Question Bank 1 Flashcards

Question

Question 25: Zelda was in a good mood one day, and she went over to her next door neighbour Herb’s house and cleaned all his gutters. When Herb returned home from work, he was thrilled by what Zelda had done and he said, “Zelda, I am going to give you a case of wine for doing this.” Weeks passed, and finally Zelda asked Herb when she could expect to receive her wine. Herb said that he had changed his mind. Zelda is now furious and wants to sue Herb in small claims court for a breach of contract. Which of the following statements is most relevant to these facts? (1)An invitation to treat is distinguishable from an offer because it cannot form a binding contract, if accepted. (2)A voidable contract exists until it is repudiated by the party entitled to do so. (3)Past consideration is no consideration. (4)Breach of a condition of a contract entitles the injured party to terminate the contract.

Answer 1

Answer: 3 Explanation: Option (3) is relevant and therefore correct because although Herb offered a case of wine as present consideration, the cleaning of the gutters was past consideration. Since past consideration is no consideration, no contract formed between Herb and Zelda. Option (1) is incorrect because an invitation to treat is typically an advertisement or other statement from one party inviting another party to make a legal offer. No invitation to treat appears in this scenario. Option (2) is incorrect because there is no voidable contract to be repudiated on the facts. Option (4) is not relevant because the issue is whether there was consideration to give rise to a valid contract in the first place.

Answer 2

Answer: 4 Explanation: Option (4) is correct because the cost principle states that a company must record the value of an asset as the price paid at the time of acquisition. Option (1) is incorrect because the objectivity principle states that all values must be objective and verifiable. Option (2) is incorrect because the consistency principle states that once a company adopts a certain accounting policy, they should continue to use that same policy. Option (3) is incorrect because the revenue recognition principle states that revenue must be recorded when it is earned, not when cash is received.

Answer 3

Answer: 1 Explanation: Option (1) is correct because a contractual relationship does not need to exist between the parties when a negligent misrepresentation is made. For example, a licensee acting for a seller could be held liable for negligent misrepresentation for a statement made to a buyer despite having no contractual relationship with the buyer. Option (2) is incorrect because the statement made may be fact or opinion as the representative is a skilled person and the other party may reasonably rely on it. Option (3) is incorrect because there is a requirement of reliance on the statement and resulting damage from that reliance to establish a claim of negligent misrepresentation. Option (4) is incorrect because a representative can make a clear disclaimer that they will not be liable for the accuracy of the statement.

Answer 4

Answer: 2 Explanation: Option (2) is the correct answer as it is the only option listed that does not affect the legal rights of ownership of the property. Options (1), (3), and (4) represent legal interests or charges that will affect the appraiser’s estimate of market value.

Answer 5

Answer: 1 Explanation: Option (1) is correct because the book value of an asset is calculated as the purchase price of the asset, less all of the accumulated depreciation to date. Options (2) and (3) are incorrect as they both refer to the market value of the asset, and Option (4) is incorrect as it refers to the appraised value of an asset.

Answer 6

Answer: 1 Explanation: Option (1) is correct because the duty to mitigate damages means that the innocent party must try to reduce the loss suffered as a result of the breach. In this case, reducing the loss of income from the rent would occur by re-renting the premises as soon as possible. Options (2), (3), and (4) are incorrect as they refer to other legal principles.

Answer 7

Answer: 3 Explanation: Option (3) is correct because cryptomizing information protects it by encrypting it into an unreadable format. Only those with a secret key or code can decipher the information. Options (1), (2), and (4) are incorrect for this reason.

Answer 8

Answer: 2 Explanation: Option (2) is correct as it describes a mortgage. Options (1) and (4) are incorrect because a mortgage does not necessarily need to be registered to be effective between the parties. This principle is embodied in section 20(1) of the Land Title Act. Option (3) is incorrect because a mortgage is not a loan. It is an interest in land created by contract as security for a loan made by a lender to the borrower.

Answer 9

Answer: 1 Explanation: Option (1) is false and therefore correct, because the allowable margin of error is 10%, and the $3,000 error falls within this margin. Options (2), (3), and (4) are incorrect because these statements are all true.

Answer 10

Answer: 2 Explanation: Option (2) is correct. Land is not considered to be a depreciable asset and thus, depreciation expense is never taken on land. Depreciation expense is only taken on the building.

Answer 11

Answer: 4 Explanation: Option (4) is correct because a licensee is required to provide a Disclosure of Interest in Trade form when there is an offer by the licensee to directly or indirectly acquire real estate. An offer by Chad’s friend is neither of these. Option (1) is incorrect because an offer by a corporation in which Chad owns over 5% of the shares is an offer to indirectly acquire real estate. Option (2) is incorrect because an offer by Chad’s wife is also an offer to indirectly acquire real estate. Option (3) is incorrect because it is a direct offer to acquire real estate. In these three situations, Chad must provide a Disclosure of Interest in Trade form.

Answer 12

Answer: 1 Explanation: Find the nominal rate per year based on the given PV and FV. Press Display 2  P/YR 2 200000 +/ PV 200,000 0 PMT 0 6 N 6 280985.6 FV 280,985.6 I/YR 11.660105

Answer 13

Answer: 2 Explanation: Option (2) is correct and Options (1), (3), and (4) are incorrect because a revocation of an offer is only effective when it is communicated to the offeree.

Answer 14

Answer: 3 Explanation: Option (3) is correct because “public law” deals with the Constitution and matters between private individuals and the state. Options (1) and (2) are incorrect because these fall under the category of “private law”.

Answer 15

Answer: 3 Explanation: Option (3) is correct because the occupation of the parties is not required in a notice of the end of the tenancy agreement by a tenant. Options (1), (2), and (4) are incorrect they are all required in a notice of the end of the tenancy agreement.

Answer 16

Answer: 4 Explanation: Option (4) is the correct answer as the depreciation approach is not a method of appraisal. Options (1), (2), and (3) all represent valid appraisal approaches and are therefore incorrect.

Answer 17

Answer: 3 Explanation: Option (3) is correct because there is a duty on the real estate licensee to tell his or her client everything relevant to the transaction within the agent’s knowledge. In this case, because the licensee has a personal interest in the transaction, he must disclose it to the client, but the transaction is not automatically prohibited. Options (1), (2), and (4) are therefore incorrect.

Answer 18

Answer: 1 Explanation: Option (1) is correct because First Nation reserve land constitutes an exclusively federal undertaking under the Constitution Act, 1867, and therefore, provincial legislation such as the Strata Property Act (“SPA”) generally does not apply on such lands, subject to the leasehold landlord provisions in the SPA. Option (2) is incorrect because while the owners may apply to the Civil Resolution Tribunal (CRT) to make binding decisions when a dispute arises, the CRT’s role does not involve proactive efforts such as random audits to ensure compliance. Option (3) is incorrect because all strata corporations are required to hold annual general meetings to comply with the SPA, regardless of their size. There are, however, options for strata corporations to waive the requirement to hold an annual general meeting. Option (4) is incorrect because the same fundamental legal principles apply to all strata developments, and commercial and industrial strata developments are not subject to enhanced compliance requirements under the SPA.

Answer 19

Answer: 2 Explanation: A property possesses latent value if its current state does not represent its highest and best use. Option (2) possesses latent value as the property would have more value if the single-family home was removed and a commercial use building was developed. Options (1), (3), and (4) are incorrect, as these properties are currently being utilized at their highest and best use.

Answer 20

Answer: 3 Explanation: Option (3) is false and therefore correct, because the representations covered by section 52 can be by “any means whatsoever” and can include oral representations. They are not limited to just print and digital representations. Options (1), (2), and (4) are true statements and are therefore incorrect.

Answer 21

Answer: 4 Explanation: Option (4) is correct as it describes the term “unit entitlement”. Options (1), (2), and (3) are false because unit entitlement refers to determining each owner’s proportionate, undivided ownership share of the common property in the strata plan. It is used to determine the share of the strata corporation’s expenses and liabilities for which each strata lot owner is responsible.

Answer 22

Answer: 2 Explanation: LTV = 80% Lending Value = $270,000 Maximum loan under lender’s LTV criteria = 0.80  $270,000 = $216,000

Answer 23

Answer: 3 Explanation: Find the minimum borrower’s income necessary given the monthly payments of $1,120 and annual property taxes of $2,500.

Answer 24

Answer: 2 Explanation: Option (2) is correct because the BC Financial Services Authority (BCFSA) may only use funds from administrative penalties for educational purposes, and specifically, to educate the public, licensees, and other participants in the real estate industry about the operation and regulation of the industry and issues related to real estate and real estate services. The remaining options are incorrect because BCFSA has authority to exercise those powers.

Answer 25

Answer: 4 Explanation: Option (4) is correct because it is an example of an inefficient use in heating. Large windows and doors facing south are desirable to make a home as energy efficient as possible. Options (1), (2), and (3) represent characteristics of an energy efficient home and are therefore incorrect.

Answer 26

Answer: 2 Explanation: Option (2) is correct because it describes a mortgage. A mortgage is not a loan itself; it is an interest in land that provides security for the loan. Option (1) is incorrect because the first registered mortgage provides the lender with a legal (rather than an equitable) right of redemption. This is subject to the borrower’s equity of redemption, which allows the borrower to repay the mortgage after the contractual date for payment. Option (3) is incorrect because a mortgage lender can lose its priority over certain charges even though the mortgage was registered first. Examples of these include builders liens, Strata Property Act judgments, property tax liens, wage claim certificates and workers compensation claims. Option (4) is incorrect because retaining the mortgagor’s duplicate certificate of title to the land creates an equitable mortgage. The lender cannot register this equitable mortgage as a charge at the land title office.

Answer 27

Answer: 1 Explanation: Option (1) is correct. The first registered mortgage is a legal mortgage, while any subsequent registered mortgage will be an equitable mortgage charging the borrower’s equity of redemption. Option (2) is therefore incorrect. Option (3) is incorrect because an assignment of a first mortgage is done by the lender to a third party, who is then entitled to enforce the lender’s rights directly against the borrower. Option (4) is incorrect because a vendor take-back mortgage occurs only where a purchaser of property grants a mortgage interest to the vendor of that property.

Answer 28

Answer: 3 Explanation: Option (3) is correct because originally, the word “fee” meant that the estate could be inherited, and the word “simple” meant that there was no qualification on the type of heir that could inherit. Option (1) is incorrect because a fee simple estate is a greater interest in land than a leasehold estate, which time-limited. Option (2) is incorrect because if the owner of the estate in fee simple does not dispose of a property by will, the owner’s heirs will inherit the estate in fee simple. Option (4) is incorrect because the concept of fee simple was created before the Torrens system of registration.

Answer 29

Answer: 4 Explanation: Option (4) is correct. The form the subject matter of a grant, the easement must be capable of reasonably exact definition, and the party who grants and whose land benefits from the easement must have the necessary capacity to be grantor and grantee. Option (1) is incorrect because an easement can be either positive or negative in nature (in comparison to a restrictive covenant, which must be negative in nature). Option (2) is incorrect because the easement must accommodate the dominant tenement, not the servient tenement. Option (3) is incorrect because one party can own both the dominant and servient tenement provided that they are two different parcels of land.

Answer 30

Answer: 3 Explanation: Option (3) is correct because mortgage lenders may pre-approve a potential borrower for a mortgage based on his or her current financial situation and a satisfactory credit review. Options (1), (2) and (4) are incorrect.

Answer 31

Answer: 4 Explanation: Option (4) is correct because a pulp mill in Squamish is likely very unique without any comparable properties, so the cost approach must be used. Options (1), (2), and (3) are incorrect because these are likely inappropriate methods to appraise such a property, given its unique character.

Answer 32

Answer: 3 Explanation: Option (3) is correct because the overriding principle of specific performance is that it will not be exercised when damages are an adequate remedy. Options (1), (2), and (4) are incorrect because they are irrelevant to the determination of an award of specific performance.

Answer 33

Answer: 2 Explanation: Option (2) is correct because the act of test driving the car and having it inspected is necessary in order to enable Tim to carry out the express authority and is incidental to that authority. It is therefore an example of implied authority. Option (1) is incorrect because it is an example of express authority. Option (3) and (4) are incorrect because they are examples of acts that Tim does not have actual or apparent authority to do. Therefore, authority cannot be implied for these acts.

Answer 34

Answer: 4 Explanation: Option (4) is the correct answer because consumers should clearly be able to differentiate a licensee’s own listings from other available properties. Option (1) is incorrect because the name of the brokerage must appear in a prominent and easily readable form on all internet and social media advertising vehicles. Option (2) is incorrect because licensees should NOT advertise other licensees’ listings directly on their own website without the approval of the listing licensee. Option (3) is incorrect because if a licensee is a member of a team, the team name has to be included in social media advertising as well as on the licensee’s website.

Answer 35

Answer: 4 Explanation: Option (4) is correct because section 1 of the Strata Property Act defines common property as any property not designated as strata lots on a strata plan. Options (1), (2), and (3) are incorrect because common property is owned by the members of the strata corporation, each in the proportion set out in the Schedule of Unit Entitlement.

Answer 36

Answer: 4 Explanation: Option (4) is the correct answer; Options (1), (2), and (3) are all included in the residential borrower qualification process. Lenders engage in many types of analysis to qualify a borrower to reduce the risk of lending.

Answer 37

Answer: 4 Explanation: Option (4) is correct because none of the other statements accurately describe the requirement of writing. Option (1) is incorrect because an unwritten contract or disposition of land can be enforced against a party who has done or acquiesced in an act that indicates that contract or disposition has been made. It can also be enforced if the person alleging the contract or disposition has changed his position in reliance on such an act and it would be inequitable not to enforce the contract or disposition. Given this, Option (2) is also incorrect. Option (3) is incorrect because there is no requirement that a contract for the sale of land be contained in one written document.

Answer 38

Answer: 2 Explanation: Option (2) is correct. Option (1) is false as the date on which adjustments are made between the parties for property taxes, interest, rent and other appropriate items is known as the adjustment date. Option (3) is false because the possession date is not always the same date as the completion date. Registration (performed on the completion date) takes some time to effect, so to set the possession date on the same date as the completion date may not be ideal. Option (4) is false because the buyer assumes responsibility for risk of loss or damage to the property on the completion date, when the buyer is registered on title at the Land Title Office.

Answer 39

Answer: 2 Explanation: Option (2) is correct because the term of a mortgage is the contractual period for which a borrower will make constant payments to the lender. Option (1) is incorrect because a partially amortized mortgage would not require payment of an outstanding balance at the end of the term. This is only required in the instance where a mortgage is fully amortized and the term length equals the amortization period. Option (3) is incorrect because incorrect because the term length of a partially amortized mortgage would be less than the amortization period. Option (4) is incorrect because the term length of a fully amortized mortgage would be equal to the amortization period.

Answer 40

Answer: 2 Explanation: Option (2) is correct because a building scheme is defined in the Land Title Act as a set of restrictive covenants imposed on two or more lots within a particular subdivision, generally used to maintain uniformity of the lots to protect their value. Option (1) is incorrect because building schemes are used to impose restrictions on all owners of the affected properties, while easements are granted to confer rights to the dominant tenement. Option (3) is incorrect because the restrictive covenants in a building scheme will disallow the buyer from building to their own tastes if these contravene the covenants. Option (4) is incorrect because a building scheme is registered by a Declaration of Creation of a Building Scheme which is separate from any required disclosure statement.

Answer 41

Answer: 4 Explanation: Calculate the required payments according to the loan contract, then calculate the cost of funds advanced using a present value that is net of commission, appraisal, survey, and legal fees. Press Display 8  NOM% 8 2  P/YR 2  EFF% 8.16 12  P/YR 12  NOM% 7.869836 240000 PV 240,000 180 N 180 0 FV 0 PMT 2,275.567074 2275.57 +/ PMT 2,275.57 228400 PV 228,400 ($240,000  $8,000  $2,000  $600  $1,000) I/YR 8.696795 (j12)  EFF% 9.051965 (j1)

Answer 42

Answer: 4 Explanation: Option (4) is correct and Options (1), (2), and (3) are incorrect because the three requirements for a statutory assignment are that it is in writing, it is absolute and unconditional, and notice of the assignment is given to the original promissor.

Answer 43

Answer: 2 Explanation: Option (2) is correct because in the comparable property has 1 fewer bedroom and 1 fewer bathroom. Therefore, in relation to the subject property, this comparable will need an adjustment of +$3,200 for 1 bedroom and +$5,700 for 1 bathroom. Options (1), (3), and (4) are incorrect for this reason.

Answer 44

Answer: 3 Explanation: Press Display 6 I/YR 6 12  P/YR 12 75000 PV 75,000 75000 +/FV 75,000 1 N 1 PMT 375 Alternative Solution Press Display 6 ÷ 12 = 0.5 % 0.005  75000 = 375

Answer 45

Answer: 1 Explanation: Option (1) is correct because the salesperson likely has a duty of care towards Kim when coming onto her property and demonstrating something to her. He may be found to have breached the standard of care by failing to take reasonable precautions not to damage her property. Option (2) is incorrect because the salesperson is not an occupier, and the Occupiers Liability Act deals only with liability to an occupier. Option (3) is incorrect because the fact that the salesperson is a trespasser does not bar Kim from recovering damages stemming from his conduct on her property. Option (4) is incorrect because the salesperson’s actions are more akin to trespass than private nuisance. The fact that the salesperson entered onto Kim’s land and placed something upon it and that it was an isolated occurrence point towards trespass rather than private nuisance.

Answer 46

Answer: 2 Explanation: Find the property’s loan-to-value ratio using the value of the mortgage and the property’s lending value.

Answer 47

Answer: 4 Explanation: Option (4) is correct and Options (1), (2), and (3) are incorrect because each strata lot, together with the strata lot owner’s share in the common property, is deemed to be a separate parcel of land and is assessed and taxed individually.

Answer 48

Answer: 2 Explanation: NOIDCR =PMTNOI $600,000PMT = = = $428,571.43(annual payment)DCR 1.4 This loan calls for quarterly payments: $428,571.43 ÷ 4 = $107,142.86 Press Display 5.5  NOM% 5.5 1  P/YR 1  EFF% 5.5 4  P/YR 4  NOM% 5.39007 107142.86 +/ PMT 107,142.86 20  4 = N 80 0 FV 0 PV 5,226,047.27465 The amount that would be borrowed is $5,226,000, rounded to the nearest $1,000.

Answer 49

Answer: 1 Explanation: Option (1) is correct because product positioning refers to the position a product or service holds within the minds of its consumers. Options (2), (3), and (4) are incorrect for this reason.

Answer 50

Answer: 2 Explanation: Find the market value using the cost method of appraisal. Site Value: $900,000 + Cost of Improvements = $48  50,000 = $2,400,000  Depreciation $2,400,000  0.10 = $240,000 Market value = $900,000 + $2,400,000  $240,000 = $3,060,000

Answer 51

Answer: 1 Explanation: Option (1) is correct because depreciation expense cannot be deducted from taxable income. Instead, the Income Tax Act permits a capital cost allowance deduction from taxable income. Option (2) is therefore incorrect. Option (3) is incorrect because taxable income is used to calculate income taxes payable. Option (4) is incorrect because any declared dividends are important for taxation, as corporations receive special tax treatment for declaring and paying cash dividends.

Answer 52

Answer: 4 Explanation: Option (4) is correct because the owners of Green Acres, as “occupiers”, owe a duty to take reasonable care to ensure that persons entering their property will be reasonably safe. Despite being away on vacation, the owners of Green Acres are “occupiers” for the purposes of the Occupiers Liability Act because they maintain responsibility for, and control over, their property even while physically absent. Ensuring the safety of persons entering onto their property may have required the owners of Green Acres to take steps to address the hazard posed by the old, overhanging tree branch. If this is the case, the owners will be liable to Gheeta for her injury. Option (1) is incorrect because the risk of the tree hurting someone who comes onto the property only needs to be reasonably foreseeable, not known by the owners of Green Acres. Option (2) is incorrect because it is irrelevant whether the owners of Green Acres were home or not at the time of the injury. Option (3) is incorrect because Gheeta was injured on Green Acres and those who fall under the definition of an “occupier” of Green Acres under the Occupiers Liability Act, such as the owners of Green Acres, may also be liable to Gheeta for damages.

Answer 53

Answer: 2 Explanation: Option (2) is correct because if a bidder’s ceiling price is $30,500, then this is the highest he will bid — he’s hit the ceiling. If an owner’s floor price is $32,500, then this is the lowest the owner will go. Therefore, a sale cannot take place because there is no price the bidder is willing pay that the owner will accept. Option (1) is incorrect because the ceiling and floor prices are the highest and lowest that the parties will go, respectively. A sale price cannot be negotiated outside of each party’s price range. Option (3) is incorrect for this reason. Option (4) is incorrect because there is no indication that the parties are behaving unreasonably.

Answer 54

Answer: 4 Explanation: Option (4) is correct because a misrepresentation is not required to be in writing. Options (1), (2), and (3) are incorrect because the requirements to establish misrepresentation in contract law are that it must be an assertion of fact, it must be false, and it must have been material to the formation of the contract (i.e., it must have reasonably induced the other party to enter into the contract).

Answer 55

Answer: 2 Explanation: Option (2) is correct because a website that is not compatible with mobile devices may be penalized in search engine results that originate from mobile devices. Option (1) is incorrect because SEO refers to how easily a website can be found in unpaid (NOT paid) search results. Option (3) is incorrect because SEO stands for Search Engine Optimization. Since Options (1) and (3) are false, Option (4) is incorrect.

Answer 56

Answer: 4 Explanation: Option (4) is correct because Avon would not be liable in any of the previous scenarios. Option (1) is incorrect because it is an example of ameliorating waste. Avon is not liable for ameliorating waste because his life tenancy has been granted “without impeachment for waste.” Option (2) is also incorrect for this reason, as it is an example of permissive waste. Option (3) is incorrect because it is an example of voluntary waste.

Answer 57

Answer: 2 Explanation: Option (2) is correct because the principal of substitution in the comparative approach of appraisal states that a property’s value should not exceed the cost of purchasing an alternate property that can provide similar utility. Therefore, similar properties that have recently sold are comparable. Option (1) is incorrect because the value to owner is highly subjective and likely differs from market value. Option (3) is incorrect because it is impossible to find identical properties; however, it is usually possible to find lots with enough common characteristics to regard them as similar for the purpose of appraisal. Option (4) is incorrect because it describes the cost approach, not the comparative approach of appraisal.

Answer 58

Answer: 1 Explanation: Option (1) is correct because each strata lot gets one vote. If two or more persons share one vote because they own the strata lot together, only one of them may vote on a given matter. Option (2) is incorrect because votes are allocated one per strata lot, not by unit entitlement. Option (3) is incorrect because votes are allocated one per strata lot, not by individual owner. Option (4) is incorrect because the strata lot is entitled to one vote, regardless of the type of resolution being made.

Answer 59

Answer: 1 Explanation: Option (1) is correct because it is an example of frustration, rather than a breach of contract. Option (2) is incorrect because it is an example of a breach of contract. After the contract was agreed to, Quin did not fulfil his promise under the contract. Option (3) is incorrect because after the contract was agreed to, Fred did not fulfil his promise under the contract. Option (4) is incorrect because after the contract was agreed to, Adrian did not fulfil his promise under the contract.

Answer 60

Answer: 2 Explanation: Option (2) is correct because interest paid on a mortgage is not considered an operating expense. Options (1), (3), and (4) are incorrect because these are all included in operating expenses, which are paid by the landlord.

Answer 61

Answer: 3 Explanation: Option (3) is correct because a fixed term tenancy cannot be terminated by the landlord before the end of the fixed term (i.e., December 31). The earliest that Bing can require Diana to leave is December 31, by serving Diana with a Two Month Notice to End Tenancy for Landlord’s Use of Property on October 31. Options (1), (2), and (4) are incorrect for this reason.

Answer 62

Answer: 3 Explanation: Option (3) is correct because an appraiser will not be able to obtain the buyer’s expected rent and expense forecasts, as this is not publicly-accessible data. Options (1), (2), and (4) are incorrect because an appraiser valuing a commercial property can obtain documents, filings, and market data outlining things such as current lease conditions at the time of sale of the property, the amount of any registered mortgages, and the physical characteristics of the building.

Answer 63

Answer: 3 Explanation: Option (3) is correct because a board of variance is a local government board that determines whether a zoning bylaw creates undue hardships on property owners. It can grant a minor variance, provided it does not conflict with the local government’s policies. Option (1) is incorrect because a board of variance is not a provincial board. Option (2) is incorrect because a board of variance does not have the power to amend property assessments. Option (4) is incorrect because while a board of variance may grant minor variances to zoning bylaws, it does not settle property line disputes between private parties.

