Chapter 2 Flashcards
RESA Section 3
You must have a license to provide real estate services to others for payment.
BCFSA
The BC Financial Services Authority, which oversees real estate professionals.
Four Licence Levels
The four types of licenses: brokerage, managing broker, associate broker, and representative.
Brokerage Licence
A company license that allows a brokerage to offer real estate services through its agents.
Managing Broker
The person responsible for the overall management and supervision of a brokerage.
Associate Broker
An experienced agent who meets the qualifications to be a managing broker but works under one.
Representative
A licensed individual who provides real estate services under the supervision of a managing broker.
Single Brokerage Rule
Real estate agents must work for only one brokerage at a time, except in specific circumstances.
Affiliated Brokerages
Managing brokers can work for multiple brokerages if they are related or affiliated.
Licensee Compensation
Agents can only receive payment for real estate services from the brokerage they are licensed with.
Vicarious Liability
Brokerages can be held legally responsible for the actions of their agents.
Financial Requirements
Brokerages must prove they are financially stable and able to cover their operational costs.
Recordkeeping
Brokerages are required to maintain accurate and complete records of all transactions and operations in BC.
Trust Accounts
Brokerages must have separate bank accounts to hold clients’ money safely.
Annual Filings
Brokerages must submit financial statements and reports to BCFSA every year.
Managing Broker Duties
Overseeing the brokerage’s operations, ensuring compliance with laws, and supervising agents.
Associate Broker Duties
Similar to managing brokers but do not have full responsibility; they assist and work under managing brokers.
Representative Duties
Must follow the instructions and guidance of the managing broker and comply with all regulations.
License Renewal
Real estate licenses must be renewed every two years, with proof of continuing education.
License Qualifications
Applicants must meet certain education, experience, and character standards to obtain a license.
Good Reputation
Applicants must demonstrate good character and conduct, often through a criminal record check.
Criminal Record Check
A background check required to ensure the applicant has no serious criminal history.
Educational Requirements
Must complete specific courses and pass exams to qualify for a real estate license.
Experience Requirements
Must have a certain amount of real estate experience to become an associate or managing broker.
Temporary Licence
A short-term license that allows the holder to practice under certain conditions.
Discipline Process
BCFSA can investigate and penalize agents for violating real estate laws and regulations.
Professional Misconduct
Actions such as fraud, dishonesty, or violating RESA and other regulations.
Conduct Unbecoming
Behavior that negatively affects public trust in the real estate industry.
Complaint Filing
Anyone can report suspected misconduct by a real estate agent to BCFSA.
Investigation
BCFSA examines complaints and conducts inquiries into agents’ actions.
Discipline Hearing
A formal meeting where BCFSA determines if an agent has committed misconduct.
Consent Order
An agreement where an agent accepts a penalty without a formal hearing.
Urgent Orders
Immediate actions taken by BCFSA to protect the public, such as suspending a license.
Sanctions
Penalties for misconduct, including fines, suspensions, or license cancellations.
Administrative Penalties
Fines for minor breaches of regulations, without needing a formal hearing.
Appeals
Agents can appeal BCFSA decisions to the Financial Services Tribunal.
Inoperative Licence
A license becomes inactive if an agent stops working for their brokerage.
Voluntary Surrender
Agents can choose to give up their license, making it inactive.
Employee vs Contractor
Agents can be hired as employees or independent contractors by brokerages.
Independent Contractor
An agent who is self-employed and not subject to certain employee benefits and protections.
Employee
An agent who is hired by a brokerage and receives wages and employment benefits.
Home Office Rules
Specific conditions for agents working from home, such as no external signage.
Trading Services Licence
Allows agents to perform activities like selling, buying, and leasing properties.
Property Management
Managing rental properties, which requires a specific license if done for others.
Unlicensed Activities
Activities that agents cannot perform without the appropriate license.
Trust Account Uses
Rules for handling and using client money held in trust accounts.
Stakeholder Role
Brokerages act as neutral parties holding deposit money during transactions.
