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Real Estate Licence > mock 3 > Flashcards

mock 3 Flashcards

1
Q

When a licensee purchases a property from the seller he or she must disclose that he or she is a realtor and file a disclosure statement. Which of the following statements are false?

  1. the purpose of filing a disclosure statement is to make sure that the licensee will not take advantage of the seller
  2. The code of Ethics, along with the Real Estate Services Act, and the Consumer Protection Act demands that the licensee files a disclosure statement
  3. Licensees should disclose all remuneration obtained in the transaction with the seller
  4. All of the above
A
  1. Licensees should disclose all remuneration obtained in the transaction with the seller
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2
Q

Which of the following statements about Fixtures and Chattels is FALSE?

  1. One aspect of the test to determine whether an item is a fixture or chattel is a proper affixation
  2. The courts have adopted a general two-part test to determine whether an item is a fixture or a chattel
  3. Items that are fixtures go with the land and will belong to the purchaser upon completion unless the contract of purchase and sale specifies otherwise.
  4. Where an object is affixed for the better use or enjoyment of the object, it is considered to be a fixture
A
  1. Where an object is affixed for the better use or enjoyment of the object, it is considered to be a fixture
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3
Q

Post, beam and plank style refers to:

  1. Two – storey structures with a low sloping roofs
  2. Floor to roof windows with necessary framing often placed between posts
  3. First floor always built on top of foundation walls
  4. Style used in ski resort condominium construction in the 1980s
A
  1. Floor to roof windows with necessary framing often placed between posts
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4
Q

If the interest rate is 5% compounded semiannually what is monthly periodic rate?

  1. 0.4218
  2. 4.9486
  3. 0.4123
  4. 0.4164
A
  1. 0.4123
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5
Q

The Health Act:

  1. Establishes public health departments under federal jurisdiction that are responsible for maintaining the public health.
  2. Is a statute through which the provincial government administers public garbage disposal in urban areas.
  3. Provides that a local public health department may determine whether or not a subdivision of lands, not served by a municipal sewer system, can be adequately served by a septic tank system.
  4. All of the above statements are true.
A
  1. Provides that a local public health department may determine whether or not a subdivision of lands, not served by a municipal sewer system, can be adequately served by a septic tank system.
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6
Q

Which of the following is NOT an element of the tort of negligent misrepresentation?

  1. a statement of fact or opinion given negligently.
  2. reasonable reliance on the statement by the person to whom it is given.
  3. a contractual relationship between the parties.
  4. no qualification by the speaker that he or she disclaims any liability for the accuracy of the Statement.
A
  1. a contractual relationship between the parties.
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7
Q

The Law and Equity Act contains a provision that is often referred to as “the requirement of writing.” Which one of the following accurately summarizes the “requirement of writing” contained in the Law and Equity Act?

  1. A contract respecting land can never be enforced against a party who has not signed it.
  2. None of the above three statements accurately summarizes the requirement of writing.
  3. A contract respecting land must be in writing or it is void.
  4. A contract for the sale of land must be contained in one written document.
A
  1. None of the above three statements accurately summarizes the requirement of writing.
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8
Q

A borrower who makes accelerated biweekly payments:

  1. Will make a smaller number of payments in a calendar year than a borrower who makes constant monthly payments (all other terms are equal)
  2. Will pay more interest over the life of the loan than a borrower who makes constant monthly payments (all other terms are equal)
  3. Pays one-twelfth of the annual payments every two weeks
  4. Pays one-half of the monthly payments every two weeks
A
  1. Pays one-half of the monthly payments every two weeks
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9
Q

“Replacement Cost” is the best defined as:

  1. The cost incurred when the building was erected
  2. The amount of funds set aside for periodic replacement of building components that wear out more rapidly than the building itself
  3. The cost of providing an exact replica of the subject property
  4. The cost of providing a building which would represent the modern equivalent of the subject property
A
  1. The cost of providing a building which would represent the modern equivalent of the subject property
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10
Q

A “Joist” is:

  1. a horizontal framing member used to support a floor
  2. the supporting structure over an interior opening
  3. the vertical framing member used to construct walls
  4. the structural member that supports the roof deck
A
  1. a horizontal framing member used to support a floo
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11
Q

John is a short-tempered condominium owner who enjoys spending quiet weekends at home. The occupant of the neighbouring condominium, Pim, is a guitar player in a rock band. Every weekend for the last month, Pim’s band has rehearsed in his backyard despite John’s repeated requests for them to stop. Finally, one weekend John became so enraged that he threw a book across the fence and hit Pim in the head. Which of the following is the first option that John should have explored instead of throwing the book?

  1. Arbitration
  2. Court action
  3. Appeal to the strata council for help
  4. Mandatory injunction
A
  1. Appeal to the strata council for help
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12
Q

One of more of the following statements describing the BC land registration system is FALSE.

A. Documents transferring a fee simple title must be registered to be effective and enforceable against subsequent bona fide purchasers of the same fee simple.
B. A charge registered against a fee simple title may be removed from title if it is a forged document.
C. The Assurance Fund will compensate every financial loss incurred as a result of BC’s land registration system regardless of the cause of the loss.
D. Unless the Land Title Act specifies the use of a particular form, any instrument sufficient to pass or create an estate or interest in land is registerable.

  1. Only A, B, and D are false.
  2. Only C and D are false.
  3. Only C is false.
  4. None of the above is false.
A
  1. Only C is false.
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13
Q

Consider the following statements regarding mortgage loans:

A. A short-term partially amortized mortgage permits readjustment of mortgage interest rates by the lender at maturity, allowing the lender to match the interest rates on its assets to the rates on its liabilities.
B. With a fully amortized loan, the amortization period is always longer than the term of the loan.
C. In a reverse annuity mortgage, the borrower makes a series of payments or advances to the lender over the term of the loan.
D. The amortization period must always be expressed in months because most loans have monthly payments.

Which of the above statements is/are TRUE?

