Unit 2-4: Brokerage responsibilities

Question 1

Brokerage prohibitions

Answer 1

Cannot hire associate employed with another brokerage

Cannot pay commissions except:
- to broker, associate broker, associate employed by brokerage
- <1 corp. that is 50% owned by the above
- to a brokerage outside AB
- auctioneer under Fair Trading Act

Question 3

Broker delegation

Answer 3

Must to be a real estate associate broker or associate capable of carrying out duties

Set out in writing and agreed to; must be monitored; still accountable for actions

Question 4

Associate broker / associate

Answer 4

Only trade under name on license
Trade only in name of brokerage
Original docs & trade records
Communicate w/ brokerage
Notify of any violations
Notify of any changes to info
Adequate supervision provided
Deposit rec’d or not
Respond promptly

Question 5

Broker, associate broker, & associate prohibitions

Answer 5

cannot offer incentive to any person in the promotion of transaction except offered by brokerage

cannot offer inducement unless offered by brokerage

Question 6

Defining realtor’s role

Answer 6

Must disclose in writing the nature of the services provided; conflict of interests; other influencing factors

(not including open houses, small talk, general fact providing)

Question 7

Real estate brokerage agreement

Answer 7

service agreement in writing

Question 8

Incentives

Answer 8

Public receives same info regarding incentives offered by brokerage; not just one realtor

Question 9

Competition Act

Answer 9

requires there should be adequate and fair disclosure of the number and approximate value of prizes

Question 10

Inducements

Answer 10

Incentive = brokerage offers public to attract business

Inducement = offered by brokerage to specific person to get them to enter into the transaction

Question 11

Documents to deliver to parties

Answer 11

Listing contract
Amendments
Addendums
Disclosures
Offer to purchase
Acceptance of purchase
Schedules
Removing conditions
Agency acknowledgement

Can be by fax, email or in person

Question 12

Personal trades

Answer 12

Realtor buying, selling, leasing, renting property for personal or commercial purposes on their own behalf

also through immediate family members

business: investment, partnerships, shares
family: spouse, parents, children, siblings, spouse’s parents, spouse’s children, spouse’s siblings

Question 13

Personal associations

Answer 13

business associates, affiliations, memberships

Question 14

Realtor buying for self

Answer 14

Have access to info public does not:
market conditions and trends
property values
future developments
land use requirements
land use changes

beware conflict of interests; disclose everything; comply with brokerage policies

Question 15

Levels of disclosure

Answer 15

Level 1: trading with party represented by another realtor from another brokerage
Disclose: authorization to trade & brokerage name

Level 2: trading with party not represented

Level 3: trading within same brokerage
Disclose:

Question 16

Agency relationships in AB for brokerages

Answer 16

Common law agency
Designated agency

Question 17

Designated agency

Answer 17

Agency relationship btwn client and individual realtor (sole agent)
Must have written consent to enter into rltnshp w/ client
Limits conflicts of interest to representing client in personal sales

Question 17

Common law agency

Answer 17

Agency relationship is between client and brokerage and all realtors at the brokerage (have attributed knowledge: aware of all client’s confidential info provided to brokerage)
Motivation of client
Price willing to offer
Price willing to accept
Personal info

Question 18

Disclosure for personal sale

Answer 18

Disclose conflict of interest
“ “ realtor’s name
“ “ brokerage relationship
“ “ release of personal info
“ “ opp. to get legal advice

Document in writing, keep at brokerage and provide copy to client

Question 19

Courts and personal trades

Answer 19

Realtor interested in property of seller they are representing
Representing client wanting to buy realtor’s property

Extra disclosures:
disclose facts affecting value of property
price obtained has to be what another realtor could get
must be righteous trade
only make commission and no further profit
cannot use any info to own benefit
prove carried out duties appropriately

Question 20

Insurance coverage in personal trades

Answer 20

Realtor as seller/buyer when hiring another realtor to represent them is excluded from REIX coverage.

Question 21

Brokerage trust accounts

Answer 21

Held for benefit of a third party
Cannot be seized by creditors etc.
Trustees administer these funds
Are subject to periodic inspection

Service agreements set disbursements

Contracts (leases etc) set out hold/disburse

Question 22

Brokerage trust accounts

Answer 22

Ensure broker has signing authority; controls receipts and disbursements

Provides written receipts for cash

Cheques are numbered and ID’d with Trust Account

Account for all cheques

Cross reference monies w/ disbursement

Don’t allow cheques to bounce

Question 23

Shared commissions

Answer 23

If commission shared with another brokerage, money goes into trust account

Question 24

Commission accounts

Answer 24

Commission monies must be paid to general account

Question 25

Order of payment from trust account

Answer 25

Cooperating brokerage first Brokerage holding trust pays itself to general account

Question 26

Trust shortage

Answer 26

deposit brokerages own money into account asap; if cannot cover it, must tell executive director in writing and then fix it

Question 27

Disbursing funds

Answer 27

Review and understand terms of trust Obtain info to make decision for trust terms Make supporting inquiries Have parties to trade make submissions regarding terms of trust Obtain legal advice

Question 28

Brokerage records

Answer 28

Created and stored in paper or electronic formats or converted Accounts, books, returns, statements, reports, financials, memoranda Results of the recording of details of electronic data and programs to illustrate systems/programs

Question 29

Records coding

Answer 29

Must have a sequential code; matches trust ledger Nature of trade/potential trade Real estate description True consideration Name of parties Deposit amount Commission

Question 30

Records retention

Answer 30

Brokers have to keep records for 3 years min. Can be extended. Licensing and registration under myRECA have to be kept forever CRA 7 years REIX recommends 10 years for civil lit

Question 31

Converting records for storage

Answer 31

Reliable location and maintains integrity Person who made conversion is noted or embedded on document Cannot materially alter information from the original Passwords must be used Computer program has to be maintained Must be accessible by broker in AB Secured and only accessible by broker etc. Linked and all stored together