acceptable and has consequences. What liability did Ahatia’s actions expose her to (regardless of whether or not action is taken)? (Select one) Ahatia is NOT liable for any damages to the client (civil liability), and is NOT liable for failure to follow regulatory requirements (regulatory). Ahatia is NOT liable for any damages to the client (civil liability), and is liable for failure to follow regulatory requirements (regulatory). Ahatia is liable for any damages to the client (civil liability), and is liable for failure to follow regulatory requirements (regulatory). Ahatia is liable for any damages to the client (civil liability), and is NOT liable for failure to follow regulatory requirements (regulatory).

Ahatia is liable for any damages to the client (civil liability), and is liable for failure to follow regulatory requirements (regulatory).

Which of the following are consequences associated with a licensee entering into a conflict of interest with a client’s consent? It increases the possibility of civil liability. It may NOT be possible to adequately represent the client. It may NOT be possible to put the client’s interest first. Conflicts of interest may expose the client to undue risk.

It increases the possibility of civil liability. It may NOT be possible to adequately represent the client. It may NOT be possible to put the client’s interest first. Conflicts of interest may expose the client to undue risk.

Alberta officially became a province in 1905. In 1947, the Alberta Real Estate Association was formed, with ties to the Canadian Real Estate Association (CREA) formed in 1943. Between 1947 and 1980, with the creation of the Real Estate Act (REA), which replaced prior legislation, which of the following had multiple revisions that continually changed or expanded the rules for those engaged in real estate transactions? (Select one) The Agents Provocateur Act. The Real Estate Agent’s Licensing Act. The Real Estate Land Agent Act. The Real Estate Licensees Act.

The Real Estate Agent’s Licensing Act.

Judy and William are both agents in the same brokerage. Judy’s friend, Beth, comes into the brokerage and asks for Beth. William greets her at the front desk. Beth is told Judy is out and William asks Beth to describe why she is there. Beth explains she is looking for an agent to work with to sell her home, and Judy, her friend, is a known agent. Because Judy is out of office, William offers to meet with Beth instead. During their conversation, William has her sign as a client for the next 6 months with a written service agreement. When Judy gets back to the office, she talks with Beth, who is excited to tell her that she’s selling her home. When Judy thanks her for coming in to see her, Beth notes, “William talked to me while you were gone and had me sign the contract. That means we get to work together, right?” Judy knows that the brokerage is a designated brokerage and looks at the contract. As expected, Judy finds that it is a sole agency contract between William and Beth. Judy is NOT listed. Which of the following statements are TRUE? (Select ALL that apply). Because Beth is Judy’s friend, Judy can actively try to get her friend to break her contract with William to sign with Judy. Legally, William hasn’t done anything wrong. Ethically, William may have crossed boundaries of professionalism. Judy can take the issue to the Broker. Judy has absolutely no recourse of action and must accept that William is Beth’s real estate agent.

Legally, William hasn’t done anything wrong. Ethically, William may have crossed boundaries of professionalism. Judy can take the issue to the Broker.

The Real Estate Council of Alberta (RECA) puts out information bulletins highlighting issues and the best practices for mitigating them. True or False: The RECA website (https://www.reca.ca) contains links to bulletins, newsletter and courses for licensees to use as a resource. True. False.

True

Kendall and Corwin are associates at Skeevy Brokerage. Recently, they were both representing a buyer and seller in the same real estate transaction, and they failed to disclose this information to their clients. It was discovered by the clients at the closing when they reviewed the documentation. The clients both shared similar experiences where the prices and contract items negotiated seemed to primarily favor the agents and their convenience. A formal complaint was filed with RECA, and both clients filed a civil claim against the licensees through the Courts. This is an example of a case regarding tort law, where the licensee had a duty to care to a client, failed to come up to the standard of care, and harmed someone in the process. Which of the following is the most common remedy from the courts for this type of case? (Select one) Compensation – An order to pay a certain amount of money in compensation for the damages the plaintiff suffered. Contractual remedies – an order to pay the deposit to either the buyer or seller, as appropriate. Criminal remedies – and order to serve jail time. Punitive remedies – and order to suspend or revoke the agent’s licenses.

