Real Estate Act Practice Quiz

Question 1

In order for certain documents to serve as enforceable contracts, they must be in writing. Which types of documents must be in writing?

Answer 1

Amendments to a real estate agreement

Legal description of land

Terms and conditions of a sale of real estate

Question 2

Major changes to the 1947 Real Estate Agents Licensing Act

Answer 2

Every agent had to have an office in Alberta where they could receive notices

It expanded the definitions in the act significantly. Most notable was the inclusion of the definition of real estate

Agents now had to keep trust accounts with a bank or Alberta Treasury Branch

No agent could employ an unlicensed salesman

Question 3

What is self-governance

Answer 3

The right to determine how members of the group should behave

The right to decide what qualification an individual must meet to join a group

The right to decide under what circumstances a member should be ejected from the group

Question 4

The following individuals are exempt from requiring a real estate license

Answer 4

A practicing Alberta lawyer (not retired and not suspended)

A person who trades only in mineral rights rather than surface rights

A person who has 25% or more interest (ownership in the real estate and sells it, or who is the employee or agent of someone who does

Question 5

What is not a main purpose of RECA?

Answer 5

To provide professional development, advocacy and member services to Alberta’s real estate professionals

Question 6

Which of the following statements are true regarding the REA bylaws

Answer 6

Bylaws are mini laws that set out how an organization should function

Bylaws are how RECA fulfills its purpose around administering the REA

The bylaws cannot be in conflict with the REA or other legislation put in place by the government

Question 7

The various industry councils can only make rules which

Answer 7

Apply in the course of the business of a license

Question 8

If a agent is not paid their commission and the choose to escalate the matter to the courts, what conditions are required

Answer 8

The person claiming the commission must be licensed

The real estate transaction must have successfully gone through or int he case of property management, the client must have received the services

The service agreement must be in writing

Question 9

Can real estate agents be paid on the difference between the list price and the sale price

Answer 9

No

Question 10

What documents may the practice review auditor request to see

Answer 10

Accounting records for a specified period of time

The brokerage’s policies or procedures

Trust account details

Question 11

Purposes of RECA practice reviews

Answer 11

Can trigger a formal process called a Proceeding, if the auditor notices a problem

Allows RECA to ensure that licensees are running their businesses properly

Reduces the number of claims against the assurances

Question 12

What criteria will a RECA auditor consider before recommending an investigations team become involved

Answer 12

Are there indications of intent or recklessness on behalf of the broker

Is this first time behavior or is there a repeated pattern of this behavior

Could there be serious consequences to the public

Question 13

Special powers of the Registrar

Answer 13

Periodic Inspections

Receiving orders

Orders to freeze assets

Question 14

Two panels that are established under the investigations process

Answer 14

Hearing panel

Appeal panel

Question 15

Days to appeal Registrar’s decision

Answer 15

30 days

Question 16

Part 2 of the Ministerial regulation in the REA are centered around

Answer 16

Real Estate Assurance Fund

Question 17

Most common type of tort law in real estate?

Answer 17

Negligence

Question 18

The principal in an agency relationship is the agent or the client

Answer 18

Client

Question 19

Main difference between a client and a customer

Answer 19

Client is in an agency relationship with a licensee, whereas a customer is not

Question 20

Standards of Conduct for brokerages

Answer 20

They can only use their license when trading in real estate

They must not employ someone to do a licensee’s work if they’re not licensed

They must not employ anyone registered in another brokerage’s name

Question 21

What are the licensee’s basic obligations to a seller in a sole agency relationship

Answer 21

To act only as the seller’s agent (unless there is a brokerage transaction agreement)

To use reasonable care and skill in performing services under the agreement

To keep the seller updated on progress

To let any interested buyer know that the licensee represents the seller as soon as possiblr

Question 22

What are the licensee’s basic obligations to a buyer in a sole agency relationship

Answer 22

To follow the buyer’s instructions

To do their best to find a property that meets the most important requirements of the buyer

To let any seller know they represent the interested buyer as soon as possible

Question 23

What is the best definition of designated agency

Answer 23

An individual licensee who is designated in writing by a brokerage to serve as a sole agent for a buyer or seller in a trade in real estate

Question 24

True or false: Transaction Brokerage cannot occur in a Common Law brokerage

Answer 24

False, a common law brokerage can use transaction brokerage to prevent a conflict of interest from occurring between buyer and seller clients interested in the same property

Question 25

What is the purpose of a customer status acknowledgement form

Answer 25

To protect the brokerage from risk of a lawsuit should the customer try to state that the brokerage did not adhere to its fiduciary duties

Question 26

What can a agent do for a customer

Answer 26

Keep the customer informed

Provide real estate statistics and comparable property information

Promptly present all offers and counter-offers

Question 27

True or False: A real estate professional cannot represent themselves in a real estate transaction

Answer 27

False

Question 28

Which situations are not covered by REIX

Answer 28

Water Damage

Injury occurring in a property listed by your brokerage

Damage arising while check a vacant property

Court decision determining that the activity of the offending party was grossly unreasonable

Question 29

The REA bylaws themselves require that they be reviewed how often?

Answer 29

Every three years

Question 30

If a client does not want to agree to a transaction brokerage scenario the agent can choose to

Answer 30

Treat the client as a customer

Contact another brokerage to ask if they will represent the second party in the transaction