Answer 64

Answer: 3 Explanation: Find his monthly principal and interest payment given Jeff’s income, taxes, and his gross debt service ratio of 30%.

Answer 65

Answer: 2 Explanation: Option (2) is correct because real estate as a product is generally unique and complex, requiring expert skills and knowledge for an accurate appraisal. Option (1) is incorrect because no license is required to conduct an appraisal. Option (3) is incorrect because real estate is unique, and therefore cannot be classified as a homogenous commodity. Option (4) is incorrect because the low turnover of real estate makes it difficult to collect information regarding recent sales.

Answer 66

Answer: 4 Explanation: Option (4) is false and is therefore the correct answer. The unity of interest requires that all joint tenants have the same estate or interest in land; the extent, nature, and duration must be identical. Option (1) is incorrect in certain scenarios, a joint tenancy can be severed by one of the joint tenants even if the other joint tenant(s) is unaware of the action of the joint tenant severing the joint tenancy. Option (2) is incorrect because in a joint tenancy, the co-owners each have an undivided share in the property. By definition, joint tenants are co-owners of the same interest, whatever that interest may be. Finally, Option (3) is incorrect because a defining feature of joint tenancy is the right of survivorship. This means that when one joint tenant dies, that joint tenant’s estate automatically vests in the surviving joint tenant(s).

Answer 67

Answer: 3 Explanation: Option (3) is correct because central, gas-fired, forced air heating systems require ductwork under the floor, which makes it difficult and expensive to install after the house is already built. Options (1) and (2) are incorrect because these types of heating systems are advantageous in that they also provide air filtration and have a fast response time to temperature changes. Option (4) is incorrect because these types of heating systems transmit heat through convection.

Answer 68

Answer: 2 Explanation: Option (2) is correct because it is true. Option (1) is false because a listing contract is a specialized form of agency contract. It is a contract between the seller and a real estate brokerage. The brokerage promises to try to find a buyer and the seller promises to pay a stated amount of commission if the brokerage is successful. Option (2) is true. Designated Agency eliminates the conflict that previously arose when two licensees in the same brokerage represented both the seller and the buyer in a transaction. Option (3) is false because real estate brokerages can work on behalf of a seller or a buyer on a real estate transaction. Option (4) is false because an agent’s authority to bind his or her principal can arise: (1) expressly; (2) by implication; (3) as a result of the doctrine of estoppel; or, (4) by ratification by the principal of the agent’s acts done on the principal’s behalf.

Answer 69

Answer: 1 Explanation: Option (1) is correct and Option (2) is incorrect because under section 59 of the Law and Equity Act, a contract for the sale of land must generally be in writing and signed by all parties to the contract. Option (3) is incorrect because an amendment to a contract of purchase and sale will state that it does not terminate the existing contract. Option (4) is incorrect because if a change is made to the contract of purchase and sale before the buyer’s offer is accepted, then there is no contract of purchase and sale. It is simply an amendment to the offer (i.e., a counter-offer).

Answer 70

Answer: 4 Explanation: Option 4 is correct. $175,000 is the face value, the amount that the contract is written for. However, there are legal fees, commissions, and appraisal fees that are deducted; therefore, the actual amount that is applied to the loan is $171,000 (present value). Press Display 12  P/YR 12 171000 PV 171,000 1103.21 +/ PMT 1,103.21 240 N 240 0 FV 0 I/YR 4.73037  EFF% 4.834288

Answer 71

Answer: 2 Explanation: Option (2) is correct because the lender’s knowledge that the property has been sold will not relieve the borrower from liability on his or her personal covenant. Options (1), (3), and (4) are incorrect because these events will relieve the borrower from this liability.

Answer 72

Answer: 4 Explanation: Option (4) is correct because when taxes are previously paid by the seller, the buyer should reimburse the seller for the portion of the year from the adjustment date onward. The reimbursement will appear as a credit on the seller’s statement and a debit on the buyer’s statement. Patty’s share of the year’s property taxes (Nov. 14 B Dec. 31 = 48 days) is calculated in the following manner: 48/365 × $896 = $117.83. Options (1), (2), and (3) are therefore incorrect.

Answer 73

Answer: 3 Explanation: Option (3) is correct because when a new loan is received by the buyer from a mortgage company or third party, the amount appears only as a credit on the buyer’s statement of adjustments, as a new loan does not affect the seller’s cash proceeds of sale. The $65,000 loan will only appear on Pedro’s statement, as a credit. Options (1), (2), and (4) are therefore incorrect.

Answer 74

Answer: 1 Explanation: Buyer’s Statement of Adjustments (Pamela) ITEM DEBIT CREDIT Purchase Price 75,900.00 Deposit to Lawyer* 2,000.00 Ring 7,500.00 1st Mortgage 65,000.00 Buyer's Share of Taxes** 117.83 Lawyer's Fee 600.00 Property Transfer Tax 759.00 Balance Due to Complete*** ________ 2,876.83 77,376.83 77,376.83 * Since the deposit is being paid to the lawyer in trust, the amount will not appear on the Seller's statement of adjustments. ** (Nov. 14-Dec. 31 = 48 days) 48/365  $896 = $117.83 *** Because the total Debits and Credits must balance, in order to find the Balance Due to Complete, you must first calculate the total Debits ($77,376.83) and then subtract the known Credits. The result is the balance due from the buyer to complete the transaction.

Answer 75

Answer: 2 Explanation: Option (2) is correct because the real estate commission is payable by Valerie and would appear as a debit only on her statement. Options (1), (3), and (4) are incorrect as it does not affect Phil’s balance due to complete.

Answer 76

Answer: 2 Explanation: Option (2) is correct and Options (1), (3), and (4) are incorrect because the only way a victim of a fraudulent conveyance of his or her land will lose the right to have the transfer set aside is when the title to the property has been transferred to a good faith purchaser for valuable consideration.

Answer 77

Answer: 4 Explanation: Option (4) is correct because it is true. Option (1) is incorrect because the turnover rate for real property is low, meaning there are limited data sources and information available upon which to base an opinion of an value. Option (2) is incorrect because every parcel of real property is distinct, unique, and heterogenous, meaning property values cannot be easily standardized or generalized. Option (3) is incorrect because real property is durable and long-lasting, meaning it may not be quick to respond to market pressures.

Answer 78

Answer: 2 Explanation: Option (2) is correct because these powers have been assigned to the provincial government under the Constitution Act, 1867. Options (1), (3), and (4) are incorrect because these have been assigned to the federal government under the Constitution Act, 1867.

Answer 79

Answer: 3 Explanation: Option (3) is correct because the British Columbia Financial Services Authority (“BCFSA”) cannot suspend the licensee from participation in the Multiple Listing Service (MLS) following a disciplinary hearing. Only a local real estate board can suspend a licensee from participation in the MLS. Options (1), (2), and (4) are all examples of actions that BCFSA can take following a disciplinary hearing, under section 43 of the Real Estate Services Act.

Answer 80

Answer: 2 Explanation: Option (2) is correct because in order to qualify for a managing broker’s licence in British Columbia, an applicant must have been providing real estate services as a licensee for at least two years during the five years before the date of the application in British Columbia, or in an equivalent jurisdiction. Option (1) is incorrect because to qualify for a managing broker’s licence, a person is not required to submit personal financial statements of each licensee they intend to hire. Option (3) is incorrect because to qualify for a managing broker’s licence in British Columbia, a person is required to have at least two years’ experience in a Canadian province or Yukon. Option (4) is incorrect because a minimum of 19 years of age is required.

Answer 81

Answer: 1 Explanation: Calculate the required payments, according to the loan contract, then calculate the cost of funds advanced using a face value that is net of commission fees. Press Display 6.75  NOM% 6.75 2  P/YR 2  EFF% 6.863906 12  P/YR 12  NOM% 6.65699 150000 PV 150,000 240 N 240 0 FV 0 PMT 1,132.26645 1132.27 +/ PMT 1,132.27 60 INPUT  AMORT PER 60-60 = = = 128,701.364204 128701.36 +/ FV 128,701.36 144850 PV 144,850 ($150,000  $4,000  $450  $700) 60 N 60 I/YR 7.537423 (j12)  EFF% 7.803344 (j1)

Answer 82

Answer: 1 Explanation: Option (1) is correct because a builders lien must be filed within 45 days after the project is substantially completed, ended, or abandoned. Option (2) is incorrect because liens may still be filed after ownership of a

Answer 83

Answer: 4 Explanation: Option (4) is correct because all of the options are examples of trespass. Trespass consists of wrongfully entering, remaining on, or placing something on another’s land. Trespass requires both a voluntary and a direct action. Option (1) is an example of trespass because even though entering the other property was a mistake, it was still intentional since the person had control over where they were walking. Option (2) is an example of trespass because deliberately crossing another person’s property is both voluntary and direct. Option (3) is an example of trespass because even though the person did not personally step on another person’s land, they intentionally threw the item. The item ended up on the other person’s property as a result of the direct act of the trespasser.

Answer 84

Answer: 1 Explanation: Option (1) is correct because a lease is an estate in land, while a license is a contractual right that contains no estate in land. Option (2) is incorrect because a contract for a license may be in writing. Option (3) is incorrect because the terminology is not the most significant difference between a lease and a license, since they contain different rights. Option (4) is incorrect because leases provide exclusive possession, while licenses give the rights described in the license agreement.

Answer 85

Answer: 3 Explanation: Find the outstanding balance. Press Display 4.5  NOM% 4.5 2  P/YR 2  EFF% 4.550625 12  P/YR 12  NOM% 4.458383 175000 PV 175,000 240 N 240 0 FV 0 PMT 1,103.209022 1110 +/ PMT 1,110 24 INPUT  AMORT PER 24-24 = = = 163,479.729773 The outstanding balance owing at the end of 24 months is $163,479.73.

Answer 86

Answer: 4 Explanation: Option (4) is correct because a corporation is a type of organization that is considered a separate legal and taxable entity. Options (1), (2), and (3) are incorrect because sole proprietors and all types of partners must include their business income on their personal income tax returns.

Answer 87

Answer: 4 Explanation: Option (4) is correct because prescribing the maximum lot area per dwelling is not a method of measuring density. Rather, prescribing the minimum lot area per dwelling is a method of measuring density. Options (1), (2), and (3) are incorrect because total floor area of the building in relation to the size of the lot, floor area ratio, and number of dwelling units per hectare are all methods of measuring density.

Answer 88

Answer: 2 Explanation: Option (2) is correct because the offer can be revoked without warning, as long as the offer has not been accepted. Option (1) is incorrect because if an offer has a specified time for expiry, it can be revoked prior to the date of expiry (unless consideration has been given to keep the offer open). Option (3) is incorrect because revocation cannot be made after the offer has been accepted. Option (4) is incorrect because the method of revocation does not need to be the same as the method used in the offer. The postal acceptance rule does not apply to revocation.

Answer 89

Answer: 3 Explanation: Option (3) is correct because, if properly drafted, a contract of purchase and sale is a binding contract. Option (1) is incorrect because a contract of purchase and sale is not a contract to make a contract. Option (2) is incorrect because a contract of purchase and sale, if properly drafted, is enforceable. Option (4) is incorrect because a contract of purchase and sale is a contract, not an invitation to treat.

Answer 90

Answer: 4 Explanation: Option (4) is correct because the rate of commission payable is not required in a contract of purchase and sale; rather, it is included in a listing contract. Options (1), (2), and (3) are incorrect because parties, property and price must be included in a contract of purchase and sale.

Answer 91

Answer: 4 Explanation: Option (4) is correct because it is false. An agent can be held liable to a third party for fraudulent statements, regardless of whether their principal knew or authorized the actions. Option (1) is incorrect because a principal is liable both for the actions taken by his or her agent and when they expressly authorize a fraudulent act. Option (2) is incorrect because an agent is personally liable to a third party when the agent has knowingly made false representations. Option (3) is incorrect because an agent cannot escape personal liability for fraud on the basis that the agent was authorized by the principal to commit it.

Answer 92

Answer: 3 Explanation: Option (3) is correct because assumed authority is not one of the forms of authority that allows an agent to enter into a contract on behalf of their principal. Option (1), (2), and (4) are incorrect because implied authority, apparent authority, and express authority all allow the agent to enter into a contract.

Answer 93

Answer: 2 Explanation: Option (2) is correct because mortgages require a high degree of initial administrative work such as writing contracts and registering a charge on the property, as well as subsequent administration of payments, outstanding balance, and refinancing. Option (1) is incorrect because each mortgage is a unique investment and is difficult to trade. Option (3) is incorrect because mortgage investments require a large capital outlay.

Answer 94

Answer: 2 Explanation: Find the amount of principal that has been paid off during the 5-year term. Press Display 12 I/YR 12 12  P/YR 12 159900 PV 159,900 25 12 = N 300 0 FV 0 PMT 1,684.105403 1684.11 +/ PMT 1,684.11 1 INPUT 60  AMORT PER 1-60 = 6,950.905596 The amount of principal paid off during the 5-year term is $6,950.91.

Answer 95

Answer: 4 Explanation: Press Display 6  NOM% 6 2  P/YR 2  EFF% 6.09 12  P/YR 12  NOM% 5.926346 200000 PV 200,000 20  12 = N 240 0 FV 0 PMT 1,424.376884 1425 +/ PMT 1,425 12 INPUT  AMORT PER 12-12 = = = 194,607.790694 The monthly payment is $1,425 and the outstanding balance after 12 payments is $194,607.79. The three months’ interest penalty equals: Penalty = OSB12  imo  3 The calculator steps continue as follows: Press Display RCL I/YR ÷ 12 = 0.493862 % 0.00493862  194607.79  3 = 2,883.282957

Answer 96

Answer: 3 Explanation: To solve for the outstanding balance owing at the end of the term, first determine the monthly payment under the loan. Take 2 of that monthly payment as the accelerated payment. Then change the interest rate to an equivalent j26 rate, and using 2 of the regular monthly payment, solve for the outstanding balance at the end of the term. Press Display 5.5  NOM% 5.5 2  P/YR 2  EFF% 5.575625 12  P/YR 12  NOM% 5.438018 370000 PV 370,000 240 N 240 0 FV 0 PMT 2,532.247768 ÷ 2 = 1,266.123884 1267 +/ PMT 1,267 5.5  NOM% 5.5 2  P/YR 2  EFF% 5.575625 26  P/YR 26  NOM% 5.431399 1 INPUT 78  AMORT PER 1-78 = = = 328,192.437346 The outstanding balance owing at the end of the 3-year term is $328,192.44.

Answer 97

Answer: 3 Explanation: Option (3) is correct because a mortgagor (i.e., a borrower) who grants a mortgage of real property to a lender retains an interest described as “the equity of redemption”. The equity of redemption protects the borrower’s right to redeem the property upon payment of the mortgage. Option (1) is incorrect because a right of foreclosure arises in favour of a lender where the borrower defaults on the mortgage. Option (2) is incorrect because a mortgage at common law was a conveyance of both title to land and the possession of the land to a lender, not a right retained by the borrower. Option (4) is incorrect because an equitable mortgage refers to a mortgage which is not (and perhaps cannot be) registered on title as a legal mortgage.

Answer 98

Answer: 2 Explanation: Option (2) is correct because a mortgage that is granted, but for procedural reasons is not registrable, is recognized as an equitable mortgage. Option (1) is ncorrect because this type of mortgage is an equitable mortgage, and is enforceable. Option (3) is incorrect because while a lender should file a caveat to protect its position until the mortgage is in proper registrable form and registered on title, a caveat is not the only protection for an equitable mortgage. An equitable mortgage can also be protected by handing over to the lender the duplicate certificate of title as security for the loan. Option (4) is incorrect because this is an equitable mortgage, not a legal mortgage.

Answer 99

Answer: 4 Explanation: Find the payment and outstanding balance according to the loan contract, then value these amounts at the market rate. Add the cash down payment to obtain the market value of the offer. In this example, since the market interest rate is higher than the contract rate, the market value of the offer will be less than the stated offer price of $235.000. Press Display 4  NOM% 4 2  P/YR 2  EFF% 4.04 12  P/YR 12  NOM% 3.967068 150000 PV 150,000 300 N 300 0 FV 0 PMT 789.030308 790 +/ PMT 790 60 INPUT  AMORT PER 60-60 = = = 130,516.63687 130516.64 +/ FV 130,516.64 9  NOM% 9 2  P/YR 2  EFF% 9.2025 12  P/YR 12  NOM% 8.835748 60 N 60 PV 122,246.785707 (market value of the mortgage) + 85000 = 207,246.785707 (market value of the offer) The market value of the offer is $207,246.79.

Answer 100

Answer: 1 Explanation: First, convert the nominal interest rate with semi-annual compounding (j2 = 11.25%) to the equivalent nominal interest rate with monthly compounding. Then, calculate the mortgage payments required for a $42,500 loan: Press Display 11.25  NOM% 11.25 2  P/YR 2  EFF% 11.566406 12  P/YR 12  NOM% 10.995046 42500 PV 42,500 300 N 300 0 FV 0 PMT 416.395839 Next, multiply the rounded payment by 12 to get the annual debt service:

Answer 101

Answer: 4 Explanation: Option (4) is correct because the federal government has exclusive jurisdiction with respect to the development and operation of airports. Options (1), (2), and (3) are incorrect because land use zoning, subdivision regulation, and building regulations are all regulated by local government.

Answer 102

Answer: 3 Explanation: Option (3) is correct because an assessment notice is a notice informing a property owner of the value of the property as of July 1 of the previous year. Option (1) is incorrect because a separate statement called a “tax notice” is sent to property owners requesting payment of taxes. Option (2) is incorrect because notice is not issued prior to an appraisal. Option (4) is incorrect because an assessment notice does not deal with costs of local improvement projects to property owners.

Answer 103

Answer: 2 Explanation: Option (2) is correct because zinc strips discourage moss growth on a roof. When it rains, the rain carries tiny amounts of zinc down the slope of the roof, which prevents moss from growing in this otherwise damp location. Options (1), (3), and (4) are incorrect as they do not describe the purpose of a zinc strip.

Answer 104

Answer: 4 Explanation: Option (4) is correct because it is false. The appraiser must understand the client’s intended use in order to make the appropriate scope of work decision. Option (1) is incorrect because appraisers do not rely on the client; they use their experience and judgment to establish the information necessary to identify and resolve the problem. Option (2) is incorrect because the appraiser determines the scope of work and level of information necessary to produce a credible appraisal. Option (3) is incorrect because limited detail may be acceptable if it falls within the requested scope of work and limitations are indicated in the report.

Answer 105

Answer: 2 Explanation: Option (2) is correct because the comparative approach is based on the principle of substitution, which asserts that a property’s value should be no more than the cost of purchasing a substitute property that provides similar utility. Options (1), (3), and (4) are incorrect as they do not form the basis of the comparative approach of appraisal.

Answer 106

Answer: 3 Explanation: Option (3) is correct because when using a rating grid, the subject property is the standard of comparison and each comparable sale is adjusted to it. The subject property is not adjusted to the comparables nor are the comparables adjusted to each other. Option (1) is incorrect because the correct approach is to determine which comparable is most like the subject property and use that as main evidence for the final market value, not to average the value of the comparable sale prices. Option (2) is incorrect because the comparable properties need not have the same lot size as the subject property. Option (4) is incorrect because the comparable properties do not require the same cost of improvements as the subject property.

Answer 107

Answer: 2 Explanation: Option (2) is correct because a wood burning furnace as a property’s primary heating system is an example of functional curable depreciation, which is an outdated feature that can be corrected economically. Options (1), (3), and (4) are incorrect for this reason.

Answer 108

Answer: 1 Explanation: Find the yield of the property given the NOI and the sale price.

Answer 109

Answer: 3 Explanation: Option (3) is correct because legal Fees for conveyance are classified under the “debit” of the purchaser, and legal Fees to discharge an existing mortgage on title is under “debit” of the vendor. Options (1), (2), and (4) are incorrect for this reason.

Answer 110

Answer: 4 Explanation: Option (4) is correct because the marketing mix consists of product, place, price, and promotion. Options (1), (2), and (3) are incorrect for this reason.

Answer 111

Answer: 2 Explanation: Option (2) is correct because an owner developer creates a strata development by filing a strata plan with the land title office. On the strata plan, the entirety of the building is divided between strata lots and common property. Option (1) is incorrect because a strata plan does not contain the developer’s goals nor does it form part of the disclosure statement. Option (3) is incorrect because cooperative owners possess shares in a non-profit corporation, which in turn holds title to the land. Therefore, there is no need to file a strata plan to divide the property into individual units. Option (4) is incorrect because a strata plan must be filed for any strata development regardless of the number of lots being created.

Answer 112

Answer: 4 Explanation: Option (4) is correct because Options (1), (2), and (3) all describe situations in which a lender who is foreclosing may ask the court to appoint a receiver. If a mortgaged property has been abandoned (as described in Option (3)) or contains a commercial operation (as described in Options (1) and (2)), the lender may request that the court appoint a receiver to collect the rents, pay the bills, and generally keep the business going.

Answer 113

Answer: 4 Explanation: Option (4) is correct because an appraisal values the legal rights of ownership vested in a particular piece of real estate. Options (1), (2), and (3) are incorrect as they do not describe the subject of an appraisal.

Answer 114

Answer: 3 Explanation: Option (3) is correct because a private nuisance occurs when an owner or occupier of land unreasonably and substantially interferes with the reasonable use and enjoyment of a neighbouring property. Option (1) is incorrect because private nuisance is concerned with the use and enjoyment of property, not the safety or comfort of the public at large. Option (2) is incorrect because an act constituting private nuisance need not involve a trespass (e.g., the wrongful disturbance of an easement may constitute a private nuisance). Option (4) is incorrect because Option (3) is correct.

Answer 115

Answer: 4 Explanation: Option (4) is correct because it is not mandatory to consider the potential increase in real property tax revenue to convert a rental building to a condominium. Options (1), (2), and (3) are all factors the approving authority must consider when deciding whether to approve the conversion.

Answer 116

Answer: 1 Explanation: Option (1) is correct because the immobility of land does not affect how a purchase is financed. Options (2), (3), and (4) are incorrect as they result from the immobility of land.

Answer 117

Answer: 3 Explanation: Option (3) is correct because a vaulted ceiling is an architectural variation, not a structural method used in housing construction. Options (1), (2), and (4) are incorrect because they describe types of structural methods used in housing construction.

Answer 118

Answer: 4 Explanation: Option (4) is correct because the monthly payment on a straight line principal reduction loan declines over time. Options (2) and (3) are incorrect because each monthly payment includes a constant amount of the principal, plus the interest that has accrued for the month. Options (1) is incorrect because as the outstanding balance declines over time, the amount of monthly interest declines; therefore, the total payment declines.

Answer 119

Answer: 1 Explanation: Seller’s Statement of Adjustments (Vanessa) ITEM DEBIT CREDIT Purchase Price 150,000.00 Assumed 1st Mortgage 71,000.00 Unpaid and Overdue Taxes + Penalty 1,200.00 Buyer's Share of Taxes* 369.00 Commission 9,000.00 Cash Proceeds of Sale** 69,169.00 _________ 150,369.00 150,369.00 * (Aug. 31-Dec. 31 = 123 days) 123/365  $1,095 = $369 ** Because the total Debits and Credits must balance, in order to find the Proceeds of Sale, you must first calculate the total Credits ($150,369.00) and then subtract the known Debits. The result is the balance of cash that the seller can expect to receive after all outstanding expenses relating to the property have been paid.

Answer 120

Answer: 3 Explanation: Buyer’s Statement of Adjustments (Parker) ITEM DEBIT CREDIT Purchase Price 150,000.00 Deposit to Agent 15,000.00 Assumed 1st Mortgage 71,000.00 2nd Mortgage 34,000.00 Buyer's Share of Taxes* 369.00 Conveyancing Fees 600.00 Property Transfer Tax 1,500.00 Balance Due to Complete** _________ 32,469.00 152,469.00 152,469.00 * (Aug. 31-Dec. 31 = 123 days) 123/365  $1,095 = $369 ** Because the total Debits and Credits must balance, in order to find the Balance Due to Complete, you must first calculate the total Debits ($152,469.00) and then subtract the known Credits. The result is the balance due from the buyer to complete the transaction.

Answer 121

Answer: 4 Explanation: Option (4) is correct because BCFSA is a regulatory agency whose primary objective is protection of the public. BCFSA is not obligated to pursue the best interests of real estate professionals, and must pursue the best interests of the public. Options (1), (2), and (3) each describe a power or duty of BCFSA.