Compensation – An order to pay a certain amount of money in compensation for the damages the plaintiff suffered.

Self-governance (self-regulation) includes the right given by the provincial government, for certain groups to determine which of the following? (Select ALL that apply) What form the discipline of members should take. What nationality or decent the members of the group should have. What qualifications an individual must meet to join the group. Under what circumstances a member should be disciplined. Under what circumstances a member should be ejected from the group. Where the clubhouses are located.

What form the discipline of members should take. What qualifications an individual must meet to join the group. Under what circumstances a member should be disciplined. Under what circumstances a member should be ejected from the group.

Four documents govern real estate licensees in Alberta: The Real Estate Act (REA), REA’s Regulations, The Real Estate Act Rules, and the Real Estate Act bylaws. Which of the following statement is TRUE? (Select one) The Real Estate Act is legislation, and the bylaws are written and enacted by the legislative department overseeing REA. The Real Estate Act is legislation, and the Regulations are written and enacted by the legislative department overseeing REA. The Real Estate Act is legislation, and the Rules are written and enacted by the legislative department overseeing REA. The Real Estate Act is legislations, and the Rules, Regulations, and bylaws are all written by the Real Estate Council of Alberta (RECA). The Real Estate Act is provincial order, and the bylaws are written and enacted by the legislative department overseeing REA. The Real Estate Act is a provincial order, and the Regulations are written and enacted by the legislative department overseeing REA. The Real Estate Act is provincial order, and the Rules are written and enacted by the legislative department overseeing REA. The Real Estate Act is provincial order, and the Rules, Regulations, and bylaws are all written by the Real Estate Council of Alberta (RECA).

The Real Estate Act is legislation, and the Regulations are written and enacted by the legislative department overseeing REA.

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

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.

During an investigation, or after a hearing has determined conduct deserving of a sanction, which of the following powers does the Registrar have, with regard to licenses? (Select ALL that apply) Power to invoke licenses. Power to designate a licensee as inepta stultus. Power to place conditions on licenses. Power to place restrictions on licenses. Power to provoke licensees.

Power to place conditions on licenses. Power to place restrictions on licenses.

Which of the following is described as a mindset where someone knew something was harmful or dangerous and meant to do it? (Select one) Accident. Agency. Consequence. Intent. Negligence. Recklessness.

Intent.

Occasionally, the Registrar may deem a complaint “frivolous or vexatious” for which of the following reasons? (Select ALL that apply) The complaint is silly. The complainant has a personal connection to the accused. The complainant is trying to cause issues for the licensee because of something not connected to the business of a licensee. When the complainant has brought back repeated complaints when the registrar has already dismissed them.

The complaint is silly. The complainant is trying to cause issues for the licensee because of something not connected to the business of a licensee. When the complainant has brought back repeated complaints when the registrar has already dismissed them.

True or False: The Real Estate Act grants the Real Estate Council of Alberta the authority to administer and regulate licensees. True. False.

True

In 1980, Alberta enacted a new Real Estate Act. The history of the act includes several changes. Which of the following is accurate (Select one) 1984 and 1987 had amendments to the Real Estate Act, and 1995 represented a large change and upgrade in legislation concerning licensees. Buying and selling mobile homes was covered in the original 1980 act. The Real Estate Assurance Fund was NOT created until 1995, but collection of funds into a central repository was allowed following the 1982 amendment. There were no amendments, only a major rewrite in 1995 that allowed for self-governance.

1984 and 1987 had amendments to the Real Estate Act, and 1995 represented a large change and upgrade in legislation concerning licensees.

Once an appeal is made, the hearing panel reviews the information. True or False: Following review, the hearing panel decides whether there should be a hearing. True. False

True

For most legislation in Canada, including the Real Estate Act (REA), there are key terms that are defined in the legislation. Which key term in the Real Estate Act is described as “Real property, leasehold property, or a portable dwelling (other than a recreation vehicle)?” (Select one) Bylaws. Council. Industry Council. Real Estate. Rules.

Real Estate.

