Chapter 1.3 - Real Estate Services Act Flashcards
Pyramid order for a brokerage (top to bottom)
1) brokerage
2) managing broker
3) associate broker (optional)
4) representative (aka me)
The __________ provides services on behalf of the brokerage
Licensee
The managing broker is responsible for the ________: and has control/conducts and __________ agents
Brokerage
Supervises
Cancellation / suspension of _________________ impacts all licensees within the brokerage
Brokerage license
Managing broker is responsible for 3 things, what are they?
1) a brokerage exercising the rights conferred on the brokerage
2) control and conduct of the brokerage’s real estate business
3) supervision of its licensees
What are the 3 qualifications that must be met for an individual to become a realtor
1) be at least 19 years old
2) be of good reputation
3) meet educational requirements
Qualification for managing broker
1) 2 years licensed experience during the 5 years before the date of application
2) be at least 19 years old (so 21 lol?)
3) be of good reputation
4) just meet educational and experience required by the Rules
Brokerage responsibilities (4 things)
1) May employ agents
2) maintain brokerages books, accounts, and records (for 7 years)
3) responsible for the agents actions
4) must have a managing broker, whose license will determine the services the brokerage is permitted to offer
How is the managing broker liable?
The brokerage will held vicariously liable for the fraud committed by the brokerage’s employees.
It may also be disciplined by the BCFSA
How long is a realtor license good for?
2 years
Can a realtor work at multiple brokerages at once?
You can only work for 1 brokerage at a time
All contracts with clients will be in the name of _____________________
Your brokerage (not the realtors clients)
A realtor can only accept ____________ from their brokerage (such as bonuses and gifts)
Remunerations
When you take a listing, it is your _______________ listing
And when you help a buyer, it is your ____________ buyer’s
Brokerages!!!
Nothing is yours
Three “real estate services” under RESA
1) trading services
2) rental property management
3) strata management services
Services are provided on behalf of your brokerage
Trading services under RESA includes
Selling / buying
Open houses
Finding properties
Rental property management services under RESA includes what? (4 things)
Collecting rents
Making payments
Collecting strata fees
Negotiating
Strata management services under RESA includes what? (5 things)
Managing on behalf of the owner
Making payments
Negotiating
Supervising contractors
Managing tenant matters
Exceptions to the Real Estate License (no need to have a real estate license if:) (6 things)
1) for sale by owner
2) collection agents
3) notaries
4) accountants
5) appraisers
6) persons acting on developers behalf
Personal Real Estate Corporation (PREC) can be licensed as a:
A personal real estate corporation can be licensed as a managing broker, associate broker, or representative
Personal real estate corporation (PREC) primary objective
Better planning of income and tax streams
Personal real estate corporation (PREC) disadvantage
Does not shield controlling individual from liability from third parties
An unlicensed assistant can do what? (6 things)
1) unlock property in order to let prospective buyers and their representatives enter
2) perform office filings and bookkeeping
3) draft documents and correspondence for approval and signature by the licensee
4) place or remove signs
5) witness signatures
6) arrange for repairs on rental property
An unlicensed assistant cannot (4 things)
1) host an open house
2) renew a listing contract on behalf of licensed realtor
3) present an offer to purchase real estate
4) negotiate lease agreements
The Real Estate Services Act aims to
RESA
1) to ensure that real estate licensees are reasonably competent
2) to ensure that real estate licensees are of good reputation
3) to discipline and, where necessary, re-educate real estate licensees if they breach the act
The Real Estate Services Act (RESA) created 3 organizations, what are they?
1) real estate foundation (law reform)
2) real estate errors and omissions insurance (indemnity plan)
3) real estate compensation fund corporation
BCFSA stands for what?
British Columbia financial services act
What is the main objective of BCFSA
Strengthen consumer protection and ensure public can have confidence in the standards of practice provided by real estate professionals
One aspect of the BCFSA is that it enforces the Act, what does this entail!
It ensures that agents meet the requirements outlined in RESA
Another aspect of the BCFSA is education, what does this mean?
Supervising and advancing the educational qualifications and programs of licensees
The BCFSA is in charge of the licenses, what powers do they have?
They have the power to issue, renew, suspend, reprimand, and CANCEL licenses
BCFSA has the right to investigate realtors, what does this entail?
The right to investigate you before or after becoming licensed
There is no complaint or permission required to start an investigation
The BCFSA may apply to the court for what?
In order to seize records (to which your permission is NOT required)
The BCFSA is responsible for fees and expenses associated with being a realtor, what is included in this?
Levying fees on all licensees to meet BCFSA expenses
They may require the licensee to pay part or all of the expense associated to investigations and discipline hearings
BCFSA makes various bylaws, such as?
Information required on a license application, it’s business and affairs, hearing procedures, bylaw creation procedures
BCFSA can hold disciplinary hearings (by discipline committee) and the decision to discipline a licensee will be heard by the ________________
Financial services tribunal
NOT THE SUPREME COURT OF BC
The superintendent of real estate is appointed by the ______________________
The BCFSA board of directors
The superintendent of real estate is the ________________ of the BCFSA who posses certain powers, and must fulfil specific duties, under the ________________
Chief executive officer (CEO)
Real estate services act (RESA)
What are 2 examples of things the superintendent does?
1) all licensing application must be made through the superintendent
2) superintendent will carry out investigations and disciplinary functions in relation to licensees
The Real Estate Foundation focuses on what?
Education
Research
Real estate law reform
The _____________________ receives interest earned on monies in brokerage ________________ in BC to pay for their expenses and research
Real estate foundation
Trust accounts
In 3 simple words, what does the Real Estate Errors and Omissions Insurance Corp do?