Answer 122

Answer: 4 Explanation: Find the effective rates for each of these nominal rates and compare. The investor acts as the lender and will prefer the loan with the highest interest rate. Press Display Loan A: 13.25  NOM% 13.25 365  P/YR 365  EFF% 14.165157 Loan B: 13.5  NOM% 13.5 4  P/YR 4  EFF% 14.198945 Loan C: 13.75  NOM% 13.75 2  P/YR 2  EFF% 14.222656 Loan D: Nominal rate compounded annually is equal to its effective rate: 14.25% Based on the above, Loan D provides the highest rate of return.

Answer 123

Answer: 1 Explanation: The first step to solving this problem is to find the monthly payments that the borrower has to make. Press Display 4.5  NOM% 4.5 2  P/YR 2  EFF% 4.550625 12  P/YR 12  NOM% 4.458383 217200 PV 217,200 20  12 = N 240 0 FV 0 PMT 1,369.239998 1369.24 +/ PMT 1,369.24 The investor is paying $225,000 for the right to receive the monthly payments of $1,369.24 for 20 years. In order to determine the investor’s rate of return expressed as a nominal interest rate, compounded semi-annually, the calculator steps are as follows: Press Display 225000 PV 225,000 I/YR 4.048729  EFF% 4.124712 2  P/YR 2  NOM% 4.083034

Answer 124

Answer: 4 Explanation: Option (4) is correct because the age of the decision does not determine which decision should govern the subsequent decision. Options (1), (2), and (3) each describe a component of the doctrine of stare decisis.

Answer 125

Answer: 3 Explanation: Option (3) is correct because it is true. Option (1) is incorrect because the net operating income represents a return on the entire value of the property; it is not a return only on the equity portion of the property’s value. Option (2) is incorrect because items specific to an owner or investor are NOT included in the calculation of net operating income. Option (4) is incorrect because the income approach can be used in appraising most types of property, although it is more appropriate for properties that produce rental income, e.g., apartment buildings, office buildings, industrial space.

Answer 126

Answer: 1 Explanation: Option (1) is correct. Karen may have a claim for private nuisance against Jack, as the interference was continuous, the act was done on his land but affected Karen’s land, and it interfered with Karen’s use and enjoyment of her land. An injunction is a possible remedy available under a successful action in private nuisance. Option (2) is false because, if Karen chooses to sue Jack for negligence, she must prove that he has breached the standard of care owed to her by a reasonable person in Jack’s situation, not that he breached the duty of care. Option (3) is false because the interference with airspace rights of a fee simple owner would likely be an action in trespass, and in this case, Jack did not trespass, as the act was done on his land. Option (4) is false because although trespass is actionable per se, Jack did not trespass onto Karen’s property. Trespass requires the direct physical invasion of land by a person or tangible object.

Answer 127

Answer: 4 Explanation: Option (4) is correct because the agent has a duty to avoid conflicts of interest with his or her principal, but the principal does not owe this duty to his or her agent. Options (1), (2), and (3) are incorrect because they are duties that are owed by a principal to his or her agent.

Answer 128

Answer: 2 Explanation: Option (2) is correct because in British Columbia the statutory liability to pay real property taxes is on the owner of the property. This applies even in the context of long term-leases where the lessor is not a tax exempt organization or public body. That said, a lease contract can impose on a lessor a contractual liability to pay property taxes. Option (1), (3), and (4) are incorrect because each of these entities would be statutorily liable for property taxes.

Answer 129

Answer: 3 Explanation: Option (3) is correct because Larry may be able to enforce the lease agreement under section 59 of the Law and Equity Act since he has spent $10,000 on a new barn. Generally, contracts respecting land in British Columbia must be in writing to be enforceable, pursuant to section 59 of the Law and Equity Act. However, section 59 allows an exception to this writing requirement in situations where the person seeking to enforce an unwritten contract has changed his or her position such that it would be unfair not to enforce the contract. Option (1) is incorrect because there are exceptions to the writing requirement imposed by section 59. Option (2) is incorrect because section 59 applies to lease agreements for more than 3 years. Option (4) is incorrect because a lease agreement is not automatically void if not in writing (e.g., section 59 does not apply to lease agreements for terms of 3 years or less).

Answer 130

Answer: 2 Explanation: Option (2) is correct because a principal will be bound to a third party by the acts of their agent provided those acts were within the agent’s authority. This means that a principal could be liable to a third party under a contract entered into by their agent where the agent failed to disclose their status as an agent, as long as the agent was acting within their authority. That said, where an agent does not disclose to a third party that he or she is acting as an agent, the agent may also be held liable as a principal. Options (1), (3), and (4) are incorrect because each statement is true of the common law of agency.

Answer 131

Answer: 3 Explanation: Option (3) is the correct answer as the cost approach is most likely to result in an appraisal value that is significantly different from the price a property might sell for. The reason for this is because the replacement cost of a property may not be representative of the value in the market. Options (1), (2), and (4) are incorrect because these factors would likely be accounted for in the appraised value.

Answer 132

Answer: 2 Explanation: Find the monthly based on the terms of the contract. Press Display 14  NOM% 14 2  P/YR 2  EFF% 14.49 12  P/YR 12  NOM% 13.608312 40000 PV 40,000 240 N 240 0 FV 0 PMT 486.07037 The monthly payment is $486.07.

Answer 133

Answer: 2 Explanation: The maximum loan amount is the lesser of the maximum loan amount using the loan-to-value (LTV) and GDSR constraints:

Answer 134

Answer: 4 Explanation: Option (4) is correct because a multiple listing agreement is a type of exclusive listing contract which requires that the listing be distributed to all members of the listing licensee’s real estate board. Option (1) is incorrect because the term “multiple” in “multiple listing agreement” does not refer to the number of properties the brokerage lists for the same seller. Options (2) and (3) are incorrect because a multiple listing contract is always an exclusive right to sell, meaning that the property is listed with only one brokerage and the seller pays one commission to that brokerage.

Answer 135

Answer: 3 Explanation: Option (3) is correct because the matching principle states that expenses must be recorded when they are incurred, not when they are paid. Option (1) is incorrect because the cost principle states that assets must be recorded for the purchase price on the date of acquisition. Option (2) is incorrect because the recognition principle is not an accounting principle, although the revenue recognition principle states that revenues must be recorded when they are earned, not when money is received. Option (4) is incorrect because the conservation principle is not a generally accepted accounting principle.

Answer 136

Answer: 4 Explanation: Option (4) is incorrect because a longer amortization period will mean that repayment is spread out over a longer period of time, and payments will be smaller. Options (1) is incorrect for this reason. Option (2) is incorrect because the size of the required payment will be smaller. Option (3) is incorrect because extending the loan amortization period does not affect its classification.

Answer 137

Answer: 1 Explanation: Option (1) is correct because digital signatures are codes that are used to authenticate the individual sending the message so as to ensure the integrity of the data. To be effective, digital/e-signatures, such as those used in credit cards, must be unforgeable. Options (2), (3), and (4) are incorrect as they do not describe digital signatures.

Answer 138

Answer: 2 Explanation: Find the loan-to-value ratio based on the property’s lending value and the amount of the mortgage. $84,000 ÷ $120,000 = 70%

Answer 139

Answer: 3 Explanation: Option (3) is correct because the commission is paid by the seller only. Therefore, it appears as a debit on the seller’s statement of adjustments and does not appear on the buyer’s statement. Options (1), (2), and (4) are incorrect for the same reason.

Answer 140

Answer: 4 Explanation: Option (4) is correct because tax law falls within the sphere of public law, and is therefore a false statement. Option (1) is incorrect because the doctrine of stare decisis provides uniformity to the common law system by requiring courts to adhere to principles that prior courts have established. Option (2) is incorrect because the Supreme Court of Canada can decide not to hear an appeal. Option (3) is incorrect because courts in Canada can apply both common law and equitable principles in deciding a matter.

Answer 141

Answer: 1 Explanation: Option (1) is correct because a property possesses latent value if its current state does not represent its highest and best use. Given this, the latent value of the property may be realized through a change of use. Option (2) is incorrect because a renovation for continued similar use would not realize the property’s latent value. Option (3) is incorrect because a property may possess latent value given its current zoning. Further, rezoning may not be possible. Option (4) is incorrect because a property may be sold at a higher price if it possesses latent value.

Answer 142

Answer: 2 Explanation: Find the maximum gross debt service ratio given the mortgage terms. Press Display 5.5  NOM% 5.5 2  P/YR 2  EFF% 5.575625 12  P/YR 12  NOM% 5.438018 190451 PV 190,451 0 FV 0 300 N 300 PMT 1,162.496683 The monthly payment is $1,162.50.

Answer 143

Answer: 4 Explanation: Option (4) is correct because rectification is not a remedy for breach of contract. Options (1), (2), and (3) are incorrect because these are all remedies for breach of contract.

Answer 144

Answer: 1 Explanation: Option (1) is correct because a dormer is a roof extension that provides extra floor area and windows for the upper level of a home. Options (2), (3), and (4) are incorrect for this reason.

Answer 145

Answer: 3 Explanation: Option (3) is correct and Options (1), (2), and (4) are incorrect because the right of survivorship means that when one joint tenant dies, the entire estate automatically vests in the surviving joint tenants.

Answer 146

Answer: 3 Explanation: Option (3) is correct because an unreasonable and substantial interference with property is required to establish a claim in nuisance. Trifling and inconsequential damages is insufficient. Option (1) is incorrect because it is no defence to say that the act complained of is beneficial to the public. Option (2) is incorrect because the fact that the activity creating the nuisance has not been performed in a negligent way is no defence to an action in nuisance. Option (4) is incorrect because the mere fact that the activity is authorized by statute does not mean the activity is not a nuisance.

Answer 147

Answer: 2 Explanation: Press Display 8 I/YR 8 12  P/YR 12 100000 PV 100,000 100000 +/ FV 100,000 1 N 1 PMT 666.666667 Alternative Solution Press Display 8 ÷ 12 = I/YR 0.666667 % 0.00666667  100000 = 666.666667

Answer 148

Answer: 3 Explanation: Option (3) is correct: this password is longer than 8 characters, includes a variety of character types, is not a dictionary word (or combination of dictionary words), and does not include a combination of consecutive keyboard keys. Option (1) is incorrect because it is a sequence of consecutive keyboard combinations. Option (2) incorrect because it is too short. Option (4) is incorrect because it is a combination of dictionary words with an obvious symbol to replace a letter, which can easily be cracked.

Answer 149

Answer: 2 Explanation: Option (2) is correct because individual borrowers have the right, under the terms of the Interest Act, to prepay all of the outstanding debt (with additional three months’ interest as a penalty in lieu of notice) at any time after five years from the initiation date of the mortgage. In some instances, mortgage contracts allow for partial or complete prepayment to occur at any point in the contractual term. Options (1), (3), and (4) are incorrect because they do not describe prepayment in a mortgage.

Answer 150

Answer: 2 Explanation: Option (2) is correct. An appraiser who is asked to find the market value of a newly-constructed church would not be able to use the comparative or investment approaches due to the lack of data and would be justified in relying upon the cost approach. In addition, the appraiser can effectively determine the cost of constructing the improvements since the church is newly constructed and has not experienced any depreciation. Option (1) is incorrect because a 40-year old bungalow should be appraised using the direct comparison approach, Option (3) is incorrect because a vacant lot with latent value should be appraised using the residual method. Option (4) is incorrect because a high rise office tower in an outer suburb should be appraised using the income approach.

Answer 151

Answer: 2 Explanation: Option (2) is correct because a profit à prendre is a right to enter onto the land of another person and to take some profit from the land, such as profits from fishing. Options (1) and (3) are incorrect because unlike easements, profits à prendre need not accompany a dominant tenement. They also need not be granted for an indefinite period of time. Option (4) is incorrect because an owner who wishes to impose restrictions consistent with a general scheme of development would likely charge the land with a building scheme.

Answer 152

Answer: 3 Explanation: Option (3) is correct because a periodic tenancy automatically renews itself on the last day of the term for a further term of the same duration until terminated by either party. Options (1), (2), and (4) are incorrect because these statements do not describe features of periodic tenancies.

Answer 153

Answer: 3 Explanation: Option (3) is correct because oil left in the storage tank is an item usually settled between the parties outside of the statements of adjustments. Options (1), (2), and (4) are incorrect for the same reason.

Answer 154

Answer: 1 Explanation: Option (1) is correct because rationing mortgage funds means to reduce the amount given out to mortgage loans. By reducing the gross debt service ratio (PIT/Gross Income), the lender decreases the amount of the loan for a given gross income. Option (2) is incorrect because decreasing their interest rates doesn’t decrease the amount lent out; it just creates a greater demand for loans. Option (3) is incorrect because increasing the maximum loan to-value ratio means for a given market value of the property, the lender is willing to advance a greater amount of a loan. Option (4) is incorrect because increasing the maximum amortization period, all other factors constant, means the present value of the loans will decrease, since borrowers are given more time to pay off the loan.

Answer 155

Answer: 1 Explanation: Option (1) is correct because if the payment is rounded up to the next higher cent, the final payment of a fully amortized mortgage will be smaller than regular payments, because the borrower is “overpaying” a slight amount each period. Options (2), (3), and (4) are incorrect for this reason.

Answer 156

Answer: 4 Explanation: Option (4) is correct because a brokerage is not permitted to withdraw money from the trust account to pay business expenses. Options (1), (2), and (3) are incorrect because the Real Estate Services Act allows a brokerage to withdraw money from the trust account in those circumstances.

Answer 157

Answer: 1 Explanation: Option (1) is correct because in relation to the subject property, this comparable has three bathrooms (one less bathroom) and 2,800 square feet. The square footage adjustment is -$10,000; therefore, since the square footage adjustment is $5,000 per 100 square feet, there is a 200 square foot difference between the comparable and the subject. Since the adjustment is negative, the comparable property is larger (by 200 square feet) than the subject (2,600 + 200). Options (2), (3), and (4) are therefore incorrect.

Answer 158

Answer: 2 Explanation: Option (2) is correct and Options (1), (3), and (4) are incorrect because an option to purchase the property provided by the borrower to the lender is considered a clog on the equity of redemption, and is void.

Answer 159

Answer: 4 Explanation: Calculate the cost of funds advanced. Press Display 12  P/YR 12 166000 PV 166,000 1117.12 +/ PMT 1,117.12 240 N 240 0 FV 0 I/YR 5.234236 (j12)  EFF% 5.361651 (j1)

Answer 160

Answer: 4 Explanation: Option (4) is correct because the petitioner may apply for either an absolute of foreclosure or a judicial sale after an order nisi is granted and the respondent borrower fails to pay the amount due as required by the order. Options (1) and (2) are incorrect for the same reason. Option (3) is incorrect because an equitable charging order is not an option for petitioners to apply for after the respondent borrower fails to pay the amount due as required by an order nisi.

Answer 161

Answer: 3 Explanation: Option (3) is correct because limiting the power of land developers is not a rationale for government regulation of land use. Options (1), (2), and (4) are correct because they are all rationales for government regulation of land use.

Answer 162

Answer: 2 Explanation: The maximum loan granted will be the lower amount of the loan-to-value constraint and the DCR constraint. Using DCR constraint, calculate maximum allowable payments.

Answer 163

Answer: 4 Explanation: Option (4) is correct because section 8.2 of the Real Estate Services Act requires licensees to include the standard assignment terms in the contract of purchase and sale (unless they have been advised otherwise by their client). If the requirements of section 8.2 are met, assignments are permissible provided that they do not prejudice the rights of the seller and the contract does not prohibit assignment. Option (1) is incorrect because contracts of purchase and sale can only be assigned if certain conditions are met. Option (2) is incorrect because contracts of purchase and sale can be assigned in some circumstances. Option (3) is incorrect because under the standard assignment terms, contracts of purchase and sale can be assigned with the written consent of the seller, not the buyer.

Answer 164

Answer: 4 Explanation: Option (4) is correct because it is false. With an insured mortgage loan, the lender has not only the borrower’s personal covenant, but also the insurance as fallback security in the case the borrower defaults on payments. Options (1), (2), and (3) are true statements and are therefore incorrect.

Answer 165

Answer: 3 Explanation: Find the monthly based on the terms of the contract. Press Display 15  NOM% 15 1  P/YR 1  EFF% 15 12  P/YR 12  NOM% 14.0579 90000 PV 90,000 75000 +/ FV 75,000 24 N 24 PMT 1,599.22238 The monthly payment is $1,599.22.

Answer 166

Answer: 2 Explanation: Option (2) is correct because the principal is the person for whom an agent has contracted to act for, and for whose benefit the agent is required to perform and make decisions. Options (1) and (4) are incorrect because while an agent may represent a buyer or seller, the question is asking for the general term for the person that an agent represents, regardless of the side of the transaction. Option (3) is incorrect because “client” is not the legal term for the person whom an agent represents.

Answer 167

Answer: 4 Explanation: Option (4) is correct because depreciation is excluded in net operating income calculations because the life of a building depends on its economic durability, not its physical durability. The economic life of many buildings is so long that the amount of depreciation taken each year is not an important element in the estimation of value. Option (1), (2), and (3) are incorrect because they do not describe reasons for excluding depreciation from net operating income.

Answer 168

Answer: 1 Explanation: Option (1) is the correct answer. A Property Assessment Review Panel is the first level of appeal from a property assessment. Option (2) is incorrect because the Board of Variance deals with exceptions to zoning bylaws. Option (3) is incorrect because the Municipal Finance Authority levies property tax, but does not deal with assessments. Option (4) is incorrect because the Property Assessment Appeal Board is the second level of appeal (i.e., it hears appeals from the Property Assessment Review Panel).

Answer 169

Answer: 1 Explanation: Option (1) is correct because a restrictive covenant must be negative, not positive. Options (2), (3), and (4) are incorrect because being negative in nature, involving two parcels of property and having intention to bind the land are all essential elements of a restrictive covenant.

Answer 170

Answer: 3 Explanation: Option (3) is correct because if payments are rounded up to the next higher dollar, the final payment will likely be smaller because the borrower is “overpaying” a small amount each period. Options (1) and (2) are incorrect because rounding will not increase the cost to the borrower or the yield to the lender. Option (4) is incorrect because the number of payments will remain the same.

Answer 171

Answer: 1 Explanation: Option (1) is correct because surrender of a commercial lease can arise by operation of law where the landlord does some act which is inconsistent with the continuation of the tenancy. Options (2), (3), and (4) are incorrect because an arbitrator, Public Trustee and the Residential Tenancy Board cannot grant orders amounting to surrender of a commercial lease.

Answer 172

Answer: 4 Explanation: Option (4) is the false statement as it is unlikely that the seller knows the buyer’s ceiling price. Options (1), (2), and (3) are all true statements.

Answer 173

Answer: 3 Explanation: Find the PV for a future cash flow of $60,000 given the investor’s requirements. Press Display 14 I/YR 14 2  P/YR 2 0 PMT 0 6 N 6 60000 FV 60,000 PV 39,980.533429 The investor would be willing to pay $39,980.53.

Answer 174

Answer: 1 Explanation: Option (1) is correct because When a company generates a profit (positive net income), the result is an increase in the owner’s or shareholder’s equity. Option (2) is incorrect because assets may increase or decrease depending on the company’s cash flow and asset purchase/sale activity. Option (3) is incorrect because cash may increase or decrease depending on the company’s cash flow activities. Option (4) is incorrect because liabilities may increase or decrease depending on the company’s borrowing and repayment activities.

Answer 175

Answer: 3 Explanation: Option (3) is correct because assuming John and Mary intend to enter into a legal relationship, the other essentials of a contract are met – offer, acceptance, and consideration. There is no evidence that one of the parties lacks capacity or is lacking genuine consent. Option (1) is incorrect because $500 is valid consideration. Option (2) is incorrect because the promise to pay is future consideration, not past, as Mary does not yet have the money. Option (4) is incorrect because the contract is not required to be in writing.

Answer 176

Answer: 3 Explanation: Option (3) is correct because a mortgage lender may attract liability for remediation of a contaminated site if they become the registered owner of the property, for example, as the result of foreclosure. Options (1), (2), and (4) are incorrect because the Environmental Management Act specifically provides that a lender is not liable if they participate only in financial matters, impose requirements that will not cause or increase contamination, or appoint a person to investigate the site.

Answer 177

Answer: 3 Explanation: Option (3) is correct because if a contract is executed under seal, the contract will be binding even if no consideration has been given. Option (1) is incorrect because the contract must also be accepted. Option (2) is incorrect because the contract may still need to be signed. Option (4) is incorrect because the seal itself does not show intention, as it is possible that the parties may not know of the legal effects of a seal.

Answer 178

Answer: 1 Explanation: Option (1) is correct because increased advertising on a particular property will result in more potential buyers that may result in a higher sale price. Option (2) is incorrect because Mr. Fisher is providing beneficial below-market financing that should increase the value of the property and mortgage for sale. Option (3) is incorrect because Ms. Brown’s motivation to sell her home quickly would be more likely to result in a quick sale for a lower price. Option (4) is incorrect because Options (2) and (3) are incorrect.

Answer 179

Answer: 4 Explanation: Option (4) is correct because chartered banks accounted for approximately 75% of all resident mortgage credit outstanding. Options (1), (2), and (3) represent other institutions that are lesser investors in mortgage funds.

Answer 180

Answer: 4 Explanation: Option (4) is correct because federally regulated financial institutions, which includes chartered banks and trust companies, are impacted by the stress test borrower qualification rule for uninsured mortgages implemented in January 2018. Options (1), (2), and (3) are incorrect as they do not describe all of the impacted lenders.

Answer 181

Answer: 2 Explanation: Option (2) is correct because a voidable contract is one which one of the parties has the option to rescind (meaning cancel) the contract. Option (1) is incorrect because this definition describes a void contract. Option (3) is incorrect because a voidable contract can still be enforceable. If the party with the option to cancel chooses not to cancel the contract, they can enforce it against the other party. Option (4) is incorrect because a deed is a document used to transfer an interest in land, not a contract.

Answer 182

Answer: 2 Explanation: Find the interest incurred for the first month of the loan. Press Display 9.5  NOM% 9.5 2  P/YR 2  EFF% 9.725625 12  P/YR 12  NOM% 9.31726 75000 PV 75,000 300 N 300 0 FV 0 PMT 645.770724 645.77 +/ PMT 645.77 1 INPUT  AMORT PER 1-1 = = 582.328738 The interest cost for the first month is $582.33.

Answer 183

Answer: 1 Explanation: Option (1) is correct because equitable waste was created by the courts of equity, not common law. Options (2), (3), and (4) are incorrect because voluntary waste, permissive waste, and ameliorating waste are all categories of waste recognized by common law.

Answer 184

Answer: 3 Explanation: Calculate the loan information based on the contract rate: First, convert the contract rate (j2 = 4%) to the equivalent nominal interest rate with monthly compounding (j12). Then, calculate the mortgage payments (round up to the next higher dollar) and the outstanding balance at the end of the term. Calculate the market value of the mortgage with the market rate: Convert the market rate (j2 = 9%) to the equivalent nominal rate with monthly compounding (j12). Then, determine the market value (present value) of the vendor-supplied mortgage. Calculate the market value of the offer: Add the $55,000 cash down payment to the market value of the mortgage to obtain the market value of the offer. Press Display 4  NOM% 4 2  P/YR 2  EFF% 4.04 12  P/YR 12  NOM% 3.967068 180000 PV 180,000 300 N 300 0 FV 0 PMT 946.83637 947 +/ PMT 947 60 INPUT  AMORT PER 60-60 = = = 156,686.207947 156686.21 +/ FV 156,686.21 9  NOM% 9 2  P/YR 2  EFF% 9.2025 12  P/YR 12  NOM% 8.835748 60 N 60 PV 146,690.439034 (market value of the mortgage) + 55000 = 201,690.439034 (market value of the offer) The market value of the offer is $201,690.44.

Answer 185

Answer: 3 Explanation: Option (3) is correct because when a person purchases a strata lot, they acquire fee simple title to their own strata lot, and a portion of the common property as a tenant in common with the other owners in the strata development. Option (1) is incorrect because the purchaser acquires a share of the common property in addition to the fee simple interest. Option (2) is incorrect because a strata lot owner does not become a joint tenant with the other owners in the development. Option (4) is incorrect because an owner does not acquire shares in the strata corporation.

Answer 186

Answer: 3 Explanation: Option (3) is correct because an official community plan contains information on residential development required to meet housing needs for at least the next five years. Options (1), (2), and (4) would all be found on an official community plan.

Answer 187

Answer: 2 Explanation: Option (2) is correct because section 29 of the Land Title Act, which abolishes the doctrine of notice, is subject to the exception of fraud perpetrated by the purchaser. Options (1), (3), and (4) are not correct because they are not listed exceptions to section 29 of the Land Title Act.

Answer 188

Answer: 2 Explanation: Option (2) is correct because both sole proprietors and partners need to report their business income on their personal income tax returns. Option (1) is incorrect because it excludes partners from this requirement. Option (3) is incorrect because corporations have different tax liability from proprietors and partners in that corporations are taxed as separate legal entities. Option (4) is incorrect because a sole proprietorship is a business enterprise owned by a single individual.

