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Agency Relationships Flashcards

1
Q

What is a fiduciary?

A

A client representative

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2
Q

Under the standard of care, what should always notify your client of?

A

Things they do not know to ask about?

The possible consequences of their lawful instructions to you

The potential results of any decisions made

Any costs to the trade that they may not have anticipated

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3
Q

5 types of people licensees will often work with?

A

Clients

Customers

Real Estate Associates

Property Managers

Condominium Managers

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4
Q

Real Estate Associate

A

Holds the qualifications of a real estate associate

Licensed by relevant industry council

Employed by or associated with a licensed real estate brokerage in Alberta

Registered with and approved to trade in real estate on behalf of that brokerage

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5
Q

Three types of relationships real estate professionals can have with clients

A

Common Law: A real estate brokerage can act as the client’s agent.

Designated Agency: An individual real estate professional can act as the client’s agent.

Customer: Neither the real estate professional nor the brokerage owe them any type of fiduciary obligation

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6
Q

To whom does a real estate professional have a fiduciary obligation?

A

Clients that have entered into a written service agreement

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7
Q

Common Law Agency

A

A agency relationship between a brokerage and a client.

The brokerage, and all its associates are the clients agents, and can represent the client without additional contracts being signed

Information about the client is shared among all the brokerage’s associates

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8
Q

Designated Agency Relationship

A

The client enters into a service agreement with a brokerage, but, are represented only by a specific licensee or licensees.

Information about the client is confidential and not shared.

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9
Q

Customers

A

A real estate professional owes no fiduciary responsibility or obligation to a customer

The real estate brokerage or associate must share all information given to them by the customer, even if it is confidential, unless it was received while they were acting as the customer’s agent.

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10
Q

What do you agree to do when dealing with a customer vs a client?

A

Act honestly

Exercise reasonable care when they provide their services to a customer under the acknowledgement

Hold money they receive in trust, as required by the the Real Estate Act

Comply with the Real Estate Act and its regulations, and the rules and bylaws of the Real Estate Council of Alberta.

Give the customer a copy of the Customer Acknowledgment as soon as possible after signing.

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11
Q

What services can you provide to a customer?

A

Statistics and information on property

Agreements of purchase and sale and other relevant forms, and help them to complete the form

Names of real estate providers without recommending any specific providers

Presenting all offers and counter offers to and from a customer. Even if a seller may have accepted another purchase contract

Information from their client that they want the customer to know

Updated on the transaction progress

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12
Q

Can you offer advice or guidance to a customer

A

No, only factual information

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13
Q

Should a broker notify the Registrar when a trust account if opened or closed

A

Yes

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14
Q

Who can create and amend Rules of the Real Estate Act

A

The various Industry Councils with due care through industry consultation and stakeholder discussion

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15
Q

Can you discuss the pros and cons of a property with a customer?

A

No, you can’t offer your personal or professional opinion.

You can only discuss or relate to them the facts of the property.

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16
Q

Can brokerages employ unlicensed individuals?

A

Yes, to help with administrative tasks.

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17
Q

Can licensed associated trade real estate and carry out administrative tasks?

A

Yes, as long as their license is valid for the type of trade.

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18
Q

Perks or benefits used to attract new clients to a brokerage are called?

A

Incentives

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19
Q

Bonuses added to a deal to convince a specific client to close are called?

A

Inducements

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20
Q

Who can offer incentives?

A

The brokerage

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21
Q

Can a licensee advertise incentives of their own?

A

No, only incentives available to all clients and associates of the brokerage can be advertised.

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22
Q

Inducement

A

Any you offer or give to a person who is, or could be party to a real estate or mortgage transaction, to assist, persuade, or cause that person to enter into a particular real estate or mortgage transaction.

In other word, benefits or bonuses offered to convince someone to close a deal

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23
Q

Can a licensee offer a deal without informing their broker?

A

No, you must first receive written approval from your brokerage.

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24
Q

Can a real estate agent offer a reduced commission rate as a inducement?

A

No, inducements fall outside the service agreement.

