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RECA Fundamentals > Real Estate Act > Flashcards

Real Estate Act Flashcards

1
Q

Unit 1: Who owns land in Canada.

A

The government (The Crown). However, you can purchase rights to a piece of property, which allow you to: Buy, sell, and give away land, so long as it’s in your or your company’s name.

This is called fee simple, where you granted rights to the land, short of actual ownership of it.

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2
Q

Unit 1: What land title system does Alberta use? How does it work?

A

The Torrens system.

It allows you look at the current title of ownership, and see who, or what entity currently has a interest (financial or otherwise) in the land.

Detailed on the title are: Current owner, mortgages, liens, etc…

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3
Q

Unit 1:What is the Statue of Frauds

A

A requirement, that, any contract for the sale of lands, or any interest in land must be in writing and signed by all involved parties for the contract or agreement to be recognized by a court.

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4
Q

Unit 1: What is the Law of Property Act

A

The act which governs court ordered sales, foreclosures, mortgage enforcement and other issues related to property.

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5
Q

Unit 1: How was the land in Alberta divided when it was surveyed from 1871 - 1876

A

Meridians, townships, ranges, sections, and legal subdivisions.

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6
Q

Unit 1: What rights do Alberta land titles exempt?

A

They exempt rights to minerals beneath the ground.
In rare occasions, rights are granted.
Land titles grand surface rights in most cases.

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7
Q

Unit 1: What are the two registration districts of Alberta?

A

North Alberta Land Registration District
South Alberta Land Registration District

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8
Q

Unit 2: What documents govern real estate licensees in Alberta?

A
  1. The Real Estate Act (REA) - passed by the legislature.
  2. REA’s regulations - written and enacted by the legislative department overseeing REA
  3. Real Estate Act Rules - produced by RECA
  4. Real Estate Act Bylaws - RECA
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9
Q

Unit 2: How many parts are there to the Real Estate Act

A

Part 1 - Real Estate Council of Alberta
Part 2 - Regulation of Trading and Dealing
Part 3 - Conduct Proceedings
Part 4 - Real Estate Assurance Fund
Part 5 - Alberta Real Estate Foundation
Part 6 - General

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10
Q

Unit 2: RECA Administrative Definitions - Board

A

Board: The Board of Directors of the Council

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11
Q

Unit 2: RECA Administrative Definitions - Bylaws

A

Bylaws: Bylaws made by the board

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12
Q

Unit 2: RECA Administrative Definitions - Council

A

Council: Real Estate Council of Alberta

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13
Q

Unit 2: RECA Administrative Definitions - Foundation

A

Foundation: Alberta Real Estate Foundation

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14
Q

Unit 2: RECA Administrative Definitions - Fund

A

Fund: Real Estate Assurance Fund

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15
Q

Unit 2: RECA Administrative Definitions - Industry

A

Industry: Means the real estate broker industry, the property manager industry, and the mortgage broker industry

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16
Q

Unit 2: RECA Administrative Definitions - Industry Council

A

Industry Council: One of the four industry councils -
1. Residential Real Estate
2. Commercial Real Estate Broker & Property Manager\
3. Residential Property Manager
4. Mortgage Broker

These councils create and administer rules and licensing requirements in the industries

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17
Q

Unit 2: RECA Administrative Definitions - Person

A

Person: Includes a partnership, where a “partnership” means a partnership between or among individuals or corporations or both.

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18
Q

Unit 2: RECA Administrative Definitions - Real Estate

A

Real Estate: Real property, leasehold property, or a portable dwelling (other than a recreational vehicle)

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19
Q

Unit 2: RECA Administrative Definitions - Rules

A

Rules: Rules made by an Industry Council

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20
Q

Unit 2: Licensee Definitions - Licensee

A

Licensee: Any person who hold a license as a real estate broker, a property manager or a mortgage broker, or as any category or class of real estate broker, property manager or mortgage brokers, issued by an Industry Council

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21
Q

Unit 2: Licensee Definitions - Business of a Licensee

A

Business of a Licensee: The trades of a real estate broker, the services of a property manager, or the dealing of a mortgage broker undertaken by a licensee.