Which of the following are consumer benefits of working with licensed mortgage brokerage professionals? (Select ALL that apply) A client may be able to get a better deal working through a mortgage broker. A mortgage broker can seek loan products from many lenders, some of which the buyer may not have direct access to. The mortgage broker may have a strong incentive to provide to you loan options that most benefit themselves. Can potentially save a client time, money, and effort to review many different loan options. Mortgage brokers work only with one lender, ensuring the best rates possible from that lender for the client.

A client may be able to get a better deal working through a mortgage broker. A mortgage broker can seek loan products from many lenders, some of which the buyer may not have direct access to. Can potentially save a client time, money, and effort to review many different loan options.

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

A mortgage broker is not defined by the job title, but rather by the types of activities they perform. Which of the following are TRUE statements regarding mortgage brokers? (Select ALL that apply) A mortgage broker must be registered to a mortgage brokerage. A mortgage broker’s licence permits an individual to claim compensation for dealing in mortgages on behalf of another person. Mortgage brokers are authorized to show buyers only the rates that best suit the mortgage broker’s commission. Mortgage brokers match the buyer to the best lender for their situation. The mortgage broker’s role is to gather enough financial and personal information about a prospective buyer to satisfy the lender’s requirements.

A mortgage broker must be registered to a mortgage brokerage. A mortgage broker’s licence permits an individual to claim compensation for dealing in mortgages on behalf of another person. Mortgage brokers match the buyer to the best lender for their situation. The mortgage broker’s role is to gather enough financial and personal information about a prospective buyer to satisfy the lender’s requirements.

Jacob and Noah are working with Rachael to purchase a new business. They are interested in purchasing an established restaurant but have some questions about what requirements there are with regard to the existing employees. Rachael has conducted many commercial transactions, but they have all been leases or purchases of empty locations. This is new to her. Jacob and Noah lament the fact that Rachael doesn’t know their answers right away, and Noah notes, “Oh great, this probably means that we’ll have to hire a lawyer, too! This is going to get more expensive.” Rachael wonders if the deal is on the line. Which of the following courses of action is NOT acceptable? (Select one) Rachael should capture the questions and approach her broker to see if she has suggestions on where to find an expert (or if the broker knows the answers). Rachael should tell Jacob and Noah that there is no need to seek legal counsel. They can Google most of the answers, and there are many online resources available that are free. Rachael should empathize with Jacob and Noah, and let them know she understands their frustrations, and that she will work to help them find an appropriate legal resource by asking her broker for suggestions. Racheal can tell Noah and Jacob that they should definitely seek legal counsel if they feel it could be useful. She can also suggest they seek answers online, and that she can reach out to the broker at the brokerage on their behalf.

Rachael should tell Jacob and Noah that there is no need to seek legal counsel. They can Google most of the answers, and there are many online resources available that are free.

According to the Real Estate Act Rules, licensees must provide competent service and “fulfill their fiduciary obligations to their clients,” in other words their obligation to act in their client’s best interests at all times. Determine which of the following situations require an interpreter. (Select ALL that apply) A buyer, who has limited English skills, wants to meet with your client, the seller, to discuss terms of the contract. A condominium contract is very complicated, and you need help understanding how to interpret the contract’s requirements. Your client is a foreign national who has limited English skills. Your client is hearing impaired and specifically asks you to only communicate through texts, written conversation, or through a special device that translates from English to text. Your client is struggling to understand the legal terms used in a contract and asks for help interpreting them. Your client’s spouse is deaf, but she tells you her husband will communicate with sign-language to her, and she will translate for you.

A buyer, who has limited English skills, wants to meet with your client, the seller, to discuss terms of the contract. Your client is a foreign national who has limited English skills.

Of the principal duties of the condominium board, which of them requires the board to act to keep the common property and assets of the corporation in good repair, including complying with municipal or public notices requiring work to be done on the property? (Select one) Duty to enforce bylaws and rules Duty to fund Duty to insure Duty to keep records Duty to manage Duty to repair and maintain

Duty to repair and maintain

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

Exclusive use areas are sometimes shown on the condominium plan. What is meant by exclusive use? (Select one) A time period in which the common area may be reserved for parties, or special events. The bylaws section in which detail of the areas and how they are maintained is found. The permitting of an owner to exercise exclusive possession in respect of an area or areas of the common property. The types of activities exclusively permitted in certain common areas.

