Flashcards - Lesson 1, Ch 2 - RETS UBC Sauder

Question 1

A _______ account is an account in which money is deposited by one person for the ________ of another. The money is devoted to a particular purpose and ________ be diverted for other purposes.

Answer 1

A trust account is an account in which money is deposited by one person for the benefit of another. The money is devoted to a particular purpose and cannot be diverted for other purposes.

Question 2

TRUE OR FALSE? Unlicensed assistants are permitted to perform trading services if they are supervised by a broker.

Answer 2

FALSE

Question 3

Name the two broad categories of improper conduct by licensees that are set out in the Real Estate Services Act.

Answer 3

The Real Estate Services Act sets out two broad categories of improper conduct by licensees: professional misconduct and conduct unbecoming a licensee.

Question 4

What are the responsibilities of a managing broker?

Answer 4

A managing broker is responsible for exercising the rights conferred on the brokerage as well as for the performance of the duties imposed on a brokerage by its licence. In addition, a managing broker is responsible for the control and conduct of a brokerage’s real estate business, including the supervision of its related licensees.

Question 5

A _______ is a person authorized to exercise all of the powers necessary to wind up the business and affairs of a licensee.

Answer 5

receiver

Question 6

Describe a managing broker.

Answer 6

A managing broker is a licensed individual in a brokerage who is responsible for the supervision of the brokerage’s licensees and who must be actively engaged in the management of the brokerage to ensure compliance with relevant statutes, regulations, and bylaws.

Question 7

TRUE OR FALSE? Improper conduct encompasses both professional misconduct and conduct unbecoming a licensee.

Answer 7

TRUE

Question 8

Which regulatory agency is responsible for making the Real Estate Services Rules and appointing the Superintendent of Real Estate?

Answer 8

The BC Financial Services Authority

Question 9

What is a listing contract?

Answer 9

A listing contract is a written service agreement where the brokerage contracts to provide trading services to an owner of real estate in relation to the offering of the real estate for sale.

Question 10

As soon as a developer becomes aware of the fact that a _________ ________ does not comply with the Real Estate Development Marketing Act (“REDMA”) or the REDMA Regulation, or contains a misrepresentation, the developer must file and deliver a new or amended one.

Answer 10

As soon as a developer becomes aware of the fact that a disclosure statement does not comply with the Real Estate Development Marketing Act (“REDMA”) or the REDMA Regulation, or contains a misrepresentation, the developer must file and deliver a new or amended one.

Question 11

What is a development unit?

Answer 11

In the context of the Real Estate Development Marketing Act, a development unit is a subdivision lot, bare land strata lot, strata lot, cooperative interest, time share interest, shared interest in land, or a leasehold interest (provided they are located in a development property).

Question 12

_____ is a relationship in which one person (the ____) is authorized by another person (the ____) to act on his or her behalf in dealing with third parties.

Answer 12

Agency is a relationship in which one person (the Agent) is authorized by another person (the principal) to act on his or her behalf in dealing with third parties.

Question 13

The Real Estate Errors and Omissions Insurance Corporation receives the interest payable on all brokerage trust accounts held in savings institutions except separate trust accounts maintained for specific clients.
(1) True
(2) False

Answer 13

(2) False.

It is the Real Estate Foundation, not the Real Estate Errors and Omissions Insurance Corporation, that receives the interest payable on all brokerage trust accounts held in savings institutions except separate trust accounts maintained for specific clients.

Question 14

The British Columbia Financial Services Authority and a licensee can agree to a ____ ____, forgoing the need for a full discipline hearing.

Answer 14

consent order

Question 15

TRUE OR FALSE? Administrative penalties imposed by the Superintendent of Real Estate are typically more onerous than those set out in the Real Estate Services Act.

Answer 15

FALSE.

Administrative penalties are typically less onerous than those set out in the Real Estate Services Act.

Question 16

Exemptions from licensing under the Real Estate Services Act are located in the Act itself, the Regulations and the Real Estate Services Rules.
(1) True
(2) False

Answer 16

(1) True

Question 17

Conduct that is contrary to the best interests of the public, undermines public confidence in the real estate industry, or brings the real estate industry into disrepute is known as:

Answer 17

conduct unbecoming a licensee.

Question 18

What is the Real Estate Errors and Omissions Insurance Corporation?

Answer 18

The Real Estate Errors and Omissions Insurance Corporation is a statutorily created corporation that provides an affordable method of protecting licensees from financial loss due to errors and omissions.

Question 19

A _______ _________ is held in a bank, trust company, or credit union in which a third party (the _______) holds all money received for or on behalf of a client (the ________).

Answer 19

A trust account is held in a bank, trust company, or credit union in which a third party (the trustee) holds all money received for or on behalf of a client (the beneficiary).

Question 20

What is an associate broker?

Answer 20

An associate broker is a licensee who meets the educational and experience requirements to be a managing broker, but who is providing real estate services under the supervision of a managing broker.

Question 21

What is a disclosure statement?

Answer 21

A disclosure statement is a document, prepared by the developer of a development property in accordance with the Real Estate Development Marketing Act, to ensure that investors or purchasers receive adequate information upon which to base a purchase of a development unit in British Columbia.

Question 22

What purpose does the Real Estate Special Compensation Fund serve?

Answer 22

The Real Estate Special Compensation Fund provides compensation to persons in relation to a real estate transaction for funds that were misappropriated, or intentionally not paid or accounted for by licensees, officers or directors, employees, or independent contractors of a brokerage.

Question 23

_______ _______ is defined as activities related to the purchase and sale of real estate, including transactions for the leasing of real estate and assignments of contracts for purchase, sale, and lease of real estate.

Answer 23

Trading services

Question 24

What is a brokerage?

Answer 24

A brokerage is a licensee (often corporate) on behalf of which other licensees must provide real estate services.

Question 25

Which act governs the sale of real estate in British Columbia?

Answer 25

The Real Estate Services Act (RESA)