chapter 6 ethics Flashcards
Which of the following is the BEST description of the relationship between professionalism and ethics?
- Ethics is a crucial element of the larger concept of professionalism.
- Ethics is a core concept in the Real Estate Services Act, while professionalism is not.
- One can be both unprofessional and ethical at the same time.
- Professionalism and ethics are the exact same thing.
Correct Answer: 1
Option (1) is correct because ethics is a key component of the concept of professionalism.
Option (2) is incorrect because professionalism and ethics are both core concepts in the Real Estate Services Act.
Option (3) is incorrect because if a person is unprofessional, they are likely also acting unethically.
Option (4) is incorrect because ethics is the group of morals that govern a person’s behaviour, while professionalism refers to the overall competence of a professional, which includes ethics.
Which of the following is one of an individual licensee’s roles in building and maintaining trust in the real estate profession?
- Acting in accordance with broader ethical principles
- Establishing strong practice standards for licensees
- Creating education initiatives and opportunities
- Setting stringent standards to enter and remain in the profession
Correct Answer: 1
Option (1) is correct because acting in accordance with broader ethical principles is an individual licensee’s role in building and maintaining trust in the real estate profession.
Options (2), (3), and (4) are incorrect because they are each examples of the regulator’s role in building and maintaining trust in the profession.
Kamal, a licensee, is faced with an ethical dilemma relating to something that one of his clients is asking him to do. As part of his thinking about the dilemma, Kamal writes down the names of everyone that would be impacted by any decision he makes to resolve the dilemma. Which step of the Framework for Ethical Decision Making is Kamal applying?
- Identify the stakeholders
- Consider the situation and identify the potential ethical issues
- Evaluate each alternative in terms of ethical consequences
- Specify feasible alternatives for evaluation
Correct Answer: 1
Option (1) is correct because identifying who would be impacted by either the current situation and/or Kamal’s decision is a part of identifying stakeholders.
Option (2) is incorrect because considering the situation and identifying the potential ethical issues involves determining the relevant facts, what ethical issues are at play, and what legal and ethical duties are owed.
Option (3) is incorrect because evaluating the alternatives involves determining if the acts are in compliance with the Real Estate Services Rules, and if broader ethical expectations are being met.
Option (4) is incorrect because specifying feasible alternatives involves determining what courses of action are possible in the situation, and what short- and long-term considerations are relevant.
Which ethical duty in the Real Estate Services Rules imposes a responsibility to non-clients upon licensees?
- The duty to use reasonable efforts to discover relevant facts
- The duty to act honestly
- The duty to disclose all known material information
- The duty to have written service agreements
Correct Answer: 2
Option (2) is correct because section 33 of the Rules imposes the common law standard of negligence, and the requirement to act honestly, upon licensees when providing real estate services to both their clients and to non-clients.
Options (1) and (3) are incorrect because they are duties owed by licensees to their clients, not to non-clients.
Option (4) is incorrect because the requirement for a written service agreement does not apply to non-clients.
The final step of the Framework for Ethical Decision Making is to:
- evaluate each alternative in terms of ethical consequences.
- specify feasible alternatives for evaluation.
- make and justify your choice.
- identify the stakeholders.
Correct Answer: 3
Option (3) is correct because the fifth and final step in the Framework for Ethical Decision Making (the “Framework”) is to make and justify your choice.
Option (1) is incorrect because evaluating the alternatives is step four of the Framework.
Option (2) is incorrect because specifying feasible alternatives for evaluation is step three of the Framework.
Option (4) is incorrect because identifying the stakeholders is step two of the Framework.
John owns a condominium in Kitsilano that he is looking to sell. Despite being an inexperienced licensee working on your first sale, John has agreed to list the property with you. Soon after the property is listed, you show the townhouse to Jennifer, an unrepresented prospective purchaser. Jennifer loves the townhouse and wants to submit an offer right away. Jennifer informs you that the funds for the purchase are currently held in a complicated blind trust managed by an offshore corporate trustee. She says not to worry and that with your help, the financing can be arranged within a week. Based on your understanding of your ethical obligations, what should you do before a contract of purchase and sale is drafted?
- Delay the sale so that you can learn more about this type of financing, in order to act in the best interests of your client
- Refuse to present the offer to John, as it would be a risky transaction for him
- Recommend to Jennifer that she should officially contract you to be her agent, so that she is better protected in this transaction
- Seek assistance from a colleague or decline to act for John, in order to meet your duty to advise your client to seek independent professional advice on matters outside your expertise
Correct Answer: 4
Option (4) is correct because you have an ethical obligation to advise your client to seek independent professional advice on matters outside of your expertise. You should get assistance from a colleague or decline to act for John, as this is your first sale and you are likely unfamiliar with blind trusts and the financing help Jennifer needs.
Option (1) is incorrect because delaying the sale so that you can learn more about the type of financing is not necessarily acting in the best interests of your client, as it may be in John’s best interest to complete the sale quickly and no other buyers are interested in his condominium.
Option (2) is incorrect because refusing to present the offer to John would be a breach of the duty to act in John’s best interests, and a breach of the duty to present offers in a timely manner.
Option (3) is incorrect because acting for Jennifer in this transaction would be a type of dual agency, which would be both a conflict of interest and a contravention of the Real Estate Services Rules.