  1. A only.
  2. B and D only.
  3. A, B, and C only.
  4. A, B, C, and D.
A
  1. A only.
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14
Q

Wattage in the Canadian electrical code system is:

  1. a measure of the rate of electrical flow
  2. a measure of electrical potential or pressure of current flow
  3. a measure of power or consumption
  4. none of the above
A
  1. a measure of power or consumption
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15
Q

Which one of the following statements regarding generally accepted accounting principles is FALSE?

  1. The consistency principle holds that once a business enterprise adopts one general accounting principle from a number of alternatives, that enterprise should follow that same principle in subsequent years.
  2. The matching principle states that expenses are always recorded when paid
  3. The cost principle holds that when a business acquires an asset, the amount paid is the appropriate amount to record in the books of the enterprise
  4. The objectivity principle states that all accounting information should be reported with objectivity and determined by verifiable data
A
  1. The matching principle states that expenses are always recorded when paid
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16
Q

Baseboard units are used in :

  1. Convective heat
  2. Radiant heat
  3. Forced warm air heat
  4. Fireplaces
A
  1. Convective heat
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17
Q

Mike bought a house two years ago, at which time he arranged a $110,000 mortgage. This loan was written at a nominal rate of 9.5%, compounded semi-annually, with a ten year term and amortization period, and monthly payments. Today Mike has received an offer from Andre to buy his house for $50,000 cash plus assumption of his mortgage. If current mortgage rates are 12% per annum, compounded semi-annually, for eight year term mortgages, what is the market value of Andre’s offer?

  1. $149,603.19
  2. $137,758.18
  3. $87,758.18
  4. $99,603.19
A
  1. $137,758.18
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18
Q

Which of the following scenarios represents a method for using a manufactured home itself as security for purchase price?

a) Mike transferred ownership of his manufactured home to Paul, who then gave a security agreement on the home in favor of Mike in exchange for part of the purchase price
b) Alex borrowed money from his sister-in-law in order to pay for his manufactured home. In exchange, Alex gave a security agreement on the home in favour of his sister-in-law
c) Ivan purchased a manufactured home from Joanne under the condition that he will make biweekly payments to her for the next 3 years, at which time Joanne will transfer legal ownership to him

  1. A & B only
  2. A&C only
  3. B & C only
  4. all the above
A
  1. all the above
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19
Q

Velveeta Bladderhack’s lender has informed her that she can qualify for a loan under the gross debt service ratio if she extends the amortization period from 10 to 15 years. Given that she does extend the amortization period to 15 years, which of the following are true? Assume the Interest rate, loan amount, and term are the same under both options.

A. The lender’s capital risk is increased.
B. Velveeta will pay off more principal in total over the duration of the loan.
C. Her monthly payments will decrease in size.
D. Her effective annual interest rate paid will not change.
E. Each monthly payment will contribute less towards paying off the principal.

A, C, D, and E are true.
A, B, C and E are true.
A, C, and E are true.
B and D are true.

A

A, C, D, and E are true.

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20
Q

The Competition Act prohibits false or misleading advertising. Which of the following statements
concerning this offence is FALSE?

  1. A person or company can be guilty under the Competition Act even though every part of their
    advertisement is literally true, when the general overall impression is misleading.
  2. For a misrepresentation to offend against the Competition Act, it must be false or misleading in a
    material respect.
  3. The standard applicable in determining whether a statement is misleading or not is whether a
    knowledgeable person would be misled.
  4. Where an accused can show that he or she had taken all reasonable care to determine the truth of
    the statement and that he or she honestly believed it to be true, the accused will avoid liability.
A
  1. The standard applicable in determining whether a statement is misleading or not is whether a
    knowledgeable person would be misled.
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21
Q

A term in a mortgage provides that if a mortgagor is in default on any payments on the property, the mortgagee may pay the amount owing and add the same amount to that year carrying interest at the same specified rate; this term is known as:

  1. A personal covenant
  2. The acceleration clause
  3. The omnibus clause
  4. The repayment clause
A
  1. The omnibus clause
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22
Q

Loan to Value Ratio is:

  1. Maximum Loan divided by Lending Value
  2. Minimum Loan multiplied by Gross Debt Service Ratio
  3. Maximum Loan divided by Debt Coverage Ratio
  4. Minimum Loan multiplied by Lending Value
A
  1. Maximum Loan divided by Lending Val
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23
Q

Under the Regulations to the Real Estate Services Act, certain categories of persons are exempted from the licensing requirements contained in the Act. Which of the following is NOT covered by an exemption?

  1. A full-time salaried employee of Mega Land Company selling houses in a 3,000 house tract developed by Mega Land Company.
  2. An individual providing a property inspection.
  3. A developer with the Hudson’s Bay Company selling a neighbour’s house for a flat fee.
  4. Accountants in relations to the purchase and sale of a business
A
  1. A developer with the Hudson’s Bay Company selling a neighbour’s house for a flat fee.
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24
Q

Gord is being sued for creating a private nuisance. He makes the following arguments:

A. The damage he has created is trifling and of little consequence.
B. The activity complained of was going on before the plaintiff moved there.
C. There is no other suitable place in which he can conduct the activity complained of.
D. The activity is authorized by statute and cannot be carried on without creating a nuisance.

Which one of the above is a valid argument in Gord’s defence to the lawsuit?

A, B, C, and D.
Only A and D.
Only B and D.
Only A and C.

A

Only A and D.

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25
Q

Which of the following statements regarding lending value are FALSE?

A. Lending value is always equal 98% of the purchase price.
B. Lending value is an estimate of the mortgage loan a purchaser will be able to obtain.
C. Lending value is a long term conservative estimate of the value of the interest in land pledged as security.
D. Lending value is equal to market value.

  1. Only statements A and C are false.
  2. Only statements A, B, and D are false.
  3. Only statements B,C, and D are false.
  4. None of the above statements is false.
A
  1. Only statements A, B, and D are false
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26
Q

If a licensee is buying or selling Real Estate property which of the following statements is TRUE with respect to disclosure?