Answer 189

Answer: 4 Explanation: Option (4) is correct. Using a technology called cryptography, protecting information on the internet is accomplished by scrambling it into an unreadable format called encrypting. Options (1), (2), and (3) are incorrect because they are all false statements.

Answer 190

Answer: 2 Explanation: Find the outstanding balance of the mortgage. Press Display 8  NOM% 8 2  P/YR 2  EFF% 8.16 12  P/YR 12  NOM% 7.869836 48000 PV 48,000 180 N 180 0 FV 0 PMT 455.113415 455.11 +/ PMT 455.11 60 INPUT  AMORT PER 60-60 = = = 37,724.886207 The outstanding balance after 60 months is $37,725, rounded to the nearest dollar.

Answer 191

Answer: 1 Explanation: Option (1) is correct because when using the cost approach of appraisal, cost of the improvements is normally determined by utilizing the current replacement cost. Options (2), (3), and (4) are incorrect for this reason.

Answer 192

Answer: 3 Explanation: Option (3) is correct because section 23 of the Land Title Act contains 10 exceptions to the principle of indefeasibility. Option (1) is incorrect because neither legal nor equitable charges are guaranteed by the principle of indefeasibility. Option (2) is incorrect because the principle of indefeasibility only provides that a good-faith purchaser can rely completely on the ownership shown on the certificate of title, and can acquire good title upon registration, even though there are defects in the vendor’s registered title. Option (4) is incorrect because the principle of indefeasibility overrules the common law doctrine of the void deed.

Answer 193

Answer: 3 Explanation: Option (3) is correct because section 7(2) of the Residential Tenancy Act imposes a duty on residential landlords to mitigate their damages that results from the tenant’s breach of the tenancy agreement. For example, if a tenant wrongfully vacates the premises prior to the expiry of a fixed term residential tenancy agreement (as occurred with Lisa in this question), the landlord must still attempt to re-rent the premises at a reasonably economic rent. Option (1) is incorrect because section 26(3) of the Residential Tenancy Act effectively abolishes the remedy of distress in residential tenancies. Option (2) is incorrect because the Residential Tenancy Act does not limit claims for arrears of rent. The amount claimed for arrears of rent is only limited by the duty to mitigate damages required of the landlord. Option (4) is incorrect because the Residential Tenancy Act does not require the landlord to sue the tenant.

Answer 194

Answer: 1 Explanation: Option (1) is correct because having references from currently licensed brokers is not a requirement for obtaining a license under the Real Estate Services Act (RESA). Options (2), (3), and (4) are incorrect because in order to become a licensee, RESA requires that a person be at least 19, of good reputation, and meet the requirements set out in the Real Estate Services Rules.

Answer 195

Answer: 1 Explanation: Option (1) is correct because the seller has already paid all of the taxes for the current year and needs to be refunded the amount proportional to the time that the seller is no longer living in the property. Option (2) is incorrect because the seller is responsible for the full amount of any penalty. It is not adjusted because only the seller is liable to pay the taxes and failed to do so in a timely manner. Option (3) is incorrect because the seller must pay the buyer, in advance of the tax payment, for the portion of the year prior to the adjustment date.

Answer 196

Answer: 3 Explanation: Option (3) is correct because current liabilities are only listed on the balance sheet. They would not show up on the statement of profit and loss, which is also known as the income statement. Options (1), (2), and (4) are incorrect because the income statement shows revenues and expenses, such as depreciation, rental revenue, and interest expense on a mortgage.

Answer 197

Answer: 4 Explanation: Option (4) is correct because the final value on a proprietor’s income statement is the net income. Option (1) is incorrect because retained earnings is an equity account on a corporation’s balance sheet. Option (2) is incorrect because the net income is equal to taxable income, plus depreciation expense, less capital cost allowance. Option (3) is incorrect because net income is the difference between revenue and expenses for the year, not revenue and liabilities.

Answer 198

Answer: 4 Explanation: Option (4) is correct because an income statement is not always determined on an annual basis. Many large companies will generate quarterly reports, and sometimes generate reports covering other time periods. Options (1), (2), and (3) are all true and are therefore incorrect.

Answer 199

Answer: 3 Explanation: Option (3) is correct and Options (1), (2), and (4) are incorrect because a notice of civil claim is served to a defendant who must respond by filing a response to civil claim.

Answer 200

Answer: 1 Explanation: Find the amount of the monthly payments on an interest only payment scheme derived from the monthly periodic rate. Press Display 8  NOM% 8 2  P/YR 2  EFF% 8.16 12  P/YR 12  NOM% 7.869836 450000 PV 450,000 450000 +/ FV 450,000 1 N 1 PMT 2,951.188621 Alternative Solution Press Display RCL I/YR ÷ 12 = 0.65582 % 0.0065582  450000 = 2,951.188621

Answer 201

Answer: 2 Explanation: Option (2) is correct because the required threshold to submit a Suspicious Transaction Report (STR) to FINTRAC is reasonable grounds to suspect. Option (1) is incorrect because reasonable grounds to believe means that there are verified facts supporting a probability that an offence has occurred, and is a higher threshold than reasonable grounds to suspect. Option (3) is incorrect because it is the standard that needs to be met to secure a criminal conviction, and it is higher than reasonable grounds to suspect. Option (4) is incorrect because simple suspicion, described as a “hunch” or intuition with little more explanation, is not enough to meet the threshold requirement for filing an STR.

Answer 202

Answer: 2 Explanation: Option (2) is correct and Options (1), (3), (4) are incorrect because each strata lot, together with the strata lot owner’s share in the common property, is deemed to be a separate parcel of land and is assessed and taxed individually. Note that a strata lot owner owns their lot in fee simple and their share of the common property as a tenant in common with the other owners.

Answer 203

Answer: 1 Explanation: Calculate the contract payments based on the face value of the loan, then find the periodic interest rate based on the funds advanced. Press Display 8  NOM% 8 4  P/YR 4  EFF% 8.243216 12  P/YR 12  NOM% 7.947251 245000 PV 245,000 300 N 300 0 FV 0 PMT 1,882.396635 1882.4 +/ PMT 1,882.4 240000 PV 240,000 I/YR 8.188328 (j12) ÷ 12 = 0.682361 (imo) The cost of funds advanced, expressed as a rate per month is 0.682361%.

Answer 204

Answer: 1 Explanation: Option (1) is correct because the marketing concept involves focusing on the client’s needs and using need satisfaction as the starting point for the development of a marketing program. Option (2) is incorrect because personal selling involves face-to-face communication with a potential customer. Option (3) is incorrect because the promotional mix refers to the proper blending of components to satisfy the needs of the target market and to accomplish the desired promotional objectives. Option (4) is incorrect because differentiated marketing refers to similar products being marketed to different market segments using different marketing techniques.

Answer 205

Answer: 1 Explanation: Option (1) is correct because in British Columbia, an infant may act as an agent. Option (2) is incorrect because an agent must be of sound mind to act as an agent in British Columbia. Option (3) is incorrect because to authorize an agent to act on behalf of yourself, you need to have the capacity to contract.

Answer 206

Answer: 4 Explanation: Option (4) is correct: if the audience across all social media platforms is the same, then Burris should avoid posting the exact same message to each different platform. Option (1) is incorrect because there is no precise number of social media platforms that Burris should use; rather, he should tailor his social media strategy to ensure he is able to reach his target market through whatever platforms they use. Option (2) is incorrect because in order to use social media effectively, it will be helpful for Burris to establish goals to ensure his time is being used productively. Option (3) is incorrect because personal and professional social media accounts should be kept separate.

Answer 207

Answer: 2 Explanation: First, convert the nominal interest rate with semi-annual compounding (j2 = 4.75%) to the equivalent nominal interest rate with monthly compounding. Then, calculate the mortgage payments required for a $150,000 loan: Press Display 4.75  NOM% 4.75 2  P/YR 2  EFF% 4.806406 12  P/YR 12  NOM% 4.703666 150000 PV 150,000 300 N 300 0 FV 0 PMT –851.183376 Next, multiply the rounded payment by 12 to get the annual debt service:

Answer 208

Answer: 3 Explanation: Option (3) is correct and Options (1), (2), and (4) are incorrect because a partnership or corporation licensed as a brokerage must have a managing broker act as its representative for all purposes under the Real Estate Services Act.

Answer 209

Answer: 2 Explanation: Option (2) is correct because even if a person has a right to enter a portion of the premises, if a person wanders into areas where he or she has no right of entry, then the person becomes a trespasser. Option (1) is incorrect because Mary was given permission to enter the store, and therefore it is not a trespass. Option (3) is incorrect because this would likely not constitute a trespass unless Joan tells Sue that she does not have permission to be on the premises.

Answer 210

Answer: 3 Explanation: Option (3) is correct because the borrower’s entitlement to assign the mortgage is not an implied term. Options (1), (2), and (4) are incorrect because redeeming the mortgage within a reasonable time, redeeming the mortgage free from all conditions or terms of the mortgage contract, and freedom from any unreasonable collateral advantage required by the lender are all implied terms of a mortgage.

Answer 211

Answer: 2 Explanation: Option (2) is the correct answer as it is the only factor listed that will affect the value of residential real property in the short run. Options (1), (3), and (4) all represent value influences in the long run.

Answer 212

Answer: 1 Explanation: Option (1) is correct and Options (2), (3), and (4) are incorrect because the Property Assessment Review Panel is the first level of appeal from property assessments under the Assessment Act.

Answer 213

Answer: 1 Explanation: Option (1) is correct because it is false. GST applies to all transactions unless it is expressly listed as an exemption in the Excise Tax Act, rather than the reverse. Options (2), (3), and (4) are incorrect because they are all true statements.

Answer 214

Answer: 4 Explanation: Option (4) is correct because Options (1), (2), and (3) are all functions of zoning bylaws. Zoning bylaws can divide the area into zones, regulate the use of land, and regulate the number of buildings on a lot.

Answer 215

Answer: 1 Explanation: Calculate the maximum loan allowable using the lending value and the loan-to-value criterion of 80%.

Answer 216

Answer: 1 Explanation: Calculate the monthly payment given the maximum allowable loan amount based on the loan-to-value ratio and the loan terms. The maximum loan allowable using the lending value and the loan-to-value criterion of 80% is:

Answer 217

Answer: 1 Explanation: Find the gross income required based on monthly loan payments of $1,200 and a GDSR of 30%.

Answer 218

Answer: 2 Explanation: Option (2) is correct because when taxes are previously paid by the seller, the buyer should reimburse the seller for the portion of the year from the adjustment date onward. The reimbursement will appear as a credit on the seller’s statement and a debit on the buyer’s statement. Options (1), (3), and (4) are incorrect for this reason.

Answer 219

Answer: 4 Explanation: Buyer’s Statement of Adjustments ITEM DEBIT CREDIT Purchase Price 175,000.00 Deposit 20,000.00 Legal Fees for Conveyance 384.00 Buyer's Share of Taxes* 221.95 Property Transfer Tax 1,750.00 Balance Due to Complete ________ 157,355.95 177,355.95 177,355.95 * (July 28-Dec. 31 = 157 days) 157/365  $516 = $221.95

Answer 220

Answer: 1 Explanation: Option (1) is correct because when taxes are previously paid by the seller, the buyer should reimburse the seller for the portion of the year from the adjustment date onward. The buyer’s share of the year’s property taxes (Jul. 28 to Dec. 31 = 157 days) is calculated in the following manner: 157/365 × $516 = $221.95. This amount will appear as a credit on the seller’s statement and a debit on the buyer’s statement of adjustments. Options (2), (3), and (4) are therefore incorrect.

Answer 221

Answer: 1 Explanation: Find the effective annual rate of interest on the funds advanced given the contract terms. Press Display 12  P/YR 12 48000 PV 48,000 499.76 +/ PMT 499.76 60 N 60 45167.5 +/ FV 45,167.5 I/YR 11.618034 (j12)  EFF% 12.257094 (j1)

Answer 222

Answer: 2 Explanation: Option (2) is correct because licensees have a duty to maintain the integrity of the real estate profession, including holding others in the profession to the highest standards. Option (1) is incorrect because ethical standards are not the same as the legal requirements for a licensee. Professional ethics standards are often higher standards compared to legislative standards. Option (3) is incorrect because the duties of full disclosure, confidentiality, acting in accordance with lawful instruction, and acting in a client’s best interests are all duties under the Rules and fiduciary duties. Option (4) is incorrect because professional ethics apply when dealing with clients, non-clients, and other real estate professionals.

Answer 223

Answer: 3 Explanation: Option (3) is correct because the comparable will need an adjustment of +$2,700 for 1 bathroom since the subject has one more bathroom than the comparable. In addition, there is a - $5,000 adjustment for the 100 square foot difference in size because the subject is smaller than the comparable. Options (1), (2), and (4) are therefore incorrect.

Answer 224

Answer: 2 Explanation: Option (2) is correct because the shopping behaviour model classifies products and services based on the amount of effort that a consumer is willing to go through to obtain that product or service. There is no superior goods classification. Options (1), (3), and (4) are incorrect because this classification system includes convenience goods, shopping goods, specialty goods, and unsought goods.

Answer 225

Answer: 4 Explanation: Seller’s Statement of Adjustments ITEM DEBIT CREDIT Purchase Price 120,000.00 Commission 6,000.00 Buyer's Share of Taxes* 372.00 Cash Proceeds of Sale 114,372.00 _________ 120,372.00 120,372.00 * (Aug. 30-Dec. 31 = 124 days) 124/365  $1,095 = $372

Answer 226

Answer: 2 Explanation: Calculate the nominal rate, compounded quarterly from the quarterly rate.

Answer 227

Answer: 2 Explanation: Option (2) is correct because of an implied term required in mortgage law that, upon full repayment of the loan, a borrower has the right to have title reconveyed to him or her in the same state as it was at the time of the making of the mortgage (usually this means title will be free and clear of all encumbrances). Any term which seeks to provide otherwise is considered to be a “clog on the equity of redemption” and will be of no effect, or void. Option (1) is incorrect because any term which is void cannot be valid. Option (3) is incorrect because a term which purports to clog the equity of redemption is not considered to be illegal; rather, it will simply not be enforced by the courts. Option (4) is incorrect because it confuses a clog on the equity of redemption with a stipulation for a collateral advantage. Problems related to collateral advantages are no longer considered a clog on the equity of redemption and are instead debated in terms of unreasonable restraints of trade.

Answer 228

Answer: 1 Explanation: Option (1) is correct because bridge financing is a type of interim financing whereby a borrower will receive a loan and grant a mortgage to a lender for a short period while long-term financing is being pursued. Bridge financing can be used where a borrower has purchased property but has not sold his or her existing property and financing to purchase the new property is required. Option (2) is incorrect as a conventional mortgage would be the most effective financing option for Jonathan in this situation. Option (3) is incorrect as a reverse annuity mortgage would best allow Jonathan to access the equity in his home to make a purchase. Option (4) is incorrect as it would not require any financing, since Jonathan wants to pay completely from his savings.

Answer 229

Answer: 2 Explanation: Option (2) is correct because when using the cost approach of appraisal, cost of the improvements is normally determined by utilizing the current replacement cost. Replacement cost is the cost of providing a building that would represent the modern equivalent of the house to be appraised in determining the construction cost of a building. Options (1), (3), and (4) are incorrect for this reason.

Answer 230

Answer: 4 Explanation: Option (4) is correct because the Strata Property Act applies to strata plans deposited on or after July 1, 2000, replacing the Schedule of Interest on Destruction which was used under previous legislation. Section 273 and 278 of the Act provide for a “conversion schedule” or “interest schedule” that will be employed to determine the distribution of the proceeds in the event that a strata complex is destroyed and the owners decide to take the insurance money instead of rebuilding. Option (1) is incorrect because the value of each strata lot is different and therefore it would be unfair to distribute insurance policy proceeds equally between all owners. Options (2) and (3) are incorrect because they are based on unit entitlement, which is similar to the Schedule of Interest on Destruction, which is only used for strata plans deposited prior to July 1, 2000.

Answer 231

Answer: 2 Explanation: Option (2) is correct because the comparative approach of appraisal is most appropriate where buyers and sellers are well informed about current sales transactions. Options (1) and (3) are incorrect because the comparative approach of appraisal is applicable when there is sufficient recent sales data of similar properties, and the property does not have redevelopment potential. Option (4) is incorrect because under the comparative approach, a property’s value should not exceed the cost of purchasing an alternative property that can provide similar utility. Therefore, it may not be appropriate if a property is unique.

Answer 232

Answer: 2 Explanation: Option (2) is correct because, although the Real Estate Services Act outlines certain disclosure requirements in Section 5-10, the common law considers an agent’s duties and responsibilities to the principal to be one of a fiduciary nature and requires a duty of loyalty, which includes both confidentiality and FULL disclosure, above and beyond what is required in Section 5-10. Options (1) and (4) are incorrect because the common law may extend a licensee’s disclosure responsibilities beyond the duty to disclose laid out in Section 5-10. Option (3) is incorrect because making a secret profit would violate the duty of utmost loyalty and full disclosure.

Answer 233

Answer: 4 Explanation: Option (4) is correct because the assessor’s primary purpose under the Assessment Act is to provide actual values on which to apply tax levies. Option (1) is incorrect because the municipal council sets the general tax rate for each class of property in a given territory, but does not determine the actual value of the property. Option (2) is incorrect because the British Columbia Financial Services Authority does not establish actual value of property. Option (3) is incorrect because the Lieutenant-Governor in Council appoints the Property Assessment Appeal board, but is not involved in assessing the actual value of a piece of property.

Answer 234

Answer: 4 Explanation: Option (4) is the correct answer as a mortgage typically has long terms and amortization periods. Option (1) is incorrect because mortgages do not trade publicly such as bonds and stocks, making them relatively illiquid. Options (2) and (3) are incorrect because mortgage loans also require a high degree of administrative work, and a relatively high initial outlay of capital compared to other investments.

Answer 235

Answer: 3 Explanation: Option (3) is correct because a restrictive covenant is an interest in land which imposes a restriction on the use of one person’s land (the servient tenement) for the benefit of another piece of land (the dominant tenement). Option (1) is incorrect because a licence creates a positive right, not a restriction. Option (2) is incorrect because a caveat is a notice registered against the title to land warning those searching the registrar that someone is claiming an estate or interest in land against the title. Option (4) is incorrect because an easement gives the holder a positive right to use the neighbouring land for his benefit, whereas a restrictive covenant prevents the neighbouring land from being used in a particular way.

Answer 236

Answer: 2 Explanation: Option (2) is correct because every strata plan must include a Schedule of Unit Entitlement. Option (1) is incorrect because the required drawings must show the strata lots distinguished by number or letter in consecutive order, but they are not necessarily required to show the street address of each strata lot. Option (3) is incorrect because there are no Standard Rules provided in legislation, and there is no requirement for a strata corporation to create Rules. Rather, there is only a requirement for there to be bylaws in place when the strata plan is filed. Option (4) is incorrect because the area of each strata lot must be indicated in square metres, not square feet.

Answer 237

Answer: 3 Explanation: Option (3) is correct because an investor can typically procure debt financing at a rate lower than the expected yield on investment. This allows the investor to cover the debt payments with the revenue generated from the investment. Option (1) is incorrect because only the interest portion of mortgage payments are tax deductible. Option (2) is incorrect as most terms are typically longer than one term, and this provides no advantage to the investment. Option (4) is incorrect as the change in property values has no influence on the investor’s choice of debt or equity financing.

Answer 238

Answer: 1 Explanation: Option (1) is correct because licensees must act honestly with non-clients, which includes being truthful about the property and the fact that Dave intends to remove the tree before the property is sold. Option (2) is incorrect because an exception to the duty to communicate all offers to the client is if a client specifically instructs their licensee not to communicate offers to them promptly. Option (3) is incorrect because Shaylena has not been asked to give advice outside of her area of expertise. Option (4) is incorrect because Shaylena has breached the duties to act honestly and to act with reasonable care and skill.

Answer 239

Answer: 4 Explanation: Option (4) is correct because a contract made without consideration can still be enforceable if it is made under seal. However, all other elements of a valid contract must still be present. Options (1) and (2) are incorrect because executing a contract under seal does not remove the requirement under section 59 of the Law and Equity Act that, in most cases, contracts affecting land must be in writing and signed in order to be enforceable in court. Option (3) is incorrect because the parties must have intended to create legal obligations in order for a contract to be formed, whether or not it is executed under seal.

Answer 240

Answer: 3 Explanation: Option (3) is correct because on the completion date the seller is obligated to transfer title and the buyer is obligated to pay the purchase price in accordance with the contract for purchase and sale. Option (1) is incorrect because the statements of adjustment of the buyer and seller are treated separately and are not comprised of identical information. Option (2) is incorrect because, although the amount of taxes for the year are apportioned between the parties as of the adjustment date, the party “held responsible” for their share of the taxes will depend on whether the property taxes for the year have been paid already by the seller or will be due in the future to be paid by the buyer. Option (4) is incorrect because, although the adjustment and possession dates are most often the same, they are not required to be so. The adjustment date may coincide with either the completion or possession date or fall in between the two.

Answer 241

Answer: 1 Explanation: Option (1) is correct because payment of the deposit is generally not subject to GST until closing occurs, at which time the full amount of the sale price (including the deposit) becomes taxable. Option (2) is incorrect because no GST applies to reimbursements for prepayments. Option (3) is incorrect because under section 165(1) of the Excise Tax Act, the buyer (the “recipient”) has the obligation to pay the GST. Option (4) is incorrect because only amounts on the statements of adjustments that are legally components of the purchase price are subject to GST.

Answer 242

Answer: 4 Explanation: Option (4) is correct because all of the above statements are true. Option (1) is true because a contract is formed when there is unequivocal acceptance of an offer. When S accepted B’s offer to purchase the property for $75,000, a contract between S and B was formed. Then, when A accepted S’s offer to purchase the property for $50,000 within the time period stipulated in the offer, a contract between A and S was formed. Option (2) is true because an offer expires when the offeror communicates revocation before acceptance, so A would no longer have been able to accept S’s offer. Option (3) is true because S is entitled to accept B’s offer, but S will be liable for damages to A because S cannot convey the property as promised and will be in breach of their contract.

Answer 243

Answer: 4 Explanation: Option (4) is correct because it is impossible to determine when the loan will be completely repaid with the information given. This is an interest only loan, and no payments are made on the principal. The principal of the loan is completely repaid on a date set between the lender and the borrower. Options (1), (2), and (3) are incorrect for this reason.

Answer 244

Answer: 4 Explanation: Calculate the effective annual rate of interest of 10% per annum, compounded semi-annually, and the effective annual rates of interest for each option. Press Display 10  NOM% 10 2  P/YR 2  EFF% 10.25 Option (1): 9  NOM% 9 2  P/YR 2  EFF% 9.2025 Option (2): 10% per annum compounded annually = 10% effective annual rate Option (3): 10  NOM% 10 12  P/YR 12  EFF% 10.471307 Option (4): 9.9  NOM% 9.9 365  P/YR 365  EFF% 10.405148 Therefore, Option (4) is correct.

Answer 245

Answer: 2 Explanation: In this question, calculate the NOI in order to find the market yield for each comparable.

Answer 246

Answer: 1 Explanation: Option (1) is correct because an individual must be licensed to and engaged by a brokerage in order to obtain and maintain a licence as a representative. Option (2) is incorrect because although a licensee may wish to incorporate his or her own Personal Real Estate Corporation, it is not a requirement that they do so as long as they are employed under and licensed to a brokerage. Option (3) is incorrect because ensuring the books and records are properly managed is a duty of the managing broker, not a representative. Option (4) is incorrect because there is no requirement for a representative to file at least one real estate transaction with the British Columbia Financial Services Authority each year.

Answer 247

Answer: 3 Explanation: Option (3) is correct because the payments of a loan contract are calculated based on a contract yield rate. If the discount, or expected yield rate decreases, the present value of the given contracted payments increases. Options (1), (2), and (4) are incorrect for this reason.

Answer 248

Answer: 1 Explanation: The market value of the mortgage is calculated by valuing the contracted loan payments at the market rate. The market value of the offer is the market value of the mortgage plus the cash down payment. Press Display 7.5  NOM% 7.5 2  P/YR 2  EFF% 7.640625 12  P/YR 12  NOM% 7.385429 755.31 +/ PMT 755.31 240 N 240 0 FV 0 PV 94,579.014897 (market value of the mortgage) + 75000 = 169,579.014897 (market value of the offer) The market value of the offer is $169,579, rounded to the nearest dollar.

