Practice Test 3 Flashcards
1
Q
he Real Estate Act requires self-regulation of the real estate industry. Self-regulation means that the government, in this case the province of Alberta, allows those within the industry to use their specialized knowledge to regulate the industry.
True or False: In practice, this means Investigation and disciplinary action for real estate professionals is managed by RECA.
True
False
A
True
2
Q
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
A
Mortgage associate
Mortgage broker
Property Manager
Real estate associate
Real estate broker
3
Q
Chrissy and Jennie are arguing about what their real estate agent should be doing for them. Chrissy thinks that the real estate professional can only offer services in buying, selling, or leasing real estate, and Jennie believes that the real estate agent, while helpful, just directs the actual buying and selling and leasing to the brokerage… and that the real estate agent’s primary role is to offer advice about the process. Who is correct? (Select the BEST answer)
Chrissy is correct, a licensed professional is only authorized to provide services related to buying, selling, or leasing real estate. Offering advice is likely to result in legal problems later, if the client acts on the good faith advice of the agent.
Jennie is correct, the real estate agent is only authorized to provide good faith advice, and must direct the client to a licensed professional at a brokerage for services related to buying, selling, or leasing real estate.
Chrissy and Jennie are both correct a real estate agent, as a licensed real estate professional, is authorized to provide both advice and services related to buying, selling, or leasing real estate.
Neither Chrissy nor Jennie is correct, as a real estate agent is just someone who shows homes. They need to contact a licensed real estate professional (broker, associate broker, or associate) to get advice and services.
A
Chrissy and Jennie are both correct a real estate agent, as a licensed real estate professional, is authorized to provide both advice and services related to buying, selling, or leasing real estate.
4
Q
When RECA receives a complaint regarding professional conduct, which of the following is NOT a part of the investigation process? (Select one)
Gather information from the complainant
Notify the complainant, broker, and the licensee that the investigation is underway
Gather relevant information
Make public (publish) the gathered information
Information presented to Registrar to make a decision
When appropriate the Registrar may refer the matter to a Hearing Panel, who will make a decision after hearing all statements and evidence
Notify all parties of the outcome of the investigation
A
Make public (publish) the gathered information
5
Q
Which of the following can assist you in the request to obtain a Certified Criminal Record Check (CCRC)? (Select ALL that apply)
A private, accredited fingerprint agency
Pawn shops
Your local police service
Your local post office
Your local public library
A
A private, accredited fingerprint agency
Your local police service
6
Q
There are two ways for real estate professionals to connect with a brokerage: as an employee or an independent contractor.
Which of the two methods is under the direction and control of the brokerage representing the employer in all business dealings? (Select one)
Employee
Independent Contractor
Both Employee and Independent Contractor
None of the above
A
Employee
7
Q
Economists believe that in a market economy, things are always moving toward equilibrium. That is the point where the forces of supply and demand are relatively equal and where the market is performing most efficiently. Which of the following market forces occurs when Demand increases if the current price is lower than the equilibrium price occurring from an increase in demand, decrease in supply, and/or government intervention? (Select one)
Market Shortage
Market surplus
Movement in the market
Quantity
A
Market Shortage
8
Q
True or False: The Real Estate Act requires that licensees cooperate and provide documents or other information as requested by RECA during an investigation.
True
False
A
True
9
Q
Specialization allows property management brokerages to concentrate on managing a sector of properties needing their services. Which specialization includes mixed-use buildings, shopping centres, strip malls, gas stations, and repair shops? (Select one)
Agri-business property management
Commercial property management
Industrial property management
Residential property management
Retail property management
A
Commercial property management
10
Q
Which of the following indicator classifications will often change prior to large economic adjustments, which makes them useful in predicting future trends. (Select one)
Chronology Indicator
Coincident Indicator
Fraternal Indicator
Lagging Indicator
Leading Indicator
A
Leading Indicator
11
Q
True or False: RECA automatically suspends a license during an investigation.
True
False
A
False
12
Q
Which of the following are characteristics of a “real estate bubble?” (Select ALL that apply)
Excessive buyer confidence convinces buyers that they will be able to sell at a higher price in the future.
Prices are driven up by an increase in demand with a limited supply.
Prices are equivalent or lower than they are at a “trough” period of the real estate cycle.
Spurred on by emotional buying and the feeling of scarcity.
The price of housing rises at a rapid and unsustainable pace.
A
Excessive buyer confidence convinces buyers that they will be able to sell at a higher price in the future.
Prices are driven up by an increase in demand with a limited supply.
Spurred on by emotional buying and the feeling of scarcity.
The price of housing rises at a rapid and unsustainable pace.
13
Q
True or False: The Trust fund can be used for both maintenance of trust funds (from sellers or buyers), and payment of brokerage expenses and commissions.
True
False
A
False
14
Q
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
A
Business brokerage
Integrated office space
Manufacturing
Office space
Retail facilities
Warehousing
Yard storage
15
Q
Which of the following must be reported to the Registrar by the licensee? (Select ALL that apply)
Has a court judgement in relation to providing goods or services to the public.
Has a name change
Has been convicted of a traffic offence
Has filed for divorce.
Has moved residences.
Is disciplined by any real estate board, professional or regulatory body, etc.
Is subject to bankruptcy proceedings or has a business under bankruptcy proceedings.
A
Has a court judgement in relation to providing goods or services to the public.
Has a name change
Is disciplined by any real estate board, professional or regulatory body, etc.
Is subject to bankruptcy proceedings or has a business under bankruptcy proceedings.
16
Q
Review the following statements and determine which of them is NOT a required written disclosure statement real estate professionals are required to make to clients. (Select one)
Any conflict of interest that may exist.
Any facts that may be likely to influence the person’s decision (including fees or commissions received).
The nature of the services the licensee will provide.
The storage location and medium where the brokerage stores documents.
Whether the licensee is acting in the trade or anticipated trade on behalf of another person, in any capacity.
A
The storage location and medium where the brokerage stores documents.
17
Q
What type of remedy for the innocent party in a breach of contract results in a forfeit of the deposit in the agreement signed by both parties. (Select one)
Contractual.
Equitable.
Impartial
Jurisprudence
Legal
Pledged
A
Contractual.
18
Q
Anna is a real estate professional who is approached by a newlywed couple looking to get into their first home. Because the wife’s job is likely to move locations to another province in about a year, they only want to live there until that time, and then rent it out. What type of ownership option should they investigate?
Fee Simple
Leasehold
Life estate
A
Fee Simple
19
Q
Theodore is living in the same home he’s been in since 1980. He has been told that the property is his as long as he wishes to live there, but he does not have the right to sell it. Upon his death, the property ownership will revert to his nephew. Which of the following owner-type is Theodore? (Select one)
Fee Simple
Leasehold
Life estate
A
Life estate
20
Q
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
A
FALSE
21
Q
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.
A
Dishonest transactions, language, or dealings.
Fraudulent actions by licensees.
Individuals acting as licensees without a licence.
22
Q
Consumers are more likely to trust real estate professionals who show confidence in themselves and what they are selling. You can build this type of confidence by increasing your knowledge on the different types of real estate and services you offer. From the following list, select all those that can contribute to your knowledge about your chosen area of practice. (Select ALL that apply)
Asking questions of those with more experience, or experts in the areas and subjects about which you want to learn more.
Familiarizing yourself with various floor plans, zoning documents, and neighborhood information.
Feedback from past clients.
Engagement in online industry forums.
Paying attention to the pre-licensing training, and re-certification training each year.
Sales training programs.
Visits to show homes or open houses to thoroughly know the product
Your fellow licensees or team members.
A
Asking questions of those with more experience, or experts in the areas and subjects about which you want to learn more.
Familiarizing yourself with various floor plans, zoning documents, and neighborhood information.
Feedback from past clients.
Engagement in online industry forums.
Paying attention to the pre-licensing training, and re-certification training each year.
Sales training programs.
Visits to show homes or open houses to thoroughly know the product
Your fellow licensees or team members.
23
Q
Real estate purchase contracts are legally binding documents between a buyer and a seller with built-in remedies for failure to meet any of their stated terms. For this reason, compensation for any damages resulting from the unexpected collapse of a real estate transaction may be pursued through civil litigation. These claims include which of the following? (Select ALL that apply)
Claim of costs associated to restore title or regain possession.
Full brokerage compensation during the time of contract.
Legal claims on deposits.