Money Withdrawal
Conditions under which money can be taken out of trust accounts.
Cryptocurrency
Special rules and risks for real estate transactions involving digital currencies.
Suspicious Activities
Agents must report any suspicious transactions to their managing broker.
Teams
Groups of agents working together under one brokerage.
Team Advertising
Rules for using team names in real estate marketing and advertising.
Licensee Names
Agents must use their legal names in all real estate activities.
Agency Relationships
Teams cannot act for both buyer and seller in the same transaction.
Recordkeeping for Teams
Teams must follow brokerage policies for keeping transaction records.
Disclosure Statement
Required document providing key information about a property development.
Material Facts
Important information that must be included in a disclosure statement.
Amended Disclosure
Required if the original disclosure statement is found to be incorrect or incomplete.
Seven Day Rescission
Buyers can cancel their purchase agreement within seven days of receiving the disclosure statement.
Rescission for Non-Delivery
Buyers can cancel if they do not receive the required disclosure statement.
Material Changes
Significant changes in a project require a new or amended disclosure statement.
REDMA
Real Estate Development Marketing Act, regulating the marketing of development units.
Development Property
Includes subdivisions, strata properties, cooperatives, and other shared interests in land.
Subdivision
Land divided into individual lots for sale.
Strata Lots
Individual units in a multi-unit property, like condos or townhouses.
Cooperative Interests
Ownership shares in a cooperative that include the right to occupy a unit.
Time Share Interest
Right to use a property periodically, such as a vacation home shared by multiple owners.
Shared Interest in Land
Property ownership shared by multiple people, each with rights to a specific part.
Leasehold Unit
Units in a building leased for residential purposes, often in long-term lease agreements.
Disclosure Statement Form
Must follow specific format and content guidelines set by BCFSA.
Marketing Restrictions
Rules for promoting a development before the disclosure statement is filed.
REDMA Penalties
Fines and penalties for developers who do not comply with REDMA.
Unlicensed Property Management
Penalties for managing properties without the proper license.
Annual Filing Requirements
Brokerages must file yearly financial and activity reports with BCFSA.
Financial Statements
Brokerages must submit detailed yearly financial reports.
Accountant’s Report
An independent review of the brokerage’s finances required annually.
Brokerage Activity Report
Yearly report detailing the brokerage’s operations and transactions.
Training and Supervision
Only licensed individuals can train and supervise other agents.
Trust Account Interest
Typically, interest earned on trust accounts is paid to the Real Estate Foundation.
Separate Trust Accounts
Clients can request separate accounts to earn interest on their deposits.
Deposit Notices
Must inform all parties if a deposit is not received or a cheque bounces.
Maintaining Proper Records
Essential for compliance, including transaction
Maintaining Proper Records
Essential for compliance, including transaction details and correspondence.
Audit Compliance
Brokerages must cooperate with BCFSA audits and inspections.
Cryptocurrency Risks
Must inform clients about the risks of using digital currencies in transactions.
Money Laundering
Be vigilant and report any suspicious activities related to deposits or transactions.
General Responsibilities
Licensees must always act in the best interests of their clients.
Client Agreements
Must be properly documented and filed according to regulations.
Honesty and Skill
Licensees are required to act honestly and with reasonable skill in all transactions.
Avoiding Conflicts of Interest
Must take steps to avoid conflicts in real estate transactions.
Prompt Payment
Client money must be deposited into trust accounts without delay.
Stakeholder Obligations
Brokerages act as neutral parties when holding deposit money.
Deposit Disputes
Specific rules apply for handling and resolving disputes over deposits.
Money Held by Third Parties
Special rules for deposits held outside of trust accounts, such as by lawyers.
Anonymous Tipline
A way to report suspicious or unethical behavior anonymously to BCFSA.
Managing Family Rentals
Rules for agents managing rental properties for family members.
Family Rentals Disclosure
Must inform tenants and the managing broker about family management roles.
Remuneration Prohibition
Cannot receive payment for managing family-owned properties.
Professional Development
Continuing education is required to renew a real estate license.