Answer 249

Answer: 3 Explanation: Option (3) is correct because the principle of indefeasibility will not protect a registered owner who is on title as a result of fraud in which he or she participated. Since Duke forged the transfer document, he is not protected by indefeasibility and Earl will be able to recover title to Blackacre from Duke. The property will not remain encumbered by Royalty’s mortgage because a mortgage is registered as a charge, and charges are not granted indefeasibility; rather, registration of a charge only raises a rebuttable presumption that the charge is valid. Options (1) and (2) are incorrect because the holder of a charge cannot rely on a title holder’s indefeasibility and Earl will be able to rebut the presumption of the validity of the mortgage by showing that Duke was registered on title as a result of forgery. Option (4) is incorrect because a claim against the Assurance Fund can only be successful where the operation of the Land Title Act caused the party to lose his or her interest, and Royalty would not have had an interest in the property at common law under the rule of nemo dat.

Answer 250

Answer: 3 Explanation: Find the number of months necessary to amortize the loan. Press Display 7  NOM% 7 2  P/YR 2  EFF% 7.1225 12  P/YR 12  NOM% 6.900047 32000 PV 32,000 1400 +/ PMT 1,400 0 FV 0 N 24.575695 The loan will be amortized in approximately 24 months, or 2 years.

Answer 251

Answer: 4 Explanation: Option (4) is the correct response because it describes an official community plan. Option (1) is incorrect because a community plan does not require the municipality or regional district to carry out every detail specified in the plan. Rather, it requires that all bylaws enacted, permits issued, and work undertaken after its enactment be consistent with the plan. Option (2) is incorrect because only bylaws enacted subsequent to the enactment of the plan are affected. Option (3) is incorrect because a plan prepared by a regional district may be required to provide the Minister of Municipal Affairs with information regarding public support for the plan, and the minister may require a referendum to determine the degree of public support for the plan.

Answer 252

Answer: 4 Explanation: Option (4) is correct because the risk involved in being a mortgagee is increased due to the greater degree of management time involved. Option (1) is incorrect because mortgage risk is higher than that of Canadian government bonds. Option (2) is incorrect because investors are willing to accept higher risk for higher return; if the interest rate is high enough, investors will accept the risk of lending mortgage funds. Option (3) is incorrect because mortgage risk can also be reduced through careful borrower qualification measures.

Answer 253

Answer: 3 Explanation: Option (3) is correct because a common mistake is one where both parties to a contract have made the same mistake about a fundamental term of the contract. Here, both parties have made the mistake of assuming that the home had not been destroyed at the time they entered into the contract. Option (1) is incorrect because a mutual mistake occurs when each party makes a different fundamental mistake about the contract, and in this case the same mistake was made. Option (2) is incorrect because frustration of a contract happens due to events occurring after the contract was entered into, and here the home was destroyed before the contract was formed. Option (4) is incorrect because an anticipatory breach occurs when one party announces that he or she will not perform before the time of performance arrives, which has not occurred in this scenario.

Answer 254

Answer: 4 Explanation: Option (4) is correct (i.e., would NOT be available as a remedy to Lawson) because this is a commercial tenancy, and so the Residential Tenancy Act would not apply. Options (1), (2), and (3) are incorrect because each of these remedies WOULD be available to Lawson for non-payment of rent on commercial premises.

Answer 255

Answer: 4 Explanation: Option (4) is the correct answer as the interest adjustment period of the loan will not affect the maximum amount a borrower may qualify for. Options (1), (2), and (3) are incorrect because with higher income, higher property lending value, and lower mortgage interest rates, a borrower will be able to qualify for a higher maximum loan.

Answer 256

Answer: 4 Explanation: Find the maximum loan allowable given the borrower’s payment constraints and the given loan criterion, assuming the loan is fully amortized in 25 years. Press Display 4  NOM% 4 2  P/YR 2  EFF% 4.04 12  P/YR 12  NOM% 3.967068 850 +/ PMT 850 300 N 300 0 FV 0 PV 161,590.750973 The maximum loan allowable is $161,590.75.

Answer 257

Answer: 1 Explanation: Option (1) is correct because when a licensee represents only one party as a client in a given transaction, it is called a sole agency relationship. Option (2) is incorrect because an agency relationship exists when a licensee represents a client. Option (3) is incorrect because a limited dual agency relationship exists when a brokerage or licensee acts for multiple parties in a single trade in real estate, but because the duty of loyalty cannot be fulfilled to all clients, the clients agree to a limited form of agency relationship. This practice is now prohibited under section 63 of the Rules. Option (4) is incorrect because an agency relationship is not referred to as a “full agency relationship”.

Answer 258

Answer: 1 Explanation: Option (1) is correct. To find the adjusted sale price of the comparable, take the sum of the listed sale price with its adjustments to the subject property. In this case, the subject property and the comparable are identical except that the subject property has 1 additional bedroom and 1 additional bathroom. The adjusted sale price is: $221,000 + $4,000 +$5,700 = $230,700.

Answer 259

Answer: 2 Explanation: Find the present value from the required yield rate and the sale price at the end of three years, or six semi-annual compounding periods. Press Display 10 I/YR 10 2  P/YR 2 55000 FV 55,000 6 N 6 0 PMT 0 PV 41,041.846815 The investor would be willing to pay $41,041.85.

Answer 260

Answer: 4 Explanation: Option (4) is correct (false) because the single best thing you can do to improve your negotiation effectiveness is to prepare. Options (1), (2), and (3) are incorrect because they are true statements.

Answer 261

Answer: 4 Explanation: Find the present value of the mortgage from the given terms. Press Display 8  NOM% 8 2  P/YR 2  EFF% 8.16 12  P/YR 12  NOM% 7.869836 0 FV 0 240 N 240 390 +/ PMT 390 PV 47,081.122383 The investor should purchase the mortgage for $47,081.12 to earn j2 = 8%.

Answer 262

Answer: 1 Explanation: Option (1) is correct because a condition precedent is a condition in a contract which must be satisfied before the contract is to be performed, and is the formal term for what is usually called a “subject to” clause in the real estate industry. Options (2), (3), and (4) are types of clauses which might be found in a contract that are distinct from “subject to” clauses. Option (2) is incorrect because a warranty is a clause which is not fundamental to the contract and whose breach would not allow a party to terminate the contract, only to sue for damages. Option (3) is incorrect because “subject to” clauses must are conditions precedent (they precede contractual performance) rather than conditions subsequent. Option (4) is incorrect because a penalty clause is a clause which states that a party who breaches the contract must pay a penalty to the innocent party. These clauses will not be enforced by the courts.

Answer 263

Answer: 2 Explanation: Option (2) is correct because the Real Estate Services Act requires a signed copy of the acceptance to be delivered to each of the parties to the transaction. Therefore, Allan, Bob, and Carol each require an individual copy as they are all parties to the transaction. Options (1), (3), and (4) are incorrect because they would each result in a party to the transaction not receiving a signed copy of the agreement.

Answer 264

Answer: 2 Explanation: Option (2) is correct because the test to determine whether an agreement creates a lease or a licence is a matter of intention between the parties, which is determined by examining the agreement, the surrounding circumstances, and the purpose behind the agreement. Option (1) is incorrect because formal wording and inclusion of terms in an agreement such as “lessor/lessee” or “licensor/licensee” will not necessarily be determinative of parties’ intentions. Options (3) and (4) are incorrect because the Residential Tenancy Act and the Commercial Tenancy Act do not apply to the holder of a licence.

Answer 265

Answer: 3 Explanation: Option (3) is correct because in the comparative approach of appraisal, “recent” refers to a time period during which demand and supply conditions in the area are relatively stable or do not change. “Recent” is the period of time, immediately preceding the appraisal date, during which property values in the region have remained stable. Options (1), (2), and (4) are incorrect for this reason.

Answer 266

Answer: 2 Explanation: Option (2) is correct because a weak secondary market for mortgages means that there are not a large amount of buyers and sellers of mortgages that already exist. Due to this, the investors’ funds are “locked in” to the interest rate written in their original contracts, and they cannot achieve the current rate until the end of the term, or until they recover enough capital to initiate a new mortgage at the new rate. Options (1), (3), and (4) are incorrect because they do not describe reasons for mortgage rates’ “stickiness”.

Answer 267

Answer: 2 Explanation: Option (2) is correct because private nuisance occurs when an owner or occupier of land unreasonably and substantially interferes with the reasonable use and enjoyment of a neighbouring property, which includes activities which product noxious fumes. Hurston’s venting highly toxic gas over Ralph’s apple orchard, destroying his crop, would classify as an unreasonable and substantial interference with Ralph’s ability to use and enjoy his land. Option (1) is incorrect because XYZ could be vicariously liable for Hurston’s activities as their employee or negligent for failing to prevent Hurston from creating the nuisance. Option (3) is incorrect because Ralph would have a remedy against Hurston, as the person who created the nuisance is liable for doing so. Option (4) is incorrect because the Occupiers Liability Act would only apply if Ralph and/or his property had been harmed while on XYZ’s property.

Answer 268

Answer: 2 Explanation: Option (2) is correct because a characteristic of a straight line principal reduction loan is that payments will decrease over time. This is favourable to a borrower that expects his or her income to decrease in the future. Option (1) is incorrect because a straight line principal reduction plan does not permit a borrower to delay repayment, as it provides for higher initial payments. Option (3) is incorrect because a borrower who foresees his or her income increasing would prefer to make higher payments in the future, rather than immediately. Option (4) is incorrect because initial payments will be higher than future payments.

Answer 269

Answer: 3 Explanation: Option (3) is correct because the duty of full disclosure requires Billy to disclose all known material information to his client, including the buyer’s intentions for the property. Option (1) is incorrect because Julio has followed his professional obligations and satisfied the duty of full disclosure. Option (2) is incorrect because Gabriel has fulfilled his duty to advise his client to seek independent professional advice on matters outside of his expertise. Option (4) is incorrect because Simon has communicated all of the offers he received to his client and fulfilled his professional obligations.

Answer 270

Answer: 4 Explanation: Option (4) is correct because all of the statements would appear as debits on the seller’s statement. Option (1) would appear as a debit on the seller’s statement of adjustments because an existing mortgage on title which will be assumed by the buyer on completion of the sale reduces the amount of cash that the buyer will owe to the seller. For Option (2), the seller is responsible for clearing the title of any encumbrances and any fees for this are the responsibility of the seller, which would reduce the amount of cash due to him or her and would be shown as a debit to the seller. For Option (3), the seller is liable to pay overdue taxes and any penalty owing as a result of late payment. This reduces the amount of cash owed to the seller and would appear as a debit on their statement of adjustments.

Answer 271

Answer: 2 Explanation: Option (2) is correct because the offeree should generally communicate acceptance using the same method as the offer was made, if the offer does not specify otherwise. Options (1), (3), and (4) are incorrect because they do not generally describe the proper means of communicating acceptance. Rather, they are methods of communication that are potentially acceptable, depending on the way in which the offer was communicated and the terms of the offer.

Answer 272

Answer: 4 Explanation: Option (4) is correct because purchasing assets will not affect owner’s equity. The purchase of the assets will either be funded by cash that will result in no net change in assets, or it will be funded by debt, which will increase both assets and liabilities. Option (1) is incorrect because Investment by the owner will increase the amount of equity. Option (2) is incorrect because personal withdrawals from the business will decrease the amount of equity. Option (3) is incorrect because earning net income will also increase the amount of equity.

Answer 273

Answer: 3 Explanation: Option (3) is correct because there is an implied covenant on the part of a commercial landlord to let the tenant into possession of the leased premises and, if they do not do so, they will be liable for damages. Option (1) is incorrect because a commercial tenant cannot get an order for specific performance in these circumstances due to the common law doctrine of interesse termini, which provides that no estate in land passes until the tenant takes possession. Option (2) is incorrect because quiet enjoyment relates to the tenant’s ability to use and enjoy the premises for all usual purposes without interference or unreasonable disturbance from the landlord, which would apply once the tenant is already in possession of the premises. Option (4) is incorrect because the tenant would be entitled to sue the landlord for damages.

Answer 274

Answer: 2 Explanation: Option (2) is the correct answer because this option represents the subjective value to the owner. Market value should be an objective value at a specific point in time. Options (1), (3), and (4) all form part of the definition of market value.

Answer 275

Answer: 4 Explanation: Option (4) is correct because the basic criteria to qualify for a home owner grant is that the person claiming the grant must be the owner of the property and must occupy it as a principal residence. Option (1) is incorrect because an owner’s name may appear on the assessment roll, but they would not qualify for a home owner grant if they were not occupying the property. Option (2) is incorrect because a tenant is not an owner of the property. Option (3) is incorrect because an owner must live at the property in order to claim a home owner grant.

Answer 276

Answer: 3 Explanation: Option (3) is correct because, in addition to the educational and experience requirements, the Real Estate Services Act (RESA) requires that an applicant must be at least 19 years of age. Option (1) is incorrect because qualification for a managing broker’s licence requires a licensee to have been providing real estate services in a Canadian province or the Yukon for at least two years during the five years before the date of the application. Option (2) is incorrect because Canadian citizenship is not required to qualify for a managing broker’s licence. Option (4) is incorrect because a minimum of 19 years of age is required under RESA.

Answer 277

Answer: 2 Explanation: Option (2) is correct because a licensee must obtain a written agreement of dual agency by both clients before providing services within the dual agency relationship. Option (1) is incorrect because an Agreement Regarding Conflict of Interest Between Clients is entered into when a licensee faces a conflict of interest when acting for multiple clients, and obtains written consent by all clients to continue to represent only one client. Option (3) is incorrect because a Disclosure of Interest in Trade form is required when a licensee or an associate of a licensee (being provided real estate services by the licensee) is to directly or indirectly acquire or dispose of real estate. Option (4) is incorrect because a Disclosure of Risks to Unrepresented Parties form is required when a licensee makes a disclosure under section 54 of the Rules to an unrepresented party while also representing a client to that trade in real estate.

Answer 278

Answer: 2 Explanation: Option (2) is correct because under sections 49 and 50 of the Rules, licensees are prohibited from making promises to others in an attempt to induce them to enter into service agreements or enter into real estate transactions UNLESS the licensee delivers a signed statement setting out the details of the promise to the person to whom the promise is made. Options (1), (3), and (4) are incorrect because making full disclosure to both the seller and the buyer, sending a copy of such a promise to the British Columbia Financial Services Authority, and providing a statement under oath without details of the promise will not be enough to prevent a violation of the rule if the signed statement containing details is not given to the promisee.

Answer 279

Answer: 1 Explanation: Find the present value of the mortgage from the given terms. Press Display 15  NOM% 15 1  P/YR 1  EFF% 15 12  P/YR 12  NOM% 14.0579 650 +/ PMT 650 48 N 48 55858.13 +/ FV 55,585.13 PV 55,698.259135 The purchase price of this loan will be $55,698.26.

Answer 280

Answer: 3 Explanation: Option (3) is correct because a strata corporation may amend the Standard Bylaws in the Strata Property Act by creating a new custom-made bylaw, but they may not enforce such a bylaw until it has been filed at the land title office. Option (1) is incorrect because a vote’s decision making value is not determined by the lot’s unit entitlement – rather, one vote per lot is given regardless of the size of the lot. Option (2) is incorrect because rental restriction bylaws do not apply to strata units for one full year following their passage or, if there is a tenant in a strata lot on the day the new bylaw is passed, the one-year grace period only begins on the day the tenant vacates the strata lot. Option (4) is incorrect because the strata lot is restricted to its description in the strata plan, and everything outside of that parcel is considered to be common property.

Answer 281

Answer: 3 Explanation: Option (3) is correct because bylaws govern owners’ obligations as well as their use of the strata lots and the common property and common assets. Option (1) is incorrect because bylaws are passed by the strata corporation, not just the council. Option (2) is incorrect because a strata corporation may only restrict the rental of a strata lot by a bylaw that prohibits the rental of residential strata lots, not commercial. Option (4) is incorrect because Options (1) and (2) are both incorrect.

Answer 282

Answer: 1 Explanation: Find the yield to the purchaser given the stabilized net operating income and the sale price of the property.

Answer 283

Answer: 4 Explanation: Option (4) is correct because Transport Canada requires a Special Flight Operations Certificate for drones weighing over 25 kilograms that are used for commercial purposes such as real estate marketing. Option (1) is incorrect because drones are less, not more, expensive than helicopters. Option (2) is incorrect because a drone used for real estate marketing must be insured. Option (3) is incorrect because a drone is generally flown during daylight hours.

Answer 284

Answer: 1 Explanation: Option (1) is correct because the defining characteristics of a West Coast design style are angular roof components and large glass areas. Options (2), (3), and (4) are incorrect because they do not describe West Coast design style.

Answer 285

Answer: 1 Explanation: The market value of Linda’s offer is the market value of the mortgage plus her cash down payment. Linda will assume the remaining 36 monthly payments of $1,356.78 and the outstanding balance of $150,948.60. Calculate the market value of the mortgage by determining the PV of the payments and OSB remaining at the end of the original 5-year term based on the current market rate of j12 = 5%. Press Display 5 I/YR 5 12  P/YR 12 1356.78 +/ PMT 1,356.78 150948.6 +/ FV 150,948.6 36 N 36 PV 175,233.074951 (market value of the mortgage) + 45000 = 220,233.074951 (market value of the offer) The market value of Linda’s offer is $220,233.07.

Answer 286

Answer: 3 Explanation: Option (3) is correct because there is no requirement for the dominant and servient tenements to be owned by different parties in order for an easement to be valid. Options (1), (2), and (4) are incorrect because an easement requires that there be a dominant and servient tenement, that the easement accommodate the dominant tenement, and that the easement be capable of forming the subject matter of a grant in order to be valid.

Answer 287

Answer: 4 Explanation: Option (4) is correct because the Assessment Notice indicates the actual value of a property as determined by the assessor. Options (1), (2), and (3) are incorrect because they refer to concepts which do not determine the actual value of a property.

Answer 288

Answer: 3 Explanation: To answer this question, calculate the maximum amount of money that can be lent out given the two constraints: the loan-to-value amount and the gross debt service ratio amount. Calculate the loan amount for the loan-to-value constraint and then calculate the loan amount for the GDSR constraint. In order to determine the maximum amount that the lender will advance, choose the lesser of the two results. LTV = 80%

Answer 289

Answer: 4 Explanation: Calculate the semi-annual periodic rate from the semi-annual nominal rate.

Answer 290

Answer: 2 Explanation: Option (2) is correct because expropriating land for the purpose of adding it to the agricultural land reserve is not included in the powers of the Agricultural Land Commission. Options (1), (3), and (4) are incorrect because they are all within the powers granted to the Agricultural Land Commission under the Agricultural Land Commission Act.

Answer 291

Answer: 3 Explanation: Option (3) is correct because salaries payable is a liability account because it represents money that is owed to another party. Options (1), (2), and (4) are incorrect because depreciation expense, accumulated depreciation, and interest expense accounts are not classified as a liability because they do not represent a future obligation to pay a third party.

Answer 292

Answer: 2 Explanation: Option (2) is correct because a lease grants exclusive possession of land to another (the tenant) for a specified term. Option (1) is incorrect because an easement is a separate type of interest in land which does not grant exclusive possession, but gives a landowner a limited right to use another’s land for the benefit of his or her land. Option (3) is incorrect because a license creates a privilege for the person who holds it to enter onto property for a certain purpose, but does not confer upon the licensee a lease or any other interest in the property. Option (4) is incorrect because a right of survivorship is a characteristic of a joint tenancy co-ownership whereby the estate automatically vests in surviving joint tenants on the death of a joint tenant.

Answer 293

Answer: 4 Explanation: Option (4) is correct (false) because where the Canada Revenue Agency sends an assessment to the seller for uncollected GST, the seller has a right to pursue the buyer for the amount of the GST. Options (1), (2), and (3) are incorrect because they are all true statements.

Answer 294

Answer: 1 Explanation: Option (1) is correct because the mortgage qualifying rate is based on the greater of the government-specified qualifying rate (5.25% as of June 2021) and 2% above the mortgage’s negotiated contract rate. In this case, you would apply a rate of j2 = 5.9% (2% + 3.9%), which is greater than the government-specified rate of j2 = 5.25%.

Answer 295

Answer: 4 Explanation: Option (4) is correct because the landlord’s duty to repair requires that the landlord repair all types of residential premises under section 32 of the Residential Tenancy Act, even if they were in disrepair when the tenancy agreement was made. Options (1), (2), and (3) are incorrect because they are overruled by section 32 of the Act.

Answer 296

Answer: 4 Explanation: Option (4) is correct because while a defect’s impact on a property’s value can be objectively determined, a stigma’s effect depends on an individual buyer’s subjective considerations. Some may view the stigma as a liability, while others may not. Option (1) is incorrect because although stigmas can increase the value of a property, they can also decrease its value, depending on the individual buyer’s subjective preferences. Option (2) is incorrect because sellers are generally not required to disclose stigmas unknown to the buyer. Additionally, unlike stigmas, some defects must be disclosed by the seller. Option (3) is incorrect because whether or not the stigma can be discovered through reasonable inspection and inquiries is not a distinguishing feature of a stigma. Further, only certain defects are discoverable upon a reasonable examination.

Answer 297

Answer: 1 Explanation: Option (1) is correct because a key purpose of the Disclosure of Risks to Unrepresented Parties form is to encourage unrepresented parties to obtain independent professional advice in respect of the trade in real estate. Option (2) is incorrect because it does not describe a purpose of the form, as a licensee is permitted to provide unrepresented parties with limited trading services, provided the licensee adheres to the Rules. Option (3) and (4) are incorrect because they are not purposes of the form.

Answer 298

Answer: 4 Explanation: Find the maximum loan allowable given the borrower’s payment constraints and the given loan criterion, assuming the loan is fully amortized in 25 years. Press Display 14  NOM% 14 2  P/YR 2  EFF% 14.49 12  P/YR 12  NOM% 13.608312 550 +/ PMT 550 300 N 300 0 FV 0 PV 46,853.310771 The maximum loan allowable is $46,853.31.

Answer 299

Answer: 4 Explanation: The value of Mark’s offer is the market value of the mortgage plus his cash down payment. Mark will assume the remaining 36 monthly payments of $2,493 and the outstanding balance of $296,762.89. Calculate the market value of the mortgage by determining the PV of the payments and OSB remaining at the end of the original 5-year term based on the current market rate of j2 = 3.5%. Press Display 3.5  NOM% 3.5 2  P/YR 2  EFF% 3.530625 12  P/YR 12  NOM% 3.474749 2493 +/ PMT 2,493 296762.89 +/ FV 296,762.89 36 N 36 PV 352,537.42204 (market value of the mortgage) + 50000 = 402,537.42204 (market value of the offer) The market value of Mark’s offer is $402,537.42.

Answer 300

Answer: 3 Explanation: Option (3) is correct because the sub-market for single-family residences experiences many sales transactions so there is a more abundant flow of market information relating to current prices. Options (1), (2), and (4) are incorrect because they are not reasons that this sub-market is considered more perfect than others.

Answer 301

Answer: 4 Explanation: Option (4) is correct because zoning bylaws are periodically consolidated to include all the amendments that have been adopted up to the time of that consolidation, but this is not a standard part that is usually included in the bylaw. Options (1), (2), and (3) are incorrect because they are all part of a standard zoning bylaw.

Answer 302

Answer: 4 Explanation: Calculate the monthly principal and interest that can be paid from the given constraints and the following equation: PIT = GDSR  Gross Income

Answer 303

Answer: 2 Explanation: Option (2) is correct because the seller’s share of the property taxes will reduce the cash proceeds due to him/her, and thus will be debited on his/her statement of adjustments. Option (1) is incorrect because taxes are apportioned between the parties as of the adjustment date and this is reflected on the statements of adjustments. Option (3) is incorrect because taxes may be paid out of the proceeds where taxes are due but have not yet been paid, whereas in this situation the taxes are not yet due. Option (4) is incorrect because a credit on the buyer’s statement of adjustments would reflect an amount that was owed to the seller, and in this situation the seller’s share of the taxes are owed to the buyer so that the buyer can pay them in the future when they become due.

Answer 304

Answer: 2 Explanation: Calculate the required payments according to the loan contract, then calculate the cost of funds advanced using a present value that is net of commission, appraisal, survey, and legal fees. Press Display 7.75  NOM% 7.75 2  P/YR 2  EFF% 7.900156 12  P/YR 12  NOM% 7.627754 100000 PV 100,000 240 N 240 0 FV 0 PMT 813.422896 813.42 +/ PMT 813.42 95450 PV 95,450 ($100,000  $3,500  $450  $600) I/YR 8.252059 (j12)  EFF% 8.571434 (j1)

Answer 305

Answer: 1 Explanation: Option (1) is correct because the developer is offering below-market rate financing as an incentive to sell more condos. Therefore, Options (2), (3), and (4) are incorrect.