Monetary provable damages.
Payment of reasonable costs to pursue legal redress.
A
Claim of costs associated to restore title or regain possession.
Legal claims on deposits.
Monetary provable damages.
Payment of reasonable costs to pursue legal redress.
24
Q
Carol and Anoop each work with Laura, an associate at Lakeview Brokerage. Carol is a buyer, and Anoop is a seller. Laura agreed to represent both of them at different times in the last month. As Carol is looking at properties, Anoop’s property happens to fit her criteria. Carol asks if Laura will make an offer on the property. Laura informs both Carol and Anoop of the conflict of interest and offers to act in a capacity that allows her to facilitate only, and not act as sole agent to either party. With Carol’s and Anoop’s permission what capacity is Laura offering to act in? (Select one)
Common Law Brokerage.
Contract Negotiator.
Mortgage Brokerage.
Team lead.
Transaction Brokerage.
Translation Brokerage.
A
Transaction Brokerage.
25
In Alberta, if a person dies and they are the only person on the residential property title, it is possible for the spouse to have a “life estate interest” in the property. Dower interest means they have a legal right to the property as the spouse of the title holder. There are three conditions which ALL must be met for dower rights to apply. Which of the following conditions are requirements? (Select THREE)
There is only one name on the property title.
The person on the property title is legally married (there is no divorce or common law marriage).
The last Will and Testament, commonly known as the "Will", does not designate another party as being an heir to the property.
Either of the legally married parties have spent at least one night sleeping in the home, either as a couple or as individuals.
There is only one name on the property title.
The person on the property title is legally married (there is no divorce or common law marriage).
Either of the legally married parties have spent at least one night sleeping in the home, either as a couple or as individuals.
26
When an agency relationship is terminated, the licensee still has obligations to the client. Which of the following statements are TRUE? (Select ALL that apply)
The agent’s and the client’s rights under the agreement are not affected.
The brokerage’s duty to keep client information confidential continues even after a written service agreement ends.
The brokerage must continue to act with fiduciary responsibility for the client, following the service agreement termination.
A client may not purchase a property without first consulting with the agent.
A client may not sell a property without first consulting with the agent.
The agent’s and the client’s rights under the agreement are not affected.
The brokerage’s duty to keep client information confidential continues even after a written service agreement ends.
27
Floyd and Katherine are now empty nesters. They are looking to sell their large 5-bedroom home on a cul-de-sac and find a medium-sized property that has a primary bedroom in the basement. While they are looking for a smaller property, they aren’t necessarily looking for a cheaper one. They want all the modern amenities and upgrades available in higher end properties.
From the following list below, match the above description with the type of client. (Select one)
First-time buyer/seller.
Move-up buyer/seller.
Move-down buyer/seller.
Investment buyer/seller.
Elderly property owner.
Move-down buyer/seller.
28
Audrey purchased her first home in a small newly built subdivision. She owns all the property and common law rights to it except mines and mineral rights. Which one of the following ownership type is Audrey? (Select one)
Fee Simple
Leasehold
Life estate
Fee Simple
29
What type of remedy, for the innocent party in a breach of contract, results in compensation for non-monetary losses, including things like pain and suffering and emotional damage. (Select one)
Contractual.
Equitable.
Impartial
Jurisprudence
Legal
Pledged
Legal
30
RECA’s Customer Acknowledgement form describes the role of the real estate professional as (2.1.a), “we have no agency obligations to you, especially fiduciary ones. In a fiduciary relationship, you rely on someone to act in your best interests.”
True or False: “Have no agency obligation” means a real estate professional has no obligation to disclose information to a customer, including fees, commissions, and information that is not in the real estate professional’s client’s best interest.
TRUE
FALSE
True
31
What is the purpose of information barriers for brokerages that practice designated agency? (Select ALL that apply)
Access to client information is available to all other agents.
Agency and fiduciary responsibilities are held by the brokerage.
Brokerage liability removed for agent actions.
Ensures client confidentiality between agents of the same brokerage.
Prevents the listing agent from seeing the client’s personal information.
Eliminates conflict of interest between agents of the same brokerage (i.e., one agent represents a buyer, another represents a seller) because there is no deemed knowledge transfer about the clients
Ensures client confidentiality between agents of the same brokerage.
Eliminates conflict of interest between agents of the same brokerage (i.e., one agent represents a buyer, another represents a seller) because there is no deemed knowledge transfer about the clients
32
A real estate licensee is required to have the professional skill and capacity to know and address certain issues in a transaction before they arise. This is considered a “standard of care.” Therefore, real estate professionals 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.
The standard of care to which real estate professionals are held includes informing the client of what? (Select ALL that apply)
Things they do not know to ask about.
The possible consequences of their lawful instructions to you.
The potential results of any decisions made.
Any costs to the trade that they may not have anticipated.
Things they do not know to ask about.
The possible consequences of their lawful instructions to you.
The potential results of any decisions made.
Any costs to the trade that they may not have anticipated.
33
Bart has secured land from the Crown in a residential area in a national park. He owns many structures on the land, but the property is his only for a fixed period of time. Which of the following owner-type is Bart? (Select one)
Fee Simple
Leasehold
Life estate
Leasehold
34
True or False: Any instruction provided by the client in an agency relationship is protected. Even if unlawful, the licensee may not inform the local authorities.
TRUE
FALSE
FALSE
35
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
36
What is the primary way RECA interfaces with the licensees to protect and promote public confidence in the industry? (Select one)
Brokerage conferences hosted by RECA.
RECA investigations.
RECA mandated pre-licensing training courses.
RECA newsletters.
RECA investigations.
37
A seller or buyer customer is an individual who has elected not to be represented by an agent in a transaction but instead represents themselves. If you represent the seller in an agency relationship, and the buyer is unrepresented (a customer), what should you discuss with the seller? (Select ALL that apply)
That you must act in the best interest of the customer.
That you must share all information given to you by the customer, with the seller, even if it is confidential (unless it were received while acting as the customer’s agent).
That you will not give the customer information or advice that is not in the seller’s best interests.
That you will use your judgement on the customer’s behalf and give them advice.
That you must share all information given to you by the customer, with the seller, even if it is confidential (unless it were received while acting as the customer’s agent).
That you will not give the customer information or advice that is not in the seller’s best interests.
38
There are a number of situations in which a brokerage must notify the Registrar, as set out in the Real Estate Act Rules. From the following list, select those that trigger the need for a brokerage to immediately notify the Registrar in writing. (Select ALL that apply)
Any circumstance where the broker is no longer able to perform the duties and responsibilities of a broker outlined in these Rules.
The termination or resignation of any associate who is registered with the brokerage.
The closing of a trust account.
A change in the address of the brokerage’s registered business office.
A change in location at which the brokerage maintains a trust account.
A change in clients if the brokerage is a partnership.
A change in the directors, officers or shareholders of a corporation if the brokerage is a corporation.
A change/amendment to the brokerage’s fiscal year reporting timing (as long as it does not result in a reporting period of greater than 12 months).
Any circumstance where the broker is no longer able to perform the duties and responsibilities of a broker outlined in these Rules.
The closing of a trust account.
A change in the address of the brokerage’s registered business office.
A change in location at which the brokerage maintains a trust account.
A change in the directors, officers or shareholders of a corporation if the brokerage is a corporation.
A change/amendment to the brokerage’s fiscal year reporting timing (as long as it does not result in a reporting period of greater than 12 months).
39
True or False: In a common law brokerage, the agency relationship is between the brokerage and the client.
TRUE
FALSE
True
40
There are multiple types of authority in representation relationships. In this type of authority, a perfectly competent owner delegates signing authority with a notarized legal document to another person when they are unavailable, such as if they are travelling abroad and difficult to reach. (Select one)
Assignee.
Assignor.
Dower.
Executor.
Power of Attorney.
Probate.
Trustee.
Power of Attorney.
41
From the following list of obligations in common written service agreements, select all those that are licensee obligations. (Select ALL that apply)
Communicating and cooperating with the agent and brokerage.
Discussing with the agent any specific information they want about a property.
Giving the agent or brokerage copies of any offers, of which they are not aware that the client makes or receives for properties that match the search criteria, unless they sign a Buyer Representation Agreement with another brokerage that begins after their agreement ends.
Help a client prepare and comply with a contract to sell the property.
Help a client negotiate favourable terms and conditions with a buyer.
