Assignment 6 (Chapter 9)

Question 1

Professionalism

Answer 1

The conduct, aims, or qualities that characterize or mark a profession or professional person. Ethics is a key component of professionalism.

Question 2

Ethics

Answer 2

The moral principles that govern a person’s behavior or the conducting of an activity. Ethics is a crucial element of professionalism.

Question 3

Conduct Unbecoming a Licensee

Answer 3

Conduct that is contrary to the interests of the public or brings the real estate industry into disrepute. It goes beyond technical compliance with legislation.

Question 4

Professional Misconduct

Answer 4

Actions that fail to meet the standards required of a professional, typically involving a breach of duty or unethical behavior.

Question 5

Ethical Principles

Answer 5

The foundational guidelines that inform and shape ethical behavior, such as honesty, integrity, and fairness.

Question 6

Trust in Profession

Answer 6

The confidence placed by the public in professionals, based on their adherence to ethical principles and standards.

Question 7

Headline Test

Answer 7

A self-evaluation method where one considers how their decision or action would look if it were reported as a headline in a newspaper.

Question 8

Ethical Decision Making

Answer 8

The process of evaluating and choosing among alternatives in a manner consistent with ethical principles.

Question 9

Public Law

Answer 9

The area of law that deals with the relationship between individuals and the government. It does not govern the relationship between a licensee and their client.

Question 10

Agency Law

Answer 10

The area of law concerning the relationships where one person acts on behalf of another, particularly in business dealings.

Question 11

Duty to Follow Lawful Instructions

Answer 11

The obligation of a licensee to act according to the instructions provided by their client, as long as those instructions are lawful.

Question 12

Confidentiality

Answer 12

The duty to protect a client’s private information and not disclose it without their consent.

Question 13

Conflict of Interest

Answer 13

A situation where a person or entity has competing interests or loyalties. Licensees must disclose any potential conflicts to their clients.

Question 14

Disclosure

Answer 14

The act of providing necessary and relevant information to parties in a transaction to ensure transparency and informed decision-making.

Question 15

Fiduciary Duty

Answer 15

The obligation of a real estate licensee to act in the best interest of their client, putting the client’s interests ahead of their own.

Question 16

Duty of Care

Answer 16

The obligation to act with the level of care, diligence, and skill expected of a reasonably prudent person in similar circumstances.

Question 17

Dual Agency

Answer 17

A situation in which a real estate agent represents both the buyer and the seller in a transaction. Dual agency must be disclosed and consented to by both parties.

Question 18

Client Relationship

Answer 18

The professional relationship between a real estate licensee and their client, defined by fiduciary duties and obligations.

Question 19

Real Estate Services Rules

Answer 19

A set of guidelines and regulations that govern the conduct of real estate licensees in British Columbia, including duties to clients and ethical obligations.

Question 20

Code of Ethics

Answer 20

A formal document that outlines the ethical standards and principles that guide the behavior of real estate professionals.

Question 21

Reasonable Grounds to Suspect

Answer 21

A standard for forming a suspicion based on factual context and indicators, used in identifying potential money laundering activities.

Question 22

Suspicious Transaction Report (STR)

Answer 22

A report filed when there are reasonable grounds to suspect that a transaction or attempted transaction is related to money laundering or terrorist financing.

Question 23

Know Your Client (KYC) Obligations

Answer 23

Requirements for financial and real estate professionals to verify the identity of their clients, understand their financial activities, and assess the risk of money laundering or terrorist financing.

Question 24

Large Cash Transaction Report

Answer 24

A report that must be filed when receiving $10,000 or more in cash in a single transaction or multiple transactions within 24 hours.

Question 25

Beneficial Ownership

Answer 25

The natural person(s) who ultimately own, control, or benefit from a company or legal entity, typically defined as owning 25% or more of the shares.

Question 26

Money Laundering Indicators

Answer 26

Red flags or warning signs that suggest potential money laundering activities, such as unusual transaction patterns or client behavior.

Question 27

Financial Action Task Force (FATF)

Answer 27

An intergovernmental organization that develops policies to combat money laundering and terrorist financing. FATF sets international standards and promotes effective implementation of legal, regulatory, and operational measures.

Question 28

Proceeds of Crime (Money Laundering) and Terrorist Financing Act

Answer 28

Canadian legislation aimed at detecting and deterring money laundering and terrorist financing activities, requiring reporting and identification measures from financial and real estate professionals.

Question 29

Framework for Ethical Decision Making

Answer 29

A structured approach to resolving ethical dilemmas, typically involving steps such as identifying stakeholders, evaluating alternatives, and making and justifying a decision.

Question 30

Real Estate Errors and Omissions Insurance

Answer 30

Insurance that provides coverage to real estate professionals for claims of negligence or mistakes made during the provision of their services.

Question 31

Misrepresentation

Answer 31

False statements or omissions that can be innocent, negligent, or fraudulent, affecting the decisions of the other party.

Question 32

Negligent Misrepresentation

Answer 32

Providing false information without intent to deceive, but failing to exercise reasonable care or competence in obtaining or communicating the information.

Question 33

Fiduciary Duties

Answer 33

Obligations of loyalty and care that an agent owes to their principal, requiring them to act in the principal’s best interest.

Question 34

Duty to Disclose

Answer 34

The obligation of a real estate licensee to disclose all relevant information to their client, including any conflicts of interest or material facts about a property.

Question 35

Vicarious Liability

Answer 35

Legal responsibility of an employer for the actions of an employee performed within the course of their employment.

Question 36

Real Estate Services Act

Answer 36

Legislation governing the conduct of real estate professionals in British Columbia, including licensing requirements and disciplinary actions.

Question 37

Due Diligence

Answer 37

The reasonable steps taken by a person to avoid committing a tort or offense, including the investigation and verification of information before entering into an agreement or transaction.

Question 38

Ethical Responsibilities

Answer 38

The moral obligations that real estate professionals have to act with integrity, honesty, and fairness in their dealings with clients, customers, and other parties.

Question 39

Agency Relationship

Answer 39

The relationship between a principal and an agent, in which the agent is authorized to act on behalf of the principal in business transactions.

Question 40

Principal-Agent Relationship

Answer 40

The legal relationship in which one party (the agent) is authorized to act on behalf of another party (the principal) in business matters.