  1. While written disclosure is not mandatory, it is encountering ……
  2. As long as the transaction is fair from the perspective of the Seller or Buyer, the disclosure is not necessary
  3. Despite strict compliance with the disclosure rules in the Real Estate Service Act, the law may still require further disclosure
  4. None of the above statements are true
A
  1. Despite strict compliance with the disclosure rules in the Real Estate Service Act, the law may still require further disclosure
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27
Q

An appraiser has estimated the market value of a single family dwelling to be $410,000. On the day of the appraisal, the house sold for $368,000. Given that there was sufficient evidence of recent sales, was the appraiser’s estimate of value reasonable?

  1. Yes, it was within the maximum error allowed for appraisers in the calculation of market value of a residence.
  2. No, the estimate exceeds the maximum allowable error for the appraisal of market value of a residence.
  3. Yes, because appraisers have no maximum allowable error when calculating market value of a residence.
  4. No, the appraiser’s estimate is a subjective “value to owner” and does not represent the market value.
A
  1. No, the estimate exceeds the maximum allowable error for the appraisal of market value of a residence.
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28
Q

Ann feels that her mortgage interest rate is harsh and unconscionable, she can apply to :

  1. Employment Standard Act
  2. Business Practices and Consumer protection Act (BPCPA)
  3. Interest Act
  4. Mortgage Broker Legislation
A
  1. Business Practices and Consumer protection Act (BPCPA)
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29
Q

On the first day of the year, the West Coast bottled water company has goods costing $417,000 in its inventory. During the year, it purchases $250,000 worth of goods to add to its inventory. West Coast’s Income Statement states that the Cost of Goods Sold for the year is $242,000. How much does West Coast have in its inventory at the end of the year?

  1. $15,000
  2. $167,000
  3. $425,000
  4. $242,000
A

.3. $425,000

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30
Q

You have been assigned the task of appraising the Oak Park community Center in Diggston, BC. The centre is located in the middle of Maple leaf estates, a townhouse subdivision on the outskirts of the town. The land on which the centre is built was purchased 8 years ago at a cost of $18,000; similar lots today sell for $28,000. The centre, a 4,000 sq. Ft. Structure, was originally built at a cost of $38 per sq. ft. ; replacement cost (new) today would be $57 per sq. ft. You estimate that an appropriate depreciation factor would be 30%. Also, you have determined that the community centre is the highest and best use for the site.

Using the cost method of appraisal, the correct estimate to the market value of the centre would be:

$187,600
$119,000
$177,000
$170,000

A

$187,600

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31
Q

Which of the following would NOT be found in an Energy Efficient home?

  1. Weather sealed and insulated double entrance doors.
  2. Single pane unglazed windows.
  3. Large windows on the south side of the house.
  4. Metal window frames which have a thermal break.
A
  1. Single pane unglazed windows.
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32
Q

When an order absolute is obtained by a petitioner who is in the position of a second mortgagee:

  1. The petitioner may sell the property after taking title to it and the petitioner does not have to account to the mortgagor for any profit made
  2. The petitioner will be entitled to recover the mortgage debt upon sale of the property, but must account to the borrower for any surplus amount.
  3. In the case of a shortfall between the sale proceeds and the mortgage debt, the petitioner can sue based the borrower’s personal covenant to pay
  4. In order to sell the property, the petitioner must obtain the approval of the court
A
  1. The petitioner may sell the property after taking title to it and the petitioner does not have to account to the mortgagor for any profit made
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33
Q

Which of the following are among the duties and powers of the Real Estate Council:

A. To supervise the educational qualifications of licensees
B. To lobby for real estate law reform on behalf of the real estate industry
C. To establish a fund for the use of the real estate foundation
D. To advance the knowledge, skill and competency of licensees

  1. Only B is among duties and powers of Real Estate Council
  2. Only A and D are among duties and powers of Real Estate Council
  3. Only A, C, and D are among duties and powers of Real Estate Council
  4. All of the above are among duties and powers of Real Estate Council
A
  1. Only A and D are among duties and powers of Real Estate Council
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34
Q

When one-half of the monthly payment is paid every two weeks which helps in paying down the principal faster and pay less interest, this is called:

  1. The accelerated bi-weekly payment
  2. Constant monthly payments
  3. Constant bi-weekly payments
  4. The accelerated monthly payments
A
  1. The accelerated bi-weekly payment
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35
Q

The stabilized annual net income for your property is $64,000. If you set the price of $775,000, what is the yield on the property?

  1. 12.109375%
  2. 8.25806452%
  3. 9.48148148%
  4. 10.546875%
A
  1. 8.25806452%
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36
Q

Who owns the common property of a strata corporation?

  1. The strata council, as a trustee for the individual strata lot owners.
  2. . The strata corporation, as a trustee for the individual strata lot owners.
  3. Each strata lot owner owns an equal share of the common property.
  4. Each individual strata lot owner owns a share of the common property of a strata corporation in the proportions set out in the Schedule of Unit Entitlement.
A
  1. Each individual strata lot owner owns a share of the common property of a strata corporation in the proportions set out in the Schedule of Unit Entitlement.
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37
Q

A vendor is willing to sell his house for $96,000. He demands 24 monthly payments, and payment of the outstanding balance in the amount of $75,000 with the 24th payment. He wishes to earn an effective annual rate of 15% on his money. What is the monthly payment required?

$1,955.72
$7,336.27
$1,008.85
$1,887.47

A

$1,887.47

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38
Q

You have recently purchased a mortgage contract that will provide you with quarterly payments of $1,700 over 4 years. The outstanding balance of the loan in the amount of $274,000 will be paid as a last payment. If you pay $250,000 for this mortgage contract, what is your yield expressed as a quarterly periodic rate?