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22
Q

Unit 2: Licensee Definitions - Condominium Management Service

A

Condominium Management Service: The exercising of a power or the performing of a duty of a condominium corporation on behalf of the condominium corporation.

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23
Q

Unit 2: Licensee Definitions - Mortgage Broker

A

Mortgage Broker: A person who paid to search out mortgage clients, negotiates a mortgage, collects payments or manager a mortgage, or buys sells, or exchanges mortgages. Under the REA a mortgager broker is also someone who promotes themselves, advertises themselves, or otherwise acts as though they are a mortgage broker. Their payment, or consideration may be money, promises, housing subsidy, trade for services, etc.

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24
Q

Unit 2: Licensee Definitions - Property management

A

Property Management: Includes work done to get a lease in place, holding money for leasing property, advertising or negotiating to get a lease in place, engaging in a condominium management service, or collecting rent or overhead payments for the owner of real estate.

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25
Q

Unit 2: Licensee Definitions - Real Estate Appraiser

A

Real Estate Appraiser: A person who gets consideration for estimating what any interest in real estate is worth, signs an appraisal report that is prepared by someone else and accepts responsibility for that report, or who promotes themselves as someone who does.

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26
Q

Unit 2: Licensee Definitions - Real Estate Broker

A

Real Estate Broker: A person who gets compensation for trading in real estate or acts as though they do.

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27
Q

Unit 2: Working as a Licensee Definitions - Purchase

A

Purchase: Includes an exchange, an option, a lease or any other acquisition of an interest in real estate.

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28
Q

Unit 2: Working as a Licensee Definitions - Sale

A

Includes an exchange, an option, a lease or any other disposition of an interest in real estate.

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29
Q

Unit 2: Working as a Licensee Definitions - Service Agreement

A

Service Agreement: Contract that establishes the relationship between the parties as to the services and obligation to be performed by a licensee

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30
Q

Unit 2: Working as a Licensee Definitions - Substantial Interest

A

Substantial Interest: An ownership interest in the real estate of not less than 25%

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31
Q

Unit 2: Working as a Licensee Definitions - Trade

A

Trade:
Purchase or sale of real estate or an offer to do so.

An offering, advertisement, listing or showing of real estate for purchase or sale.

Acting as though a person trades in real estate.

Anything done to obtain a contract for any of the above.

However, trade does not include providing someone with signs, creating a web page to market properties, or publishing a list of properties to buy or sell.

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32
Q

Unit 2: Who is exempt from needing a license to trade real estate?

A
  1. A personal representative of a deceased individual(not selling on their own behalf)
  2. Those order to do so by a court
  3. Financial institutions which purchase real estate for investments
  4. Anyone who either has, or is employed by someone that has a 25% or more interest (ownership) in the real estate and sells it.
  5. A person who trades only in mineral rights, rather than surface rights.
  6. Practicing Alberta lawyers
  7. Anyone otherwise exempted by regulations
  8. A person licensed under the Land Agents Licensing Act
33
Q

Unit 3: Which minister oversees the Real Estate Act?

A

The minister of Service Alberta

34
Q

Unit 3: Is RECA a corporation, and is it independant of the government?

A

Yes

35
Q

Is RECA directed by a board and can the board make bylaws?

A

Yes

36
Q

What are REA’s rules on how the board is formed?

A
  1. The minister appoints three members of the public who cannot be licensees.
  2. Each Industry council (four) appoints one member, who must be member of that council
  3. This results in a total of seven members. 3 public, and four licensed industry members.
37
Q

Unit 3: According to the REA, what are the four purposes of RECA?

A
  1. To set the strategic direction and ensure the effective operation of the council
  2. To protect against, investigate, detect and suppress fraud as it relates to the business of licensees and to protect consumers.
  3. To provide, or support the provision of services and other things that facilitate the business of the licensees, as provided for in the regulations.
  4. To administer this Act as provided in this Act, the regulations, the bylaws and the rules.
38
Q

Unit 3: What are the four industry councils under REA?

A
  1. The residential real estate broker industry
  2. The residential property manager industry
  3. The commercial real estate broker industry and commercial property manager industry
  4. The mortgage broker industry
39
Q

Unit 3: What is the composition of each industry council?