Keep a client informed of the agent’s marketing activities and any resulting transaction.
Market the property until the property is sold under the agreement, or the agreement ends.
Present all offers and counteroffers to and from a client, even when a client has accepted a purchase contract.
Telling the agent about inquiries the client makes or receives about purchases that affect their agreement.
The agent must keep the client informed during the search and any resulting transaction.
Help a client prepare and comply with a contract to sell the property.
Help a client negotiate favourable terms and conditions with a buyer.
Keep a client informed of the agent’s marketing activities and any resulting transaction.
Market the property until the property is sold under the agreement, or the agreement ends.
Present all offers and counteroffers to and from a client, even when a client has accepted a purchase contract.
The agent must keep the client informed during the search and any resulting transaction.
42
True or False: Real estate professionals have a fiduciary obligation to customers.
TRUE
FALSE
False
43
No licensee may participate in any unlawful activities, at any time, for any reason.
Which of the following actions are options to deal with unlawful client instructions? (Select ALL that apply)
The agent should decline in writing to follow the instruction and clearly outline the reasons for their refusal.
The agent should follow the client’s instructions. Even when unlawful, an agent has a fiduciary responsibility to the client to follow all instructions.
The agent should immediately speak with their broker to confirm the validity of the request.
The brokerage may take steps to terminate the agency relationship in order to preserve the agent and brokerage's reputation.
The agent should decline in writing to follow the instruction and clearly outline the reasons for their refusal.
The agent should immediately speak with their broker to confirm the validity of the request.
The brokerage may take steps to terminate the agency relationship in order to preserve the agent and brokerage's reputation.
44
Jeffrey is looking into hiring a real estate professional to sell several of his properties. Jeffrey is a very private person, and really doesn’t like anyone learning about his personal information. He works very hard to keep his “digital footprint” at near zero. He understands he’ll have to provide some information to sell his properties, but wants to keep the distribution of his information to an absolute minimum, preferably, with just one person.
Which type of agency contract allows Jeffrey to have a single real estate professional act as his agent, with protections in place to prevent his personal information from being accessed by other agents at the brokerage? (Select one)
Common law agency relationship.
Customer relationship.
Designated agency relationship.
Designated customer relationship.
De facto agency relationship.
Designated agency relationship.
45
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.
46
Which permit type is needed to confirm that buildings comply with applicable building codes? (Select one)
Building permit.
Code permit.
Construction permit.
Development permit.
Building permit.
47
Ursula and her husband Barney are selling their parents' old property. The old garage has been torn down, but the old house is still standing and is NOT undergoing renovations prior to the sale. During the property inspection, the garage area’s dirt is inspected and found to have a significant amount of grease and oil. Barney notes to the inspector, “oh, that’s just where Dad used to dump all the oil from the cars he worked on. He probably just didn’t dig the hole deep enough that time.”
The property inspector moves to the house and finds the attic is filled with asbestos as insulation and is well-contained and undisturbed. When the inspector goes into the crawlspace with a flashlight (there is no light down there), he discovers the water lines are Poly-B but have copper joints and there is no cracking.
For the above scenario, evaluate each of the following statements, and select those that are TRUE. (Select ALL that apply)
The soil contaminants are NOT an issue, because it’s a residential property.
The soil contaminants are a potential issue.
Asbestos must be removed and replaced before sale of the property.
Asbestos that is NOT being disturbed by renovations (or other movement) is NOT a prohibition to the sale of the property but MUST be disclosed to potential buyers.
Poly-B with copper joints is NOT reason to be concerned because they are in the dark basement.
Poly-B with copper joints may be an elevated leak risk, and a potential buyer should check with their insurance company to see if the building can be insured.
The soil contaminants are NOT an issue, because it’s a residential property.
Asbestos must be removed and replaced before sale of the property.
Poly-B with copper joints may be an elevated leak risk, and a potential buyer should check with their insurance company to see if the building can be insured.
48
From a buyer’s perspective, which of the following property types is likely to be the most economical for first-time buyers, usually has just one floor, may of may not have private laundry facilities, but has several adjoining units? (Select one)
Apartment.
Detached.
Duplex.
Row.
Semi-detached.
Triplex.
Fourplex.
Apartment
49
When is a building permit NOT required? (Select one)
Change the use of a building
Construct new buildings
Construct secondary suites in existing buildings.
Painting the exterior of a building.
Significantly alter existing buildings
Painting the exterior of a building.
50
Which of the following land use district (zone) would allow residential buildings that are NOT intended for full-time occupancy? (Select one)
Commercial.
Industrial.
Residential.
Recreational.
Special Use.
Recreational.
51
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.
52
Which permit type is needed to confirm that the use of a property complies with the municipality’s land use plan and the associated land use bylaws? (Select one)
Building permit.
Code permit.
Construction permit.
Development permit.
Development permit.
53
Reginald is working with a client to build a property on a parcel of land that has recently been zoned for commercial development. The client is looking to secure a permit that confirms that the use of the property complies with the municipalities land use plan and the associated land use bylaws. What type of permit does Reginald’s client need? (Select one)
Building permit.
Development permit.
Improvement authorization permit.
Property construction permit.
Setbacks and easements permit.
Development permit.
54
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.
55
Which of the following land use district (zone) would allow large parcels with low density and mixed dwellings? (Select one)
Commercial.
Industrial.
Residential.
Recreational.
Special Use.
Residential.
56
Regarding the primary differences between permitted land uses and discretionary land uses, review each item below, and select the one TRUE statement. (Select one)
Permitted land use and discretionary use are the same things (what the property owner is allowed to do with the land).
Permitted land use are defined lists of uses that are allowed on the land with no further approvals required other than the necessary building permits, whereas discretionary uses are approved on a case-by-case basis by the Development Authority.
Permitted land use are defined lists of uses that are allowed on the land with no further approvals required (including any building permits), whereas discretionary uses are approved on a case-by-case basis by the Development Authority.
Permitted land use are defined lists of individuals who are authorized to build and construct properties within a municipality, whereas discretionary uses are construction companies that require advanced approval through the municipality’s Development Authority.
Permitted land use are defined lists of uses that are allowed on the land with no further approvals required other than the necessary building permits, whereas discretionary uses are approved on a case-by-case basis by the Development Authority.
57
A municipal land use plan must be diverse and thoughtfully planned to satisfy various needs and benefit the local population as a whole. Which of the following are reasons for the municipalities' policies on land use (Select ALL that apply)
Aesthetics.
Better education for primary students.
Decrease in overall taxes required for municipality council members.
Economic development.
Environmental sustainability.
Improved prices for property sellers.
Providing adequate infrastructure for properties.
Public health.
Reduction of conflicts between property owners.
Aesthetics.
Economic development.
Environmental sustainability.
Providing adequate infrastructure for properties.
Public health.
Reduction of conflicts between property owners.
58
Gary is looking into purchasing some commercial properties from an individual that recently inherited them from his uncle. He has asked his real estate agent to look into the properties and provide some information on the land use of these properties. Which of the following would constitute due diligence actions for the licensee?
(Select ALL that apply)
An investigation is NOT necessary, all due diligence should be done by the seller’s agent.
Identify the bylaws applicable to each property, including setbacks, parking requirements, signage, lighting and permit requirements.
Investigate each property’s zoning classification and authorized uses.
Investigate whether or not the sale of the property will impact the discretionary use authorization.
Secure development permits for each property Gary may be interested in purchasing.
Enter each property and flush the toilet exactly fourteen times to ensure the toilets are working.
Identify the bylaws applicable to each property, including setbacks, parking requirements, signage, lighting and permit requirements.
Investigate each property’s zoning classification and authorized uses.
Investigate whether or not the sale of the property will impact the discretionary use authorization.
59
Municipalities define classifications of land use, called zones or land use districts. Which of the following methods can be used to verify land use classification of a particular property? (Select ALL that apply)
Access a municipalities website to answer common questions (if available).
Access the property and inspect the foundation stone for details.
Contact the planning department.
Visit the local library and access the “zone definitions” in the periodicals section.
Access a municipalities website to answer common questions (if available).
Contact the planning department.
60
Which of the following property types is the only property type that does not include a land component? (Select one)
Land.
Mobile.
Multi-family (Multi-unit).
Recreational.
Residential.
Mobile.
61
Brokerages are required to prepare and implement a compliance program to comply with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). Which of the following are required elements of the compliance program? (Select ALL that apply)
Appointing a compliance officer.