  1. 1.4992863176%
  2. 4.59971452703%
  3. 1.22670405544%
  4. 4.90681622176%
A

3..1.22670405544%

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39
Q

Which of the following is NOT one of the requirements of a building scheme?

  1. The initial purchasers must receive their title from the same vendor, although the initial purchasers may then sell to others without affecting the building scheme
  2. The building scheme must be approved by each of the initial purchasers and then enforced against the titles of each of the lots.
  3. The vendor must have intended that the benefit of the restrictions should bind each individual lot
  4. The vendor must have laid out and sold the property subject to restrictions which apply equally to all the individual lots and which is consistent with some general scheme of development
A
  1. The building scheme must be approved by each of the initial purchasers and then enforced against the titles of each of the lots.
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40
Q

A term which makes the redemption date so distant as to result, in practical terms, in the mortgage not being redeemable will also be:

  1. enforceable, if the borrower has independent legal advice.
  2. void.
  3. enforceable in all cases.
  4. a collateral advantage
A
  1. void.
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41
Q

Dan Danard wishes to purchases a house from a vendor who is willing to provide partial financing. Dan is offering an $88,000 downpayment with a mortgage of $142,000 at 4% per annum, compounded semi-annually. The loan is to be fully amortized with level monthly payments over 25 years. What is the market value of this offer if the market rate for similar mortgage loans is 6% per annum, compounded semi-annually?

  1. $115,101.97
  2. $204,746.21
  3. $203,101.97
  4. $230,000.00
A
  1. $204,746.21
42
Q

In applying the cost method of appraisal to the valuation of a single family residence built in 1945, the value of improvements is determined by:

  1. The current costs of constructing an exact replica of the property being appraised.
  2. The construction costs for a builder of average efficiency measured in 1945 dollars.
  3. The actual construction costs, or if unavailable, historic construction cost data.
  4. The current costs of constructing a modern equivalent of the subject property.
A
  1. The current costs of constructing a modern equivalent of the subject property.
43
Q

Roberto makes an offer of $546,000 to purchase a house in Vancouver, subject to obtaining an acceptable first mortgage. A lender, who has appraised the property at $536,000, requires a 75% loan-to-value ratio and a 32% gross debt service ratio. Net taxes are $6,365 per annum and Roberto has a gross income of $130,000 per year.
What is the maximum amount this lender will advance if the rate is J2 = 5.75%, the amortization period is 25 years, and payments are to be made monthly?

  1. $469,783.37
  2. $554,500.00
  3. $409,500.00
  4. $402,000.00
A
  1. $402,000.00
44
Q

An agency can be terminated in one or more of the following ways:
A. By the death of one of the parties
B. By the legal doctrine of frustration
C. By a letter of termination by the principal
D. By insanity of the agent or the principal

Which of the following is TRUE:

A, B and D are true
D, C and A are true
A, B and C are true
All of the above

A

All of the above

45
Q

On June 1st, Matt offered to buy Jason’s property for $230,000 and Jason accepted. Since the Cottage was on a secluded island, neither party was aware that just two days prior, the property had been completely destroyed by flood. Jason has no insurance and is seeking to enforce the contract. Which of the following statements is TRUE?

  1. Matt and Jason are relieved of their future obligations under the contract by frustration
  2. The doctrine of mutual mistake allows Matt to rescind the contract.
  3. This is an example of common mistake and the contact is void
  4. A court will set aside the contract based on “non est factum” (it is not my deed) or unilateral mistake since Jason did not know the nature of the document he was signing and could not have known the cottage was no longer standing.
A
  1. This is an example of common mistake and the contact is void
46
Q

In establishing the actual value of a residential property for tax assessment purposes the assessor may consider
A. Land value
B. Economic obsolescence
C. Outstanding balance of the mortgage purposes
D. Present use

A and D
B and C
A, B, and D
A, B and C

A

A, B, and D

47
Q

Which of the following statements about trust accounts under the Real Estate Services Act is FALSE?

  1. A brokerage must have a trust account for each client.
  2. All client funds must be placed in a trust account as soon as they are received by the brokerage.
  3. Money paid by mistake into trust may be withdrawn from the trust account.
  4. Money paid for expenses incurred on behalf of a client and according to the client’s instructions may be withdrawn from the trust account.
A
  1. A brokerage must have a trust account for each client.
48
Q

Which one of the following situations is/are consistent with the existence of an ongoing joint tenancy under current BC law?

A. Brad and Naomi are co-owners of Windy Field. The document transferring the property to them does not expressly state how they hold the property or what interest each owns.
B. Susan, Scott, and Sarah are co-owners of Greensfields Farm. Susan and Scott each have a quarter share in the farm, while Sarah has a half share.
C. Jack was co-owner of Bluefields. When Jack died, the surviving co-owners of Bluefields automatically became its only co-owners.
D. Greg, a co-owner of Blackfields Farm together with Leah, executes a conveyance to himself and registers the conveyance in the land title office. To this day, Greg and Leah are co-owners.

A, B, and C.
B and D.
Only C.
C and D.

A

Only C.

49
Q

An investor invests $7,200 in a savings account which bears interest at rate of 20% per annum, compounded daily. What amount will be on hand at the end of 2 years?

  1. $10,368.00
  2. $10,705.79
  3. $10,541.42
  4. $10,739.96
A
  1. $10,739.96
50
Q

When an Order Absolute of Foreclosure is obtained by a petitioner who is in the position of second
mortgagee:

A. that mortgagee can no longer exercise its right to sue the borrower on his or her personal covenant.
B. the order forecloses the registered owner’s interest in the mortgaged land and permits the petitioner
to transfer title into his or her own name.
C. all other charges, liens, encumbrances and interests registered on the borrower’s title are foreclosed
or “wiped” off the title.
D. the petitioner may sell the property after taking title to it and does not have to account to the
borrower for any profit which might be realized in excess of the mortgage debt.

Which of the above statements is/are TRUE?

Only A and B are true.
Only A, C, and D are true.
Only A, B, and D are true.
All of the above statements are TRUE.