The permitting of an owner to exercise exclusive possession in respect of an area or areas of the common property.

Which of the following factors is a reason to NOT audit a condominium financial statement? (Select ALL that apply) If the condominium is complicated, in that it consists of both residential and commercial units with possible accounting issues between the two groups. If the condominium is relatively small and all of the owners likely have firsthand knowledge of all of the accounting, the status of the bank account and similar details. If the day-to-day accounting is complete and detailed, and there is periodic confirmation of the balances in the various accounts. When detailed knowledge of the condominium’s accounts is not possible, such as when the condominium consists of a greater number of units.

If the condominium is relatively small and all of the owners likely have firsthand knowledge of all of the accounting, the status of the bank account and similar details.

How are condominium corporation’s decisions made? (Select one) The board hires a property manager. The property manager selects 15% of the units to act as a voting group. The board puts decisions to the property manager who sends the choices to the voting group for decision making. The board selects the unit owners to act as voters on all decisions. Decisions are mailed (or electronically provided) to the unit owners for vote. Votes are made by unit owners and decisions published by the board. The unit owners select the board, the board drafts decisions, a town hall meeting is called, the board presents the draft decision, unit owners vote on the decision. The unit owners select the board, the board makes the decisions. The unit owners select the board, the board selects a property management company, the property management company makes the decisions.

The unit owners select the board, the board makes the decisions.

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: Foreclosure proceedings vary from province to province. TRUE FALSE

True

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 above the loan value.

In a mortgage who is typically referred to as “the buyer” or individual who is obtaining the loan? (Select one) Mortgagee. Mortgagor. Primary title holder. Writ of Guarantor.

Mortgagor.

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.

Which of the following are common red flags that may indicate a fraudulent transaction? (Select ALL that apply) Someone offers you money to use your name and credit information to get a mortgage. The loan amount on the mortgage is significantly lower than the value of the property. The mortgage has been refinanced several times and, in each instance, the amount of the mortgage has increased. The seller or investment adviser encourages you to see and inspect the property you are offering to purchase. You are encouraged to include false information on a loan application. You are asked to leave signature lines or other important areas on a loan application blank.

Someone offers you money to use your name and credit information to get a mortgage. The mortgage has been refinanced several times and, in each instance, the amount of the mortgage has increased. You are encouraged to include false information on a loan application. You are asked to leave signature lines or other important areas on a loan application blank.

In a mortgage, who is the person who is providing funds for the purchase of a loan or mortgage security on a real estate transaction? (Select one) Mortgagee. Mortgagor. Primary title holder. Writ of Guarantor.

Mortgagee.

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).

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.

In most real estate situations, mortgage brokers are acting as intermediaries between a lender and a client. Mortgage brokers can represent just the client, just the lender, or both. When a mortgage broker acts as an intermediary, what are the fiduciary responsibilities of the broker? (Select ALL that apply) Complete and submit any required documentation to the lender. Evaluate and list all available options for the borrower. Explain the client’s situation to the lender using supporting documents. Explain these options in clear language and make sure the borrower understands their options. Gather information about the borrower's specific financial situation and the property that they are wanting to finance. Help the client understand and meet the lender’s requirements. Keep both parties informed about the status of the mortgage application. Treat both the client and the lender with equal care and honesty.

Complete and submit any required documentation to the lender. Evaluate and list all available options for the borrower. Explain the client’s situation to the lender using supporting documents. Explain these options in clear language and make sure the borrower understands their options. Gather information about the borrower's specific financial situation and the property that they are wanting to finance. Help the client understand and meet the lender’s requirements. Keep both parties informed about the status of the mortgage application. Treat both the client and the lender with equal care and honesty.

Which of the following is NOT a method to reduce financial risk? (Select one) Accept a job in an employment field with low turnover. Check the title for liens or encumbrances before using the property as collateral for a loan. Mortgage a property with a loan that is less than 80% of the property’s true value. Save money in a savings account. Secure multiple loans from lenders who do not report to credit agencies. Secure a pre-approval for a loan amount.

Secure multiple loans from lenders who do not report to credit agencies.