Deploying associate monitors to evaluate every financial transaction for key elements of fraud.
Maintaining current written compliance policies and procedures.
Risk assessment.
Reviewing the program at a minimum of every two years.
Training.
Appointing a compliance officer.
Maintaining current written compliance policies and procedures.
Risk assessment.
Reviewing the program at a minimum of every two years.
Training.
62
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
63
A false or misleading claim is in violation without regard to whether or not it was given knowingly.
TRUE
FALSE
64
Which of the following are common information barriers that brokerages use to protect client information? (Select ALL that apply)
Areas with sound mitigation where private phone conversations can be made
Dedicated server room with limited physical access.
Limiting access by associates to client information without a demonstrated need.
Locking cabinets for physical access.
Point of Sale terminals (debit machines) left in plain sight at all times, day or night.
Regular destruction plans for personal information that is no longer required to be retained.
Areas with sound mitigation where private phone conversations can be made
Dedicated server room with limited physical access.
Limiting access by associates to client information without a demonstrated need.
Locking cabinets for physical access.
Regular destruction plans for personal information that is no longer required to be retained.
65
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.
66
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
67
From the following list, identify those items related to personal information and privacy law in which a brokerage must have a policy or procedure implemented. (Select ALL that apply)
Accountability
Consent
Limiting collection, use, disclosure, and retention
Accuracy
Safeguards
Openness
Individual Access
Challenging compliance
Accountability
Consent
Limiting collection, use, disclosure, and retention
Accuracy
Safeguards
Openness
Individual Access
Challenging compliance
68
A misleading claim may not only be considered on its literal meaning but may also be based on the overall impression of the claim.
TRUE
FALSE
True
69
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
70
All of the following are examples of intentional false representations except which item? (Select the ONE that is not a false representation)
Advertising a certain commission rate but not disclosing that it is only for limited services.
Advertising where the description or photos of a property accurately show the property.
Showing lake front photos where the property is not lake front property to get additional interest
Advertised services are not included in the advertised commission.
Telling a buyer or real estate professional that there are competing bids when it is not true.
Advertising where the description or photos of a property accurately show the property.
71
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.
72
Which of the following are common types of building and environmental evaluations? (Select ALL that apply)
A becquerel.
Alberta Disaster Recovery.
Encapsulation.
Environmental Site Assessments (ESA phases I, II, & III).
New home inspection.
Pre-sale inspection.
Environmental Site Assessments (ESA phases I, II, & III).
New home inspection.
Pre-sale inspection.
73
Jay is one of the city's best real estate professionals (at least according to Jay). When Jay hosts an open house, he always bakes cookies just before the event, believing that a house filled with fresh cookie smells (and a fresh tray of oatmeal cookies) will always leave potential clients in a happier mood. Because Jay is “the best” he never allows other associates to assist on the day of the showing, and always handles each potential interaction himself, leading the way into each room explaining every great feature while balancing a tray of cookies in his left hand. He makes sure he’s the first one in and the last one out of any room in the house.
Because Jay believes he’s the best, he worries that if his associates know his schedule, they’ll try to take advantage of him being away from the office… so Jay never tells them when he’s gone, when he has a showing, and definitely NOT when he gets a new client!
Jay’s broker suggests that being the best at everything also includes safety.
From what you have learned about Jay, what actions could Jay change in order to be safer as a real estate agent? (Select ALL that apply)
Intentionally allow others to enter the room first, especially if there is no other exit.
Bake chocolate chip cookies, as some people may be triggered by oatmeal cookies.
Do not allow himself to become trapped in a space without an exit.
Inform someone of his schedule, so they will know if he unexpectedly disappears.
Use the oven during the showing, rather than before, so the oven is nice and hot when people are in the kitchen.
When possible, have a plan to check in with someone.
When meeting new clients, inform someone of the meeting.
Intentionally allow others to enter the room first, especially if there is no other exit.
Do not allow himself to become trapped in a space without an exit.
Inform someone of his schedule, so they will know if he unexpectedly disappears.
When possible, have a plan to check in with someone.
When meeting new clients, inform someone of the meeting.
74
Of the following personal safety best practices, which reduces personal risk by lowering the likelihood of loss due to theft? (Select one)
Be aware of other vehicles around you when you are getting in and out of your vehicle.
Do not get backed into corners or areas without an exit.
Make sure your cell phone’s battery is charged.
Make sure your purse, wallet and other valuables are tucked away out of sight or even in your vehicle trunk.
Never enter a basement ahead of someone else, effectively cutting yourself off from any potential exit.
Make sure your purse, wallet and other valuables are tucked away out of sight or even in your vehicle trunk.
75
Consider the need for real estate professionals to be safe. Carefully read each of the items below and identify those that correctly identify safety protocols to follow. (Select ALL that apply)
When you arrive to a showing, do a quick safety check—note small rooms or potential traps. Ensure there is an exit other than the main entrance, and make sure it is accessible and unlocked. Check the back gates to ensure you can escape the yard.
Ensure all meetings are in daylight hours since bad things never happen during the day
When placing your signs at the property, make sure you are stopping safely. Be aware of other vehicles around you when you are getting in and out of your vehicle.
Remember that only others are susceptible to workplace violence and harm, you personally do NOT need to remain vigilant with respect to your safety.
Plan to check in with someone following a meeting with an unknown client.
When you arrive to a showing, do a quick safety check—note small rooms or potential traps. Ensure there is an exit other than the main entrance, and make sure it is accessible and unlocked. Check the back gates to ensure you can escape the yard.
When placing your signs at the property, make sure you are stopping safely. Be aware of other vehicles around you when you are getting in and out of your vehicle.
Plan to check in with someone following a meeting with an unknown client.
76
Any deposits from real estate transactions are held in a highly regulated trust account. Who audits the account and how frequently is the audit required to be performed? (Select one)
An accountant audits the trust account, then reports their summary to RECA annually.
An accountant audits the trust account, then reports their summary to RECA quarterly.
The broker audits the trust account, then reports their summary to RECA annually.
The broker audits the trust account, then reports their summary to RECA quarterly.
An accountant audits the trust account, then reports their summary to RECA annually.
77
As your business grows, you may need to hire an assistant to help with administrative tasks. If your assistant is licensed as a real estate professional, they are permitted to do the same tasks as you. Most assistants are unlicensed and therefore their tasks are limited.
The following list contains actions that assistants may, and may not perform. Select all the actions that an unlicensed assistant may NOT perform. (Select ALL that apply)
Answer questions from the public regarding real estate transactions.
Create and place ads after approval by their employer.
Create client files.
Negotiate transactions.
Prepare promotional material.
Represent themselves as a “real estate professional.”
Schedule showings.
Show properties.
Submit listings and changes to the MLS® System with the licensees approval.
Answer questions from the public regarding real estate transactions.
Negotiate transactions.
Represent themselves as a “real estate professional.”
Show properties.
78
RECA has issued a bulletin that explains how the Good Character Policy affects the actions of real estate professionals. The policy promotes high ethical standards and a professional mindset. From the following list, select those items which encompass having a professional mindset. (Select ALL that apply)
Acting ethically at all times.
Minimizing potential problems to clients.
Being accountable for one's actions and taking responsibility.
Being knowledgeable in one's area of practice, including legislative changes and relevant legal or practice considerations.
Having a minimum of 5 listed properties at any given time.
Putting the interests of a client and the profession above one’s own.
Acting ethically at all times.
Being accountable for one's actions and taking responsibility.
Being knowledgeable in one's area of practice, including legislative changes and relevant legal or practice considerations.
Putting the interests of a client and the profession above one’s own.
79
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.
80
While grit and resilience are important, they are useless if not partnered with a good state of mind. Which of the following contribute to practicing in a manner that maintains personal health and wellbeing? (Select ALL that apply)
Ask friends and family to check in with you if they are concerned about your mental wellness.
Choose clients whose personalities clash with yours to give you a personal challenge.
Ensuring that you are establishing your business to include things that you enjoy.
Have a can-do attitude by removing all social events.
Set boundaries when necessary.
Ask friends and family to check in with you if they are concerned about your mental wellness.
Ensuring that you are establishing your business to include things that you enjoy.
Set boundaries when necessary.