Answer 306

Answer: 4 Explanation: Find the market value of a loan contract given the change in the market rate; add the down payment to obtain the market value of the offer. Press Display 4  NOM% 4 2  P/YR 2  EFF% 4.04 12  P/YR 12  NOM% 3.967068 125000 PV 125,000 240 N 240 0 FV 0 PMT 755.308081 755.31 +/ PMT 755.31 6.5  NOM% 6.5 2  P/YR 2  EFF% 6.605625 12  P/YR 12  NOM% 6.413688 PV 101,999.942524 (market value of the mortgage) + 75000 = 176,999.942524 (market value of the offer) The market value of the offer is $176,999.94.

Answer 307

Answer: 1 Explanation: Calculate the required payments, according to the loan contract, then calculate the cost of funds advanced using a face value that is net of commission fees. Press Display 6 I/YR 6 12  P/YR 12 350000 PV 350,000 180 N 180 0 FV 0 PMT 2,953.498898 2953.5 +/ PMT 2,953.5 60 INPUT  AMORT PER 60-60 = = = 266,031.76828 266031.77 +/ FV 266,031.77 336000 PV 336,000 ($350,000  $10,000  $2,500  $500  $1,000) 60 N 60 I/YR 7.063573 (j12)  EFF% 7.296801 (j1)

Answer 308

Answer: 1 Explanation: Option (1) is correct because an invitation to treat is an invitation to the public to submit offers. Option (2) is incorrect because a legal offer is meant to be binding if accepted, whereas an invitation to treat is not an offer capable of acceptance to form a binding contract. For this reason, Option (4) is also incorrect. Option (3) is incorrect because a request for information is not sufficient to constitute an invitation to treat; rather, a request for offers is required.

Answer 309

Answer: 3 Explanation: Option (3) is correct because the subject of a real property appraisal is the legal interest of ownership vested in the land. A legal interest in cattle is not a legal interest of ownership vested in the land. Options (1), (2), and (4) are incorrect because they are all legal interests of ownership vested in the land.

Answer 310

Answer: 3 Explanation: Option (3) is correct because an exclusive listing is an ‘exclusive right to sell’ which gives the real estate brokerage (through its Designated Agent) the sole authority to sell the property for a specified period. Option (1) is incorrect because an open listing authorizes a real estate brokerage through its Designated Agent to sell the property; however, it does not prevent the seller from employing a number of other brokerages to also represent the seller through their Designated Agents. Option (2) is incorrect because a general listing is another name for an open listing. Option (4) is incorrect because a restricted listing is not a type of real estate agency listing contract.

Answer 311

Answer: 4 Explanation: Option (4) is correct because the document grants a right of way, which is a form of easement, to Mary for the benefit of her land (the dominant tenement) over John’s land (the servient tenement). Option (1) is incorrect because a restrictive covenant imposes a restriction on the use of one person’s land for the benefit of another, and this document grants a positive right to use the land rather than a restriction. Option (2) is incorrect because a lease grants a right to possession for a certain amount of time, whereas this interest does not have an end date attached to it and it does not grant exclusive possession to the property. Option (3) is incorrect because a license is a privilege to enter onto premises for a certain purpose that is a personal right (i.e. can only be exercised by the person to whom it was granted) whereas this right is an interest which runs with the property rather than to Mary exclusively.

Answer 312

Answer: 3 Explanation: Option (3) is correct because in using the cost approach of appraisal, the major difficulty is experienced in calculating incurable physical depreciation. The cause of the difficulty lies in determining the economic life of the building. Options (1), (2), and (4) are incorrect for this reason.

Answer 313

Answer: 2 Explanation: Option (2) is correct because if supply and demand factors have remained relatively stable for the last 3 months, a good comparable property is a similar property that sold one week ago, after two months exposure to the market. This is the best comparable because the comparative approach is built on the premise that the market value of the subject property will be equal to the prices recently paid for similar properties. Options (1) and (4) are incorrect because they do not represent the market value of similar properties. Option (3) is incorrect because this similar property has not sold.

Answer 314

Answer: 1 Explanation: Option (1) is correct because to find the adjusted sale price of the comparable, take the sum of the listed sale price with its adjustments to the subject property. In this case, the subject property and the comparable are identical except that the subject property has 1 additional bedroom and is 100 square feet larger. The adjusted sale price is: $321,000 + $3,200 + $5,000 = $329,200.

Answer 315

Answer: 3 Explanation: Option (3) is correct because reproduction cost is the current cost of constructing an exact replica of the subject property. Options (1), (2), and (4) are incorrect for this reason.

Answer 316

Answer: 2 Explanation: Option (2) is correct (FALSE) because a binding contract of purchase and sale can be created if there is an offer, acceptance, and consideration. The exchange of promises to convey title to the property in return for the purchase price is valid consideration, even without a deposit. Options (1), (3), and (4) are incorrect because they are TRUE statements.

Answer 317

Answer: 3 Explanation: Option (3) is correct because an ordinary residential property is assessed at market (actual) value. Option (1) is incorrect because it would qualify as a special residential property and could be assessed according to the value based solely on the current residential use. Option (2) is incorrect because pipelines are classified under Major Industry property and are assessed on a separate basis due to difficulty in determining actual value. Option (4) is incorrect because for real estate classified as farm land, the assessor must consider only the value of the property as a farm and exclude value attributable to any other potential uses (i.e. value in use is considered rather than actual value).

Answer 318

Answer: 1 Explanation: Find the highest effective rate of the nominal interest rates given. Press Display 14  NOM% 14 12  P/YR 12  EFF% 14.934203 14  NOM% 14 6  P/YR 6  EFF% 14.842523 14  NOM% 14 4  P/YR 4  EFF% 14.7523 14  NOM% 14 2  P/YR 2  EFF% 14.49 As the number of compounding periods increases, the effective rate increases, so the more interest you will receive for an investment.

Answer 319

Answer: 3 Explanation: Seller’s Statement of Adjustments ITEM DEBIT CREDIT Purchase Price 195,000.00 1st Mortgage 71,000.00 Seller's Share of Taxes* 739.73 Commission 11,700.00 Cash Proceeds of Sale 111,560.27 _________ 195,000.00 195,000.00 * (Jan. 1-June 29 = 180 days) 180/365  $1,500 = $739.73

Answer 320

Answer: 1 Explanation: Option (1) is correct because all things being equal, a longer term on a bonused partially amortized loan will result in a lower effective interest rate paid by the borrower. This is because the value of the bonus is paid off over a longer term, thus decreasing the annual cost of borrowing. Options (2), (3), and (4) are incorrect for this reason.

Answer 321

Answer: 3 Explanation: Press Display 9  NOM% 9 2  P/YR 2  EFF% 9.2025 12  P/YR 12  NOM% 8.835748 25000 PV 25,000 240 N 240 0 FV 0 PMT 222.297374 222.3 +/PMT 222.3 Find the effective annual interest rate on the funds advanced. The calculator steps continue as follows: Press Display 22000 PV 22,000 I/YR 10.679327  EFF% 11.217868 The cost of funds advanced is greater than the contract equivalent rate of 9.2025%. However, calculations are not required. Given the inverse relationship between the present value and interest rates, since the present value declines (all else constant), the interest rate increases (as supported by the above calculations).

Answer 322

Answer: 4 Explanation: Option (4) is correct because the objectivity principle states that all accounting information needs to be objectively determined, as well as verifiable. Option (1) is incorrect because the consistency principle states that once an accounting policy is adopted, the company must continue to use the same policy in the future. Option (2) is incorrect because the verification principle is not a generally accepted accounting principle. Option (3) is incorrect because the materiality principle is not studied in this course.

Answer 323

Answer: 2 Explanation: Option (2) is correct because increasing the interest rate is a way to accommodate increased risk by providing increased return for the lender, but this does not reduce the risk. In fact, a higher interest rate will result in a higher payment, making the risk of default even greater. Options (1), (3), and (4) are incorrect because they represent ways that a lender can reduce risk.

Answer 324

Answer: 1 Explanation: Option (1) is correct because where acceptance is intended to be by non-instantaneous means, which includes by post, the acceptance is effective when it is put in the mail rather than when it is actually received. If the acceptance is lost in the mail, there is still a binding contract as long as the offeree can prove the acceptance was actually mailed. For these reasons, Options (2), (3), and (4) are incorrect.

Answer 325

Answer: 4 Explanation: Option (4) is correct because there is no requirement for developers to consult with the public over proposed developments under the Real Estate Development Marketing Act (REDMA). Options (1), (2), and (3) are incorrect because developers are required to do each of these things under REDMA. Its purpose is to protect purchasers by requiring developers who market or intend to market development units in development properties to: meet any preliminary requirements or approvals applicable to the type of property to be marketed; ensure appropriate steps are taken to pay the cost of utilities or other related services and to assure the purchaser’s title (or other interest) upon purchase; and prepare and file a disclosure option in the form required by the BC Financial Services Authority.

Answer 326

Answer: 2 Explanation: Option (2) is correct because an owner cannot file a lien against the strata corporation because they are dissatisfied with the corporation’s actions. However, if an owner sues a strata corporation and succeeds, they may receive a judgment against the strata corporation. Options (1), (3), and (4) are incorrect because they are all remedies available under the Strata Property Act to an owner who is dissatisfied with acts of the strata corporation.

Answer 327

Answer: 3 Explanation: Option (3) is correct because a licensee is required to file a Suspicious Transaction Report (STR) as soon as practicable. Option (1) is incorrect because individual licensees have an obligation under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to file STRs, whether or not the managing broker approves. Option (2) is incorrect because law enforcement direction is not required to file an STR. Option (4) is incorrect because it is the requirement for filing a Large Cash Transaction Report. There is no specified number of days required for filing an STR, because the requirement is that it be filed as soon as practicable.

Answer 328

Answer: 4 Explanation: Option (4) is correct because in British Columbia, only fee simple owners are protected by the guarantee of indefeasibility. In Gill v. Bucholtz (2009) the British Columbia Court of Appeal confirmed that the Land Tile Act preserves the common law principle that “one cannot give another person that property which one does not have” with respect to registered charges. Options (1) and (3) are incorrect because under British Columbia’s Torrens system, the indefeasibility principle provides that when a person is named on a certificate of title as the owner of the fee simple estate in land, that is conclusive proof that he or she is entitled to that fee simple estate. Therefore, a fee simple owner cannot recover title from a good faith purchaser who acquires fee simple title by way of a void deed. Option (2) is incorrect because nemo dat quod non habet is the fundamental common law tenet that one cannot give what one does not have, which would protect the rightful owner. The indefeasibility principle protects the registered fee simple owner.

Answer 329

Answer: 4 Explanation: Option (4) is the correct answer as reconciling the market value of the subject property is not a reason to include a market analysis in the appraisal report. Options (1), (2) and (3) are incorrect because they are valid reasons to include the market analysis in the appraisal report.

Answer 330

Answer: 2 Explanation: Option (2) is correct because an agent is a person authorized to act on behalf of another person, the principal, so that they represent the principal in dealings with third parties. Therefore, while the agent is acting within the scope of his authority as an agent and after having disclosed that he is an agent for the principal, the contract will be between the principal for whom the agent is acting and the third party. Option (1) is incorrect because, although there would be a contract between the agent and the principal in order to establish the agency relationship, in this case the contract is with a third party. Options (3) and (4) are incorrect because the agent is acting on behalf of the principal as if he were stepping into the principal’s shoes rather than contracting for himself; therefore, the agent is not party to the agreement.

Answer 331

Answer: 3 Explanation: Option (3) is correct because a sub-lease is a lease by the original tenant (the sub-landlord) to a third party for less than the total remainder of the sub-landlord’s original lease term. Option (1) is incorrect because an assignment is the transfer by a party of all of the party’s interest in a property, i.e. for the total remainder of the lease term rather than a portion of it. Option (2) is incorrect because a tenancy by sufferance occurs when there is no tenancy because no lease exists. For example, if a tenant does not move out of the leased premises upon the expiration of the term of the lease. Option (4) is incorrect because a tenancy at will is where the tenant, with the consent of the landlord, occupies land as a tenant for a term which can be terminated by either party at any time.

Answer 332

Answer: 1 Explanation: Option (1) is correct because where property taxes are to be paid in the future by the buyer, the seller owes the share of taxes from January 1 up to the adjustment date, in this case, up to April 14 as the adjustment date is April 15. Option (2) is incorrect because taxes are split according to the proportion of the year that each party has ownership of the property rather than an equal split. Option (3) is incorrect because Benson is responsible for paying taxes on July 1. Vanessa will have to pay Benson for her share of taxes from January 1 through April 14. Option (4) is incorrect because the property taxes will have to be paid regardless of when the sale completes.

Answer 333

Answer: 2 Explanation: Option (2) is correct because the statement of profit and loss, also known as the income statement, measures revenues and expenses for a certain time period. Option (1) is incorrect because there is no financial statement that reflects the acquisition of assets of a certain period of time. Option (3) is incorrect because there is no financial statement that measures the revenues accrued at a single point in time. Option (4) is incorrect because the balance sheet is the financial statement that measures the assets and liabilities held at a single point in time.

Answer 334

Answer: 1 Explanation: Option (1) is correct because the estate in fee simple is the greatest estate in Canadian law, equivalent to what we ordinarily think of as outright ownership of real property, where the owner has rights to the land for so long as he or she has heirs. This includes the right to freely use and enjoy it, sell it, rent or lease it, grant mortgages or easements or other interests in land, and to dispose of it under the terms of a will. Options (2) and (4) are incorrect because leasehold estates and estates pur autre vie are estates in land less than fee simple since the interests have a prescribed end date and other conditions or obligations attached to the use and enjoyment of the land. Option (3) is incorrect because an easement is an interest in land less than an estate as it is a limited right to use another’s land rather than a full right to possession of the property.

Answer 335

Answer: 2 Explanation: Option (2) is the correct answer because the value to owner cannot be used in appraisal, but may be used in investment analysis. Options (1), (3), and (4) are incorrect for this reason.

Answer 336

Answer: 3 Explanation: Option (3) is correct because the shopping behaviour model classifies products and services based on the amount of effort that a consumer is willing to go through to obtain that product or service. In order of the amount of effort required by the consumer, from the least effort to the most effort, the goods are unsought goods, convenience goods, shopping goods, and specialty goods. Options (1), (2), and (4) are incorrect for this reason.

Answer 337

Answer: 4 Explanation: Option (4) is correct because niche marketing focuses on a relatively small but active and growing target market. Option (1) is incorrect because undifferentiated marketing is when a single product or service is marketed to all potential consumers with a single marketing program. Option (2) is incorrect because differentiated marketing refers to numerous similar products being marketed to different market segments using different marketing programs. Option (3) is incorrect because specialty marketing is a term not used in this course.

Answer 338

Answer: 1 Explanation: For this question you are given the monthly periodic rate and asked to calculate how many years Joanne will make payments. First, express the rate as a j12, then calculate N. Press Display .5  12 = I/YR 6 12  P/YR 12 15000 PV 15,000 450 +/PMT 450 0 FV 0 N 36.555396 ÷ 12 = 3.046283 N is expressed as months; therefore, divide by 12 to express the amortization in years. Joanne will have to make payments for three full years.

Answer 339

Answer: 3 Explanation: Option (3) is correct because a listing licensee has a duty to verify information for the listing and may be liable if they fail to do so and the buyers incur damages as a result. Options (1), (2), and (4) are incorrect because they would not meet the licensee’s duty to independently check the information provided to them by the seller where possible.

Answer 340

Answer: 4 Explanation: Option (4) is correct because a tenant under a commercial lease may assign without the consent of the landlord unless there is an express prohibition in the lease. Options (1), (2), and (3) are incorrect because the presumption is that assignment is allowed unless otherwise specified in the lease, and none of the situations in these options are required for the presumption to prevail.

Answer 341

Answer: 1 Explanation: Option (1) is correct because under the Real Estate Development Marketing Act, a new disclosure statement is required when the identity of the developer changes. A developer is defined as a person who, directly or indirectly owns, leases or has a right to acquire or dispose of development property, subject to exclusion by regulation. Therefore, the bank would be considered a new developer and would have to file a new disclosure statement. For this reason, Options (2) and (3) are incorrect. Option (4) is incorrect because there is no requirement to file a prospectus rather than a disclosure statement in the event of a foreclosure.

Answer 342

Answer: 2 Explanation: Option (2) is correct because, in the income approach of appraisal, the market value for any particular real estate property is determined by the yields that prospective purchasers reasonably expect to earn. Options (1), (3), and (4) are true and are therefore incorrect.

Answer 343

Answer: 3 Explanation: Option (3) is correct because “identify the proposal” is not one of the 10 privacy principles provided for under the Personal Information Protection Act (PIPA). Option (1) is incorrect because Principle 10 is to provide recourse. Option (2) is incorrect because Principle 2 is to obtain consent. Option (4) is incorrect because Principle 5 provides for limiting use, disclosure, and retention.

Answer 344

Answer: 3 Explanation: Option (3) is correct because the debt coverage ratio is calculated by dividing the annual net operating income by the annual sum of mortgage payments. Options (1), (2), and (4) are incorrect for this reason.

Answer 345

Answer: 2 Explanation: Option (2) is correct because a counter-offer terminates the original offer to become the new offer. Option (1) is incorrect because if the counteroffer is not accepted, the offeree cannot accept the first offer because it has already terminated. Option (3) is incorrect because a counter-offer does not terminate all negotiations, just the original offer. Option (4) is incorrect because a counter-offer does not have the effect of accepting the original offer but rather suggests new terms.

Answer 346

Answer: 4 Explanation: Option (4) is correct because Options (1), (2), and (3) all constitute events which will end an agency relationship. If a principal revokes the authority of the agent orally or by conduct, the agency will be terminated. An event which frustrates the continuation of the agency contract would also terminate the relationship. Finally, once an agent has performed the actions for which he or she was given authority in the agency contract, the agency relationship will be over as an agent cannot act outside his or her scope of authority.

Answer 347

Answer: 2 Explanation: Find the present value of the perpetual net operating income given the market capitalization rate of 9.5%.

Answer 348

Answer: 3 Explanation: Option (3) is correct because the two types of damages recognized in the case of a private nuisance are unreasonable interference with another occupier’s use and enjoyment of property, and interference which causes physical damage to the property. Option (1) is incorrect because the courts have held that it is no defence to a nuisance action to say that the plaintiff came to the nuisance. Option (2) is incorrect because the standard against which reasonableness is measured is that of the average reasonable person, and it is not relevant that a plaintiff happens to be unusually sensitive unless the defendant seeks to take advantage of that fact. Option (4) is incorrect because the person who creates the nuisance (in this case, Schroeder) is liable for creating it, and in a landlord and tenant situation, the tenant occupier is primarily liable for nuisances created on the property.

Answer 349

Answer: 3 Explanation: Option (3) is correct because an interest accruing loan poses a high risk to the lender, since the entire amount of principal and interest is outstanding for the entire length of the term. Due to this, these loans are typically written for short terms. Option (1) is incorrect because although it is a true statement, it is not the reason interest accruing loans are written for short terms. Options (2) and (4) are incorrect because they are false statements.

Answer 350

Answer: 1 Explanation: Sue purchases the townhouse for $145,000 (present value) and sells the townhouse in 7 years for $190,000 (future value). The steps to find the pre-tax yield expressed as an effective annual rate are: Press Display 1  P/YR 1 145000 +/ PV 145,000 0 PMT 0 7 N 7 190000 FV 190,000 I/YR 3.936807 Sue’s pre-tax yield on her investment is j1 = 3.936807%.

Answer 351

Answer: 3 Explanation: Option (3) is correct because a time clause in a contract for purchase and sale of land allows a party to invoke a time period in which a condition precedent must be removed, where the right to invoke the clause arises on the vendor receiving another offer after entering the original contract of purchase and sale. Option (1) is incorrect because it must be for a specified time period, not just a “reasonable time.” Option (2) is incorrect because the date by which the condition precedent must be removed depends on the vendor receiving another offer, and so the time period is set out in the contract during which the condition must be removed rather than a specified date. Option (4) is incorrect because Option (3) correctly describes a time clause.

Answer 352

Answer: 3 Explanation: Press Display 9 I/YR 9 4  P/YR 4 80000 PV 80,000 80000 +/  FV 80,000 1 N 1 PMT 1,800 Alternative Solution Press Display 9 ÷ 4 = 2.25 % 0.0225  80000 = 1,800

Answer 353

Answer: 4 Explanation: Option (4) is correct because the Local Government Act provides that subdivision bylaws created by municipal councils may regulate the location, width, alignment and grade of highways and may also require that the subdivider provide street lighting and underground (as well as wiring, water, sewer and drainage systems, fire hydrants, and roads) within the subdivision. Options (1), (2), and (3) are incorrect because they are outside of the scope of what bylaws created by municipal council are permitted to regulate with regard to the subdivision of land.

Answer 354

Answer: 2 Explanation: Option (2) is the correct answer as it is the only option that is not represented by interest received by a lender. Interest due or paid represents the cost of financing debt, not interest received. Options (1), (3), and (4) all represent interest charged on a mortgage and are therefore incorrect.

Answer 355

Answer: 1 Explanation: Option (1) is correct because under section 40 of the Rules, when a licensee advertises real estate, the name of the brokerage must be displayed in a prominent and easily readable way. Options (2), (3), and (4) are not provided for under the Real Estate Services Act and are therefore incorrect.

Answer 356

Answer: 3 Explanation: Option (3) is correct because real property taxes are a component of operating expenses, which are deducted from gross realized income to arrive at net operating income when preparing an appraisal using the income approach. Options (1), (2), and (4) are incorrect because income tax, interest on a mortgage, and depreciation expense are not included in operating expenses and do not factor into the calculation of net operating income.

Answer 357

Answer: 3 Explanation: Option (3) is correct because a periodic tenancy is one which automatically renews itself on the last day of the term for a further term of the same length until it is terminated by either party with proper notice. Option (1) is incorrect because a tenancy at will is a tenancy where a tenant, with the consent of the landlord, occupies land for a term which can be terminated by either party at any time. Option (2) is incorrect because a tenancy at sufferance occurs when there is no tenancy because no lease exists, for example, if a tenant does not move out of the leased premises upon the expiration of the term of the lease. Option (4) is incorrect because a fixed term tenancy has a predetermined date at which the tenancy expires.

Answer 358

Answer: 3 Explanation: This question requires you to compare the effective annual interest rates of alternatives A, B, C, and D and choose the lowest rate for the borrower.: Alternative A Press Display 6.6  NOM% 6.6 2  P/YR 2  EFF% 6.7089 1  P/YR 1  NOM% 6.7089 125500 PV 125,500 8 N 8 0 FV 0 PMT 20,780.724614 20780.72 +/ PMT 20,780.72 122000 PV 122,000 I/YR 7.439903 Alternative B Press Display 6.5  NOM% 6.5 2  P/YR 2  EFF% 6.605625 1  P/YR 1  NOM% 6.605625 125000 PV 125,000 5 N 5 0 FV 0 PMT 30,165.113079 30165.11 +/ PMT 30,165.11 122000 PV 122,000 I/YR 7.513749

Answer 359

Answer: 2 Explanation: Press Display 4  NOM% 4 2  P/YR 2  EFF% 4.04 12  P/YR 12  NOM% 3.967068 165000 PV 165,000 300 N 300 0 FV 0 PMT 867.933339 868 +/ PMT 868 48 INPUT  AMORT PER 48-48 = = = 148,252.628505 148252.63 +/ FV 148,252.63 6  NOM% 6 2  P/YR 2  EFF% 6.09 12  P/YR 12  NOM% 5.926346 48 N 48 PV 154,044.907533 (market value of the mortgage) + 185000 = 339,044.907533 (market value of the offer) The sale price of the house is $339,000, rounded to the nearest $100.

Answer 360

Answer: 1 Explanation: Option (1) is correct (and therefore Options (2), (3), and (4) are incorrect) because distinguishing a case occurs when a judge decides the factual circumstance of the case at hand is not similar enough to the former decision to warrant following the judgment, and therefore the decision will not be binding on the judge.

Answer 361

Answer: 2 Explanation: A charge is any interest in land less than a fee simple. Rights of way, liens, mortgages, and easements are all examples of charges. Option (2) is correct because an easement is a type of interest in land less than a fee simple that can be registered under the Land Title Act and thus may appear on a Certificate of Title as a charge. Options (1), (3) and (4) are incorrect because while indications of all of these circumstances may appear on a Certificate of Title, none of them necessarily indicate an estate or interest in land, and so they do not constitute a charge.

Answer 362

Answer: 2 Explanation: Option (2) is correct because land is never depreciated, so the purchase price is $180,000. Options (1), (3), and (4) are therefore incorrect.