A
  1. Two members of the public, appointed by the Minister
  2. Three licensees from the relevant industry council, elected by members of the industry.

Total of five members: Three licensees, two public.

40
Q

Unit 3: How many officers positions are established under the REA?

A
  1. The CEO
  2. The Registrar
41
Q

Unit 3: Who has immunity from from the REA

A
  1. The Minister
  2. An official administrator
  3. RECA
  4. The board of directors of RECA
  5. The Industry Council
  6. Any member, officer, or employee of RECA
42
Q

Unit 3:What do you need to bring a claim about a unpaid commission to court?

A
  1. Correct license type to earn a free from the service provided
  2. The commission or service agreement must be in writing.
  3. A successful real estate transaction (sale, lease, or interest in the land)
  4. A completely signed transfer, lease, or agreement for sale to all necessary parties
43
Q

Unit 3: Are real estate agents allowed to be paid on the difference between the list price and the actual sale price?

A

No.

44
Q

Unit 4: What is a practice review and who can conduct it?

A

It is a audit of a brokerage conducted by the registrar to ensure the company is meeting industry standards, or to guide them towards meeting industry standards if they aren’t.

45
Q

Unit 4: Why is it import to distinguish intent from recklessness?

A

Intent: Someone is trying to do wrong, or commit harm.

Recklessness: Someone is aware there is a risk of breaking the law/rules, but continues regardless.

46
Q

Unit 4: For how long after a licensee’s license expires, or is revoked can RECA conduct a investigation into their conduct as a licensee?

A

For up to two years from the date the license expires/was revoked.

It is required to keep all records until two years from the date the license expires.

47
Q

Unit 4: Can information collecting during a proceeding be used against a licensee in court?

A

Information collected during a proceeding, whether incriminating or not, can only be used for anything other than the proceeding or claims in court regarding the real estate act.

48
Q

Unit 7: What organization oversees a licensee’s professional liability insurance

A

The Real Estate Assurance Fund (REAF)

49
Q

Unit 7: In which two circumstances is REAF to pay all or part of a judgement against a licensee

A
  1. Fraud or breach of trust occruing while the licensee is carrying out the duties or responsibilities of a licensee
  2. Improper use of a trust account/funds
50
Q

Unit 7: What are the maximum payments a complainant can claim from REAF?

A
  1. Real estate broker, commercial real estate broker, property manager - $35,000
    Multiple parties - $350,000
  2. Mortgage broker - $25,000
    Multiple parties $100,000
51
Q

Unit 7: What is the maximum administrative penalty that can be assessed against a licensee?

A

$25,000

52
Q

Unit 7: Money received in trust must deposited how many days after being received?

A
  1. Within three business days
  2. For an offer to purchase - within three business days after the offer is accepted
53
Q

Unit 7: Between conflicting rules in Real Estate Amendment Act and the REA, which should a licensee follow?

A

REA

54
Q

Unit 8: What are the 5 sections of Ministerial Regulation

A
  1. AREF - Alberta Real Estate Foundation
  2. REAF - Real Estate Assurance Fund
  3. Repealed
  4. Other Matters
  5. Transitional Matters
55
Q

Unit 8: Who is exempt from REA?

A
  1. On-site Managers
  2. Retail Home Sales Business
  3. Non-Profit Organizations
  4. Employee housing mortgage
  5. Agricultural finance
  6. Real Estate Appraiser
  7. Sole owner of condo corporation
  8. Collection on of rent for a condo corporation
  9. Court appointed administrator
56
Q

Unit 9: What is a real estate brokerage?

A

A person (partnership or corporation) licensed by the relevant Industry Council who employed or has associated with it a licensed and registered real estate broker.

57
Q

Unit 9: What is a broker?

A

An individual with a real estate broker’s qualifications and license and is employed with a licensed real estate brokerage in Alberta.

Manages and is responsible for the entire brokerage.

58
Q

Unit 9: What structure do most real estate brokerages have?

