Property Management Chapter 2 Flashcards
What is RESA?
Real Estate Services Act
Trading services related to RE, rental property management services and strata management services.
What is the goal of RESA?
To increase oversight of the RE industry and enhance consumer protection. The amendments transfer rule-making powers from the RE Council to the Superintendent of RE and enable an enhanced oversight role for the Superintendent.
INCREASE OVERSIGHT / ENHANCE CONSUMER PROTECTION
What is / the goal of REDMA?
Real Estate Marketing Act - imposes disclosure requirements on developers marketing various forms of RE developments, such as strata lots, coops, time share, and shared interests.
RESA defines real estate services as:
rental property management services, strata management services, trading services
Who are exempt from RESA?
- a person acting under the authority of a court
- trustee in bankruptcy, custodian, receiver, receiver manager or liquidation who is appointed under a provincial or federal enactment in respect of real estate services undertaken by the person in that capacity
- An executor or administrator of an estate, in respect of real estate services provided in relation to real estate owned or held by the estate
- A trustee, in respect of real estate services provided under the terms of a will, marriage settlement or deed of trust
- A financial intuition that has trust business authorization
- A lawyer providing services in the course of a person’s practice.
In addition to the exemption contained in RESA, Part 2 of the Regulation contains a number of exemptions. There are 4 categories
- employees of a principal who are providing real estate services to or on behalf of that principal.
- Collection agents acting in the course of their business.
- Individuals involved in various mining and oil and gas activities
- Governments and government corporations.
The categories of exemptions available for rental property management services include:
- caretakers or managers employed by the owners of different residential real estate properties
- individuals and non-profit organizations who are providing services in relation to rental real estate that is administered by BCHMC
- savings institutions and mortgage brokers acting in accordance with an assignment of rents.
The categories of exemptions available for strata management services include:
- those who are strata lot owners themselves and provide searches by reason of being the strata lot owner
- caretaker or managers acting on behalf of a strata corporation
- owner developers
Those exempted from having a license with respect to trading services fall into 8 categories:
- employees of developers
- notaries
- accountants in relation to purchase and sale of a business
- appraisers and property inspectors
- auctioneers
- individuals who provide information of a general nature to assist owners to sell or otherwise dispose of their own real estate or who publish information contained in an advertisement of specific real estate
- individuals who refer others to a licensee or exempt party
- agents of expropriating authorities.
What is an unlicensed assistant allowed to do under RESA?
- negotiate
- make payments to 3rd parties
- manage landlords and tenant matters
- supervise employees
- make telephone calls, telemarketing or performing other activities to solicit business.
What is the job of the real estate council?
a crown agency empowered under the RE Services Act to administer the RE Services Act, maintain and advance the knowledge, skill, and competency of licensees; and uphold and protect the public interest in relation to the conduct and integrity of licensees.
EDUCATE / PUBLIC INTEREST
What is the job of the Superintendent of Real Estate?
a person appointed by order of the Lieutenant Governor in Council whose role it is to oversee and direct the operations and activities of the Council, make orders respecting unlicensed activity, and make orders against licensees in the public interest.
OVERSEE OPERATIONS OF COUNCIL / ORDER AGAINST LICSENSEES / PUBLIC INTEREST
Superintendent 3 Roles:
- Oversee and direct operation of council: investigate, issue notice of discipline, establish committees, make new by laws
- make sure non licensed individuals to not conduct what a licensee would do
- ensure licensees have not done nothing detrimental to the public
What are Property Management Procedures under the RESA?
- advertising
- record keeping
- trust accounts
- remuneration
What are a licensee’s requirements when advertising?
- the licensee name of the brokerage must be displayed in a prominent and easily readable way
- if the advertising identifies a managing broker, associate broker or representative, it must be done using the licensee name of the individual
- if an office address for the licensee is included, it must be the address of the related brokerage office.
Which of the following statements concerning disclosure statements in British Columbia is FALSE?
1) A disclosure statement must be provided by a developer to a buyer where an offer of sale or lease relates to a time
share interest on a development property.
2) disclosure statement must indicate that the purchaser has the right to rescind the purchase agreement by serving
written notice of the rescission on the developer.
