Introduction to Real Estate Flashcards
What is Real Estate
Physical land and the structures attached to it.
The land includes the waters and the minerals below it, the airspace above.
Structure includes any building or improvements.
What are chattels?
Items not securely affixed to the land or buildings.
Furnishings
Appliances
Also referred to as private property
What is a fixture?
Items that cannot be easily removed from the property without causing damage to the property
Wells
Fences
What is Real Property
Consists of both physical objects and common law rights
What rights are associated with Real Property
- The right to possess
- The right to control
- The right to enjoy
- The right to exclude
- The right to dispose of
What is Fee Simple?
The Crown (government) own most land in Canada. The government allows people to purchase land titles (interest) interest in the land.
There are three types of land ownership. What are they?
Sole owner
Joint Tenancy
Tenancy-in-common
What is Sole ownership
The land or property is owned by one person or entity.
If the owner is married, dower rights may apply if the spouse’s name is not on the title
What is Join tenancy
Owner with two or more owners on the title.
If one of them passes away, the property remains in possession of the surviving joint tenant.
In Alberta joint tenancy must be specified, the default is tenant in common
What is tenancy in common
Two or more owners own proportional shares of the property. If one owner passes away, their share of the land goes to their estate, not to the other owners.
Tenants in common can sell their shares or transfer their shares to another party.
What is a life estate
The ownership of the property exists for the duration of the life of a person and will then revert to another person.
If the life tenant sells the property, the purchaser would be forced to leave upon the life tenant’s death.
What document in Alberta shows legal ownership to a property or asset?
the title
What is “interest in land”?
A right of ownership in land or in an encumbrance against it, such as a mortgage
What is an encumbrance?
A claim against the property
Mortgage
easement
Each encumbrance has a registration number which will appear of the certificate of title
Easement
Easments gives a person or company other than the property owner the right to access a portion of the land. Easements stay on the title regardless of a change in ownership.
Encroachments
Where an item on a property encroaches or is built on or over an adjoining property.
If a homeowner build a fence that does not stay within their property line, this maybe an unintentional encroachment.
An encroachment agreement can registered. The agreement sets the terms which will allow the encroachment to remain.
Restrictive Covenants
Places restrictions on what can and can not be done with a property. Can be related to architecture, land use etc.
Can leases in excess of three years be registered against a title?
Yes
Lien
When a party has a financial interest in a property.
E.g. a person owning taxes
Caveat
A notice that someone has a interest in the propery.
- Only a notice, just because a caveat exists doesn’t mean it’s valid.
e.g. condominium fees
Which interests have priority over mortgages
Property taxes & condo fees
Who creates and amends the rules of The Real Estate Act
The various industry councils
When is a real estate license required in Alberta
If you are acting on someone else’s behalf, or if you’re being compensated.
How does the Real Estate Act define residential real estate in Alberta
real estate used for residential purposes, or intended to be used for residential purposes, comprising of or to be comprised of not more than four residential premises
How does the Real Estate Act define commercial real estate
real estate used or intended to be used to generate income and includes real estate used for retail, office, industrial, investment, institutional purposes and residential real estate comprising of more than four residential premises
What are the three groups of commercial real estate?
Industry
Business
Investment
Is a brokerage a company or a person?
Person
Can a brokerage pay a unlicensed person?
If they completed a service for which no licensing is required, yes.
If they completed a service for which licensing is required, no.
For how many years must a brokerage keep records pertaining to a real estate trade?
3 years
What is the purpose of Alberta Real Estate Foundation (AREF)?
The education of professions working in real estate and public regarding real estate
Law reform and research for the real estate industry
Other projects to improve the real estate industry
What is the Real Estate Assurance Fund (REAF)?
A fund that compensates consumers who suffer a financial loss resulting from fraud, or breach of trust. Consumers can claim a maximum of $35,000 per application.
Who is insured by Real Estate Insurance Exchange (REIX)
Real estate agents. REIX provides errors and omissions insurance for real estate professionals.
It is a mandatory program for licensees in Alberta & Saskatchewan.
What act governs real estate professionals in Alberta?
The Real Estate Act
Associate broker
Someone licensed as a broker, but not authorized to operate a brokerage
What must the registrar be notified of immediately?
Name changes
Brokerage changes
Disciplinary matters
Judgement relating to the provisions of goods and services to the public
Real property bundle of rights
The right to dispose of
The right to enjoy
The right to possess
The right to control
Joint tenancy and tenancy in common
Joint tenancy is best for married couples
tenancy in common is best for individuals residing together, who want their own ownership stake
Sole ownership
Best used if you are paid for the entire purchase yourself
Governing body responsible for registering land ownership rights in Alberta?
Service Alberta
What is a caveat?
A notice or warning that someone is declaring they have an interest in a specific property
Define a housing bubble
When the price of housing rises rapidly
What are the four components of the Real Estate Act?
The act
The Bylaws
The rules
The regulations
How does RECA protect the public
Licensing practitioners
Setting standards of competency
Providing mechanisms to discipline members who fail to meet standards
RECA leadership titles
Board of Directors
Executive Director
Registrar
Industry Councils
A hearing panel finds a licensee deserving of sanction. What are the possible penalties?
A letter of reprimand
Fines of up to $25,000
Suspensions or cancellation of license
If a unlicensed individual commits an error which harms a client, does that client have recourse under the Real Estate Act?
No
Do you need a license to be compensated for completing a real estate transaction?
Yes
Items required for brokerage to operate according to RECA
A licensed broker
A registered business office
A trust account
What is the REALTOR code
A code of conduct set up by the National
What does the Real Estate Assurance Fund do
Provides up $35,000 of compensation in a single claim for consumers that have suffered a loss as a result of fraud
What is Real Estate Insurance Exchange (REIX)
A mandatory program for all licensees in Alberta & Saskatchewan
Provides Errors & omissions insurance for licensed industry professionals
Is a brokerage a person
Yes
