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mock 10 Flashcards

(100 cards)

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1
Q

Which of the following statements made during a recent discussion about ownership is TRUE?

A. A corporation is subject to income tax, unlike a partnership.

B. Only shareholders are entitled to manage a corporation in accordance with the Consumer Protection Act.

C. A corporation whose shares are traded on a stock exchange is referred to as a private company.

D. Individuals who acquire shares in a company do not own the assets of the company.

  1. Only statements A and D are true
  2. Only statements A, B and C are true
  3. Only statements B and D are true.
  4. A, B, C and D are true.
A
  1. Only statements A and D are true
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2
Q

You are trying to calculate the market value of an income-producing property. In order to determine the market value, however, you must find the yield of several comparable properties and determine a market capitalization rate. The following information is for the recent sale of a similar income-producing property:

Selling Price $864,000

Gross Potential Revenue $100,000 per annum

Operating Expenses $22,750 per annum

Market Vacancy Rate 4%

What is the yield on the sale of the comparable property?

  1. 8.11722%
  2. 8.47801%
  3. 9.98964%
  4. 8.94097%
A
  1. 8.47801%
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3
Q

A buyer and seller have entered into a binding contract of purchase and sale for the seller’s luxury cottage. The cottage is situated on an extremely private island, where other properties are rarely listed for sale. Shortly before the completion date, the seller, having just received a much higher offer from a third party for the cottage, informs the buyer that she will not complete the transaction. The buyer learns that the seller intends on entering into a contract with the third party to sell the cottage at that higher price. The buyer, who has spent two years searching for the perfect cottage, is desperate to buy the cottage. He wants to prevent the sale to the third party. What can the buyer do?

A. The buyer can initiate an action in court for an order of specific performance.

B. The buyer can initiate a complaint with the Real Estate Council of British Columbia, which can order that the second sale not proceed.

C. The buyer can initiate an action in court for an order that the contract with the third party is frustrated.

D. The buyer can make an application to court for injunction, preventing the seller from entering into a contract with the third party.

  1. Only A and B
  2. Only A and D
  3. Only C and D
  4. Only B and C
A
  1. Only A and D
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4
Q

A borrower has arranged a loan of $285,000 at an interest rate of 5% per annum, compounded semi-annually with payments set at $2,157 per month. What is the period necessary to amortize the loan?

  1. Exactly 191. 2808 74401 years
  2. Exactly 240 months
  3. Approximately 13 years
  4. Approximately 16 years
A
  1. Approximately 16 years
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5
Q

A buyer enters into a purchase and sale agreement for a sellers property subject to a condition precedent. Prior to the expiry, the buyer waves the condition that was made exclusively for the buyers benefit. The seller refuses to acknowledge the waiver of a condition precedent. In law, the agreement for purchase and sale is:

  1. Binding
  2. One which is not binding on other party
  3. Voidable at the option of the buyer
  4. Voidable at the option of the seller
A
  1. Binding
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6
Q

An appeal on a point of law regarding a real property assessment value can be made from the Property Assessment Appeal Board directly to the:

  1. Property Assessment Review Panel
  2. B.C. Supreme Court
  3. B.C. Court of Appeal
  4. Supreme Court of Canada
A
  1. B.C. Supreme Court
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7
Q

One of the reasons that the Commercial Act appears to be more favorable to landlords than the Residential Tenancy Act is because under the former commercial landlords, unlike residential landlords,:

  1. May only collect a security deposits that is equal to or less than-one-half of one month’s rent.
  2. May not exercise the common law remedy of distress.
  3. Do not have to mitigate damages when a tenant abandons a property.
  4. May interfere with a tenant’s reasonable quiet enjoyment of a property
A
  1. Do not have to mitigate damages when a tenant abandons a property.
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8
Q

The immobility of real property means that land is subject to external influences from neighboring properties known as:

  1. externalities
  2. latent influencing factors
  3. immobilities
  4. extrinsic factors
A
  1. externalities
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9
Q

You are talking to your friend about green construction and she seems to be confused about third party certifications. In order to help, you explain to her that when someone says LEED, they are referring to:

  1. The Lender for Environmental Education Designations third-party certification program.
  2. The Leadership in Energetic Efficiency Design third-party certification program.
  3. The Leader in Environmental and Ergonomic Design third-party certification program.
  4. The Leadership in Energy and Environmental Design third-party certification program.
A
  1. The Leadership in Energy and Environmental Design third-party certification program.
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10
Q

Consider the following interest in land:

Which of the above interests and land require a dominant and servant tenement?

A. Life States

B. Easements

C. Freehold estates

D. Profits a prendre

  1. B only
  2. A and C only
  3. B, C and D only
  4. All of the above
A
  1. B only
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11
Q

Which of the following is a remedy available for private nuisance?

  1. Frustration
  2. Rescission
  3. Quantum meruit
  4. Injunction
A
  1. Injunction
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12
Q

An offer of $350,000 is accepted, comprised of a cash down payment of $75,000 and a vendor supplied mortgage loan of $275,000 at 5% per annum, compounded semi-annually. The loan has an amortization period of 25 years, a term of 3 years and calls for monthly payments rounded up to the next higher dollar. Market rates of interest for equivalent mortgages are currently 7.5 % per annum, compounded semiannually. The market value of the offer is:

  1. $330,090.87
  2. $334,493.08
  3. $331, 690.44
  4. $332,554.99
A
  1. $332,554.99
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13
Q

Eric and Mandy own a unit in Poppyseed place, a beautiful strata development that sits on the waterfront of a lake in northern British Columbia. They bought the unit five years ago as joint tenants and have rented it out to Ms. Johnson, who continues to occupy the unit. Mandy has recently passed away , and her will gifted her interest in the unit to her son Melvin. Melvin has now contacted Eric and is demanding that he be paid one half of the rent paid by Ms. Johnson. Which of the following statements is false?