3)A disclosure statement must be in the form and include the content required by the BC Financial Services Authority.
4)One of the supporting documents that must accompany the disclosure statement is a certificate from a lawyer who is a member of the Law Society of British Columbia confirming that a true copy of the disclosure statement will be delivered to the prospective purchaser or lessee.
Option (4) is correct because a certificate from a lawyer who is a member of the Law Society of British Columbia does not to
accompany the disclosure statement.
Under the Real Estate Services Act, disciplinary action against a licensee normally begins with an investigation by the BC
Financial Services Authority (“BCFSA”). Which of the following statements concerning an investigation to determine if disciplinary action should be taken against a licensee are TRUE?
A. BCFSA may conduct an investigation to determine whether a licensee may have committed professional misconduct or conduct unbecoming a licensee.
B. BCFSA can conduct an investigation only at the request of the Superintendent of Real Estate.
C. At any time during business hours, BCFSA can inspect the records that are located on the business premises of a licensee.
D. A misleading statement in an accountant’s report is not enough to trigger an investigation.
2 ARE CORRECT
A. BCFSA may conduct an investigation to determine whether a licensee may have committed professional misconduct or conduct unbecoming a licensee.
C. At any time during business hours, BCFSA can inspect the records that are located on the business premises of a licensee.
A brokerage providing rental property management services must keep copies of certain documents. Which of the following is NOT such a document?
1) The written service agreement between the property owner and the brokerage
2) Accounting Statements that have been provided to the clients
3) Invoices for expenditures incurred on behalf of the clients
4) A listing of all the telephone contact numbers of current tenants in each rental property
A listing of all the telephone contact numbers of current tenants in each rental property
Which of the following transactions involving a developer of residential subdivisions located in British Columbia does NOT require
a disclosure statement under the Real Estate Development Marketing Act?
1) The strata lots in a 10-unit strata building located in a municipality are being sold individually.
2) 15 lots of 35 hectares each in a subdivision located outside a municipality are being sold individually.
3) All 5 strata lots of a development property located outside a municipality are being sold in a single transaction.
4) A bank intends to individually resell to the residential market 20 of 25 lots in a subdivision after repossessing the lots
when the developer filed in bankruptcy.
Option (3) is correct because the Real Estate Development Marketing Act (“REDMA”) provides an exemption to the disclosure
requirements where a developer is marketing a development property in a single transaction.
Which type of misconduct, as described in the Real Estate Services Act, focuses more on the overall professionalism of a
licensee, over and above technical compliance with legislation and the Real Estate Services Rules?
1) Professional misconduct
2) Lapse of character
3) Conduct unbecoming a licensee
4) Breach of civility
Option (3) is correct because conduct unbecoming a licensee is conduct that is contrary to the interests of the public; undermines
public confidence; or brings the real estate industry into disrepute. This is above and beyond technical compliance with legislation
and the Real Estate Services Rules (the “Rules”).
Lily, a rental property manager, is tasked with finding a new landscaper for her client. She only receives one bid, from her cousin Petunia; however, Lily does not mention her relationship to Petunia when she presents the offer to her client.
Which of the following duties, set out by the Real Estate Services Rules, has Lily LEAST likely breached?
1) The duty to act in the client’s best interests
2) The duty to disclose conflicts of interests
3) The duty to disclose all known material information
4) The duty to maintain confidentiality
Option (4) is correct because the fact scenario does not suggest that Lily has disclosed any of her client’s confidential information.
The duty of confidentiality is owed by Lily to her client, not to Petunia. Option
Kamal, a rental property manager, is faced with an ethical dilemma relating to something that one of his clients is asking him to do. As part of his thinking about the dilemma, Kamal writes down the names of everyone that would be impacted by any decision he makes to resolve the dilemma.
Which step of the Framework for Ethical Decision Making is Kamal applying?
1) Step 1: Consider the situation and identify the potential ethical issues
2) Step 2: Identify the stakeholders
3) Step 3: Specify feasible alternatives for evaluation
4) Step 4: Evaluate each alternative in terms of ethical consequences
Option (2) is correct because identifying who would be impacted by either the current situation and/or Kamal’s decision is a part
of identifying stakeholders.