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

True

Which of the following are indicators of suspicious transactions? (Select ALL that apply) A landlord asks potential tenants if they have pets. Deposits on rental transactions using cash. If you own a commercial property, someone offers you a lease or rent to-own on the commercial space, and they want to pay you over market rates in cash installments. Paying down a mortgage with a large sum of cash. Paying for commercial or residential real estate lease payments with cash. The buyer offers the full asking price of a property. Your client tells you that they were offered the opportunity to make some money by allowing someone else to use their credit to get a mortgage.

Deposits on rental transactions using cash. If you own a commercial property, someone offers you a lease or rent to-own on the commercial space, and they want to pay you over market rates in cash installments. Paying down a mortgage with a large sum of cash. Paying for commercial or residential real estate lease payments with cash. Your client tells you that they were offered the opportunity to make some money by allowing someone else to use their credit to get a mortgage.

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.

The principle of Surplus Productivity states that after all costs are satisfied in a venture, the net income flows to the land and establishes the value of that land. True or False: This principle has a limited effect on residential property. TRUE FALSE

True

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 mortgage types is a secured, revolving type of mortgage that operates similar to an unsecured line of credit? (Select one) Acreage lending mortgage. Construction draw mortgage. Cashback mortgage. Home Equity Line of Credit. Residential mortgage. Reverse Mortgage.

Home Equity Line of Credit.

Becca is looking at purchasing a commercial property as an investment with the expectation to rent the property. She has two choices, both of which are located on the same property block, and are the same price. The first property already has a tenant occupying it. The tenant has agreed to the same financial terms as held with the prior landlord, has been there for more than a decade, and has indicated they have no intention or reason to stop renting the property. The rental would more than cover the cost of the loan. The second property has no occupant and is in need of a remodel, which, when completed potentially may result in a higher monthly rent. Becca knows that securing the loan will require demonstrating the least possible financial risk to the lender. Which of the properties provides the least possible risk for the lender? (Select one) The first property with the current occupied tenant. The second property with no current tenant, requiring renovations, but higher possible rents. There is no risk difference to the lender for either property.

The first property with the current occupied tenant.

Which type of mortgage fraud targets vulnerable individuals who have defaulted or are at risk of defaulting on their mortgage? (Select one) Foreclosure fraud. Fraud for housing. Fraud for profit. Fraud for title.

Foreclosure fraud.

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.

True or False: Consent is a legal term meaning the party freely agrees. TRUE FALSE

True

Which of the following are components to maintaining proper documentation? (Select ALL that apply) Immediately dispose of contracts that had conditions unmet. Keep notes and documents relating to a transaction together. Keep records of all signed documentation Maintain electronic records in an accessible format. Maintain electronic records in difficult to access methods and locations.

Keep notes and documents relating to a transaction together. Keep records of all signed documentation Maintain electronic records in an accessible format.

Written communication, documentation, and record-keeping are fundamental to the work of a real estate professional. In situations where an important file note is being made, a best practice is to send a brief written correspondence to the client outlining the issue or discussion and any advice given. In which situation does this apply? (Select one) Actions. Advice. Conversations. Individual practice. All of the above. None of the above.

All of the above.

In commercial transactions, which of the following financial statements may be required by the buyer from the seller? (Select ALL that apply) Annual financial statements. Balance sheets. Compilation engagements. Income (profit and loss) statements. Monthly financial statements.

Annual financial statements. Balance sheets. Compilation engagements. Income (profit and loss) statements. Monthly financial statements.

When information that requires disclosure is made available to the real estate professional, what is the time requirement to disclose the information to the client? (Select one) 12 hours. 24 hours. 3 business days. 1 week. As soon as possible.

As soon as possible.

Which method of control allows each proposed development to be considered according to its own merits? (Select one) Development control. Permitting. Principal Title. Regulatory commission. Zoning control.

Development control.

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.

In which of the following types of ownership, does the property belong to each of the owners entirely but together? (Select one) Conjoined ownership. Investor deemed. Joint tenants. Survival ownership. Tenants in common.

Joint tenants.

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.

Which of the following additional documents lists the details and particulars of leases, tenant information, and deposits being held by the seller? (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.