A. Upon Mandy’s death, the entire interest remains with the surviving joint tenant, Eric.

B. By gifting her interest in the unit to Melvin, Mandy severed the joint tenancy.

C. Melvin and Eric now own the unit as tenants in common.

D. Melvin and Eric now own the unit as joint tenants.

  1. Only A is false
  2. Only D is false
  3. Only A and D are false.
  4. Only B, C and D are false.
A
  1. Only B, C and D are false
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14
Q

Which of the following statements comparing stratas and cooperatives is FALSE?

  1. Unlike strata ownership, cooperative ownership does not bestow an individual fee simple title to the cooperative’s owner’s unit.
  2. The requirement for a disclosure statement may apply to both strata and cooperatives.
  3. Cooperatives are generally easier to sell than strata
  4. Where an existing building is being converted to either strata or a non-profit cooperative, the existing tenants are covered by the protections afforded by the B.C. Residential Tenancy Act.
A
  1. Cooperatives are generally easier to sell than strata
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15
Q

When will BC Assessment mail assessment notices to property owners?

  1. Sometime in July
  2. The end of October
  3. The end of December
  4. Sometime in March
A
  1. The end of December
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16
Q

To qualify for a managing broker’s license in B.C., a person must meet which of the following requirements?

  1. Have five year’s license experience in British Columbia
  2. Be of good reputation
  3. Submit personal financial statements
  4. All of the above are requirements for a managing broker’s license.
A
  1. Be of good reputation
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17
Q

Elvis is purchasing Jerry’s beach house in Tofino, BC. Elvis is having a difficult time getting enough financing for the deal; so he decides to give Jerry his boat, valued at $21,000. Furthermore, he will be assuming Jerry’s existing mortgage on the property. Elvis is able to obtain the balance of the funds needed by granting a second mortgage to Crabapple Credit Union. Elvis has just delivered the deposit of $30,000 directly to Jerry. Which of the following items would appear on Jerry’s statement of adjustments?

  1. Purchase price, property transfer tax, cash proceeds of sale.
  2. Real estate licensee’s commission, sale price, conveyancing fees
  3. Deposit, assumption of first mortgage, real estate licensee’s commission
  4. Boat trade, deposit, property transfer tax
A
  1. Deposit, assumption of first mortgage, real estate licensee’s commission
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18
Q

Which of the following statements regarding a generally accepted accounting principles are TRUE?

A. The materiality principle holds that changes to accounting principles should only be made when the change results in providing more relevant and useful information to the user of the financial statements.

B. The consistency principle is closely aligned to the cost principle because the best way to ensure your objectivity in accounting transactions is to record the amount of consideration given up at the date of the transaction.

C. To conform with the cost principle, it is not appropriate to record the asset at what might be considered its fair market value; the asset should be recorded at the amount that the enterprise paid for it.

D. The matching principle requires the accrual basis of accounting; that is expenses are always recorded when incurred which is not necessary when they are paid.

  1. Only statements A and D are true
  2. Only statements C and D are true
  3. Only statements A and B are true
  4. Only statements B and C are true
A
  1. Only statements C and D are true
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19
Q

The anchoring effect is best described as:

  1. A sociological theory that predicts that the longer someone occupies a property, the higher the price he or she will seek upon deciding to sell it.
  2. A psychological phenomenon whereby the first number quoted in a negotiation causes the rest of the negotiation to be based on that number.
  3. A market force that causes the median price of a good to fall when there is a declining market for that good.
  4. An economic factor that decreases demand for real estate services due to an increase in interest rates.
A
  1. A psychological phenomenon whereby the first number quoted in a negotiation causes the rest of the negotiation to be based on that number.
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20
Q

Mark, an experienced trading services representative, showed a house in Lion’s Bay to John, a prospective purchaser. John asked Mark whether the house was infested with termites. Mark told John that the vendor, George, had told him that there was no insect infestation in the house. In fact, the vendor had lied to Mark because the vendor knew there was a termite infestation. John bought the house and discovered the infestation. On which of the following grounds might the vendor, George, be liable to John in a lawsuit?

  1. Breach of warranty of authority
  2. Deceit
  3. Negligent misrepresentation
  4. Breach of a condition precedent in the contract of purchase and sale.
A
  1. Deceit
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21
Q

Which of the following statements regarding the stress test borrower qualification rule for uninsured mortgages is FALSE?

  1. The mortgage qualifying rate is based on the greater of the Bank of Canada’s 5-year benchmark rate and 2% above the mortgage’s negotiated contract rate.
  2. The Financial Institutions Commission of BC established the stress test requirements for all new mortgages from federally chartered institutions.
  3. The stress test mortgage qualifying rate is also known as the benchmark interest rate.
  4. The stress test qualification rules only apply to mortgages from federally chartered institutions.
A
  1. The Financial Institutions Commission of BC established the stress test requirements for all new mortgages from federally chartered institutions.
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22
Q

Which of the following statements regarding the Multiple Listing Service (MLS) is TRUE

  1. The MLS website focuses on industry issues, trends and financing
  2. When a property is listed for sale, the MLS website is the only place that listing information can be obtained
  3. The MLS website allows trading services representatives to generate the most common forms and contracts in the real estate market
  4. Local real estate boards manage the listing information for properties listed on the MLS in their geographic area; however the accuracy of the information is the responsibility of the licensee
A
  1. Local real estate boards manage the listing information for properties listed on the MLS in their geographic area; however the accuracy of the information is the responsibility of the licensee
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23
Q

Your client has just purchased a business for $200,000 and made a cash down payment for 20% of the purchase price. The rest of the purchase was financed with a loan which calls for monthly payments of $1,400 over a 20 year amortization period and term. What is effective annual interest rate is your client paying on the loan?