Answer 363

Answer: 4 Explanation: Option (4) is correct because rent receivable is the only option that would not be found in the current liabilities section. Current liabilities are those debts that are expected to be repaid within the next year, and rent receivable is not a debt that is payable, it is an asset that is receivable. Options (1), (2), and (3) are incorrect because they are all current liabilities.

Answer 364

Answer: 4 Explanation: Option (4) is correct (and Options (1), (2), and (3) are incorrect) because the Assessment Act states that factors which the assessor may consider in determining actual value include: present use, location, original cost, replacement cost, revenue or rental value, selling price of the land and improvements and comparable land improvements, economic and functional obsolescence, and any other circumstances affecting value.

Answer 365

Answer: 4 Explanation: Option (4) is correct because deposits for real estate transactions are 5-10% of the total purchase price, so a deposit of 50% as liquidated damages will likely not be enforced by the courts since it would not be a reasonable pre-estimate of damages. Option (1) is incorrect because the courts will award specific performance to the seller if damages are considered to be an inadequate remedy. Options (2) and (3) are incorrect because the court will award damages to any party who can prove that he or she has suffered loss as a result of a breach of contract so as to return them to the position they would have been in had the contract been performed as promised.

Answer 366

Answer: 2 Explanation: Option (2) is correct because the Real Estate Services Act does not give the British Columbia Financial Services Authority (BFCSA) the power to investigate breaches of the REALTOR Code. The REALTOR Code is a professional ethical code that has been developed by the Canadian Real Estate Association and is enforced by local real estate boards, not BCFSA. Options (1), (3), and (4) are incorrect because section the Real Estate Services Act empowers BCFSA to conduct an investigation to determine whether a licensee has committed professional misconduct, and wrongful taking or deceptive dealing; contravention of the Act, the Regulations or Rules; and incompetence in performing any activity for which a license is required all amount to professional misconduct under section 35 of the Real Estate Services Act.

Answer 367

Answer: 4 Explanation: Option (4) is correct because the acceleration clause is a term in the contract which brings the maturity date of the loan forward if the borrower defaults, so that the outstanding balance is immediately due and payable. Option (1) is incorrect because the repayment clause states that the full amount outstanding is due and payable on a fixed date after the loan is made (i.e. it sets the maturity date, which can be brought forward by the acceleration clause in the case of default). Option (2) is incorrect because the personal covenant is the personal contractual promise made by the mortgagor to pay the mortgage money and interest of the mortgage. Option (3) is incorrect because the omnibus clause gives the lender an alternative to accelerating the loan if the borrower defaults.

Answer 368

Answer: 2 Explanation: Option (2) is correct because the commission is paid by the seller only, and so it would appear as a debit to the seller (reducing the amount of cash proceeds of sale due to the seller) and the buyer’s statement would not be affected. Because of this, Option (4) is incorrect. Option (1) is incorrect because taxes will appear as a credit on the buyer’s statement of adjustments and a debit on the seller’s statement of adjustments in the case that taxes are to be paid in the future by the buyer. Option (3) is incorrect because, although it is true that conveyancing fees would appear on the buyer’s statement of adjustments as a debit, the fees would not be included in the seller’s statement of adjustments.

Answer 369

Answer: 3 Explanation: Option (3) is false. Individual borrowers, not corporations, have the right, under the terms of the Interest Act, to prepay all of the outstanding balance at any time after five years from the initiation date of the mortgage. The calculations for Options (1) and (2) are as follows: (1) Solving for payment: Press Display 12.75  NOM% 12.75 2  P/YR 2  EFF% 13.156406 4  P/YR 4  NOM% 12.553027 1450000 PV 1,450,000 20  4 = N 80 0 FV 0 PMT 49,700.134749 The payment is $49,701, rounded to the next higher dollar. Option (1) is true. (2) To solve the outstanding balance at the end of the term (10 years), re-enter the rounded payment and then can calculate the OSB. The calculator steps continue as follows: 49701 +/ PMT 49,701 10  4 = INPUT  AMORT PER 40-40 = = = 1,123,491.83788 This shows that the outstanding balance immediately following the 40th payment is $1,123,491.84, which is less than $1,123,500. Therefore, Option (2) is a true statement. Option (4) is also a true statement; the lender has no right to demand payment of the total outstanding balance at any time prior to the end of the contractual term provided the borrower meets all contractual obligations.

Answer 370

Answer: 3 Explanation: In this question, solve for the present value. Press Display 10.5  NOM% 10.5 2  P/YR 2  EFF% 10.775625 12  P/YR 12  NOM% 10.277418 500 +/ PMT 500 360 N 360 0 FV 0 PV 55,670.597795

Answer 371

Answer: 4 Explanation: Option (4) is correct (false) because the standard bylaws do not allow the strata council to pass rules with respect to the safety and cleanliness of individually owned strata lots – they can only do so with respect to the common property. Options (1), (2), and (3) are all incorrect because they are true statements.

Answer 372

Answer: 3 Explanation: Option (3) is correct because the names of individual shareholders are not included on a corporation’s balance sheet because this could represent anywhere from one shareholder to millions of shareholders. Option (1) is incorrect because the shareholders’ equity section of the balance sheet does list the number of shares issued and outstanding. Option (2) is incorrect because the original cost of property owned by the corporation (i.e., its assets) is listed on the balance sheet. Option (4) is incorrect because retained earnings to date are also listed on the balance sheet.

Answer 373

Answer: 2 Explanation: Option (2) is correct because it correctly describes a method that a licensee can use to identify an individual. Option (1) is incorrect because when using government-issued photo identification to identify an individual, the licensee must either examine the document in person, or virtually through sophisticated software that will analyze its security features. Videoconferencing will not meet this requirement. Option (3) is incorrect because the government-issued photo identification must be valid and current, and an expired driver’s licence, even if it has only been expired for a short period of time, will not meet this requirement. Option (4) is incorrect because an offshore financial entity is not considered a reliable source for the purposes of the dual process method of identification.

Answer 374

Answer: 4 Explanation: Option (4) is correct (and Options (1), (2), and (3) are incorrect) because section 19(1) of the Infants Act provides that a contract entered into by an infant will be unenforceable against the infant unless another statute provides that the contract is enforceable, the infant affirms the contract after turning 19, the infant performs or partially performs the contract after turning 19, or the infant does not repudiate the contract within one year of turning 19.

Answer 375

Answer: 2 Explanation: Option (2) is correct because the income approach is generally only used to for income-generating investment properties. Single-family residences are generally not income-generating investment properties, and are more frequently owner occupied. Options (1), (3), (4) are incorrect because the income approach is more often used for warehouses, leasehold interests, and apartment buildings.

Answer 376

Answer: 4 Explanation: Option (4) is correct because apparent authority results where a reasonable third party would consider, from the conduct or statements of the principal and agent, that the agent did, in fact, possess authority. Option (1) is incorrect because actual authority refers to the authority given to the agent by the principal in their agency agreement and includes express authority, implied authority, and customary authority. Option (2) is incorrect because express authority is the authority created by the terms of the agency contract and does not need to be implied by acts of the parties. Option (3) is incorrect because legal authority is not a recognized category of agency (although the terms of the agency agreement could include giving the agent authority to make legal decisions).

Answer 377

Answer: 3 Explanation: Option (3) is correct because each strata owner jointly owns the common property of the strata development, and the Schedule of Unit Entitlement determines each owner’s proportionate, undivided ownership share as a tenant in common of the common property in the strata plan. Option (4) is incorrect for the same reason. Option (1) is incorrect because the owner-developer is not a trustee for the individual strata lot owners. Option (2) is incorrect because, although the strata corporation exercises exclusive control over the common property, it is still owned jointly by the individual strata lot owners.

Answer 378

Answer: 2 Explanation: Option (2) is correct because a borrower is normally charged the costs of preparing and registering a new first mortgage. Option (1) is incorrect because the seller is responsible for the full amount of any penalty; it is not adjusted because only the seller was liable to pay and failed to do so in a timely manner. Option (3) is incorrect because taxes up until the possession date are owed by the seller; the buyer is only responsible for taxes from the possession date until December 31. Option (4) is incorrect because the commission is normally paid by the seller.

Answer 379

Answer: 4 Explanation: Option (4) is correct (and Options (1), (2), and (3) are incorrect) because under section 53 of the Rules, where a licensee is acquiring real estate, disclosure must be made to the other party before the agreement is entered into by providing them with the Disclosure of Interest in Trade form, which includes an indication that the licensee is licensed under RESA, the terms under which the real estate is to be resold (where applicable), and the amount of remuneration or other money that is anticipated to be received by the licensee.

Answer 380

Answer: 3 Explanation: Option (3) is correct because when using the cost approach of appraisal to estimate the value of a building that contains urea formaldehyde foam insulation (UFFI), insulation should be considered in your calculation as part of the overall replacement costs and as a deduction for depreciation. Option (3) is incorrect for this reason. Options (1) and (4) are incorrect because insulation would not be a part of the land/site value.

Answer 381

Answer: 4 Explanation: In this question, solve for the future value. Press Display 3 I/YR 3 1  P/YR 1 0 PV 0 7 N 7 8000 +/ PMT 8,000 FV 61,299.697447

Answer 382

Answer: 4 Explanation: Option (4) is correct because an agreement for sale is a purchase agreement whereby the purchaser agrees to pay the purchase price of the property (usually with a down payment plus monthly payments of principal and interest) directly to the seller. Option (1) is incorrect because under a mortgage the title is registered to the purchaser and the vendor’s mortgage is registered as a charge, while in an agreement for sale the vendor remains on the title as registered owner and promises to execute a transfer as soon as the final payment is made. Option (2) is incorrect because an agreement of purchase and sale is a contract for the purchase of land which contains the obligations of the vendor and purchaser with respect to the transaction. Option (3) is incorrect because the equity of redemption is the mortgagor’s right to repay the mortgage and regain title even after the contractual date for repayment has passed.

Answer 383

Answer: 3 Explanation: Option (3) is correct and can be illustrated by way of example. A loan with an interest rate of 5% compounded annually will yield a $5 return at the end of the year for a $100 investment. If it was a nominal rate of 5%, compounded semi-annually, the yield would be $5.06025 (a 5.06025% effective rate). Therefore, increasing the compounding period increases the yield to the lender. Options (1), (2), and (4) are incorrect for this reason.

Answer 384

Answer: 2 Explanation: Option (2) is correct as remuneration that is to be received as money must be expressed as a dollar amount in the Disclosure of Expected Remuneration (Payment) form. Options (1), (3), and (4) are incorrect for this reason.

Answer 385

Answer: 1 Explanation: Option (1) is correct because the shareholders’ equity section on a corporation’s balance sheet is made up of two accounts: share capital and retained earnings. Options (2) and (3) are incorrect because this section does not include dividends. Option (4) is incorrect because net income is already accounted for within the retained earnings account.

Answer 386

Answer: 3 Explanation: Option (3) is correct because according to the capital cost allowance rules set out by the Canada Revenue Agency, in the year an asset is disposed of, no CCA deduction is allowed on that asset. In the case of ABC Inc., no CCA may be claimed at the end of the current year. Options (1), (2), and (4) are therefore incorrect.

Answer 387

Answer: 1 Explanation: Option (1) is correct (and Options (2), (3), and (4) are incorrect) because section 25 of the Real Estate Services Act requires a brokerage to maintain one or more interest bearing trust accounts in British Columbia.

Answer 388

Answer: 1 Explanation: Option (1) is correct because where a condition is for the sole benefit of the buyer, the buyer may waive it and thus the agreement would be binding. Because a binding agreement can be enforced and is not void, Options (2) and (4) are incorrect. Option (3) is incorrect because the condition was made for the benefit of the buyer, so it would only be voidable at the option of the buyer, not the seller.

Answer 389

Answer: 1 Explanation: Option (1) is correct because an appraisal should not rely on the registered owner as the ultimate source of data on the property. Instead, the appraiser is often expected to perform his or her own research an analysis. An appraiser should not make assumptions represented in Options (2), (3), or (4).

Answer 390

Answer: 2 Explanation: Find the amount of principal that has been paid off during the 5-year term. Press Display 12  NOM% 12 2  P/YR 2  EFF% 12.36 12  P/YR 12  NOM% 11.710553 159000 PV 159,000 20  12 = N 240 0 FV 0 PMT 1,718.748792 1718.75 +/ PMT 1,718.75 1 INPUT 60  AMORT PER 1-60 = 13,541.838497 The amount of principal paid off during the 5-year term is $13,541.84.

Answer 391

Answer: 4 Explanation: Option (4) is correct because the revocation of an offer must be actually communicated to be effective (the postal acceptance rule does not apply to revocation). Therefore, the offer is still valid and can be accepted until the revocation reaches the offeree. Options (1), (2), and (3) are incorrect because the offer is released or expired in each of those scenarios.

Answer 392

Answer: 2 Explanation: Press Display 6.5 I/YR 6.5 12  P/YR 12 300000 PV 300,000 25  12 = N 300 0 FV 0 PMT 2,025.621484 2026 +/ PMT 2,026 24 INPUT  AMORT PER 24-24 = = = 289,751.99961 The monthly payment is $2,026 and the outstanding balance after 24 payments is $289,752. For the interest rate differential (IRD), find the j12 difference in rates (6.5%  4.5% = 2%). The IRD = OSB  IRD  length of time remaining in the term and is calculated as follows: Press Display 2 ÷ 12 = 0.166667 % 0.00166667  289752  36 = 17,385.12 The IRD penalty is $17,385.12.

Answer 393

Answer: 1 Explanation: Option (1) is correct because functional depreciation can be defined as the loss in value caused by an outmoded or inadequate design. Options (2), (3), and (4) are incorrect for this reason.

Answer 394

Answer: 3 Explanation: Option (3) is correct because an agent is a person authorized to act on behalf of the principal, so that they represent the principal in dealings with third parties. Therefore, while the agent is acting within the scope of his authority as an agent and after having disclosed that he is an agent for the principal, the contract will be between the principal for whom the agent is acting and the third party. Option (4) is incorrect for the same reason. Options (1) and (2) are incorrect because the agent is acting on behalf of the principal as if he were stepping into the principal’s shoes rather than contracting for himself; therefore, the agent is not party to the agreement.

Answer 395

Answer: 1 Explanation: Option (1) is correct because a landowner owns or has rights in the airspace above his or her property to the extent that he or she can effectively use it. Options (2) and (3) are incorrect (and Option (4) is therefore also incorrect) because the fact that an object has entered the boundaries of your property does not give you ownership rights over it.

Answer 396

Answer: 3 Explanation: Option (3) is correct because specific performance involves the court ordering a party to carry out a specific action, which the courts will not grant as a remedy for nuisance – they will only make an order for a party to stop doing a particular act (i.e. an injunction). Options (1), (2), and (4) are each incorrect because injunctions, damages, and abatement are all remedies which are potentially available for a private nuisance.

Answer 397

Answer: 3 Explanation: Option (3) is correct because this financial statement is known as the balance sheet. A balance sheet, or statement of financial position, shows all of the company’s assets, liabilities, and the equity of the shareholders at a single point in time. Options (1) and (2) are incorrect because the statement of profit and loss, also known as the income statement, shows the company’s revenues and expenses. Option (4) is incorrect because there is no financial statement known as a corporate statement of holdings.

Answer 398

Answer: 2 Explanation: Option (2) is correct because a deposit which is paid directly to a seller (rather than to the brokerage) will appear as a credit to the buyer and a debit to the seller, because it will reduce the cash proceeds to be received by the seller upon completion. Because of this, Options (1), (3), and (4) are incorrect. Although a deposit which is paid to the buyer’s brokerage will only appear on the buyer’s statement of adjustments and not the seller’s, this is not the case where the deposit is paid directly to a seller.

Answer 399

Answer: 4 Explanation: Option (4) is correct because in relation to the subject property, this comparable has one more bedroom and one less bathroom. Options (1), (2), and (3) are therefore incorrect.

Answer 400

Answer: 3 Explanation: Option (3) is correct because the difference in term has no impact on the monthly payments. Since the loan amount, interest rate, and amortization period are all the same, the monthly payments will be the same. Options (1), (2), and (4) are incorrect for this reason.

Answer 401

Answer: 4 Explanation: Option (4) is correct because there is no requirement, statutory or common law, that the previous address of the lessee be included as an essential term of the lease agreement. Options (1), (2), and (3) are incorrect because the Residential Tenancy Act requires the rent and the date on which the tenancy starts to be included in every tenancy agreement, and also requires that the agreement be in writing and signed and dated by both the landlord and tenant.

Answer 402

Answer: 4 Explanation: P + I = (GDSR  Gross Income) B Property Taxes P + I = (0.30  $45,000) B $1,500 P + I = $12,000 per year = $1,000 per month The mortgage qualifying rate is based on the greater of (1) the government-specified qualifying rate of j2 = 5.25% OR (2) an additional 2% above the mortgage’s negotiated contract rate. In this case, you would apply a rate of j2 = 6% (2% + 4%), which is greater than the government-specified rate of j2 = 5.25%. Press Display 6  NOM% 6 2  P/YR 2  EFF% 6.09 12  P/YR 12  NOM% 5.926346 1000 +/ PMT 1,000 240 N 240 0 FV 0 PV 140,412.275903 Given the stress test borrower qualification rules, the maximum loan that will be granted is $140,412.28.

Answer 403

Answer: 2 Explanation: Option (2) is correct because in the case where there is no listing contract but the agent effects a sale of the seller’s property at the request of the seller, the courts can apply the principle of quantum meruit to imply a promise to pay a reasonable amount for the professional services provided. Option (1) is incorrect for the same reason. Option (3) is incorrect because the courts will give a reasonable remuneration based on what the service provided was worth, not just out of pocket expenses. Option (4) is incorrect because, even if there was a listing contract between the agent and the principal in this case, the agent is working on behalf of the seller and so they would not be held liable for the buyer’s default.

Answer 404

Answer: 1 Explanation: First, find the annual depreciation expense from the building. Then, in order to calculate the annual depreciation expense using the straight-line method, take the cost of the building less any salvage value and divide the sum by the economic life.

Answer 405

Answer: 3 Explanation: Option (3) is false and is the correct answer. A client must provide consent when being added to a mailing list [Option (2)], but even after consent is obtained, the sender must be provided with a way to request to be removed from the mailing list [Option (1)] and any such requests must be honoured immediately. Option (4) is incorrect because an email database needs to be maintained regularly and if the client’s correct email address is not being used, then they will not receive the messages.

Answer 406

Answer: 4 Explanation: Option (4) is correct because rent receivable is considered a current asset. A current asset is something that the company owns, and will use up within the next year. Option (1) is incorrect because the owner’s initial investment will be listed as owner’s equity. Option (2) is incorrect because rent payable will be listed as a current liability. Option (3) is incorrect because real property will be recorded as a fixed or long-term asset, and will be recorded at its historic cost.

Answer 407

Answer: 4 Explanation: Option (4) is correct because the agent’s duty of disclosure includes everything known to the licensee respecting the transaction and is not limited to situations where there is a detriment to the seller. Failure to make full disclosure amounts to a breach of the fiduciary duty and where this duty is breached, the seller may not be required to pay the licensee a commission on closing. Options (1) and (2) are incorrect for the same reason. Option (3) is incorrect because the agent is acting on behalf of the seller, and thus her fiduciary duty is to Susan, not to Bella.

Answer 408

Answer: 1 Explanation: Option (1) is correct because firewalls are hardware and software boundaries frequently used to prevent unauthorized users from accessing private computers or networks connected to the internet. All data attempting to pass through the firewall is blocked unless it meets a certain criteria of authorization needed to pass through. Options (2), (3), and (4) are therefore incorrect.

Answer 409

Answer: 3 Explanation: Option (3) is correct because under the Torrens system in place in British Columbia, all mortgages are registered as charges against the title and the title will continue to show the borrower (mortgagor) as the registered owner, not as a charge holder. Option (1), (2), and (4) are incorrect for the same reason.

Answer 410

Answer: 2 Explanation: Option (2) is correct because property taxes are an expense included in operating expenses for appraisal purposes. Options (1), (3), and (4) are incorrect because income taxes, mortgage payments, and capital cost allowance are not included in operating expenses.

Answer 411

Answer: 2 Explanation: Option (2) is correct because all things being equal, a shorter term on a bonused partially amortized loan will result in a higher effective interest rate paid by the borrower. This is because the value of the bonus is paid off over a shorter term, thus increasing the annual cost of borrowing. Options (1), (3), and (4) are incorrect.

Answer 412

Answer: 4 Explanation: Options (1), (2), and (3) are all guidelines that Jason should follow in establishing his real estate blog, therefore Option (4) is the correct answer.

Answer 413

Answer: 3 Explanation: Option (3) is correct because the British Columbia Real Estate Association, its member local real estate boards, and other professional associations are responsible for enforcing the provisions of the applicable professional codes of ethics, not the British Columbia Financial Services Authority (BCFSA). Options (1), (2), and (4) are incorrect because they are all duties for which the BCFSA is responsible.

Answer 414

Answer: 2 Explanation: Option (2) is correct because a polyethylene vapour barrier must be used immediately under the interior wood panelling on the perimeter walls of a western platform wood-frame house in order to ensure proper function of the vapour barrier. Options (1), (3), and (4) are incorrect because a polyethylene vapour barrier would not be used under those surfaces.

Answer 415

Answer: 2 Explanation: Calculate the payments and outstanding balance based on the face value of the mortgage of $170,000. The actual rate that the borrower earns, expressed as a j1, is based on the actual funds advanced of $163,500. Press Display 6.  NOM% 6.5 2  P/YR 2  EFF% 6.605625 12  P/YR 12  NOM% 6.413688 170000 PV 170,000 240 N 240 0 FV 0 PMT 1,258.850709 1259 +/ PMT 1,259 163500 PV 163,500 I/YR 6.912084 (j12)  EFF% 7.135321 (j1)

Answer 416

Answer: 2 Explanation: Option (2) is correct because an estate pur autre vie ends when the person whose life upon which it is based dies, in this case, Bentley. Option (1) is incorrect because Anton’s interest is dependent on Bentley’s life, not his own. Option (3) is incorrect because Anton’s interest is not terminated when Charles dies, rather, Charles (or his heirs, if Charles dies before Bentley) will receive the interest that Anton currently holds once Bentley dies, ending Anton’s interest. Option (4) is incorrect because only Bentley must die for Anton’s interest to end.

Answer 417

Answer: 4 Explanation: Option (4) is correct and Options (1), (2), and (3) are incorrect because plastic, galvanized steel, and copper are common materials used in water supply piping, while aluminum is not.

Answer 418

Answer: 3 Explanation: Option (3) is correct because retained earnings is the company’s total accumulated profits less any dividends paid since incorporation. Option (1) is incorrect because it refers to the net income as shown on the income statement. Option (2) is incorrect because it represents the amount that the retained earnings will increase in a given year if no dividends are paid. Option (4) is incorrect because it refers to how retained earnings may be invested, but is not considered retained earnings.

Answer 419

Answer: 1 Explanation: Press Display 8  NOM% 8 2  P/YR 2  EFF% 8.16 12  P/YR 12  NOM% 7.869836 150000 PV 150,000 1250 +/ PMT 1,250 0 FV 0 N 236.566775 There will be 236 full payments of $1,250 and one smaller final payment.

Answer 420

Answer: 4 Explanation: Option (4) is correct because the party benefiting from the subject clause (in this case, Patricia) may remove the clause by declaring it fulfilled by written notice or by waiving it on or before the specified date for the condition. Option (1) is incorrect because in a standard form contract of purchase and sale, unless each condition is waived or declared fulfilled, the Contract will be terminated and the deposit would be returned (i.e., Velma would not retain the deposit). Option (2) is incorrect because the contract will be cancelled if Patricia does not fulfill the subject clause by selling her home and she does not waive it, so Patricia will not be forced to complete. Option (3) is incorrect because Patricia must waive the requirement on or before the date specified in the clause (December 31) rather than any time before completion.

Answer 421

Answer: 2 Explanation: Option (2) is correct because it is true. Option (1) is incorrect because the mortgage qualifying rate is based on the greater of the government-specified qualifying rate (j2 = 5.25% as of June 2021) or an additional 2% above the mortgage’s negotiated contract rate. Option (3) is incorrect because the Office of the Superintendent of Financial Institutions (OSFI) established the stress test requirements for all new mortgages from federally chartered institutions. Option (4) is incorrect because the stress test qualification rules only apply to mortgages from federally regulated financial institutions, which does not include credit unions.