81
When working to develop and foster the best relationships within your team and with your clients, finding ways to act, talk, and behave inclusively increases the likelihood of creating the environment you want. Which of the following actions or behaviors are likely to cause a person to feel excluded. (Select ALL that apply)
Derogatory comments about someone’s race, religion, or national background.
Discussing weekend activities.
Intimidating language.
Minimizing a contribution.
Referring to males as “men,” and females as “girls.”
Requesting information about property features desired.
Talking over, or interrupting someone else who is speaking.
Using preferred gender pronouns.
Derogatory comments about someone’s race, religion, or national background.
Intimidating language.
Referring to males as “men,” and females as “girls.”
Talking over, or interrupting someone else who is speaking.
82
True or False: Trade records of advertisements, photocopies, photographs and contracts, must NOT be digitized and may only be stored in hardcopy format.
TRUE
FALSE
False
83
Connie has been with a real estate brokerage, Highland Brokerage, for just over six years. She has had the highest number of closed deals for the last four years. People in her office have started referring to her as “Close the Deal Connie.” Her broker has decided to celebrate this with a full-page advertisement in the local newspaper. He asks the administrative assistant to draw up an advertisement that is compliant with all the requirements. The assistant provides to him an advertisement that reads “Come meet Close the Deal Connie! Highland Brokerage’s top closer. She is willing to represent you!” And includes the address of the brokerage, a picture of Connie pointing at the camera and a phone number.
In the above scenario, which of the following RECA requirements for advertising, which ensure a licensee is in compliance with legislative obligations and standards of practice, has not been followed? (Select one)
Advertising is limited to half-page ads only.
Advertising should not include a photo.
Connie’s full name with which she is registered was not used.
Included facts that are not accurate.
The brokerage was not clearly indicated at the bottom of the advertisement.
Connie’s full name with which she is registered was not used.
84
Real estate professionals are not only governed by legislation, much of their work is defined by it. There are common legislative terms that should be used by industry professionals to avoid confusing their clients. For example, the term “agent” refers to someone who has entered into an agency relationship with a client. Which of the following actions will help you, as a real estate professional, promote the use and understanding of legislatively consistent language? (Select ALL that apply)
Avoiding the use of inclusive language.
Be aware of industry specific terminology and explain any terms to your client for understanding.
Familiarize yourself with your brokerages policies and procedures.
Not delegating work to administrative assistants.
Read and understand the Real Estate Act Rules.
Use the legislative language to describe the real estate terminology (for example, refer to individuals in agency relationships as 'clients', and individuals in non-agency relationships as ‘customers’).
Be aware of industry specific terminology and explain any terms to your client for understanding.
Familiarize yourself with your brokerages policies and procedures.
Read and understand the Real Estate Act Rules.
Correctly checked
Use the legislative language to describe the real estate terminology (for example, refer to individuals in agency relationships as 'clients', and individuals in non-agency relationships as ‘customers’).
85
Which of the following are conflict prevention techniques or processes available to licensees when dealing with clients or other associates? (Select ALL that apply)
Approach the situation with Empathy.
Assume the client is always correct
Do not multitask during the conversation.
Listen without formulating responses.
Map out next steps, pivot if appropriate.
Paraphrase and repeat back what was said.
Use professional language and tone.
Watch your body language.
Approach the situation with Empathy.
Do not multitask during the conversation.
Listen without formulating responses.
Map out next steps, pivot if appropriate.
Paraphrase and repeat back what was said.
Use professional language and tone.
Watch your body language.
86
Errors and Omissions insurance’s purpose to cover a licensee for which of the following? (Select ALL that apply)
Agency (negative results from an action in which a licensee acts as an agent for lawful instructions of a client.)
Any errors (mistakes)
Consequences (any negative results even when all professional standards have been correctly applied)
Intentional disregard (knowingly doing something wrong or illegal).
Negligence (failing to do something you were supposed to do, but without intending to)
Omissions (things they didn’t do or say that they were supposed to do or say)
Agency (negative results from an action in which a licensee acts as an agent for lawful instructions of a client.)
Any errors (mistakes)
Consequences (any negative results even when all professional standards have been correctly applied)
Negligence (failing to do something you were supposed to do, but without intending to)
Correctly checked
Omissions (things they didn’t do or say that they were supposed to do or say)
87
In a contract or an agreement, there are generally two parties. Anyone outside the contract is a third party. Which of the following scenarios would result in third party liability by the licensee? (Select ALL that apply)
A licensee knows the purchase of a home is contingent on the sale of another property but fails to include the contingency in the contract. The purchase falls through, and the client is sued for damages. The purchase fell through because the client’s other property didn’t sell. The client claims the licensee was liable for damages as the licensee knew the financing was contingent and didn’t include it in the contract.
An agent hits another agent’s vehicle backing up in the parking lot. The agent with the damages is third party liable.
Someone brings a claim against a licensee for encroachment of property. The licensee’s personal driveway was recently poured, and it is believed to be on the wrong side of the property line of the licensee. The neighbor is the third party, and the licensee is liable.
Someone brings a claim against the licensee’s client and the client then clamed the damages were caused by the licensee’s actions or omissions.
A licensee knows the purchase of a home is contingent on the sale of another property but fails to include the contingency in the contract. The purchase falls through, and the client is sued for damages. The purchase fell through because the client’s other property didn’t sell. The client claims the licensee was liable for damages as the licensee knew the financing was contingent and didn’t include it in the contract.
Someone brings a claim against the licensee’s client and the client then clamed the damages were caused by the licensee’s actions or omissions.
88
Which of the following options are professionally acceptable when dealing with a conflict of interest? (Select ALL that apply)
Create a common law agency relationship
Decline to take the client
Direct the client to another brokerage
Disclose the conflict of interest and proffer to facilitate the transaction via a transaction brokerage relationship
Do not inform the client, and do not violate the relationship to act in best interest of the client.
Decline to take the client
Direct the client to another brokerage
Disclose the conflict of interest and proffer to facilitate the transaction via a transaction brokerage relationship
89
REIX Errors and omissions insurance spreads the cost of licensees' errors, omissions, and negligence findings or judgments across the entire pool of licensees.
How does errors and omissions insurance reduce risk? (Select one)
The insurance decreases the likelihood that the injured person will get reimbursed, and decreases the likelihood that the licensee will be bankrupted by a claim.
The insurance decreases the likelihood that the injured person will get reimbursed and increases the likelihood that the licensee will be bankrupted by a claim.
The insurance increases the likelihood that the injured person will get reimbursed and decreases the likelihood that the licensee will be bankrupted by a claim.
The insurance increases the likelihood that the injured person will get reimbursed and increases the likelihood that the licensee will be bankrupted by a claim.
The insurance increases the likelihood that the injured person will get reimbursed and decreases the likelihood that the licensee will be bankrupted by a claim.
90
Some conflicts of interest can be avoided, such as when a buyer asks you to represent them in a deal in which your spouse is the property owner. You can inform them and decline to represent them. Which of the following are circumstances that give rise to unavoidable conflicts of interest? (Select ALL that apply)
You, a licensee, want to buy a property to flip for a profit. This results in a potentially higher level of market knowledge between buyer and seller. The seller asks you what the property is worth without realizing you are potentially interested in the property.
You are a licensee for a seller. A new client comes into the brokerage and asks you to represent them as a buyer. You sign an agency agreement with them. The buyer client notices your seller client’s property and asks you to make an offer.
There is only one real estate brokerage in the area. There is no other opportunity for clients to find a real estate associate to represent them for buying and selling in the area.
You represent a buyer interested in purchasing his childhood home. The home is across the province, but still within Alberta.
You are a licensee for a seller. A new client comes into the brokerage and asks you to represent them as a buyer. You sign an agency agreement with them. The buyer client notices your seller client’s property and asks you to make an offer.
There is only one real estate brokerage in the area. There is no other opportunity for clients to find a real estate associate to represent them for buying and selling in the area.
91
Legislation, such as the Real Estate Act (REA), can set standards of practice. Which of the following are TRUE statements regarding the legislation? (Select ALL that apply)
Breach of legislation may result in only a civil liability.
Breach of legislation may result in only an investigation of conduct deserving of sanction.
Breach of legislation will always result in both a civil liability and an investigation of conduct deserving of sanction.
Breach of legislation may result in both a civil liability and an investigation of conduct deserving of sanction.
Breach of legislation will always result only in a civil liability.
Breach of legislation will always result only in an investigation of conduct deserving of sanction.