Protects against negligence!!
What is the Real Estate Errors and Omissions Insurance Corp Indemnity Plan?
Insurance coverage and exclusions for real estate licensees in BC
What are three things the Indemnity Plan does?
1) Protects against negligently performing or failing to perform real estate duties
2) levies different assessments on licensees
3) the indemnity plan will cover the licensee up to $2 million for negligence but not for any fines, penalties imposed on a licensee by BCFSA
The indemnity plan will cover the licensee up to $_______________ for negligence, but not for _______ or _________ imposed on the licensee by the BCFSA
$2,000,000
Fines or penalties
The Real Estate Errors and Omissions Insurance Corp does not protect you from:
- dishonest, fraud, criminal matters (aka on-purpose things)
- disputes concerning commission or fees
- The real estate agent is selling their personal home (For sale by owners (FISBO) is not covered)
- Claims for discrimination arising from the complains (human rights issues)
- bodily injuries, sickness, disease, or death (accident insurance covers this)
The ________________________ provides compensation in relation to a real estate transaction for funds that were misappropriated
Real Estate Compensation Fund
Example: money is collected, deal falls through, go to these guys to get money back
CREA stands for what?
Canadian Real Estate Association
The ________________________ is a national organization comprised of licensees and real estate boards across the country, as well as all of the provincial real estate associations
Canadian Real Estate Association (CREA)
Who developed the Code of Ethics (Realtor Code)
Canadian Real Estate Association (CREA)
What is the golden rule
Do unto others as you would have them do unto you
What does BCREA stand for?
British Columbia Real Estate Association
The British Columbia Real Estate Association has _____ real estate boards, they run the _____, and they are the ones who enforce the __________________
10
MLS
Realtor Code of Ethics
What does MLS stand for?
Multiple Listing Service
What does BCREA do!
equips REALTORS® with tools, from advocacy, economic analysis, standardized legal forms to professional development
Real Estate Institute of BC
Awards the professional designation “RI”
Advances education
What does REDMA stand for?
Real Estate Development Marketing Act
Real Estate Development Marketing Act covers 4 topics, which are
1) subdivisions
2) strata properties
3) cooperatives
4) Time Shares
Real Estate teams must consist of at least _____ people, and minimally one of them must be _______
2
Licensed
To work on a real estate team, all licensed members must be licensed with the ______________
Same brokerage
A licensee can only be on _________ real estate team at a time
One
Uno
1
Real estate team members and team name must be registered with ______
BCFSA
It is the obligation to advice BCFSA in writing if any team members leave or join too
All advertising from a real estate team that includes the name of ___________ team members must identify that member as being ___________
Unlicensed
Unlicensed
A real estate team is collectively one agent for the client and cannnot separate agency relationships, meaning
That one team member cannot represent the buyer and another member of the same team represents the seller
The ________________________________ was created to impose disclosure requirements on ___________ with the superintendent of Real Estate
Real Estate Development Act
Developers
What is considered a “Development Property”
1) subdivisions - ______ or more
2) bare land strata lord - _____or more
3) cooperative interests - ____ or more
1) 5 or more
2) 5 or more
3) 2 or more
Purchasers are required by REDMA requiring developers to: (3 things)
1) meet requirements or approvals of the property
2) to assure the purchasers title
3) file disclosure statements in the form required by the superintendent
A ________________ discloses material interest about property
Disclosure statement
When is a disclosure statement required?
When sold Individually
When must a disclosure statement be provided to a buyer:
Before the offer is made
NOT AFTER
A disclosure statement must indicate the right to rescind the purchase within _________
7 days
1 weeks bitch
The disclosure statement must be in the prescribed form by the __________________
Superintendent of Real Estate
A disclosure statement must be prepared and filed with the ______________
Superintendent of real estate
A _____________ is a document prepared by the developer to ensure the purchasers have adequate information upon which to base a purchasing decision
Disclosure statement
BCFSA Discipline Matters include (for development related matters) (things you get in trouble for)
1) accepting remunerations directly from the developer and not from the brokerage in relation to which the licensee was licensed
2) failing to recommend legal advice to purchasers
______________: Where money is deposited by one for the benefit of another, in which the money is devoted to a particular purpose and should not be diverted for other purposes
Trust Account
A brokerage must have at least one ____________ in a bank and not one trust account for _______________
Trust account
Each client
The agent / brokerage collects the deposit as a ___________
Stakeholder
🐮 🥩 🐄
Withdrawals from trust accounts can only happen for certain occasions, which are:
1) by mistake
2) interest paid to the Real Estate Foundation
3) Remuneration for a licensee if earned
4) Accordance with the instructions of the principal
You can not take money out of a trust account for 2 things:
1) brokerage business expenses
2) Agents personal expenses
_____________________: providing measured and proportionate response to particular instances of non-compliance and adds to a progressive discipline system
Administrative Penalties
Administrative Penalties are meant for offences that are ____________ than offences dealt with by a Notice of Disciplinary Hearing
Less serious
Administrative penalties do not apply to ____
Fraud
The BCFSA can conduct an investigation to determine whether a licensee has committed _____________________ or _________________
Professional Misconduct
Unbecoming a licensee
If an investigation is started against a licensee, they are required to: (4 things)
1) respond promptly to any inquiry addressed to the licensee by the BCFSA
2) Licensee response must be in writing and within the time limit set for response
3) promptly notify their managing broker of their own misconduct.
4) Even misconduct observed outside one’s brokerage should be reported, but isn’t required
Under section 47 of RESA, BCFSA must publish all orders (consent orders, discipline orders, urgent orders) and provide copies to any person under request
The order must be posted where
On the BCFSA website