  1. 8.613182%
  2. 5.713475%
  3. 7.115529%
  4. 8.961474%
A
  1. 8.961474%
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24
Q

A company has just bought a machine for $12,500. It is expected that the machine can be sold for $4,000 ten years from now. The current market value of the machine is $15,000. Using the straight-line method what is the annual depreciation expense?

  1. $1,100
  2. $1,250
  3. $1,650
  4. $850
A
  1. $850
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25
Which British Columbia statute regulate survey private sector organizations collect, keep secure, and disclose personal information? 1. Private Information and Disclosure Act 2. Private Sector Secure Protection Act 3. Personal Privacy Collection Act 4. Personal Information Protection Act
4. Personal Information Protection Ac
26
Which of the following statements regarding property appraisal is FALSE? 1. The courts provide some guidelines as to an appraiser’s legal responsibilities, which are outlined in the law of contract and the law of tort. 2. A licensed real estate representative can give an appraisal of real property. 3. A large over-valuation of property by an appraiser, by itself, always establishes liability on the part of the appraiser. 4. The courts have recognized that a reasonable margin of error exists when calculating damages resulting from a negligent appraisal.
3. A large over-valuation of property by an appraiser, by itself, always establishes liability on the part of the appraiser.
27
Which of the following statements is FALSE with respect to trespass? 1. A trespasser’s actions must be intentional. 2. A trespasser’s actions cannot be an indirect result of another act or occurrence. 3. A trespasser’s actions do not have to result in physical damage. 4. A trespasser’s actions must occur repeatedly.
4. A trespasser’s actions must occur repeatedly.
28
Which of the following are among the duties and powers of the Real Estate Council? 1. Establishing a fund for the use of the Real Estate Foundation 2. Lobbying for real estate law reform on behalf of the real estate industry 3. Advancing the knowledge, skill and competency of licensees 4. Protecting licensees from financial loss due to errors and omissions
3. Advancing the knowledge, skill and competency of licensees
29
Who owns the common property of a strata corporation? 1. Each strata lot owner owns a proportionate share of the common property based on his or her unit entitlement 2. The strata council, whose responsibility is to manage the common property in the best interest of the strata lot owners 3. Each strata lot owner owns an equal share of the common property 4. The strata manager, as a trustee for the individual strata lot owners
1. Each strata lot owner owns a proportionate share of the common property based on his or her unit entitlement
30
An investor has decided to establish a bank account in order to accumulate sufficient capital at the end of 5 years to purchase a vacant lot. If the occupant pays interest at 6% per annum, compounded annually and the investor makes a deposit of $15,000 at the end of each year how much capital will she have accumulated at the end of 5 years? 1. $104,629.78 2. $84,556.39 3. $63,185.46 4. $75,733.70
2. $84,556.39
31
Which of the following are general guidelines the Real Estate Council of British Columbia (RECBC) follows with respect to teams and team names? A. Unlicensed team members must be identified as unlicensed in team advertising in which they appear. B. Licensed team members must advise the council, in writing, when any team member leaves the team. C. No team name will be approved that is identical to an existing approved team name. D. A team must consist of more than one person (licensed or unlicensed) 1. Only statements A and C 2. Only statements A, B and D 3. Only statements B, C and D 4. All of the above
4. All of the above
32
A property is located in an area that is famous for its banyan trees. The fact that underground tree roots from the banyan trees have begun to breach the foundation of the property in question is a situation known as: 1. A patent defect 2. An encumbrance 3. A latent defect 4. A unilateral mistake
3.A latent defect
33
With regard to a licensee purchasing property for themselves, which of the following statements is FALSE? 1. The REALTOR Code and the Real Estate Services Act require a member licensee to provide written notice to the seller when personally buying a seller’s property. 2. A key principle behind the imposition of disclosure requirements in relation to a licensee acquiring real estate for themselves is to ensure that the licensee does not take advantage of the seller. 3. If a licensee does not comply with the disclosure requirements in relation to his or her acquisition of property, the seller can choose to not complete the sale. 4. Disclosure can be made within a service agreement or any other agreement that gives effect to the trader in real estate.
4. Disclosure can be made within a service agreement or any other agreement that gives effect to the trader in real estate.
34
Fred is the registered owner of Blackacre, a property located just outside Kelowna, British Columbia. Todd forges and registered a transfer of Blackacre to himself. Todd then borrows $150,000 from Royalty Trust Co. The loan is secured against Blackacre by way of a mortgage. Which one of the following statements is TRUE? 1. Royalty is secure in relying on Todd’s title 2. Fred can recover Blackacre but the title to the property will remain encumbered by the Royalty Trust Co mortgage 3. Because of the forgery, Fred can recover Blackacre free of the Royalty Trust Co. Mortgage 4. Royalty Trust Co may recover its $150,000 from the assurance fund.
3. Because of the forgery, Fred can recover Blackacre free of the Royalty Trust Co. Mortgage
35
Which of the following is TRUE with respect to the contaminated sites registry (CSR) British Columbia? 1. The CSR is part of the land title registration system in BC 2. The CSR was established by the Land Title Act 3. It is more likely that a commercial property will be in the CSR than residential property 4. CSR searches must be done by visiting the the CSR office in Victoria, BC
3. It is more likely that a commercial property will be in the CSR than residential property
36
Which of the following acts would engage a category of law that is considered ‘public law’? 1. Breaching a warranty in a contract 2. Negligence 3. Evading taxes 4. Filing for divorce