A
  1. Real estate brokerage license - for the brokerage to trade real estate
  2. Real estate broker license - required for the broker to operate the brokerage and trade real estate on behalf of the mortgage
  3. Associate broker or associate license - required for an associate to trade real estate. Cannot be used to operate brokage.
59
Q

Unit 9: How many brokerages can a broker be registered with?

A

Only 1. They cannot work as a broker, or associate broker at any brokerage other than their own.

60
Q

Unit 9: Who is the broker of record?

A

Person in charge of running the day to day operations of a brokerage.

61
Q

Unit 9: Under what circumstances may the registrar cancel a brokerage’s license?

A
  1. Not making their records available for review.
  2. Not immediately placing money into a trust account if there’s less than there should be
  3. Failing to cooperate with investigators or auditors
  4. If the broker of record is not a broker or is no longer a broker
62
Q

Unit 9: When must the registrar cancel a licensee’s license?

A
  1. Does not obey a condition on their license
  2. They don’t obey an order of a hearing panel, appeal panel, or court
  3. Failure to pay outstanding fees, penalties, or costs ordered by a panel or court.
63
Q

Unit 9: When may the registrar cancel a licensee’s license?

A
  1. They lied on their application
  2. Lied on a affidavit
  3. Not replying constructively to the registrar or industry council when asked to provide information or send a letter or email.
  4. Failure to maintain proper insurance
  5. Failing to file reports by deadline
  6. Violating Education Code of Conduct for Leaners
64
Q

Unit 10: What is negligence?

A

Based on the idea that you are responsible for ensuring that your actions or inactions do not hurt the people around you.

65
Q

Unit 10: What types of care should a licensee consider when executing duties for a client?

A
  1. Duty of care
  2. Standard of care
66
Q

Unit 10: What will the courts consider when examining a licensee’s actions?

A
  1. Mindset
  2. Negligence - When someone’s actions fall short of the standards a reasonable individual in the same circumstance would exercise.
  3. Recklessness - When someone knows their actions will harm someone, but they decide to act without taking precautions, regardless
  4. Intent - Whether someone meant to do something harmful or dangerous
67
Q

Unit 10: What is agency?

A

If someone is acting on your behalf, they are an agent for you.

If you’ve hired them, you’re their principal.

You and that person have an agency relationship

They not only have a duty of care to you, but a fiduciary of care to you, as well.

If a client signa a contract with an associate in a brokerage, then the agency relationship exists between the client, the associate and the brokerage as a whole.

68
Q

Unit 10: Are the statements, actions, and decisions of the agent binding on the principal?

A

Yes, they lock the principal into whatever was agreed between the agent and the other party.

69
Q

Unit 10: Does a licensee need to enter into a written service agreement anything they provide a client with a service covered the REA?

A

Yes, unless dealing with commercial real estate

70
Q

Unit 10: What must a written service agreement contain?

A
  1. Signed by all relevant parties
  2. All terms and conditions of the agreement in plain language
  3. The client immediately receives a true copy
71
Q

Unit 10: What are the Industry Disclosure requirements for Real Estate Licensees

A
  1. What services the licensee will provide
  2. Whether the licensee is acting in the matter for any other person and to what extent
  3. Any conflicts of interest
  4. Anything else that might change the person’s mind from entering into a service agreement
72
Q

Unit 10: What are the Industry Disclosure requirements for Property Management Licensees

A
  1. What services the licensee will provide
  2. Any conflicts of interest
  3. Anything else that might change the person’s mind from entering into a service agreement
73
Q

Unit 10: What is a client? What is a customer?

A

Client: Buyer or seller in a agency relationship with a licensee

Customer: Buyer or seller not in a agency relationship with the licensee

74
Q

Unit 10: What is Sole Agency?

A

When a brokerage and all it’s licensees act as the agent for only one party in a trade, deal, or negotiation.

75
Q

Unit 11: What is Designated Agency

A

One or more licensees with the same brokerage are designated in writing by the brokerage to act as sole agent for a buyer or seller in a trade in real estate.

76
Q

Unit 11: What is a transaction brokerage?

A

When a single agent represents a buyer and seller

77
Q

Unit 12: What type of insurance is mandatory for licensee’s?

A

Errors and Omissions Insurance

78
Q

Unit 12:

A

RECA Fundamentals (27 decks)

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