A

Only A, B, and D are true.

51
Q

In order to advertise to a wider audience, you have decided to create your own website. However, since you are embarking on website design for the 1st time, you made sure that you read general guidelines that you should follow:

Due to the global nature of internet advertising, adequate contact information of the employing brokerage should be included on the licensee’s website
B. Licensees can keep expired listings on their websites so that consumers have them for comparison purposes
C. Licensees must not give the impression that they are licensed in a province or state they are not
D. In order to increase contact with potential clients’ licenses can advertise other licensees’ listings directly on their websites without permission from the listing licensees
Only C
Only A and C
Only B and D
Only A and D

A

Only A and C

52
Q

Which type of mortgage has payments which will gradually increase over time:

  1. Reverse Annuity Mortgage
  2. Straight line principal reduction mortgage
  3. Graduated mortgage
  4. Variable Rate mortgage
A
  1. Graduated mortgage
53
Q

A caveat is:

  1. A warning issued by the court.
  2. A notice placed on the land title register at the request of a person who claims an interest in the land.
  3. A specific type of builder’s lien.
  4. Formal notice to anyone searching title that a court action has been commenced concerning the property.
A
  1. A notice placed on the land title register at the request of a person who claims an interest in the land
54
Q

The purpose of the Real Estate Development Marketing Act is to protect the public by requiring developers to:

  1. meet any preliminary requirements or approvals applicable to the type of property being marketed.
  2. assure the purchaser’s title upon purchase.
  3. prepare and file a disclosure statement in the form required.
  4. All of the above are purposes of the Real Estate Development Marketing Act.
A
  1. All of the above are purposes of the Real Estate Development Marketing Act.
55
Q

Jim and Janice have just received an inheritance of $320,000. Their plans are to purchase a house with a $270,000 down payment after travelling around the world for five years. They have found a place to invest their money at 12.5% per annum compounded monthly for a five year term. What is the maximum amount of their inheritance which they can use to purchase traveller’s cheques (which will be spent on their vacation) without sacrificing their $270,000 down payment?

  1. $144,988.54
  2. $102,443.22
  3. $175,011.46
  4. $320,000.00
A
  1. $175,011.46
56
Q

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

  1. Unlike condominiums ownership, cooperative ownership does not bestow an individual fee simple title to the cooperative owner’s unit
  2. The requirements for disclosure statements may apply to both condominiums and cooperatives
  3. Cooperatives are generally easier to sell than condominiums
  4. Where an existing building is being converted to either condominium or a non-profit cooperative, the existing tenants are covered by the protections afforded by the BC Residential Tenancy Act
A
  1. Cooperatives are generally easier to sell than condominiums
57
Q

For which of the following properties would you use the “cost method” to determine market value?

  1. A 3 story office tower located in outer suburb
  2. A newly-constructed temple of contemporary design
  3. A vacant lot which possesses latent value
  4. A 10 year old single family home which represents the property’s highest and best use
A
  1. A newly-constructed temple of contemporary design
58
Q

Whenever the amount advanced to a borrower is less that the face value of the mortgage , the loan is referred to as a:

  1. Bonused mortgage
  2. Vendor take back mortgage
  3. Assumed mortgage
  4. Graduated mortgage
A
  1. Bonused mortgage
59
Q

An appraiser has estimated the market value of a single family dwelling to be $410,000. On the day of the appraisal, the house sold for $370,000. Given that there was sufficient evidence of recent sales, was the appraiser’s estimate of value reasonable?

  1. No, the estimate exceeds the maximum allowable error for the appraisal of market value of a residence.
  2. No, the appraiser’s estimate is a subjective “value to owner” and does not represent the market value.
  3. Yes, because appraisers have no maximum allowable error when calculating market value of a residence.
  4. Yes, it was within the maximum error allowed for appraisers in the calculation of market value of a residence.
A
  1. Yes, it was within the maximum error allowed for appraisers in the calculation of market value of a residence.
60
Q

Which of the following situations does NOT involve the breach of duty owed by a licensee to a client?

  1. Leigh, a trading services representative, discloses a client’s bargaining position to that client’s competitor. Leigh thought it would be okay to do so because the transaction took place five years before.
  2. Bob receives six similar offers to purchase the house of his client, the Simpsons. He decides not to waste the Simpson’s time, so he only presents them with the four best offers.
  3. Susan represents Navco Developments in its purchase of houses in Vancouver. Susan also represents Abco Inc., a competitor of Navco, in Abco’s acquisition of properties in the Cariboo.
  4. Ward is a real estate licensee in Prince Rupert who deals solely with residential properties. One of his present clients expresses an interest in purchasing a warehouse and office complex for a business to be opened in Vancouver. Ward offers to fly down to Vancouver, at the expense of the client, in order to locate and negotiate the purchase. The client accepts.
A
  1. Susan represents Navco Developments in its purchase of houses in Vancouver. Susan also represents Abco Inc., a competitor of Navco, in Abco’s acquisition of properties in the Cariboo.
61
Q

Which of the following are advertising contraventions for which a penalty may be imposed by the Real Estate Council of BC (RECBC):

A. Failure to have all advertising materials approved by the RECBC before using in advertising purposes
B. Failure to have a team name registered and approved by RECBC before using for advertising
C. Failure to display the name of a licensee’s brokerage on an advertisement in a permanent and easy readable way
D. Failure to display signage that real estate services are provided from a licensee’s personal office

  1. Only statement A
  2. Only statement B and C
  3. Only statement B, C and D
  4. All of the above
A
  1. Only statement B and C
62
Q

A petitioner has granted an order NISI of foreclosure and the respondent has 6 months as a redemption period. The borrower has failed to pay the amount due within the redemption period. Now, the petitioner may return to court and ask for:

  1. An Order Absolute of Foreclosure
  2. An Order granting a loan on the subject property
  3. Notation of the mortgage
  4. An assignment of the mortgage to the petitioner
A
  1. An Order Absolute of Foreclosure
63
Q

Vendor V offers to sell a property to a buyer A and gave a time limit 12 noon next day. At 11am (next day) buyer B gives an offer to buy and V accepts. At 11:30 am, A accepts the original offer. What is the result?