3. Evading taxes
37
Which one of the following statements is FALSE regarding the Real Estate Council’s power to investigate a licensee? 1. The real estate Council may investigate a licensee if it is suspected that he or she has contravened any provision of the act, regulations or rules. 2. The real estate Council may conduct an investigation to determine whether the licensee has committed professional misconduct or conduct unbecoming a licensee. 3. The Real Estate Council must obtain permission from the court before beginning an investigation. 4. The Real Estate Council can conduct an investigation into a licensee's conduct whether or not it has received a complaint.
3. The Real Estate Council must obtain permission from the court before beginning an investigation.
38
Which of the following is a TRUE statement regarding the Code of Ethics of the Canadian Real Estate Association? 1. The Code stresses that a REALTOR’s highest duty is owed to his or her client regardless of the nature of the client’s instructions. 2. The Code is a document that each REALTOR may or may not choose to adopt in his or her practice. 3. The Code acts as an alternative to the Canadian Real Estate Association’s Standards of Business Practice. 4. The Code includes the Golden Rule – “Do unto others as you would have them do unto you.”
4. The Code includes the Golden Rule – “Do unto others as you would have them do unto you.”
39
Which of the following charges on title MOST likely indicates to licensee that a particular property is subject to foreclosure proceedings? 1. A mortgage 2. A lender’s lien 3. A restrictive covenant 4. A certificate of pending litigation
4. A certificate of pending litigation
40
Which of the following statements regarding mortgages is TRUE? 1. An acceleration clause allows the lender to accelerate the expiry of the term of the mortgage and demand repayment of the entire loan amount, provided that the borrower is given three month’s notice. 2. Upon the execution of the mortgage contract, the lender is required to advance the total amount of the mortgage immediately, regardless of the terms of the mortgage. 3. Under the Property Law Act, a lender cannot require the borrower to obtain the advance consent of the lender before making any alterations for improvements to the property. 4. The mortgage contract, in addition to the common law, provides the lender with a number of options and remedies to pursue when the borrower defaults on the mortgage. It is up to the lender to choose the remedy it feels is most advantages in the circumstances.
4. The mortgage contract, in addition to the common law, provides the lender with a number of options and remedies to pursue when the borrower defaults on the mortgage. It is up to the lender to choose the remedy it feels is most advantages in the circumstances.
41
Which of the following statements is/are TRUE? A. The three most common exterior door materials are rubber, metal and plastic B. Glass fibre batt is the most common type of wall insulation and is rated according to R-value C. When the opening portion of a window is hinged on the top and it opens outward, it is known as casement window D. Manufactured vinyl siding is popular because of its low cost and ability to maintain its finish 1. A and D only 2. B and C only 3. B and D only 4. A, B and D only
3. B and D only
42
Which of the following is a type of municipal government? 1. Towns 2. Communities 3. Improvement districts 4. Regional districts
1. Towns
43
Your client plans to pay $400,000 for a vacant lot which she feels will sell at the end of 4 years for $545,000. Assuming that these are the only cash flows for this investment, what yield expressed as a nominal rate with monthly compounding, will your client earn? 1. 11.660105% 2. 7.884475% 3. 7.758001% 4. 8.039889%
3. 7.758001%
44
A potential borrower with an annual income of $100,000 and net real property taxes of $5,000 per annum has been told by a mortgage lender that the largest loan available will be $390,551.90. What will be the maximum gross debt service ratio allowed by the lender given that the loan has annual payments and is to be written at 4% per annum, compounded annually and amortized over 25 years? 1. 28% 2. 30% 3. 31% 4. 32%
2. 30%
45
One key difference between the registration system for manufactured homes and the Torrens system is that: 1. Each system is dealt with separately under the Land Title Act. 2. The register must be satisfied that a transfer of ownership in a manufactured home is sufficient to give the purchaser a good safe holding and marketable title, whereas in land transfers, this is not necessary. 3. The manufactured home registration system has no title, only registered ownership. 4. Indefeasibility is a more important concept under the registration system that the Torrens system.
3. The manufactured home registration system has no title, only registered ownership.
46
Your client owns a small office building and has applied for a loan at the bank. The property has an annual net operating income of $117,000 and has a lending value of $500,000. The bank uses a 1.17 debt coverage ratio and will allow a maximum loan-to-value ratio of 70%. Mortgage rates are J1= 5% for fully amortized loans over a 4-year term with annual payments. What is the maximum 4 year loan your client will be entitled to from the bank, rounded to the next highest dollar? 1. $350,000 2. $322,9 3. $354,596 4. $414,877
1. $350,000
47
Jason, looking to sell his downtown apartment unit, enters into a multiple listing agreement with Pamela, a licensee at Sell-it Realty. Which one of the following statements is FALSE? 1. Jason is free to sign multiple listing agreements with a number of licensees, and the licensee that effects the sale will be entitled to the commission as stated in his or her multiple listing agreement 2. Other real estate licensees may assist Pamela in selling Jason’s house. 3. If a selling agent approaches Jason with a purchaser and he completes a contract of purchase and sale without Pamela’s assistance and knowledge, Jason will still be liable for a commission to Pamela. 4. A multiple listing agreement is different from the ordinary exclusive listing because the contract requires that the listing be distributed to all the members of the real estate board.