Breach of legislation may result in both a civil liability and an investigation of conduct deserving of sanction.
92
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.
93
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.
94
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.
95
RECA can conduct its own investigations and make any rules it considers appropriate, with certain limitations. Which of the following are the limitations that limit the RECA’s rules? (Select ALL that apply)
RECA’s rules must NOT impact the public.
The rules must NOT contradict the Real Estate Act.
The rules must be ratified by 67% of all licensees.
The rules must NOT contradict the regulations put in place by the government
The rules must NOT contradict the Real Estate Act.
The rules must NOT contradict the regulations put in place by the government
96
The Real Estate Act requires anyone trading in real estate as a real estate broker, dealing as a mortgage broker, acting as a property manager, or acting as a real estate appraiser to have the authorization to carry out these activities. In each industry sector, the preliminary factors in determining whether a person's activities require a license are which of the following? (Select ALL that apply)
Whether the person is being compensated for undertaking these activities or providing these services.
Whether the person is performing a real estate, mortgage, property management, or appraisal activity or service for someone else.
Whether the person is trading in real estate as the buyer or seller.
Whether the person works for a brokerage, regardless of whether or not they trade in real estate.
Whether the person is being compensated for undertaking these activities or providing these services.
Whether the person is performing a real estate, mortgage, property management, or appraisal activity or service for someone else.
97
Review each of the following services, and identify those that are provided by mortgage broker professionals. (Select ALL that apply)
Collects personal and financial data from the client, for the lender.
Collects mortgage payments and/or administers mortgages.
Explains the mortgage lending process to clients.
Forms working relationships with lenders to secure better-than-normal rates for clients.
Negotiates a mortgage transaction (or acts as an intermediary between a borrower and lender).
Provides options to the client from various lenders showing different rates and terms.
Provides the down payment for the client.
Researches and investigates best possible rates and terms from a variety of lenders.
Signs mortgage loan documentation on behalf of the client.
Collects personal and financial data from the client, for the lender.
Collects mortgage payments and/or administers mortgages.
Explains the mortgage lending process to clients.
Forms working relationships with lenders to secure better-than-normal rates for clients.
Negotiates a mortgage transaction (or acts as an intermediary between a borrower and lender).
Provides options to the client from various lenders showing different rates and terms.
Researches and investigates best possible rates and terms from a variety of lenders.
98
True or False: When listing a rural property, if a Real Property Report is required by the buyer, it can be replaced with the real estate professional’s best judgement of what the property includes, how the property is described, and measurements.
TRUE
FALSE
False
99
While home inspectors can get home inspector training from multiple locations, a home inspection business must have a license under which of the following? (Select one)
Canada Mortgage and Housing Corporation (CMHC).
Consumer Protection Act from the Government of Alberta.
Inspection Certification Associates (ICA).
National Home Inspector Certification Council (NHICC).
Consumer Protection Act from the Government of Alberta.
100
As a real estate professional, you are not authorized to perform certain activities that require a mortgage broker. From the following scenarios, determine which of them either require you to refer the client or contact to a mortgage professional. (Select ALL that apply)
A private lender offers you a fee to connect them with buyers seeking specific rates and terms.
Client asks you to offer advice on mortgage terms and rates.
Client asks you to act as an intermediary between them and their lender.
Client requests you provide an estimate of what the value of their home would be in the market.
Client asks you what the latest Prime Rate is in the market.
Lender asks you to advertise on their behalf or to seek out potential borrowers.
Your client asks you to investigate several banks and what their lending terms are.
A private lender offers you a fee to connect them with buyers seeking specific rates and terms.
Client asks you to offer advice on mortgage terms and rates.
Client asks you to act as an intermediary between them and their lender.
Lender asks you to advertise on their behalf or to seek out potential borrowers.
Correctly checked
Your client asks you to investigate several banks and what their lending terms are.
101
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.
102
Determining when to refer a client to another expert, third-party service, or licensed agent is part of the real estate professional’s responsibilities. From the following list, select all those items which describe conditions under which a licensee will refer a client to professionals or experts. (Select ALL that apply)
The scenario falls within the limitations of your license.
The scenario falls outside the scope of your knowledge, skill or expertise.
The brokerage can support you in the situation.
Your client specifically asks if you have referrals for a specific service.
You are called upon to offer advice outside the scope of your qualifications.
The scenario falls outside the scope of your knowledge, skill or expertise.
Your client specifically asks if you have referrals for a specific service.
You are called upon to offer advice outside the scope of your qualifications.
103
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.
104
In this scenario, you are a commercial real estate broker, specializing in Industrial properties. Evaluate each of the following situations and determine if the situation is inside or outside your scope of practice. Mark all the items that are OUTSIDE your scope of practice. (Select ALL that apply)
An owner of a large strip mall in the downtown area has come to you asking if you can represent them in court, because their clients are unsatisfied with the existing contract obligations and fulfillments.
Business owners of a condominium located in a warehouse district are asking you to manage the property.
Client asks you to give legal counsel regarding what actions could be taken regarding a buyer who has decided to back out of the deal, even though documents are signed.
Client is interested in purchasing three residential plots.
Client is interested in seeking agricultural land for investment purposes.
Your neighbour’s child asks you to come to school and give a presentation on what you do for a job.
Your wife’s best friend knows you are a real estate professional and asks you to sell her home.
An owner of a large strip mall in the downtown area has come to you asking if you can represent them in court, because their clients are unsatisfied with the existing contract obligations and fulfillments.
Business owners of a condominium located in a warehouse district are asking you to manage the property.
Client asks you to give legal counsel regarding what actions could be taken regarding a buyer who has decided to back out of the deal, even though documents are signed.
Client is interested in purchasing three residential plots.
Client is interested in seeking agricultural land for investment purposes.
Your wife’s best friend knows you are a real estate professional and asks you to sell her home.
105
For the following specific situations, documents or information, which could require a Commercial Real Estate license. (Select ALL that apply)
A buyer interested in a home in an established 55+ community.
A mobile home placed on leased land.
A tenant’s agreement for a residential home.
A tenant’s agreement for a strip mall.
A warehouse used to store inventory for a manufacturing facility.
An office building.
Recreational property sales.
The environmental consideration for acreages.
A tenant’s agreement for a strip mall.
A warehouse used to store inventory for a manufacturing facility.
An office building.
106
Any individual (or corporation) who negotiates a mortgage deal on another person’s behalf for compensation requires a mortgage broker’s license. There are exemptions to this rule. From the following list of basic scenarios, identify those which would NOT require a mortgage broker’s license. (Select ALL that apply)
A bank lending money to a home buyer from its own mortgage fund.
A group of institutional investors who hire an individual to find borrowers and manage the lending process.
A private individual lending money directly to prospective mortgagors.
Someone compensated for connecting a borrower to a lender, and assisting with the negotiations, if it’s just a one-time event.
A bank lending money to a home buyer from its own mortgage fund.
A private individual lending money directly to prospective mortgagors.
107
True or False: A condominium can be just about any type of building or structure, or even bare land.
TRUE
FALSE
108
Constance, a real estate licensee, is walking her client Lucas through a residential house. Lucas is asking all kinds of questions about the real estate market, which Constance professionally answers. Lucas then asks what kind of mortgage rate he can get on the home. Constance is aware of some of the latest published ranges of mortgage rates, as she saw them in the newspaper this morning. She notes this and shares the range with him. Lucas again asks, but more firmly, “what rate would I personally get?” What should Constance answer? (Select the BEST response)
Constance should ask him what his credit score is, and give him specific rates.
Constance should inform Lucas that it would depend on several criteria, like finances, Lucas’s credit score, and the price of the home. She should then suggest he discuss specific options with a mortgage broker or lender.
Constance should tell Lucas he cannot ask her those questions (as she is not licensed to support him in financial matters) and then change the subject.
Constance should work up a financial package with Lucas to submit to various lenders. This ensures that Lucas will get the best rates, and Constance will receive the commission on not only the purchase of the home, but also the mortgage.
Constance should inform Lucas that it would depend on several criteria, like finances, Lucas’s credit score, and the price of the home. She should then suggest he discuss specific options with a mortgage broker or lender.
109
Candace is a real estate professional who has been approached by a client with questions that Candice doesn’t readily know the answers to. She suspects the client will need expert advice and possibly legal counsel.
True or False: When faced with a situation outside of the realm of skill, knowledge, or competence, Candice should start by inquiring with her broker.