Renewal Application
Must be submitted at least 30 days before the license expires.
Refusal to Renew
BCFSA can refuse to renew a license for various reasons, such as misconduct.
Suspension or Cancellation
Licenses can be suspended or canceled if rules are broken.
Right to be Heard
Agents must be given a chance to defend themselves if their license is at risk.
Written Reasons
BCFSA must provide written reasons for any license refusals or suspensions.
Financial Services Tribunal
The body that handles appeals against BCFSA decisions.
Inoperative Licence Reinstatement
Conditions under which an inactive license can be reactivated.
Voluntary Licence Surrender
Agents can voluntarily give up their license, making it inactive.
Employee vs Contractor
Differences between being an employee (wages and benefits) and a contractor (self-employed).
Independent Contractor
An agent who is self-employed and handles their own taxes and benefits.
Employee
An agent employed by a brokerage, receiving wages and employee benefits.
Home Office Rules
Specific conditions for agents working from a home office, such as no signage.
Trading Services Licence
Allows agents to perform buying, selling, and leasing activities.
Property Management
Managing rental properties requires a specific license if done for others.
Unlicensed Activities
Activities that agents cannot perform without the appropriate license.
Trust Account Uses
Rules for handling and using client money held in trust accounts.
Stakeholder Role
Brokerages act as neutral parties holding deposit money during transactions.
Money Withdrawal
Conditions under which money can be taken out of trust accounts.
Cryptocurrency
Special rules and risks for real estate transactions involving digital currencies.
Suspicious Activities
Agents must report any suspicious transactions to their managing broker.
Teams
Groups of agents working together under one brokerage.
Team Advertising
Rules for using team names in real estate marketing and advertising.
Licensee Names
Agents must use their legal names in all real estate activities.
Agency Relationships
Teams cannot act for both buyer and seller in the same transaction.
Recordkeeping for Teams
Teams must follow brokerage policies for keeping transaction records.
Disclosure Statement
Required document providing key information about a property development.
Material Facts
Important information that must be included in a disclosure statement.
Amended Disclosure
Required if the original disclosure statement is found to be incorrect or incomplete.
Seven Day Rescission
Buyers can cancel their purchase agreement within seven days of receiving the disclosure statement.
Rescission for Non-Delivery
Buyers can cancel if they do not receive the required disclosure statement.
Material Changes
Significant changes in a project require a new or amended disclosure statement.
REDMA
Real Estate Development Marketing Act, regulating the marketing of development units.
Development Property
Includes subdivisions, strata properties, cooperatives, and other shared interests in land.
Subdivision
Land divided into individual lots for sale.
Strata Lots
Individual units in a multi-unit property, like condos or townhouses.
Cooperative Interests
Ownership shares in a cooperative that include the right to occupy a unit.
Time Share Interest
Right to use a property periodically, such as a vacation home shared by multiple owners.
Shared Interest in Land
Property ownership shared by multiple people, each with rights to a specific part.
Leasehold Unit
Units in a building leased for residential purposes, often in long-term lease agreements.
Disclosure Statement Form
Must follow specific format and content guidelines set by BCFSA.
Marketing Restrictions
Rules for promoting a development before the disclosure statement is filed.
REDMA Penalties
Fines and penalties for developers who do not comply with REDMA.
Unlicensed Property Management
Penalties for managing properties without the proper license.
Annual Filing Requirements
Brokerages must file yearly financial and activity reports with BCFSA.
Financial Statements
Brokerages must submit detailed yearly financial reports.
Accountant’s Report
An independent review of the brokerage’s finances required annually.
Brokerage Activity Report
Yearly report detailing the brokerage’s operations and transactions.
Training and Supervision
Only licensed individuals can train and supervise other agents.
Trust Account Interest
Typically, interest earned on trust accounts is paid to the Real Estate Foundation.
Separate Trust Accounts
Clients can request separate accounts to earn interest on their deposits.
Deposit Notices
Must inform all parties if a deposit is not received or a cheque bounces.