1. Jason is free to sign multiple listing agreements with a number of licensees, and the licensee that effects the sale will be entitled to the commission as stated in his or her multiple listing agreement
48
Your client bought a house 2 years ago, at which time he arranged a $210,000 mortgage. This loan was written at a nominal rate of 6.5 % per annum, compounded semi-annually, with ten-year term and amortization period, and monthly payments. Today your client has received an offer to buy his house for $50,000 cash plus assumption of his mortgage. If current mortgage rates are 8% per annum, compounded semi-annually for 8 year term loans, what is the market value of the offer? 1. $268,023.90 2. $218,023.90 3. $246,890.11 4. $218,812.85
4. $218,812.85
49
How much should an investor be willing to pay for a property that she expects to sell for $525,000 in six years if she desires a yield of J2 = 5%? 1. $ 391,763.08 2. $ 512,195.12 3. $ 390,366.84 4. $ 452,705.85
3. $ 390,366.84
50
As a borrower of mortgage funds, which of the following rates would you choose? A. 3.95% per annum, compounded monthly B. 4.25% per annum, compounded annually C. 4% per annum, compounded semi-annually 1. Rate A 2. Rate B 3. Rate C 4. Impossible to determine which rate is more favourable
1. Rate A
51
As defined by the promotional mix, which of the following represents face-to-face communication with a potential customer? 1. Personal selling 2. Public relations 3. . Sale promotion 4. Publicity
1. Personal selling
52
Which of the following items is NOT included in a form B Information Certificate? 1. Any court proceeding for arbitration in which the strata corporation is a party and any judgments or orders against the strata corporation. 2. The Schedule of Certificate of Title 3. Any amount by which the expenses of the strata corporation for the current fiscal year are expected to exceed the expenses budgeted for the fiscal year. 4. The monthly strata fees payable by the owner
2. The Schedule of Certificate of Title
53
The Local Government Act permits a council to enact certain bylaws relevant. Which of the following areas is NOT directly regulated by local government? 1. Zoning regulation 2. Public health 3. Subdivision regulation 4. Building regulation
2. Public health
54
Which of the following is TRUE about official community plans (“OCPs”)? 1. Another word for OCP is ‘zoning by law’ 2. The purpose behind OCP is to encourage the provincial government to prepare long-range plans dealing with future development of the province. 3. If a municipality wishes to rezone some of the lands to a use inconsistent with the OCP, it first must amend the OCP show that the proposed rezoning is consistent with the OCP. 4. A municipality must adopt any OCP for any land with
2. The purpose behind OCP is to encourage the provincial government to prepare long-range plans dealing with future development of the province
55
You have a partially completed appraisal report that you need to fill in. The subject property has 4 bedrooms and 5 bathrooms. The house next door is similar in all respects except for the number of bedrooms and bathrooms. It sold for $534,000 and had 3 bedrooms and 3 bathrooms. If the market value of a bedroom is $4,500 and the market value of a bathroom is $5,000, this comparable will have to be adjusted for bedrooms and bathrooms by: 1. +$4,500 and +$10,000 respectively 2. -$4,500 and $0 respectively 3. $0 and -$10,000 respectively 4. +$4,500 and -$5,000 respectively
1. +$4,500 and +$10,000 respectively
56
The following items are found in a house: A. New laminate flooring in the downstairs rooms and hallways. B. An ordinary fridge in the garage. C. Wood for the fireplace D. A rose bush in the front garden. Which of the items are chattels? 1. A and C only 2. B and C only 3. B and D only 4. C and D only
2. B and C only
57
You are assigned the task of appraising a small apartment building. Current construction costs are $100 per square foot, the total area of the building is 10,000 square feet, the land value is estimated to be $500,000, and the Gross Potential Rent from the building is estimated at $120,000. The building was built 4 years ago and is deemed to have depreciated 10% in this time. It has been determined that a reasonable capitalization rate is is 11%. Using the cost method of appraisal, estimate the market value of the building. 1. $1,000,000 2. $950,000 3. $1,400,000 4. $1,508,000
3. $1,400,000
58
Anna is a real estate licensee who is hosting an open house. Immediately prior to the open house, the sellers of the house told her that they are in the middle of repairing a front step, but need to have the open house immediately; therefore, the step will not be completely repaired in time for the open house. the sellers will not be present during the showing, and Anna only has access to the house for the duration of the open house. Anna did not put up a sign warning visitors of the step, and guest was injured on the step during the open house. Which of the following statements is TRUE. 1. Anna would not be liable for the breach of the Occupiers Liability Act as a broken step is not dangerous enough to require a warning to visitors. 2. Anna would not be liable for breach of the Occupiers Liability Act because she was not an occupier of the premises when the visitor was injured. 3. Anna may be liable for breach of the Occupiers Liability Act as she was an agent of the sellers and they empowered her to fulfill their duties under the act. 4. Anna would not be liable for breach of the Occupiers Liability Act because the visitors willingly assumed the risks of injury when entering the house for an open house
3. Anna may be liable for breach of the Occupiers Liability Act as she was an agent of the sellers and they empowered her to fulfill their duties under the act.
59
When mortgage payments on fully amortized loans are rounded up to the next higher $10: 1. The final payment necessary to repay the loan will be the same as the regular payments. 2. The number of payments required may decline in addition to reducing the size of the final payment. 3. The final payment necessary to repay the loan will be larger than the regular payments. 4. The number of payments required will always stay the same due to the loan term and the final payment will also be the same as the regular payments.
2. The number of payments required may decline in addition to reducing the size of the final payment
60
