Disclosures

Question 1

Introduction to Disclosures

Answer 1

Introduction to Disclosures

Question 2

Discussing Disclosures with your Client

Answer 2

Discussing Disclosures with your Client

Question 3

Mandatory disclosures do more than advise consumers about important facts

Answer 3

They also provide consumers an opportunity to make an informed decision about how to proceed with a transaction based on the information provided

Question 4

While RESA outlines specific circumstances in which a disclosure is required

Answer 4

Any time you feel your client may benefit from information about a transaction or your role in it, it is always advisable to err on the side of caution and disclose that information early and often

Question 5

Examples of the kind of circumstances when the disclosures must be made to clients

Answer 5

-before an agreement is entered into (interest in trade, remuneration)

-As soon as possible after you become aware of some fact (eg: latent defect, material information)

Question 6

Disclosure Obligations

Answer 6

Disclosure Obligations

Question 7

The importance of proper, timely disclosure cannot be overstressed!

Answer 7

The importance of proper, timely disclosure cannot be overstressed!

Question 8

When no specific format is required

Answer 8

It is always prudent to get written documentation of the disclosure to verify that is was both made and also that the disclosure provided all the required information under RESA rules

Question 9

Failing to make Mandatory Disclosures

Answer 9

Failing to make Mandatory Disclosures

Question 10

If you fail to fulfil the various obligations in accordance with real estate services rules,

Answer 10

You run the risk of a complaint, being investigated and subsequent discipline you are found to have committed professional misconduct

Question 11

Simple matra

Answer 11

A fully informed consumer is a better protected consumer

Question 12

When in doubt,

Answer 12

Disclose, disclose, disclose

Question 13

A late disclosure is better then

Answer 13

No disclosure at all

But you could still be subject to discipline

Question 14

Disclosures that must be made on BCFSA Forms

Answer 14

Disclosures that must be made on BCFSA Forms

Question 15

Disclosure of interest in trade

Answer 15

Is used any time a licensee or associate of the licensee directly, or indirectly acquires or disposes of real estate

Question 16

Disposing of real estate

Answer 16

Includes both selling and leasing property

Question 17

Indirect acquisition or disposition

Answer 17

Can occur when an associate of the licensee is purchasing, selling or leasing real estate and the licensee is providing real estate services to the associate

Question 18

Associate in relation to a licensee means

Answer 18

a) in the case of an individual licensee
i) a spouse or family partner of the license

ii) A trust or estate in which the licensee, or a spouse or family partner of the licensee, has substantial beneficial interest or for which the licensee, spouse, or family partner serves as a trustee or in similar capacity
Etc…

Question 19

Disclosure to seller of expected remuneration

Answer 19

Disclosure to seller of expected remuneration

Question 20

It is important to review this information as they may have forgot the commission rate if it was months or weeks prior

Answer 20

Disclosure is most meaningful when given in context

Question 21

This disclosure must be made on the BSFCA prescribed form, and must include information on every offer, and counteroffer from the buyer

Answer 21

This information includes:
-Amount being paid to your brokerage
-the amount being paid to the cooperating brokerage
-The amount being retained by your brokerage
-The amount of any remuneration you might receive or anticipate receiving other than commission paid by the client

Question 22

Additionally, you are required to provide the dollar figure on the form

Answer 22

Not the percentage of the sale price that is often used in a service agreement

Dollar figure = more transparent

Question 23

Disclosures that may be made in any written form

Answer 23

Disclosures that may be made in any written form

Question 24

RESA defines remuneration as

Answer 24

Any form of remuneration, including any commission, fee, gain or reward, whether the remuneration is received, or is to be received, directly or indirectly

Question 25

Remuneration includes

Answer 25

Commission payment, referral fees, gifts, discounts on future purchase or services, etc.

Question 26

Before you client makes an offer to purchase,

Answer 26

You must disclose in writing the portion of the commission your cooperating brokerage expects to receive from the listing brokerage

Question 27

Due to your fiduciary duties,

Answer 27

You have an obligation to disclose any remuneration received from someone other than the client

Question 28

If you are dealing with an unrepresented party who gives you a gift

Answer 28

You have no requirement to disclose remuneration as yo do not act on behalf of that unrepresented party

Question 29

A licensee must not accept remuneration from anyone other than his brokerage

Answer 29

That is why referral fees, bonuses, etc must always be paid to your brokerage and not to your directly

Question 30

Remuneration from a party other than a client can be disclosed in the service agreement and in a record that is separate from the service agreement

Answer 30

Yo, word

Question 31

The disclosure of remuneration cannot be made in a contract of purchase and sale

Answer 31

Because that is an agreement giving effect to a trade in real estate

Question 32

Disclosure of Material Latent Defects

Answer 32

Disclosure of Material Latent Defects

Question 33

The two types of defects

Answer 33

1) Patent defect 2) Latent Defect

Question 34

Patent defects

Answer 34

Visible to the eye, or which are necessarily implied by something which is visible to the eye, and which the purchaser should have discovered by a reasonably careful inspection of the property

Question 35

Examples of patent defects could include

Answer 35

-A mouldy wall due to leaking pipes -Water stains on the ceiling

Question 36

There is no obligation for you or your seller to disclose the existence of

Answer 36

patent defects

Question 37

Material latent defects

Answer 37

Defined as a defect that cannot be discerned through a reasonable inspection of the property

Question 38

Latent defects includes a defect that renders real estate

Answer 38

-Dangerous or potentially dangerous to the occupants -Unfit for habitation -Unfit for the purpose for which the party is acquiring it if i) The part has made the purpose known to their licensee ii) The licensee is otherwise aware of the purpose

Question 39

A material latent defect additionally includes

Answer 39

-A defect that would involve great expense to remedy -A circumstance that affects the real estate in respect of which a local government or local authority has given notice to the client or the licensee, indicating that the circumstance must or should be remedied -A lack of municipal building permits and other permits respecting the real estate

Question 40

A licensee representing a seller,

Answer 40

you must disclose in writing, to the buyer, all known material latent defects respecting the seller's property, promptly and before any contract is entered into, if the defect is not already disclosed, in writing, by the seller

Question 41

Caveat Emptor

Answer 41

Let the buyer beware

Question 42

Due to Caveat Emptor, it is best

Answer 42

To have the property inspected by a qualified professional

Question 43

What if the seller does not want to disclose the material latent defect

Answer 43

You must refuse to provide further trading services to the client

Question 44

Disclosures that may be made in any form

Answer 44

Disclosures that may be made in any form