  1. V could have revoked his offer to A and avoided the problem
  2. Both A and B are entitled to contractual remedies against V
  3. V entered into a contract with both A and B
  4. All of the above three statements are true
A
  1. All of the above three statements are true
64
Q

A monthly payment is divided in half, and, instead of being paid once a month, is paid every two weeks. In this way, the borrower makes one extra monthly payment per year, thus paying down the principal faster and paying less interest. This is called:

  1. Accelerated biweekly payment
  2. Monthly payment
  3. Interest only payment
  4. Interest accruing payment
A
  1. Accelerated biweekly payment
65
Q

Which one of the following is inconsistent with generally accepted accounting principles?

  1. Expenses are recognized at the time they are incurred.
  2. Assets are revalued upwards to account for the effect of inflation.
  3. Fiscal year ends cannot be changed at will.
  4. Revenues are recognized at the time they are earned.
A
  1. Assets are revalued upwards to account for the effect of inflation.
66
Q

A ranch style home is:

  1. composed of angular roof components and broken rectangular walls.
  2. a one-storey building under a continuous sloping roof and occupies a large surface area.
  3. usually a two-storey structure with a low sloping roof.
  4. characterized by large covered verandas and roof lines similar to barn construction.
A
  1. a one-storey building under a continuous sloping roof and occupies a large surface area.
67
Q

Which of the following is considered to be a fixture?

A. rose bush
B. fridge
C. hardwood flooring
D. a lamp

  1. only A and C
  2. only A, B, C
  3. only B and C
  4. all of the above
A
  1. only A and C
68
Q

According to Real Estate Services Act and Regulations, which of the following statements is TRUE?

  1. An individual may commence trading in real estate immediately after receiving passing results of the real estate licensing exam
  2. All staff employed be real estate brokerage must be registered with Real Estate Council
  3. An individual may be registered independently as a real estate representative without being employed by a Real Estate brokerage
  4. A real estate representative is employed by his or her brokerage to trade in real estate in the brokerage’s name, on behalf of the brokerage’s clients
A
  1. A real estate representative is employed by his or her brokerage to trade in real estate in the brokerage’s name, on behalf of the brokerage’s clients
69
Q

In order for a person to make a successful claim against the Assurance fund, he has to prove three of the following. Indicate the EXCEPTION:

  1. He or she lost an interest in land
  2. He or she cannot recover that interest or estate by court action
  3. The person who deprived the injured party of his or her interest passed that interest to a bona fide purchaser for valuable consideration
  4. If the Land Title Act had not been passed, he or she would have recovered the interest by a court action
A
  1. The person who deprived the injured party of his or her interest passed that interest to a bona fide purchaser for valuable consideration
70
Q

Nick dumped some toxic waste into Maria’s backyard and the neighbor saw it. Maria traced it back to Nick and decided to press charges against him and sue for $20,000 in damages. Which of the following is TRUE?

  1. If the plaintiff decides to appeal from small claim court it will go to Court of Appeal
  2. If the plaintiff wants to appeal from small claim court he/she can go to a Supreme Court anywhere in the province
  3. If the plaintiff decides to take action, he/she has to bring the claim down to $3,000 in order to go to Small Claims Court
  4. The Supreme Court of Canada will hear any case
A
  1. If the plaintiff wants to appeal from small claim court he/she can go to a Supreme Court anywhere in the province
71
Q

Which one of the following statements comparing condominiums and cooperatives is FALSE?

  1. Purchasers of both condominiums and cooperatives acquire ownership of a fee simple interest in land.
  2. The Real Estate Development Marketing Act requirement for a disclosure statement may apply to both condominiums and cooperatives.
  3. Condominiums are generally easier to sell than cooperatives.
  4. Where an existing building is being converted to either a condominium or a non-profit cooperative, the existing tenants are covered by the protections afforded by the BC Residential Tenancy Act.
A
  1. Purchasers of both condominiums and cooperatives acquire ownership of a fee simple interest in land.
72
Q

Which of the following elements is NOT required in order to establish a restrictive covenant?

  1. It must be negative in nature.
  2. Both the benefited and burdened land must be precisely identified in the agreement of document creating the restrictive covenant
  3. The burden of the restriction must have been intended by the parties to bind the land.
  4. The covenantor must also retain the restricted property as any subsequent purchaser will not be a
    party to the original contract.
A
  1. The covenantor must also retain the restricted property as any subsequent purchaser will not be a
    party to the original contract.
73
Q

How would prepaid expenses and income taxes payable be classified on the Balance Sheet?

  1. Prepaid expenses – current assets; income taxes payable – noncurrent liabilities
  2. Prepaid expenses – current assets; income taxes payable – current liabilities
  3. Prepaid expenses – noncurrent assets; income taxes payable – noncurrent liabilities
  4. Prepaid expenses – noncurrent assets; income taxes payable – current liabilities
A
  1. Prepaid expenses – current assets; income taxes payable – current liabilities
74
Q

Two years ago, Mark bought a house at which time he arranged a mortgage in the amount of $520,000. The loan was written at a rate of 4.75%, compounded semi-annually with a 5 year term and 25 year amortization and monthly payments. Mark has just received an offer from Alice to buy his house. Alice offers to provide $60,000 deposit and to assume the existing financing for the remainder of the term. If the current lending rates for 3 year term mortgages are 5.75% per annum, compounded semi- annually, what is the market value of Alice’s offer?