The term in the mortgage agreement that brings the maturity date of the loan forward if the borrower defaults, so that the outstanding balance is immediately due and payable, is known as the: 1. Acceleration clause 2. Omnibus clause 3. Indemnity clause 4. Portability clause
1. Acceleration clause
61
H gave J an exclusive listing to sell her condo with an expiry date of Aug 1st. J brought A, a prospective purchaser to see the condo. A expressed an interest in purchasing the property and went home to prepare an offer. H emailed A and asked her to wait until after Aug 1st to make her offer so that H could avoid paying J the agreed upon commission. A agreed and waited until Aug 4th to submit her offer. After completion, J heard about the transaction, telephoned H, and demanded her commission. Which of the following statements is TRUE? 1. If J can show that H and A got together and agreed to wait out the listing period in order to avoid payment of commission, she can successfully sue H for damages. 2. J is not entitled to commission after the listing contract has expired. 3. J may be given reasonable remuneration for her work based on the principle of Quantum meruit. 4. H’s conduct terminated the agency relationship and therefore J has no claim for commission.
1. If J can show that H and A got together and agreed to wait out the listing period in order to avoid payment of commission, she can successfully sue H for damages.
62
Given the following information, calculate the cash proceeds of sale to Victoria, the seller, from Peter, the buyer. Price: $200,000 Deposit to brokerage: $15,000 Financing: 1st mortgage of $92,000 to be assumed 2nd mortgage of $34,000 has been arranged Taxes: Unpaid and overdue in the amount of $1,095. A penalty is owing of $105. These will be paid by the conveyancer. Commission: 5% of sale price Conveyancing Fees: $1000 Adjustment, completion & possession dates: August 31st Note: Assume that it is NOT a leap year. 1. $97,166.00 2. $96,169.00 3. $97,169.00 4. $82,169.00
3. $97,169.00
63
An “Unrepresented party” is: 1. Not a client of any licensee in a particular real estate transaction 2. A client of a brokerage at large, without a designated agent representing him. 3. An individual in an agency relationship with a licensee. 4. An individual in a dual agency relationship with a licensee.
1. Not a client of any licensee in a particular real estate transaction
64
Which of the following statutes affect the real property taxation system in British Columbia? A. Income tax Act B. Assessment act C. School Act D. Seized property management act 1. B only 2. A and C only 3. B and C only 4. A, B and D only
3. B and C only
65
Section 52 of the Competition Act states that false or misleading advertising is a criminal offence. Which of the following statements are FALSE? A. Section 52 requires that a representation to the public be false or misleading in any respect. B. Section 52 covers only those representations made in writing, as oral presentations cannot be proven in a court of law. C. To determine whether a given representation is false or misleading, a court is required to assess the general impression conveyed by the representation as well as its literal meaning. D. The only penalty for those who breach Section 52 is fines, which can be several thousands of dollars. 1. Only C is false 2. Only A and B are false 3. Only A, B and D are false 4. All of the statements are false
3. Only A, B and D are false
66
Your client has been offered an investment opportunity that will pay her 40 quarterly payments of $1,700 and a lump sum of $12,000 at the end of 40 quarterly payments. If interest rates are 5% per annum, compounded monthly what is the maximum she should pay for the investment? 1. $60,490.04 2. $59,330.79 3. $73,325.14 4. $39,658.87
1. $60,490.04
67
The requirement in British Columbia that a real estate agent (i.e. one who provides real estate trading services) must possess a license is set out by: 1. The common law 2. Federal legislation 3. Provincial statute 4. The real estate council of British Columbia
3. Provincial statute
68
When preparing an appraisal using the income method, which of the following items is deducted from gross realized revenue to arrive at net operating income? 1. Vacancy and bad debt allowance 2. Depreciation and cost capital allowance 3. Income tax 4. Operation expenses (paid by landlord)
4. Operation expenses (paid by landlord)
69
An offer is released or expires when one or more of the following occurs: A. The offeror decides to revoke his or her oral offer and mails a written revocation of the offeree before acceptance. B. No time limit is specified in the offer but a reasonable time has passed without acceptance by the offeree. C. The offeror dies or becomes insane before the offeree accepts the offer. D. An offer is revoked by the offeror and the revocation is communicated to the offeree before acceptance. Which of the following is correct? 1. All of the above statements are true 2. Only A, B and C are true 3. only A and B are true 4. Only B, C and D are true
4. Only B, C and D are true
70
Electric baseboard heaters are a common example of: 1. Electrostatic heating 2. Convection heating 3. Distributive heating 4. Forced heating
2. Convection heating
71
The ‘term’ of a mortgage ALWAYS: 1. is equal to the amortization period 2. necessitates the payment of an outstanding balance payment 3. specifies the duration of the contractual relationship 4. lowers the amount of the monthly payment
3. specifies the duration of the contractual relationship
72
Which of the following is NOT a unity required to create a joint tenancy? 1. Title 2. Interest 3. Possession 4. Disposal
4. Disposal
73
At lunch one Sunday afternoon, Frank and Stefan orally agreed that Stefan will lease Frank’s ski cabin for 4 years. With respect to section 59 of the Law and Equity Act which states the general requirement that contracts dealing with real estate should be in writing, which one of the following statements is TRUE? 1. Section 59 of the law and equity act exempts leases with the term less than 5 years from the writing requirement 2. Section 59 of the law and equity act is inapplicable because it deals with transfers of real estate rather than the leasing of real estate 3. Since there is no written record of the lease, the lease is void. 4. If Frank wants to help Stefan move his belongings and attends Stefan’s house-warming party on the property, it is likely that the lease, despite not being in writing, will be enforceable against Frank, as Frank’s conduct is consistent with a contract being made.