Tenancy Schedule.

The Alberta Real Estate Association's (AREA) standard purchase contract establishes which of the following with regard to the deposit? (Select ALL that apply) Amount of the deposit. Bullion equivalency of the payment (in gold or silver standard). Date and time which the deposit must be paid. Method of payment. The deposit trustee to whom the amount is payable. Commission split of the brokerage handling the deposit. Terms of trust that the trustee must follow

Amount of the deposit. Date and time which the deposit must be paid. Method of payment. The deposit trustee to whom the amount is payable. Terms of trust that the trustee must follow

Which of the following describes the primary differences between a latent defect and a patent defect? (Select one) Latent defects are inconsequential to the sale of the home (dust, doorways into rooms, roofing material); patent defects can affect the price of the home. Latent defects are obvious enough that they should be discovered during a reasonable inspection of the home; patent defects are known defects that can NOT be uncovered by a reasonably thorough inspection of the home. Latent defects are ones that would cost more than $1,000 to fixed and can be used to halt the sale due to inspection results; patent defects cost less than $1,000, and cannot be used to halt the sale due to inspection results. Patent defects are obvious enough that they should be discovered during a reasonable inspection of the home; latent defects are known defects that can NOT be uncovered by a reasonably thorough inspection of the home. Patent defects are ones that would cost more than $1,000 to fix and can be used to halt the sale due to inspection results; latent defects cost less than $1,000, and cannot be used to halt the sale due to inspection results.

Patent defects are obvious enough that they should be discovered during a reasonable inspection of the home; latent defects are known defects that can NOT be uncovered by a reasonably thorough inspection of the home.

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.

Written service agreements with those who enter into a buyer client relationship may be exclusive or non-exclusive. Which of the following are characteristics of an exclusive relationship? (Select ALL that apply) Establishes an agency relationship. The buyer is bound to use the services of one specific brokerage for the duration of the agreement. The buyer may enter into more than one buyer representation agreement. The client may use the services of multiple brokerages at the same time. Payment of commissions is owed to one specific brokerage upon a completed purchase.

Establishes an agency relationship. The buyer is bound to use the services of one specific brokerage for the duration of the agreement. Payment of commissions is owed to one specific brokerage upon a completed purchase.

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

A seller has the authority to place conditions on people visiting their property. These conditions must be followed by real estate professionals and their clients. This may include which of the following? (Select ALL that apply) Limitations on the day of the week the property is available for viewing. Mandatory offers on the property if making a visit. Limitations on the number of people visiting at one time. Limitations on the time of day the property is available for viewing. Requirements to use provided shoe covers on the property. Scheduled visits only.

Limitations on the day of the week the property is available for viewing. Limitations on the number of people visiting at one time. Limitations on the time of day the property is available for viewing. Requirements to use provided shoe covers on the property. Scheduled visits only.

Which of the following type of land estate is the most common type of ownership, where the holder of the land owns the land in perpetuity, with all rights to its capital or present value? (Select one) Fee simple. Leasehold. Life estate. Life mortgage.

Fee simple.

In Alberta, if the seller is married and living with their spouse on the property and the seller’s spouse is not a registered owner on title; what requires the spouse on title to obtain the consent of the non-owner spouse in order to sell the property? (Select one) Common law. The Dower Act. The Marriage and Family Law Act (MMLA). The Spousal Rights Verdict (courts declaration). Tort law.

The Dower Act.

According to the Electronic Transactions Act (ETA), electronic records and transactions have the same effect and enforceability as traditional paper-based transactions as long as which of the following conditions are met? (Select ALL that apply) Able to be retained. Contains disclosures that information stored electronically is authorized by RECA. Easily accessible. The electronic information is organized in the same manner as on the paper forms. The electronic information utilizes either .pdf formatting, or XML coding.

Able to be retained. Easily accessible. The electronic information is organized in the same manner as on the paper forms.

True or False: When multiple brokerages are handling a transaction (one for the buyer, one for the seller), the Real Estate Act Rules require the deposit money to be evenly split between the brokerage trust accounts. TRUE FALSE

False

Practice Test 2(2.1) Flashcards

(149 cards)