chapter 6 service rule Flashcards
Which type of misconduct, as described in the Real Estate Services Act, focuses more on the overall professionalism of a licensee, over and above technical compliance with legislation and the Real Estate Services Rules?
- Professional misconduct
- Lapse of character
- Breach of civility
- Conduct unbecoming a licensee
Correct Answer: 4
Option (4) is correct because conduct unbecoming a licensee is conduct that is contrary to the interests of the public; undermines public confidence; or brings the real estate industry into disrepute.
This is above and beyond technical compliance with legislation and the Real Estate Services Rules (the “Rules”).
Option (1) is incorrect because professional misconduct is concerned with technical compliance with legislation and the Rules.
Options (2) and (3) are incorrect because lapse of character and breach of civility are not types of misconduct explicitly mentioned by the Real Estate Services Act.
What is the “Headline Test”?
- A test that clients of a licensee can use to determine whether the licensee’s actions were professional
- A test that the British Columbia Financial Services Authority uses to determine whether a licensee has committed professional misconduct
- A test that licensees can use to evaluate whether a decision or action aligns with their overall professionalism, that considers how they would feel if their decision or action were to appear as a headline of a newspaper or news site
- A test that is set out in the Real Estate Services Rules that licensees must follow in their fulfilment of their duties to clients
Correct Answer: 3
Option (3) is correct because the “Headline Test” refers to a decision maker evaluating their own decisions and actions by considering how they would feel if the decision or action were to appear as a headline in a newspaper or news site.
Option (1) is incorrect because the “Headline Test” is not used by clients of a licensee, but by licensees themselves.
Option (2) is incorrect because the British Columbia Financial Services Authority determines if a licensee has committed professional misconduct by deciding whether the licensee has acted contrary to the Real Estate Services Act, not by imagining what might happen if their actions were reported in the media.
Option (4) is incorrect because the “Headline Test” is not a test set out in the Rules.
Ava is representing Gerome in the sale of his property. Ava receives an offer for Gerome’s property that is $100,000 below the listing price. Gerome tells Ava that he wants to accept the offer. Rather than informing the buyer of this fact, Ava tells the buyer that Gerome will not accept anything less than $85,000 under the list price. She does this because she truly believes that the buyer will be willing to pay more, which is better for Gerome, and she wants him to be completely satisfied with her representation of him. Which of the following duties, set out in the Real Estate Services Rules, has been breached?
- The duty to maintain confidentiality
- The duty to use reasonable efforts to discover relevant facts
- The duty to avoid conflicts of interest
- The duty to follow lawful instructions
Correct Answer: 4
Option (4) is correct because Ava has breached her duty to follow lawful instructions when she did not accept the offer on Gerald’s behalf after he instructed her to do so.
Option (1) is incorrect because Ava did not reveal any confidential information of Gerome to the buyer.
Option (2) is incorrect because Ava did not have to discover relevant facts in this scenario.
Option (3) is incorrect because there is nothing in this fact scenario that suggests conflicting interests.
Jiaxin is assisting Harvey in the sale of his property. Jiaxin receives an offer for Harvey’s property from a good friend of hers; however, she does not mention her relationship to Harvey when she presents the offer to him. Jiaxin has likely breached all of the following duties, set out by the Real Estate Services Rules, EXCEPT the duty to:
- maintain confidentiality
- act in the client’s best interests
- disclose conflicts of interests
- disclose all known material information
Correct Answer: 1
Option (1) is correct because the fact scenario does not suggest that Jiaxin has disclosed any of Harvey’s confidential information.
Option (2) is incorrect because Jiaxin has not acted in Harvey’s best interests by withholding the fact that the offer is from her friend.
Option (3) is incorrect because Jiaxin has breached the duty of disclosing conflicts of interest by not advising Harvey that the offer comes from her friend, with whom she has a personal relationship.
Option (4) is incorrect because the duty to disclose all known material information requires the disclosure of any information that might impact the client’s decision, which includes the identity of the offeror and whether the licensee has any relationship with the offeror.
Which of the following is NOT an explicit obligation found directly in the Real Estate Services Rules?
- Maintaining the confidentiality of your client’s information
- Advising your clients to seek independent professional advice on matters outside of your expertise
- Doing unto others as you would have them do unto you
- Acting in the client’s best interests
Correct Answer: 3
Option (3) is correct because the Golden Rule of “Do unto others as you would have them do unto you” is not an explicit obligation found in the Real Estate Services Rules (the “Rules”).
It is instead a guiding principle for behaviour, as well as a component of other ethical codes, such as the Canadian Real Estate Association’s REALTOR® Code. Options (1), (2), and (4) are incorrect because they are all explicit obligations that are found in the Rules.
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.
You are a licensee who has been hired to list a property for a seller who is about to leave town for a vacation. The seller sternly tells you in writing that they want to relax on their vacation and do not want to be contacted about any offers for their property until they are back in town in seven days. On the second day of their vacation, you receive a very strong offer for their property that is only open for acceptance for 24 hours. Which of the following is TRUE?
- Because the offer will expire before the seller returns from vacation, you must contact them to communicate the offer.
- This situation demonstrates the fact that, sometimes, a licensee’s duties under the Rules conflict with each other.
- Not communicating the offer to the seller immediately is a serious breach of the duty to avoid conflicts of interest.
- Telling the buyer’s agent that the seller instructed you not to present them with any offers until they return from their vacation is a clear breach of the duty of disclosure.
Correct Answer: 2
Option (2) is correct because, in this situation, you are obeying the client’s lawful instructions by not contacting her while she is on vacation, and there is no conflict with the duty to present offers in a timely manner, as your client has specifically instructed you not to contact her. However, you may not be acting in the client’s best interest by not presenting the offer to her.
Option (1) is incorrect because the client has clearly communicated that she is not to be disturbed while on vacation, so you should not communicate the offer to her.
Option (3) is incorrect because there is no conflict of interest present in this scenario.
Option (4) is incorrect because the duty of disclosure relates to what a licensee discloses to a client, not what a licensee discloses to a third party.