4. If Frank wants to help Stefan move his belongings and attends Stefan’s house-warming party on the property, it is likely that the lease, despite not being in writing, will be enforceable against Frank, as Frank’s conduct is consistent with a contract being made.
74
h of the following details is not required in the disclosure form to be given to the seller of the apartment? 1. The legal description and street address of the apartment 2. Audrey’s best estimate of the true value of the property at the proposed completion date 3. The amount of renumeration that Audrey anticipates receiving in connection with the sale of the apartment 4. An indication that Audrey is licensed under the Real Estate Services act.
2. Audrey’s best estimate of the true value of the property at the proposed completion date
75
Which of the following statements are FALSE? A. The B.C. Supreme Court acts as a trial court only. B. An appeal from Small Claims Court is to the B.C. Court of appeal. C. The Supreme Court of Canada is the highest appellate court in Canada. D. The B.C. Supreme Court is the highest trial level court in this province. 1. Only A and B 2. Only C and D 3. Only A and C 4. Only B and D
1. Only A and B
76
When attempting to determine whether a particular agreement has created a license or a lease, the best method is to: 1. Check what classification the agreement was registered as in the Land Title Office. 2. Apply the test for a lease as set out in the Residential Tenancy Act. 3. Use the agreement, the surrounding circumstances and the purpose behind the agreement to determine the intention of the agreement. 4. Look at the formal title and headings of the agreement for either license-type or lease-type legal language.
3. Use the agreement, the surrounding circumstances and the purpose behind the agreement to determine the intention of the agreement.
77
Which of the following is an offence under the Competition Act? 1. Failure to disclose a conflict of interest 2. Charging and excessive rate of interest 3. Agreements in restraint of trade 4. Committing mortgage fraud
3. Agreements in restraint of trade
78
A builder negotiates an interest only loan with a lender. The face value of the loan is $200,000, the interest rate is 5.5 % per annum, compounded semi-annually, the term of the loan is 1 year, and the interest only payments are to be made monthly. What will be the size of the interest only payments? 1. $906.34 2. $916.67 3. $1,375.78 4. Unable to calculate with the information provided
1. $906.34
79
Among the following people, the person who would best fit the description of ‘special purchaser’ as used in appraisal, would be: 1. A professional hockey player who is interested in purchasing department building to invest part of his stable income. 2. A famous actor who is looking for an apartment in the heart of downtown Vancouver 3. A former prime minister of Canada who is interested in purchasing residential property in an upper middle class neighborhood in the vicinity of Vancouver. 4. A retail store owner who is looking to expand by purchasing the property next door.
4. A retail store owner who is looking to expand by purchasing the property next door.
80
Assume that a purchaser has properly received, read and acknowledged reading the disclosure statement relating to a development unit in B.C. that she wishes to purchase. She then enters into a purchase agreement for that development unit and no breaches of the Real Estate Development Marketing Act have occurred. When may she serve notice to rescind the purchase agreement? 1. Never, unless the disclosure statement contains a misrepresentation with respect to the development property and/or unit. 2. No later than 7 days from the date of the purchase agreement. 3. No later than 6 months from the date of the purchase agreement. 4. At any time prior to receiving title to the development unit.
2. No later than 7 days from the date of the purchase agreement.
81
In the comparative method of appraisal, it is most important that the subject building and the comparable buildings be: 1. Similar with respect to factors that have a major influence on buyers and sellers 2. Free from any mortgages on title 3. Of the same general architectural style 4. Constructed by either average or above average workmanship
1. Similar with respect to factors that have a major influence on buyers and sellers
82
With respect to section 5-10 of the Rules and the requirement to make a disclosure of representation in trading services, the Rules state that a licensee is exempt from making this disclosure if the licensee does not solicit or receive information from the consumer about their motivation, financial qualifications, or needs in respect of real estate, AND: 1. The licensee is only hosting an open house. 2. The licensee is offering trading services in the context of a commercial real estate transaction. 3. The licensee is only dealing with an unrepresented party. 4. The licensee will make the same disclosure in the contract of purchase and sale.
1. The licensee is only hosting an open house.
83
Julie is acting as the listing agent for a property in a larger city that is owned by her client, George. Julie also represents a client, Ahmed, who becomes interested in purchasing George’s property. Which of the following statements is TRUE regarding Julies’s responsibilities in this scenario? 1. Julie can continue to act for Ahmed in buying a property and provide with a referral to another licensee or brokerages to continue listing his property. Julie thereby avoids the potential conflict of interest and is not required to obtain a written agreement from either client. 2. Julie can continue to act for both Ahmed and George if she obtains a written agreement from both clients at the time that the potential conflict of interest arises. 3. Julie must cease providing trading services to either client in respect of this transaction in order to avoid the potential conflict of interest. 4. Julie can continue to represent one of either Ahmed or George if she obtains a written agreement to do so from both the clients.
4. Julie can continue to represent one of either Ahmed or George if she obtains a written agreement to do so from both the clients.
84