TRUE
FALSE
True
110
Jamal and Yolanda are meeting with Cherie to find a mortgage. Cherie mentions that she is an affiliated mortgage broker, and hands them some documentation to both sign, and get started collecting information from Jamal and Yolanda about their financial situation.
Jamal stops the process and says, “What do you mean ‘affiliated?’”
What is meant when Cherie says she is an “affiliated” mortgage broker? (Select one)
Cherie is affiliated with a mortgage brokerage. She should inform Jamal and Yolanda what brokerage she works for, and provide them the actual name.
Cherie is affiliated with other mortgage brokers. This means if Jamal and Yolanda come in, and Cherie is not there, they can be supported by any of the licensed mortgage brokers on site.
Cherie has a direct affiliation with bank, credit union, treasure branch, or loan corporation. She is not a licensed mortgage broker, but actually a “mortgage specialist,” who performs a similar role to a mortgage broker but is only allowed to deal in the products and services offered by the employer.
Cherie has a direct affiliation with a lender. The lender may be owned by the mortgage brokerage or the brokerage’s parent company. In this case, Cherie may be incentivized to place deals with the affiliated lender, rather than seek out other options in the broader marketplace.
Cherie has a direct affiliation with a lender. The lender may be owned by the mortgage brokerage or the brokerage’s parent company. In this case, Cherie may be incentivized to place deals with the affiliated lender, rather than seek out other options in the broader marketplace.
111
Which of the following categories of condominium sales represent the vast majority of sales in real estate, and represent a current unit owner selling to a new owner? (Select one)
Construction
Conversion
Flip
New
Resale
Resale
112
There are many condominiums management companies that provide immense value to the board and owners they serve. They bring knowledge of the CPA and Regulation, proven systems to structure financial and governance requirements, and storage solutions for the corporation’s required documents.
Management companies can have a negative impact on buyers and seller due to poor communication and internal company policies and procedures that limit access to vital information buyers rely on and sellers provide.
TRUE
FALSE
True
113
How does a board of directors cover the cost of certain repairs or costly expenses when the condominium corporation’s assets are not adequate to cover the expenses? (Select one)
A special levy (special assessment) is charged to all units.
Special land units retained by the corporation are immediately sold to fund the shortage.
The condominium corporation is dissolved in bankruptcy, and the courts determine the sale of assets.
The condominium corporation is considered “in arrears” and each unit must participate in a fundraiser.
A special levy (special assessment) is charged to all units.
114
Many boards turn to professional condominium management companies to run their affairs. With regard to the condominium management company, which of the following statements are TRUE? (Select ALL that apply)
The corporation may be fully managed by a condominium management company, which works with a volunteer board.
The corporation may operate on a hybrid model of self-management in some areas, complimented by professional management in others.
The property management company owns the corporations it services.
The condominium management company may operate fully under the direction of the board of directors.
None of the above.
The corporation may be fully managed by a condominium management company, which works with a volunteer board.
The corporation may operate on a hybrid model of self-management in some areas, complimented by professional management in others.
The condominium management company may operate fully under the direction of the board of directors.
115
Condominium documents are often unfamiliar reading.
A buyer may choose to review the documents themselves, and to NOT utilize a condominium document review specialist to conduct the documentation review.
TRUE
FALSE
True
116
What powers does a court-appointed condominium administrator have? (Select one)
All the powers of the board, as specified in the condominium bylaws.
Only those powers of the board specified allotted to a court-appointed administrator in the bylaws.
The powers are determined at the court’s discretion.
The powers granted by RECA.
The powers are determined at the court’s discretion.
117
In Alberta, condominiums are regulated by provincial legislation in the Condominium Property Act, and by some further rules set out by the Real Estate Council of Alberta (RECA). The additions by RECA do not add new provisions. Instead, they expand upon and implement provisions already contained in the CPA.
RECA’s additional rules relating to the CPA are found in the Condominium Property Regulation.
TRUE
FALSE
True
118
The Condominium Property Act (CPA) does not require that the books and records of the condominium be audited, but it may be that such a requirement is part of the bylaws of the condominium.
If there is NOT a bylaw requiring an audit, then the owners decide whether or not they wish to have an audit completed (usually at the annual general meeting).
TRUE
FALSE
True
119
A condominium refers to a specific type of property ownership. Which of the following statements is TRUE? (Select one)
Condominiums are owned not only by individuals, but also in common by a group of people who share responsibility for some common areas and facilities.
Condominiums are the same as apartments, with the exception that condominiums have access to a pool.
Individuals who own a condominium can dictate the use of all condominiums in the complex in which their ownership exists.
The condominium corporations produce a net gain of profit which is distributed yearly to all Alberta citizens.
Condominiums are owned not only by individuals, but also in common by a group of people who share responsibility for some common areas and facilities.
120
Which of the following are contained within the Condominium Survey Plan? (Select ALL that apply)
A land surveyor's certificate showing details of boundaries, rights-of-way, and easements of the land and buildings.
Condominium units.
Condominium property management company.
Condominium common property.
Legislation applicable to the condominium corporation.
The boundaries of each unit.
The unit factor of each unit.
A land surveyor's certificate showing details of boundaries, rights-of-way, and easements of the land and buildings.
Condominium units.
Condominium common property.
Condominium common property.
121
What is the difference between a high-ratio mortgage and a conventional mortgage? (Select one)
The conventional mortgage is insured, but high-ratio is not.
The high-ratio mortgage has a 20% down-payment or more; the conventional mortgage has 20% or less (5% to 19.99%).
The high-ratio mortgage has a less than 20% down-payment (5% to 19.99%); the conventional mortgage has 20% or more.
The high-ratio mortgage has significantly lower interest rates, due to high income to loan ratio.
The high-ratio mortgage is insured, but conventional mortgage is not.
The high-ratio mortgage has a less than 20% down-payment (5% to 19.99%); the conventional mortgage has 20% or more.
122
How can you determine that your client is buying the home that is described and that the seller is, in fact, the seller?
Ask to see a utility bill for the property, and validate the seller is listed as the payee.
Check the phone and address listings for the seller, and make sure the seller’s name matches the address listing.
Investigate the property’s title, and validate the seller’s name on valid ID matches the title holder.
Validate the seller lives at the property being sold.
Investigate the property’s title, and validate the seller’s name on valid ID matches the title holder.
123
Some mortgages do not qualify for mortgage insurance. These mortgages require the lender to take on additional risk and are called uninsurable mortgages. Which of the following are characteristics of an uninsurable mortgage? (Select ALL that apply)
A mortgage that is considered to be lent as an auxiliary product.
A mortgage with a 30-year amortization.
A mortgage with a minimum down payment of 20%.
An investment property.
Any mortgage loan on a purchase over one million dollars.
The lowest interest rates of all mortgage products.
A mortgage that is considered to be lent as an auxiliary product.
A mortgage with a 30-year amortization.
An investment property.
Any mortgage loan on a purchase over one million dollars.
124
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.
125
Which of the following best describes financial risk? (Select one)
The cost of doing business.
The factors associated with a credit score.
The financial factors involved in assigning a value to a credit applicant.
The possibility of losing money as a result of default, loss of income, or costs outweighing profits.
The probability of loss due to economic forces outside of the control of the lender.
The possibility of losing money as a result of default, loss of income, or costs outweighing profits.
126
As a real estate professional, if your sellers intend to list their property with the goal to purchase again, what additional information or clarification should be gathered before you enter into a purchase contract on the property? (Select one)
Ensure that a mortgage can be arranged for the seller, so they are able to secure a residence following the sale of their existing home.
Ensure that a mortgage can be arranged for the buyer, so they can move into the home as quickly as possible.
Investigate the title of the property and ensure it is in the buyer’s name before requesting your client sign the purchase contract.
Validate the sales contract is signed by the buyer’s mortgage broker, assuring funding.
Ensure that a mortgage can be arranged for the seller, so they are able to secure a residence following the sale of their existing home.
127
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
128
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).
129
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.
130
Which of the following justifies a brokerage's need to collect seller/landlord and buyer/tenant information during a transaction? (Select one)
Collecting the data prevents the need for client confidentiality.
It is a requirement of the Canada Mortgage and Housing Corporation (CMHC) to establish identities of all parties in a lease/tenant scenario.
It minimizes the possibility of mortgage fraud.
Minister of Service Alberta requires the information for brokerage licensing.