$532,106.49
$476,068.20
$536,068.20
$544,174.13

A
  1. $544,174.13
75
Q

Which one is NOT an Objective of the Real Estate Council:

  1. Administering the Act
  2. Maintaining and advancing the knowledge of its licensees
  3. Upholding and protecting the public interest in relation to the conduct and integrity of its licensees
  4. Establish the RE compensation fund
A
  1. Establish the RE compensation fund
76
Q

Where a principal has granted an agent express authority to sell his house but has not explicitly granted the right to show it, and the agent shows the house to a potential buyer, the agent is said to be acting on:

  1. Apparent authority.
  2. Implied authority.
  3. Actual authority.
  4. Express authority.
A
  1. Implied authority.
77
Q

Of the following rules and bylaws, which one has been properly enacted?

  1. The strata corporation of Dunbar House, a strata building, passes a rule by ordinary resolution establishing parking stalls 1 and 2 as limited common property allocated to the exclusive use of apartment 101 in Dunbar House.
  2. The strata council of Crossley Manor, a strata building, passes a bylaw requiring all strata lot owners to use venetian blinds as the only type of windows covering in the units.
  3. The strata corporation of Blackladder Mansions, a strata building, passes by 60% majority, a resolution amending the Standard Bylaws to delete the prohibition against keeping animals on a strata lot after notice from the council in that regard.
  4. The strata council of Baldrick Mews, a strata building, passes a rule with 60% in favour, prohibiting teenagers from using the common property health club on Saturday nights after 10pm.
A
  1. The strata corporation of Dunbar House, a strata building, passes a rule by ordinary resolution establishing parking stalls 1 and 2 as limited common property allocated to the exclusive use of apartment 101 in Dunbar House.
78
Q

Which one of the following statements is NOT true?

  1. In a conflict between common law principles and equitable principals, equitable principles will prevail.
  2. In a conflict between common law principles and statute law, statute law will prevail.
  3. In a conflict between statute law and equitable principles, equitable principles will prevail.
  4. In a conflict between equitable principles and statute law, statute law will prevail.
A
  1. In a conflict between statute law and equitable principles, equitable principles will prevail.
79
Q

Which of the following is the most common type of construction today for high-rise apartment buildings?

  1. wood stud frame
  2. steel studs and concrete topping
  3. concrete framing
  4. masonry walls and wood floors
A
  1. concrete framing
80
Q

If an applicant for a mortgage loan has income of $1,000 per month, taxes are estimated of $60 per month and his permitted gross debt service ratio is 35%, what can he afford to pay for monthly principal and interest?

  1. $290
  2. $240
  3. $300
  4. $250
A
  1. $290
81
Q

Which of the following is the best description of a property that has latent value?

  1. A property that possesses the potential for redevelopment
  2. A property that is in its highest and best use
  3. A property for which the highest net return is likely to result from its current use
  4. A warehouse, located in an industrial park, that has high value to the owner
A
  1. A property that possesses the potential for redevelopment
82
Q

Which of the following steps is part of the “pleading” process:

  1. Judgment
  2. Discovery
  3. Response to a civil claim
  4. Garnishing order
A
  1. Response to a civil claim
83
Q

Which of the following is NOT an example of a situation in which a landlord can end a residential tenancy agreement for cause?

  1. The number of persons permanently occupying a suite is unreasonable.
  2. A tenant fails to give the necessary security deposit within 30 days of the tenancy agreement.
  3. The premises must be vacated to allow for renovations that cannot be performed while the premises are occupied.
  4. The premises must be vacated to comply with an order made by local authority regarding zoning.
A
  1. The premises must be vacated to allow for renovations that cannot be performed while the premises are occupied.
84
Q

Which one of the following statements is TRUE?

  1. When calculating legal fees, the purchaser is responsible for the portion of the year after and including the adjustment date.
  2. Taxes will never appear as a credit item on the vendor’s statement of adjustments and as a debit item on the purchaser’s statement of adjustments.
  3. Where the licensee acts only for the vendor, Real Estate commission always appears as a debit on the vendor’s statement of adjustments and does not appear on the purchaser’s statement of adjustments.
  4. Under the standard form contract of purchase and sale, risk always passes to the purchaser at 12:01am on the possession date.
A
  1. Where the licensee acts only for the vendor, Real Estate commission always appears as a debit on the vendor’s statement of adjustments and does not appear on the purchaser’s statement of adjustments.
85
Q

Audrey and Bart have just purchased the popular Plants-R-Us store in Vancouver. They purchased the business for $122,500 and made a cash down payment for 15% of the purchase price. The rest of the purchase was financed with a loan, calling for monthly payments of $1,022.65 over a 25 year amortization period and term. What effective annual interest rate is Audrey and Bart paying on the loan?

  1. 11.0279838409%
  2. 11.2844774682%
  3. 11.6028260475%
  4. 8.93898216767%
A
  1. 11.6028260475%
86
Q

A owes B $1,000. B assigns the debt to C. For this to be a statutory assignment three requirements are necessary. Which one of the following is NOT one of them?

  1. The assignment from B to C must be for the entire amount.
  2. The assignment from B to C must be in writing.
  3. The notification from C to A must be in writing.
  4. The notification from A to B must be in writing
A
  1. The notification from A to B must be in writing
87
Q

Given the following information, calculate the cash proceeds to Vanessa, the vendor, from Paul the purchaser:
Price: $150,000
Deposit to brokerage: $ 15,000
Financing: 1st mortgage of $71,000 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: 6% of sale price
Conveyancing Fees: $600
Adjustment, completion and possession dates: August 31st
Note: Assume that it is NOT a leap year.

Calculate the cash proceeds of sale to Vanessa, as vendor, from Paul, the purchaser.

  1. $ 69,169.00
  2. $ 69,538.00
  3. $ 69,204.38
  4. $ 140,169.00
A
  1. $ 69,169.00
88
Q

Which of the following could be used by a defendant as a defense to a claim in negotiation?

  1. The defendant did not intend to cause injury or damage to the plaintiff
  2. The defendant did not know and had never previously met or interacted with the plaintiff
  3. The defendant did not foresee the type of damage that the plaintiff suffered as following in outcome
  4. The defendant did not breach the standard of care owed to the plaintiff
A
  1. The defendant did not foresee the type of damage that the plaintiff suffered as following in outcome
89
Q

Which one of following statements is not a requirement to become a Managing Broker?