Which type of tenancy automatically renews itself on the last day of the term for a further term of the same duration? 1. A periodic tenancy 2. A joint tenancy 3. A tenancy at will 4. A fixed term tenancy
1. A periodic tenancy
85
You have come across a property that possesses latent value. What method of appraisal would be the most appropriate to appraise the subject property? 1. the cost method 2. the comparison method 3. the income method 4. the residual method
4. the residual method
86
In mortgage lending, the interest adjustment period is: 1. One period after the date on which the first payment is due on. 2. Any period of 12 consecutive months chosen by a business as its accounting period. 3. The period of time agreed to by both parties to a real estate transaction for the adjustment of property taxes, interest, rent, and other items. 4. The period of time between the date that funds are advanced and the beginning of the first payment period.
4. The period of time between the date that funds are advanced and the beginning of the first payment period.
87
Which one of the following will NOT be found on the balance sheet of a corporation? 1. Retained earnings to date 2. Names of the corporation’s shareholders 3. The original cost of the property owned by the corporation 4. Number of shares issued
2. Names of the corporation’s shareholders
88
Garry and Andrew who are the best friends, are drafting a contract to document the facts that Garry will purchase Andrew’s house. The house is worth approximately $100,000. Which of the amounts, items and services could Garry use as consideration to make the contract enforceable? A. $1 in American currency B. Garry’s vintage car, which Andrew has always wanted, worth $90,000 C. A case of beer Garry gave Andrew last week D. A promise from Garry to repair Andrew’s computer next week. 1. B only 2. A and B only 3. A, B and D only 4. All of the above.
3. A, B and D only
89
A mortgage was written for $60,000 at an interest rate of J2= 10%, an amortization period of 20 years and monthly payments. Calculate the balance owing at the end of five years, rounded to the nearest dollar. 1. $54,885 2. $53,753 3. $53,806 4. $56,372
2. $53,753
90
A mortgage loan with a face value of $475,000 is arranged through a mortgage broker. A commission of $7,250, appraisal fees of $425, as well as survey and legal fees totaling $600 will be deducted from the face value before the funds are advanced to the borrower. Calculate the cost of funds advanced to the borrower, expressed as an effective annual rate, if the loan is written at 5% per annum, compounded semi-annually, with monthly payments over a 25 year amortization period and a 5 year term. 1. 5.344991% 2. 5.368398% 3. 5.502478% 4. 6.954952%
3. 5.502478%
91
Which of the following items will NOT appear on the buyer’s statement of adjustments? 1. Cash proceeds of sale 2. Purchase price 3. Property transfer tax 4. Balance due to complete
1. Cash proceeds of sale
92
The strategic corporation of a large residential complex has instructed its strata manager to mail notice of a special general meeting (SGM) to all persons entitled to vote at strata meetings. In order to comply with the statutory regime governing required written notice of an SGM, the strata manager should mail the meeting notice a minimum of: 1. 14 days prior to the date of the meeting 2. 16 days prior to the date of the meeting 3. 20 days prior to the date of the meeting 4. 5 days prior to the date of the meeting
3. 20 days prior to the date of the meeting
93
Before providing trading services to consumer, a licensee must obtain: 1. The informed consent of that consumer. 2. The undivided loyalty of that consumer 3. A service agreement from that consumer 4. A retainer from that consumer
1. The informed consent of that consumer.
94
In using the cost method of appraisal, the MAJOR difficulty is experienced in calculating: 1. Incurable physical depreciation 2. Curable functional depreciation 3. Curable physical depreciation 4. Replacement cost of the building as new
1. Incurable physical depreciation
95
A landlord provides a tenant notice or termination under the following scenarios: A. A residential tenant causes damage to the landlord’s property by taking part in an illegal activity. B. A residential tenant fails to pay rent C. A residential landlord wants to convert the tenant’s premises into a suite for his elderly mother. Which of the scenario(s) require(s) the SHORTEST notice period? 1. Scenario A 2. Scenario B 3. Scenario C 4. Both A and B
2. Scenario B
96
Which of the following is NOT an example of an equitable mortgage? 1. Mortgage of the collateral advantage. 2. Deposit of a duplicate certificate of title. 3. Mortgage of the equity of redemption. 4. Agreement to execute a legal mortgage.
1. Mortgage of the collateral advantage.
97
Which of the following is NOT an appraisal approach to value? 1. The income approach 2. The redevelopment approach 3. The direct comparison approach 4. The cost approach
2. The redevelopment approach
98
An investor is willing to sell his house for $296,000. He demands 24 monthly payments, and payment of the outstanding balance in the amount of $275,000 with the 24th payment. He wishes to earn an effective annual rate of 10% on his money. What is the monthly payment required? 1. $3,157.76 2. $1,166.37 3. $3,212.42 4. $3,260.71
1. $3,157.76
99
Which of the following statements regarding the immobility and durability of land is FALSE? 1. The immobility of real estate as a commodity allows it to be moved to a better market. 2. The physical durability of real property means that it has value as an investment and a source of shelter. 3. When considering the durability of structures, it is important to distinguish between the physical life and the economic life of the structure 4. Immobility is responsible for the local nature of real property markets
1. The immobility of real estate as a commodity allows it to be moved to a better market.
100
Which of the following criteria are used by negotiation experts in determining the effectiveness of negotiations? 1. Efficiency, preservation of the relationship, a zero-sum game. 2. Distributive results, preservation of the relationship, minimal wasted resources. 3. False authority, efficiency, a zero-sum game. 4. Efficiency, satisfaction of both parties, minimal wasted resources
4. Efficiency, satisfaction of both parties, minimal wasted resources

Real Estate Licence (11 decks)

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