The service agreement would have to be renegotiated if the licensee wants to offer a reduced commission

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25
Who pays for the inducement?
The brokerage must both approve of the inducement in writing and pay for it.
26
Should incentives be included in contracts?
Yes, the incentive and all its details should be included in any written agreement between a brokerage, licensee, and a client.
27
Do inducements need to signed?
Yes, the brokerage, licensee, and client must all agree on the inducement and how it will be redeemed.
28
Does a client need to know if you'll earn a referral fee from a service provider you've recommended to them?
Yes, it needs to be communicated in writing. The licensee must also keep record of the communication.
29
Can a licensee receive direct payments for a referral?
No, the payments must be made to the brokerage.
30
Sanction
A penalty or threatened penalty for disobeying a law or rule
31
RECA has which process in place to asses a licensee's behaviour
Professional conduct review (PRC)
32
Potential outcomes of PRC
Fine Restrictions placed upon the licensee temporary license suspension permanent license suspension Fulfillment of prescribed education requirements Some other form of non-monetary santion Details of the offence are published Some combination of all the above
33
Types of sanctions
Monetary Non monetary
34
Other types of sanctions
Written warning Educational requirement License suspension
35
What are an agent's duties to a customer?
Deal with them honestly, with reasonable care and skill Provide them with correct information when requested
36
What are a licensee's obligation to a client?
Undivided loyalty Confidentiality Full disclosure Obedience Reasonable care and skill Full accounting
37
Common Law Agency
Common Law Agency is a type of relationship where any licensee from a brokerage can step in and represent a individual client in a transaction without amending the relationship agreement.
38
Designated Agency
The service agreement is between the brokerage and the consumer, but the agency relationship is between the consumer and the licensee(s) designated as their agent(s).
39
Can a designated agent share a clients confidential information with other licensee's at the brokerage?
No, even though the service agreement is between the client and the brokerage, on the designated agent can have access to the clients confidential information.
40
In designated agency, can a agent represent a buyer and another agent represent a seller?
Yes, conflict of interest arises when two of a agent's clients, in a sole agency agreement, are interested in the same property.
41
Sole Agency
A brokerage or licensee acts on behalf of one individual in a transaction.
42
Transaction brokerage
Both parties in a transaction agree to use a single agent for both sides of a transaction
43
Implied Agency
If you offer a customer advice normally reserved for clients, you have created a implied agency relationship. In case of a complain against you by the customer, a hearing panel could hold you to a higher standard as you led the customer to believe you could provide them with services normally reserved for clients that have signed a written service agreement.
44
Clients responsibilities to licensee
Provide honest & accurate information Do not lie or deceive about material latent defects
45
If a WSA is signed, and the client sells or buys a home without the licensee's involvement, does the licensee still earn a fee?
Yes
46
Transaction facillitator
A agent works both sides of a transactions rather than as the sole agent for either client. If either the client(s) or agent disagree, then the agent must serve the client that first entered into a agency relationship with the brokerage
47
Who does a agent serve if a transaction facilitation is rejected.
The client that first entered into an agency relationship with the brokerage. Even if a client signed a WSA second, if they had implied agency with the brokerage first, they will be served by the agent.
48
Transaction brokerage
A licensee's duties are limited to facilitating the closure of a contract by collecting documents and answering factual questions. The transaction facilitator does not represent either side in an agency relationship, they simply assist the parties to complete their purchase contract
49
What are the fiduciary obligations of a licensee acting in the capacity of a agent for a client?
Confidentiality Reasonable care of skill Full disclosure Lawful obedience
50
What are three responsibilities of a client to a agent?
Indemnification Renumeration Disclosure of relevant information
51
What are three things an agent must do with a client?
Act honestly Provide competent service Ensure their role is clearly understood
52
Can you be held for false information extracted from an MLS listing?
Yes. Any and all information presented to a client should be verified by the agent.
53
Can a brokerage pay a commission to an unlicensed individual?
So long as the work done does not require a license.
54
What type of agency relation does the follow sentence describe? "A real estate brokerage can act as the clients agent."
Common law
55
Can RECA impose non monetary sanctions?
RECA can impose: Fines Restrictions/conditions on a license/licensee Temporary/permanent suspension Additional education Publicizing the details of your offense Some other form of non-monetary sanction Publication of the details of your offense A combination of some or all the above
56
Conduct that could lead to sanctions?
Withholding material latent disclosure Not completing forms or contracts correctly Not submitting contracts to your brokerage on time Being unprofessional with another licensee
57
Implied Agency
When an agent provides services to a customer/individual which are normally reserved for clients. No WSA is signed.
58
Is showing a client a home of a seller you represent a conflict of interest?
No, simply showing the home is not a conflict of interest. Entering into negotiations would be.
59
Transaction Brokerage
The buyer and seller agree to use a single agent. The agent may assist buyer and seller by providing facilitation services by collecting documents and answering questions.
60
When the courts force a sale so for the financial recovery of a third party, what type of sale is this?
Judicial sale
61
Can residential areas contain leasehold properties?
Yes
62
Legal authorization for a designated individual, termed the agent, to act for another person, known as the principal?
Power of attorney

RECA Fundamentals (27 decks)

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