  1. Meet the education and experience requirements established by the Rules
  2. To be over 19
  3. Have a good reputation
  4. Must register itself as corporation
A
  1. Must register itself as corporation
90
Q

Section 52 of the Competition Act prohibits false or misleading advertising. Consider the following statements about the offense.

A. An element of the offense is a “representation to the public” which could include statements made by a licensee over the phone to a purchaser of real estate.
B. For a misrepresentation to be contrary to the Act, it must be false or misleading in a material respect.
C. The Competition Act applies to both oral and written representations.
D. To avoid liability where a false or misleading representation has been made, the person accused of the offence must show that he or she took all reasonable care in the circumstances to ensure that the representation was accurate.

Which of the following is correct?

All of the above statements are true.
Only B, C, and D are true.
Only B and D are true.
Only A, B, and C are true.

A

All of the above statements are true.

91
Q

Bard is a developer who wants to subdivide his 2.5 acre lot, which is in a single family residence zone, and build two 24 unit condominium projects on the land. Which of the following statements concerning Bard’s rezoning applications are TRUE?

Bard will have to apply for a spot rezoning permit for this development site, according to the process outlined in the Local Government Act (formerly known as the Municipal Act).

b. By making an application for rezoning to the municipal council, Bard may begin the rezoning process.
c. A public hearing must be held by the municipal council prior to a change in the permitted land use or density under a zoning by-law.
d. The municipal council has the power, after a public hearing has been held, to alter an amended by-law to further change the use or density of a zone without holding another public hearing, so long as it is in the public’s best interests to make this further change.
1. a and d
2. b and c
3. a only
4. all of the above are true

A
  1. b and c
92
Q

Which one of the following statements about fixtures and chattels is FALSE?

  1. To determine whether an item is a fixture or a chattel, the courts have devised a two-part test.
  2. Where an item has been affixed for the enhancement of the use of the premises, that is evidence the item is a chattel.
  3. The two-part test examines the degree of fixation of an item and the purpose of affixation of the item.
  4. Where an item is affixed slightly to the premises it will be considered, based on the first impression, to be a fixture.
A
  1. Where an item has been affixed for the enhancement of the use of the premises, that is evidence the item is a chattel.
93
Q

The doctrine of privity of contract:

  1. creates the right of a third party to sue on a contract.
  2. only applies to contracts creating an interest in land.
  3. does not apply to bare licences.
  4. does not apply to contracts where an interest in land is created
A
  1. does not apply to contracts where an interest in land is created
94
Q

A nominal interest rate of 8% per annum, compounded semi-annually is NOT equivalent to:

an effective annual rate of 8.16%

  1. 1.98039027186% compounded quarterly
  2. 4.85006200803% compounded monthly
  3. 7.844985576% compounded daily
A
  1. 4.85006200803% compounded monthly
95
Q

Which of the following statements regarding print advertisement is FALSE?

  1. A Reader’s eyes 1st focuses on the 10 o’clock position and moves upward to the right
  2. The headline is the single most important part of the advertisement
  3. Informal balance uses a non-symmetrical arrangement
  4. Advertisements always end with a call for action
A
  1. Advertisements always end with a call for action
96
Q

Which statements are FALSE in regards to licensee’s advertising?

  1. The licensee name and brokerage must be placed in a prominent and easily readable way
  2. The brokerage sign must be placed outside of your personal office
  3. The office address must be used on licensee’s business cards
  4. Information is not required if the licensee is advertising his own real estate as long as information of his brokerage is not used
A
  1. The brokerage sign must be placed outside of your personal office
97
Q

When attempting to determine whether a particular relationship is that of landlord and tenant or licensor and licensee, it is best to:

  1. Look at the formal wording of the document.
  2. Look at the terminology used to describe the parties, ie. Landlord & tenant/licensor & licensee.
  3. Consult the Residential Tenancy Act or the Commercial Tenancy Act.
  4. Determine the intention of the parties by examining the substance of their agreement.
A
  1. Determine the intention of the parties by examining the substance of their agreement.
98
Q

Alomar and Carter Development Co. have recently won the contract to build a new baseball stadium in Kelowna for the Little League World Series. The stadium is to be built over the next three years and will be able to hold over 7,000 fans. The company has received a construction loan in the amount of $2,500,000 written at the rate of 17% per annum, compounded monthly, with a 3 year term, a 25 year amortization period and annual interest only payments. What is the amount of annual interest only payments?

$466,586.30
$459,729.33
$425,000.00
$35,416.67

A

$459,729.33

99
Q

Which of the following is/are TRUE regarding a Real Estate (RE) licensee’s duty to ascertain the facts respecting a client’s Real Estate transaction?

A. A RE licensee should be knowledgeable, among other things, about price levels in the real property market, general economic trends, and changes to zoning bylaws.

B. A RE licensee will not be liable for a breach of his duty to ascertain the facts if the breach resulted from a client providing incorrect information.

C. The duty placed on a licensee is “strict” — meaning that any fact overlooked by a licensee will result in a breach of the licensee’s duty, even if the licensee acted in the manner of a reasonably prudent broker in similar circumstances.

D. On-line access to the land title registry has removed most excuses for a licensee’s failure to perform a title search.

  1. Only A, C, and D are true.
  2. Only A is true.
  3. Only A and D are true.
  4. Only A and B are true.
A
  1. Only A and D are true.
100
Q

The book value of an asset can be best defined as:

  1. the purchase price of that asset less any depreciation taken to date.
  2. the price for which a similar asset could currently be purchased in the market.
  3. the price for which that asset could be sold.
  4. a value which is subjectively arrived at by an appraiser.
A
  1. the purchase price of that asset less any depreciation taken to date.

Real Estate Licence (11 decks)

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