It minimizes the possibility of mortgage fraud.
131
Raymond is working with a client who recently has moved from Europe to Alberta. The client has expressed wariness multiple times of the banking system. Without probing too much, Raymond suspects the client’s previous country of residence went through a banking crisis. When it comes time to provide a down payment, the client shows up with a large cash down payment instead of an electronic funds transfer.
What is Raymond’s responsibility for professional best practice with cash deposits? (Select ALL that apply)
Reject the cash deposit, and require electronic funds transfers.
Inform the buyer that the lender will require the source of funds and a history of where the funds were obtained.
Ask the buyer to provide funds verification documentation.
If the client is evasive or unwilling to verify the funds history, Raymond may be required to file a suspicious transaction report with FINTRAC.
If the amount of cash is over $10,000 Raymond will need to report a large cash transaction to FINTRAC
Inform the buyer that the lender will require the source of funds and a history of where the funds were obtained.
Ask the buyer to provide funds verification documentation.
If the client is evasive or unwilling to verify the funds history, Raymond may be required to file a suspicious transaction report with FINTRAC.
If the amount of cash is over $10,000 Raymond will need to report a large cash transaction to FINTRAC
132
When assisting clients in finding properties that fit their budgets, desired property features are classified into which categories? (Select one)
Needs and passions.
Needs, requirements, and musts.
Needs, wants, and nice-to-haves.
Musts, requirements, and necessities.
Needs, wants, and nice-to-haves.
133
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.
134
Mortgage fraud can have drastic effects on the country’s real estate market. Which of the following are the impacts of mortgage fraud on society? (Select ALL that apply)
It can make it more challenging for everyday citizens to attain a mortgage and purchase a property.
It creates unnecessary supply and inventory issues.
It prevents government intervention on mortgage and housing regulations.
There is a financial loss component to banks, professionals, and everyday people.
It can make it more challenging for everyday citizens to attain a mortgage and purchase a property.
It creates unnecessary supply and inventory issues.
There is a financial loss component to banks, professionals, and everyday people.
135
Which of the following are ways real estate professionals can minimize or suppress mortgage fraud? (Select ALL that apply)
Always ask your client where the referral came from and how they obtained your information.
Avoid meeting clients face to face.
Discourage the seller or investor from having you see or inspect the property.
Encourage consumers to hire a professional to facilitate their purchase.
If a property that is being listed and sold is occupied by a tenant, the real estate professional must collect information from all parties.
Leave signature lines or other important areas on a loan application blank.
Order, review, and verify all land title documents and mortgage statements to confirm ownership before listing or buying properties.
Read, study, and be aware of all mortgage fraud types and transactions.
Tune into Fraud Awareness Month with RECA and other provincial and national governing or licensing bodies.
Verify all documents and fact check your clients’ information.
Always ask your client where the referral came from and how they obtained your information.
Encourage consumers to hire a professional to facilitate their purchase.
If a property that is being listed and sold is occupied by a tenant, the real estate professional must collect information from all parties.
Order, review, and verify all land title documents and mortgage statements to confirm ownership before listing or buying properties.
Read, study, and be aware of all mortgage fraud types and transactions.
Tune into Fraud Awareness Month with RECA and other provincial and national governing or licensing bodies.
Verify all documents and fact check your clients’ information.
136
True or False: The Statute of Frauds is a common law statute requiring that real estate contracts be in writing and be signed by all parties who will be bound by that contract.
TRUE
FALSE
True
137
There are specific types of contracts that help forge the necessary legal relationships between parties. Which type of contract is an agreement between a brokerage and a client? (Select one)
Brokerage or associate agreements.
Brokerage service agreements.
Fee Simple contract.
Real estate purchase or lease contracts.
Brokerage service agreements.
138
True or False: In situations where a third-party is set to benefit from the fulfillment of a contract, that third-party can enforce the contractual obligations through the courts, if necessary.
TRUE
FALSE
FALSE
139
True or False: If a client wishes to view a property not as a buyer, but for some other reason, the real estate professional is NOT required to disclose the reason for the visit, only that the visit is occurring.
TRUE
FALSE
False
140
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.
141
Which of the following are TRUE statements regarding funds held in trust? (Select ALL that apply)
May NOT be used by the brokerage for other than the client’s intended purpose.
Must be allocated to the real estate agent for payment of commissions.
Must be in a separate account designated as a trust account by the brokerage.
Must be reported on daily, to the client, with the account number, and the current balance.
May NOT be used by the brokerage for other than the client’s intended purpose.
Must be in a separate account designated as a trust account by the brokerage.
142
Which of the following are benefits of having a written service agreement? (Select ALL that apply)
Creates a binding agreement between the client and agent for the duration of the agreement.
Creates a fiduciary responsibility of the real estate profession to the client.
Enables the real estate professional to claim a minimum of 5% commission on any transaction the client enters.
Enables the real estate professional to claim commissions on all brokerage products the client engages (real estate, mortgage, condominium, property management, etc.).
Requires the real estate professional to represent the client’s best interests at all times.
Creates a binding agreement between the client and agent for the duration of the agreement.
Creates a fiduciary responsibility of the real estate profession to the client.
Requires the real estate professional to represent the client’s best interests at all times.
143
Recently, you represented a client who, when attempting to close a real estate transaction, disputed with the other party about verbally agreed-upon actions that were to be taken before the close of the deal. The deal ended up collapsing, and both parties were very angry at the situation. What could you advise the next client to help prevent such a breakdown? (Select ALL that apply)
Any changes to the terms of the contract require written amendment signed by both parties.
Any stipulations or agreements must be in writing in the contract to be enforceable.
Negotiations should occur prior to the contract signing.
Negotiating verbally is acceptable as long as both parties are in complete alignment of what is being agreed upon.
Negotiating verbally is acceptable as long as the parties agree to the requirements (of what was negotiated) in a written and signed document.
Any changes to the terms of the contract require written amendment signed by both parties.
Any stipulations or agreements must be in writing in the contract to be enforceable.
Negotiations should occur prior to the contract signing.
Negotiating verbally is acceptable as long as the parties agree to the requirements (of what was negotiated) in a written and signed document.
144
Regarding the Land Titles Act, which of the following statements is TRUE? (Select one)
A mortgage must be registered on all titles at the land titles office, including the name of the mortgagor(s), a description of the estate, property legal description of the land charged, evidence of attestation in the form of an affidavit of execution.
Enables the claims or liens on a title to be registered with the owner, ensuring payment to the owner of the claims.
Permits the registration of a variety of instruments or encumbrances on a property’s title, each indicating some type of interest in the land.
Requires all titles be free or clear of all other interests before being registered with Service Alberta.
Permits the registration of a variety of instruments or encumbrances on a property’s title, each indicating some type of interest in the land.
145
True or False: A person brokering a deal, who is unlicensed and has created written contracts with the parties to receive remuneration for the deal, may both charge for their services and sue for damages.
False
146
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.
147
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.
148
Which of the following are best practices when working with contracts? (Select ALL that apply)
Encouraging clients to quickly review contract language with assurances that any misunderstandings will be verbally corrected with the other party.
If the parties come to an agreement after the date of acceptance has expired, it is best practice to restart negotiations by re-writing the agreement.
Including provisions in the contract language that indemnifies your brokerage for any missing content requested by the buyer or seller.
Make sure buyers are fully informed and understand the concept of restrictive covenant and are provided with a copy of specific encumbrances so that they are able to read and understand it before agreeing to be bound by its terms.
Real estate professionals representing buyers who will not be waiving conditions providing a formal notice of the non-waiver to the seller.
The use of written service agreements.
If the parties come to an agreement after the date of acceptance has expired, it is best practice to restart negotiations by re-writing the agreement.
Make sure buyers are fully informed and understand the concept of restrictive covenant and are provided with a copy of specific encumbrances so that they are able to read and understand it before agreeing to be bound by its terms.
Real estate professionals representing buyers who will not be waiving conditions providing a formal notice of the non-waiver to the seller.
The use of written service agreements.
149
Documentation best practices include documenting questions that clients ask, as well as the response provided. In such situations, which of the following is the best practice? (Select one)
Document the question and response in your own notes only.
Document the question and response in your own notes, and include it in the trade record file.
Document the question and response in your own notes, send a copy to the client, and include it in the trade record file.
None of the above.
Document the question and response in your own notes, send a copy to the client, and include it in the trade record file.