Answer 422

Answer: 1 Explanation: Option (1) is correct because common law duress occurs where a person is forced to enter into a contract against his or her will by the threat of imprisonment either to himself or his family, or the threat of actual physical violence. Option (2) is incorrect because difficulty of performance would arise after a contract was entered into, whereas duress relates to the party being robbed of the free will to enter into the contract. Option (3) is incorrect because undue influence is a separate concept from duress. Although it also relates to the loss of free will to contract, it is as a result of a person in a superior or dominant position in relation to another using their position to induce the other to enter a contract which he or she would not have otherwise made rather than as a result of a threat. Option (4) is incorrect because it describes negligent misrepresentation rather than duress.

Answer 423

Answer: 3 Explanation: Press Display 9.25  NOM% 9.25 2  P/YR 2  EFF% 9.463906 12  P/YR 12  NOM% 9.076624 175500 PV 175,500 300 N 300 0 FV 0 PMT 1,482.009161 1482.01 +/ PMT 1,482.01 1 INPUT  AMORT PER 1-1 = = 1,327.456197 The interest cost for the first month is $1,327.46.

Answer 424

Answer: 2 Explanation: Option (2) is correct because where taxes have previously been paid by the seller, the buyer will reimburse them for the portion of the year starting from and including the adjustment date, (i.e., the portion of the year that they have ownership of the property.) In this case, this includes September 20 to December 31. Options (1), (3), and (4) are incorrect for this reason.

Answer 425

Answer: 2 Explanation: Option (2) is correct because the cost approach of appraisal is generally used for unique properties that do not have any comparable sales data, relying on a land value estimate from direct comparison, then valuing the improvements on the land with the cost approach. Since vacant land has no improvements the cost approach cannot be used on vacant land. Options (1), (3), and (4) could be valued using the cost approach in certain circumstances.

Answer 426

Answer: 1 Explanation: Option (1) is correct because a gain or reward received by an agent from a third party in connection with his or her agency relationship with the principal, if not disclosed to the principal, is known as a secret profit. Options (2), (3), and (4) are incorrect for this reason.

Answer 427

Answer: 2 Explanation: Option (2) is correct because an agent’s authority can be granted retroactively through ratification where an agent enters into a contract on behalf of the principal that is beyond the agent’s authority, but the principal later consents to be bound by the unauthorized acts of the agent. Option (1) is incorrect because rectification occurs when a court corrects an error made by the parties in a contract (or other document) in order to reflect the parties’ true intentions. Options (3) and (4) are incorrect because rescission and revocation are concepts to do with offer and acceptance in contract law rather than agency.

Answer 428

Answer: 4 Explanation: Option (4) is correct because it is not an essential term of the lease (whether commercial or residential) to include the occupations of the parties. Options (1), (2), and (3) are incorrect because the names of the parties, a description of the premises leased, and the rent are all essential terms that should be included in the lease.

Answer 429

Answer: 3 Explanation: Option (3) is correct, because in order for a valid contract to be formed, there must be acceptance of an offer. In this case, although both parties have made identical offers, neither offer has been accepted by the other party. Joe has not accepted Frank’s offer because he did not have notice of the offer before sending the email to Frank; rather, he has make a separate offer. Option (1) is incorrect for the same reason. Option (2) is incorrect because section 59 of the Law and Equity Act requires most contracts affecting land to be in writing, and since this is not a contract respecting land, section 59 would not apply. Therefore, Option (4) is also incorrect.

Answer 430

Answer: 1 Explanation: Option (1) is correct because satisfying the condition precedent is not a requirement for waiver under the Law and Equity Act. Options (2), (3), and (4) are incorrect because section 54 of the Law and Equity Act requires that, in order to waive a condition precedent, the condition precedent must benefit only the party waiving it, the contract must be capable of being performed without fulfillment of the condition precedent, and the waiver must be made before the time stipulated for the condition’s fulfillment (or within a reasonable time if not specified).

Answer 431

Answer: 1 Explanation: Option (1) is correct because revocation refers to the cancellation of an offer communicated by the offeror to the offeree prior to acceptance. Option (2) is incorrect because rectification occurs when a court corrects an error made by the parties in the contract (or other document) in order to reflect the parties’ true intentions. Option (3) is incorrect because rescission refers to the cancellation of a contract. Option (4) is incorrect because Option (1) is correct.

Answer 432

Answer: 1 Explanation: Option (1) is correct because if borrower agrees to a shorter term in order to increase the maximum allowable loan, they are exposing themselves to greater risk of change in interest rates. The borrower may have to refinance the loan at a higher interest rate in the future, which may cause financial distress to the borrower. Option (2) is incorrect because a a borrower, with a higher maximum allowable loan, may still opt to arrange a new loan with another lender in the future. Option (3) is incorrect because a loan with shorter term and higher maximum allowable loan would expose the borrower to a greater risk of change in interest rates. Option (4) is incorrect because the lower interest rate would mean less interest is paid.

Answer 433

Answer: 2 Explanation: Option (2) is false. Many, but not all lenders, will set up a separate tax account that the borrower will pay into every periodic payment. This provides security to the lender that their mortgage is the highest priority charge, as well as relieves the borrower from having to make a lump sum payment for property taxes. This strategy requires additional administration by the lender, so typically smaller or private lenders will leave the property tax payments to the borrower. Option (1) is incorrect because borrowers have the obligation to include payment of property taxes, insurance, and maintenance. Option (3) is incorrect because there should be a covenant included in the mortgage loan agreement to insure against fire and other hazards for the property. Option (4) is incorrect because borrowers should be maintaining the property condition as to not reduce the value of the property. This is necessary to reduce capital risk.

Answer 434

Answer: 2 Explanation: Option (2) is correct because in a joint tenancy, each co-owner owns an undivided interest in the whole of the estate. Option (1) is incorrect, because, Mary may still sell or mortgage her interest without John’s consent as a joint tenant (although doing so will convert the co-ownership to a tenancy in common by severing the unity of title). Option (3) is incorrect because, although married people or people in close relationships often use joint tenancies for tax planning purposes, there is no requirement for married couples who are co-owners of a property to register as joint tenants in, and they are free to co-own as tenants in common if they prefer to do so.

Answer 435

Answer: 4 Explanation: Option (4) is correct because quiet enjoyment is an assurance to the tenant against the consequences of a defective title, i.e., it assures the tenant of the use and enjoyment of the premises for all usual purposes without physical interference or unreasonable disturbance from the landlord. Option (1) is incorrect because the implied covenant of quiet enjoyment does not concern noise that interferes specifically with the tenant’s business. Option (2) is incorrect because the implied covenant of quiet enjoyment is an implied promise given by the landlord to the tenant, and does not restrict the tenant’s own conduct on the property. Option (3) is incorrect because the implied covenant of quiet enjoyment does not concern the premise’s fitness for habitation.

Answer 436

Answer: 4 Explanation: Option (4) is the correct answer; an investor will only use borrowed funds if he or she is able to invest the borrowed funds at a higher rate (not a lower rate) of interest than the borrowing rate. Options (1), (2), and (3) are all reasons to use borrowed funds in a real estate investment.

Answer 437

Answer: 4 Explanation: Option (4) is true and is the correct answer: when a BC statute makes references to “written” documents or signatures, it will not exclude electronic documents and signatures merely because they are in electronic form. Option (1) is false because a legally binding contract may be formed by an offer or acceptance communicated through electronic means, but only if the parties so intend. Option (2) is false because certain documents that relate to land or land transactions, including listing agreements, are covered by the Act. Option (3) is false because documents that create or transfer interest in land and that require registration to be effective against third parties are specifically excluded from the Act.

Answer 438

Answer: 4 Explanation: The first step to solving this problem is to find the monthly payments and the outstanding balance owing at the end of the 3-year term. Press Display 1.95  NOM% 1.95 2  P/YR 2  EFF% 1.959506 12  P/YR 12  NOM% 1.942125 384000 PV 384,000 30 × 12 = N 360 0 FV 0 PMT 1,408.25106 1408.25 +/ PMT 1,408.25 36 INPUT  AMORT PER 36-36 = = = 354,859.164285 354859.16 +/ FV 354,859.16 The investor is paying $350,000 for the right to receive the monthly payments of $1,408.25 for 3 years and receives the outstanding balance of $354,859.16 at the end of the 3-year term. In order to determine the investor’s rate of return expressed as an annual rate, compounded annually, the calculator steps continue are as follows: Press Display 350000 PV 350,000 36 N 36 I/YR 5.256543  EFF% 5.385054

Answer 439

Answer: 4 Explanation: Option (4) is correct because a condition precedent is the legal term for a “subject to” clause. It calls for the happening of some event or the performance of some act before the contract is binding upon the parties. Option (1) is incorrect because a binding contract does not exist when a “subject to” clause gives one party sole discretion over whether or not to proceed with a sale. When a subject clause is wholly subjective, the court may view the arrangement, in law, as nothing more than an offer. Option (2) is incorrect because it describes a condition subsequent, not a condition precedent. While a condition subsequent is an event that will discharge the principal obligations of a party to the contract, a condition precedent is an event that must occur before the parties are bound to the contract. Option (3) is incorrect because it provides an example of a condition subsequent.

Answer 440

Answer: 4 Explanation: Option (4) is correct because a mortgage of the equity of redemption, an agreement to execute a legal mortgage, and a mortgage by way of deposit of the duplicate certificate of title are all examples of ways to create equitable mortgages. A mortgage of the equity of redemption is a mortgage of the equitable interest in the land that the borrower retains after granting a legal mortgage. An agreement to grant a mortgage in the future is recognized as a present equitable mortgage. A mortgage by way of deposit of the duplicate certificate of title occurs when a bank requires the duplicate certificate as collateral security for a demand loan.

Answer 441

Answer: 3 Explanation: Option (3) is correct because a purchaser has a right to rescind the purchase agreement if the developer fails to deliver a disclosure statement to the purchaser by serving a written notice of rescission on the developer under the Real Estate Development Marketing Act (REDMA). Option (1) is incorrect because REDMA applies to the marketing of development units in a development property, and subdivisions are included as development properties. Option (2) is incorrect because the a subdivided lot in a development property is called a development unit.

Answer 442

Answer: 2 Explanation: Option (2) is the best evidence of market value because of the similarity and recent nature of the sale of the homes. Option (1) is incorrect because the subject property has unique characteristics that was sold to a special purchaser. Option (3) is incorrect because the urgency of Miss Jones’ sale will likely have an unpredictable influence on the sale price. Option (4) is incorrect because this is an example of a sale between related parties (a special relationship) where the sale price may be discounted to less than market value.

Answer 443

Answer: 3 Explanation: Cost of Improvements $2,500,000 = $50 × 50,000 + Site Value + 750,000  Depreciation  250,000 = 0.10 × $2,500,000 Market Value $3,000,000

Answer 444

Answer: 1 Explanation: Option (1) is correct because under section 3(3) of the Occupiers Liability Act, an occupier has no duty of care to a person in respect of risks willingly assumed by that person (other than a duty not to create a danger with intent to do harm to the person or damage or the person’s property, or to act with reckless disregard to the safety of the person or the integrity of the person’s property). Options (2), (3), and (4) are incorrect because under section 3(2) of the Occupiers Liability Act, the duty of care owed by an occupier applies in relation to the condition of the premises, the activities on the premises, or the conduct of third parties on the premises.

Answer 445

Answer: 4 Explanation: Option (4) is correct because the residual method is most appropriate for properties with latent value or (re)development potential. Options (1), (2), and (3) are incorrect.

Answer 446

Answer: 4 Explanation: Find the payments, rounded up to the nearest dollar, based on the terms of the mortgage contract that are given in the question. Press Display 7  NOM% 7 2  P/YR 2  EFF% 7.1225 12  P/YR 12  NOM% 6.900047 170000 PV 170,000 0 FV 0 240 N 240 PMT 1,307.828081 The monthly payment, rounded up to the next higher dollar, is $1,308.

Answer 447

Answer: 4 Explanation: From the information given, calculate the loan-to-value ratio. This will be the maximum loan divided by the lending value. $122,500 ÷ $153,125 = 0.8 Option (4) is true; therefore, Option (3) must be false. The lending value of the property is what the appraiser estimates the property value to be. In this case, the lending value is $153,125. Therefore, Options (1) and (2) are false.

Answer 448

Answer: 3 Explanation: Option (3) is correct because a damage award would put Sally in the position she would have been in if the contract had been performed as promised, so she would be able to recover the money she lost from the value of the sewing machines dropping as a result of the wholesaler’s breach. Option (1) is incorrect because quantum meruit would only be awarded when the price was not fixed in the contract (and so the court implies a promise to pay a reasonable sum). In this case, the price was stipulated in the contract. Options (2) and (4) are incorrect because the court will refuse to grant equitable remedies (such as specific performance and injunction) when damages are an adequate remedy, as they are in this case.

Answer 449

Answer: 2 Explanation: Press Display 8 I/YR 8 2  P/YR 2 300000 +/ FV 300,000 5 × 2 = N 10 0 PMT 0 PV 202,669.250648

Answer 450

Answer: 1 Explanation: Max loan = Lending value × Loan-to-value Max loan = $66,000 × 0.80 Max loan = $52,800 This is the amount of their mortgage. The question asks for the down payment. If the purchase price is $67,000, and the mortgage is $52,800, then the down payment is equal to the difference of $14,200 ($67,000  $52,800).

Answer 451

Answer: 3 Explanation: Option (3) is correct because a contract is formed where there is offer, acceptance, and consideration. In the case of a contract to purchase land, the consideration is the promise to convey title to the purchaser in exchange for the purchase price – the deposit is not required as consideration in order for a valid contract to be formed. Option (1) is incorrect for the same reason. Option (2) is incorrect because there is no requirement for the licensee to pay his or her own money into the brokerage’s trust account where a buyer makes an offer to purchase land without a deposit. Option (4) is incorrect because the offer is treated as an offer so long as it is capable of being unequivocally accepted, regardless of whether or not a deposit is paid.

Answer 452

Answer: 4 Explanation: Option (4) is correct because, under the Real Estate Services Act, a licensed representative is not entitled to carry out trading services for an unlicensed brokerage, to be the managing broker of their own proprietorship, or to carry out trading services without being employed by a brokerage.

Answer 453

Answer: 1 Explanation: Option (1) is correct because duplicate certificates of title cannot be issued if title is subject to a mortgage or an agreement for sale. Option (2) is incorrect because while transfers, mortgages, and long-term leases cannot be registered if a duplicate title is out of the land title office, some specific documents, including easements and builders liens, can still be registered. Option (3) is incorrect because a duplicate title will only be issued upon a written request of the registered owner. Option (4) is incorrect because most lenders prefer a registered mortgage as security.

Answer 454

Answer: 4 Explanation: Option (4) is correct because the Business Practices and Consumer Protection Act allows the court to intervene and effectively rewrite the transaction where it considers the cost of the loan to be excessive or the transaction is harsh and unconscionable. Options (1), (2), and (3) are incorrect because the Interest Act, the Mortgage Brokers Act, and the Real Estate Services Act do not confer this power on the courts.

Answer 455

Answer: 2 Explanation: Option (2) is correct because in the case that taxes are to be paid in the future by the buyer, the seller’s share from January 1 to the adjustment date will be a debit on the seller’s statement of adjustments and will reduce the cash proceeds due to him. Option (1) is incorrect because Paula should be given a credit for the estimated taxes between January 1 and April 30 (i.e., the time that Vince owned the property), not from May 1 to December 31. Option (3) is incorrect because of the amount of taxes is not yet known, it will be calculated based on estimates. Option (4) is incorrect because the taxes will appear as a credit on Paula’s statement and a debit on Vince’s statement.

Answer 456

Answer: 2 Explanation: Option (2) is the correct answer as vacant land can only be appraised using the comparative approach. Therefore, Options (1), (3), and (4) are incorrect.

Answer 457

Answer: 2 Explanation: Press Display 14 I/YR 14 2  P/YR 2 20 N 20 23000 +/ PV 23,000 0 PMT 0 FV 89,002.742637

Answer 458

Answer: 1 Explanation: First, calculate the monthly payment and the outstanding balance owing at the end of the 5-year term based on the contract rate. Then, calculate the market value of the mortgage based on the contract payment and outstanding balance using the market rate of interest. Since the market interest rate is higher than the contract rate, the market value of the mortgage will be less than the mortgage amount of $150,000. Press Display 5  NOM% 5 2  P/YR 2  EFF% 5.0625 12  P/YR 12  NOM% 4.948699 150000 PV 150,000 300 N 300 0 FV 0 PMT 872.407478 873 +/ PMT 873 60 INPUT  AMORT PER 60-60 = = = 132,721.018365 132721.02 +/ FV 132,721.02 8  NOM% 8 2  P/YR 2  EFF% 8.16 12  P/YR 12  NOM% 7.869836 60 N 60 PV 132,849.118994 (market value of the mortgage) The market value of the mortgage is $132,849.12.

Answer 459

Answer: 2 Explanation: Option (2) is correct because licensees owe a duty to act with reasonable care and skill to all parties, including both clients and non-clients. Option (1) is incorrect because a licensee must act in the best interests of their client in a transaction. They do not have a duty to act in the best interests of non-clients. Option (3) is incorrect because a licensee does not owe a duty of loyalty to non-clients; they only owe an ethical duty of loyalty to their clients. Option (4) is incorrect because a licensee who breaches their ethical duty to a client is no longer acting ethically.

Answer 460

Answer: 3 Explanation: Option (3) is true because the apartment is in an area that is zoned for commercial use and surrounding developments are all office buildings. Given this, the apartment possesses latent value. Therefore, Option (1) is incorrect as the property is “ripe for re-development”. Option (2) is incorrect because the tenants’ rent cannot increase until the lease renewal in two years. Option (4) is incorrect because the apartment is not at its highest and best use if it possesses latent value.

Answer 461

Answer: 3 Explanation: Option (3) is correct because, since the cooperative owner is a tenant of the cooperative corporation and they do not own an estate in land, financing of a cooperative purchase may be more difficult as a buyer can only grant the lender a security interest in his or her shares under the Personal Property Security Act and, if not prohibited by the corporation, a mortgage of his or her leasehold interest. Banks and lending institutions are less willing to lend on this form of security. Option (1) is incorrect because, while a fee simple strata property is created by a strata plan which is filed in the land title office, a cooperative is created by the incorporation of a company or a cooperative association. Option (2) is incorrect because cooperative ownership does not bestow an individual fee simple title to the cooperative owner’s unit; rather, the owner in a cooperative possesses shares in a non-profit corporation which in turn holds title to the land. Option (4) is incorrect because strata lot owners are generally not restricted in any way as to whom he/she wishes to sell the strata lot to, whereas a cooperative owner typically must have the buyer approved by the cooperative association’s board of directors.

Answer 462

Answer: 4 Explanation: Option (4) is correct because a listing licensee is required to provide a Disclosure of Expected Remuneration (Payment) form to a seller whenever he or she presents an offer to acquire real estate to a seller. Options (1), (2), and (3) are incorrect for this reason.

Answer 463

Answer: 3 Explanation: Press Display 1  P/YR 1 200000 +/ PV 200,000 0 PMT 0 3 N 3 280985.6 FV 280,985.6 I/YR 12

Answer 464

Answer: 2 Explanation: Option (2) is correct; depreciation expense is an attempt to allocate the cost of the asset over its useful life. Option (1) is incorrect; depreciation expense is not another name for capital cost allowance (CCA) because CCA is a method of calculating depreciation for income tax purposes. Option (3) is incorrect; land is not considered to be a depreciable asset thus depreciation expense is never taken on land. Option (4) is incorrect because a company holding a single-family residence as an asset is entitled to claim depreciation expense on their income statement.

Answer 465

Answer: 3 Explanation: Option (3) is correct because agency law is concerned with matters between two (or more) individuals, and so it would fall within the body of private law rather than public law. Options (1), (2), and (4) are incorrect because they deal with matters that have to do with the relationship between individuals and the state or matters that are of direct concern to the state, so they fall within the body of public law.

Answer 466

Answer: 3 Explanation: Option (3) is correct because when using the income approach, an appropriate annual allowance or reserve should be made to cover the total cost of periodic repairs. For example, to cover the cost of painting every three years, one-third of the total painting cost could be allocated as an expense each year. Options (1), (2), and (4) are therefore incorrect.

Answer 467

Answer: 2 Explanation: Option (2) is correct because income earned by a family trust will be taxed separately for each beneficiary, at each of their own personal tax rates. Options (1), (3), and (4) are incorrect because they are all true statements.

Answer 468

Answer: 4 Explanation: Option (4) is correct because it is true. Option (1) is incorrect because newsletters should not be sent more frequently than once a week. Option (2) is incorrect because a newsletter should provide compelling content, such as market news, local events, real estate-related tips, and information on new housing developments. Option (3) is incorrect because even though pictures can enhance the look of the newsletter, one must remember to keep the file size of the newsletter small so the message is easily received.

Answer 469

Answer: 4 Explanation: Option (4) is correct because when a licensee takes a deposit from a buyer, section 28 of the Real Estate Services Act says that the brokerage must hold the deposit as a stakeholder (and not as an agent) on behalf of all the parties to the contract. Therefore, Options (1), (2), and (3) are incorrect.

Answer 470

Answer: 1 Explanation: Press Display 5  NOM% 5 2  P/YR 2  EFF% 5.0625 12  P/YR 12  NOM% 4.948699 102000 PV 102,000 240 N 240 0 FV 0 PMT 670.267533 670.27 +/ PMT 670.27 60 INPUT  AMORT PER 60-60 = = = 85,045.802042 Next, we set the rounded outstanding balance equal to the future value. The calculator steps continue as follows: Press Display 85045.8 +/ FV 85,045.8 Then we can calculate the PV based on market rates. The calculator steps continue as follows: Press Display 4  NOM% 4 2  P/YR 2  EFF% 4.04 12  P/YR 12  NOM% 3.967068 60 N 60 PV 106,191.599675 (market value of the mortgage) + 28000 = 134,191.599675 (market value of the offer) The market value of the offer $134,191.60.

Answer 471

Answer: 3 Explanation: In this question, you must find the interest rate that is not equivalent to a nominal rate of 8% per annum, compounded semi-annually. Press Display 8  NOM% 8 2  P/YR 2  EFF% 8.16 Continuing the calculation, the j12 rate is calculated as follows: 12  P/YR 12  NOM% 7.869836

Answer 472

Answer: 3 Explanation: Option (3) is correct because there is no requirement for an offer to be in writing in order to be accepted; rather, it can be expressed in any form, including in writing, orally, or by conduct. Options (1), (2), and (4) are incorrect because an offer must be made in clear and unambiguous terms such that both parties clearly understand the extent of their obligations, and the offer must demonstrate a serious intention to be bound in order to be capable of forming a contract on acceptance.

Answer 473

Answer: 3 Explanation: Option (3) is correct because the Occupiers Liability Act (OLA) has removed the common law distinction between different types of visitors. Option (1) is incorrect because section 1 of the OLA specifies that there may be more than one occupier of the same premises. Option (2) is incorrect because section 3 of the OLA states that an occupier has no duty of care in respect of risks willingly assumed by a visitor, other than a duty not to create a danger with intent to do harm to the person or damage to the person’s property, or to act with reckless disregard to the safety of the person or the integrity of the person’s property. Option (4) is incorrect because the legislation specifies that the duty of care imposed on an occupier is to take such care as is reasonable in the circumstances, so it is likely that the standard owed in the circumstances of someone trespassing on the property would be lower than that owed to an invited guest.

Answer 474

Answer: 4 Explanation: Option (4) is correct because the square foot adjustment for the property is +$15,000. We know that each additional 100 square feet is worth $5,000, so $15,000 ÷ $5,000 = 300 sq ft bigger than the comparable property. Therefore, the total square footage of the subject property is 2,300 + 300 = 2,600. Since the comparable has 4 bedrooms and was adjusted +$4,200, the comparable has one more bedroom than the subject (5 bedrooms in subject). Options (1), (2), and (3) are therefore incorrect.

Answer 475

Answer: 3 Explanation: Option (3) is correct because the development and operation of airports is an exclusively federal matter. Options (1), (2), and (4) are incorrect because each of these issues could be regulated by zoning bylaws implemented by a local government.

Answer 476

Answer: 1 Explanation: Option (1) is correct because the Interest Act imposes no limit on the rate of interest which can be charged in a mortgage transaction (however, a rate of interest can be challenged under other legislation, such as the Criminal Code). Option (2) is incorrect because section 6 of the Interest Act requires that, where a mortgage requires blended payments, the mortgage document must contain a statement of the interest rate calculated either “yearly or half-yearly not in advance.” Option (3) is incorrect because under section 3 of the Interest Act, if a document requires interest to be paid but the rate is not set out, then the rate allocated by law is 5% per annum. Option (4) is incorrect because section 8 of the Interest Act states that the interest rate on arrears cannot be greater than the regular rate payable on the principal.

Question Bank 1 Flashcards

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