Unit 4: Brokerage Flashcards
The only legal entity authorized to trade in real estate by RECA is…
a brokerage
How many associate brokers can a brokerage employ?
There is no limit. Nor is there a limit to the number of associates. However only one Broker may be employed.
Does the Broker need to be the owner of the Brokerage?
No - they can just manage it on behalf of the owner
What are the three components of leadership?
1) Authority
2) Responsibility
3) Accountability
What are the 3 steps to becoming a Broker?
1) Complete all REAP area of practice courses (real estate, commercial, mortgage, management)
2) Complete REBP courses (specific broker courses)
3) Apply to a Brokerage to become their Broker (must have at least 2 years associate experience in last 5)
What are the Rules for broker delegation?
- Delegate must be with same brokerage
- Delegate must be capable
- Delegation details are clear
- Delegation details shared among brokerage staff
- Broker can still monitor delegate and supervision
What 3 types of insurance should an agent consider acquiring?
- Homeowner’s Insurance / vehicle insurance (home office equipment, car accident)
- Comprehensive General Liability Insurance (ex. theft after forgetting to lock, client slips on ice, water left on, etc.)
- Professional Liability Insurance (Through REIX - MANDATORY)
REIX is administered under the guidance of…
an Advisory Board appointed by RECA
REIX is a form of reciprocal insurance, so each incident / lawsuit against a brokerage or agent is paid from…
the collective premiums of all brokerages and agents that contribute.
Who collects the premiums on behalf of REIX?
RECA. Payment is due when the licensing fees are also due, on Sept 30 each year.
If an agent fails to lock a door upon leaving and the house is vandalized, which insurance would cover this?
General Liability Insurance
What is the REIX deductible?
$3,500 for first claim
Any further claims within 3 years of that is $7,000
How much does REIX cover per claim?
A limit of $1,000,000
What are some root causes of disputes / complaints?
- Assumptions (failure to understand expectations)
- Omissions (an act missed)
- Commissions (an act done that shouldn’t have)
What are the 3 types of reactions to disputes?
1) Physical Reactions (tension, sweating, headache)
2) Cognitive Reactions (observing, listening, reflecting)
3) Emotional Reactions (frustration, fear, sarcasm, self-doubt)
Professional Courtesy is …
notifying a colleague of a minor mistake or error
VBRP stands for the…
Voluntary Broker Resolution Process
VBRP includes both:
Negotiations and Mediations (internal and external resolutions)
Benefits of VBRP include:
- Faster resolution of issues
- Privately conducted (RECA and court orders are public records)
- Keeps costs lower than going to court
- Helps to mend relationships with consumers
What is Arbitration?
hiring arbitrators (mediation consultants) to hear each party’s perspective on a dispute and pass along their decision on resolution. Must confer with REIX prior to starting thigs
Legal Action involves the…
complainant suing the agent / real estate brokerage
REP is the…
annual re-licensing program requirements set by RECA
Examples of personal information include:
- Name
- Address
- Phone numbers
- DOB
- Gender
- Physical description
- Personal photos / videos
- Religion
- Marital status
- Citizenship
- Education
- Criminal History
- Employment info
- Medical History
- Political beliefs
- Income / finances
- SIN, driver’s license #, etc.
FOIPP covers personal info collected by AB government, but PIPA covers…
private sector organizations collecting info for commercial activities (ex. real estate trades)
What are the 10 Privacy Principles?
1) Accountability
2) Identifying Purposes
3) Consent
4) Limiting Collection
5) Limiting use, disclosure and retention
6) Accuracy
7) Safeguards
8) Openness
9) Individual Access
10) Challenging Compliance
What are the 3 types of Consent?
1) Express Consent (clear opt-in)
2) Implied Consent (individual volunteers info)
3) Opt-Out Consent
How much time must pass for an individual’s personal information to become available without consent?
20 years since their death or 100 years since original collection
The Real Estate Act requires brokerages to retain records of any real estate details for a minimum of..
3 years after they come into existence
Privacy Officers must respond to requests for personal info within how many days?
Within 45 days
You can lawfully withhold personal info in these circumstances:
- Reveals info about anyone else
- Threatens life or security of anyone
- Info protected legally
- It would reveal restricted business info
- It was originally collected for legal reasons
- If disclosure meant that info wasn’t shared anymore
- Generated in dispute resolution process
If convicted of an offence under PIPA, an agent could face fines up to _____________ and a brokerage could be fined up to _____________
$10,000 and $100,000
Under the real estate act, this info is considered personal info:
- Motivations of sellers, buyers, landlords or tenants
- Price the seller will sell for or that the buyer will buy for
- Net worth of business
- Assets / Liabilities of business
- Existence of other offers / agreements
Personal information that was collected before privacy legislation came into effect is called…
Legacy Information (it is still protected under original purpose for consent)
Can you take client lists with you when you switch to a new brokerage?
No, consent was given to the original brokerage, not you.
Can I send marketing materials to local property owners in my area?
Yes, as long as their info was obtained from public records.
Can I advertise the price of a property I sold to get new business?
No, it is considered confidential info and would require consent in writing.
What are the 2 areas of unfair / anti-competitive practices described in the Competition Act?
- Conspiracy among competitors (collusion)
- False / misleading advertising
Examples of conspiracies among competitors include:
- Price-fixing
- Market Division
- Service Restriction
- Service Refusal
How to avoid anti-competitive conversations:
- Don’t talk about fees, commissions or splits
- Don’t imply that commission fees are fixed
- Don’t agree to dividing the market
- Don’t discuss market or business plans with competitors
- Don’t discriminate against brokerages with lower commission rates
How to test for whether an ad is misleading:
- General Impression given
- If it influences purchasing decision (material respect)
- If info is omitted
What two types of criminal operations illicit funds through money laundering?
- Organized crime groups
- Terrorist groups
3 Goals of money laundering:
1) Convert crime proceeds to less suspicious forms
2) Conceal criminal origins of funds
3) Create legitimate explanations for source of funds
What is Property Manipulation Scheme (money laundering)
Purchase a property using dirty money (for down payment) then changing value to launder illicit funds.
What is Cash Purchases (money laundering)
buying expensive items like boats, cars and real estate in the name of another person. Resells to a legitimate buyer after.
What is Transaction Manipulation (money laundering)
Seller agrees to falsify transaction documents, agreeing to a lower price, but accepting dirty money from seller for the difference.
What does PCMLTFA stand for?
The Proceeds of Crime, Money Laundering, and Terrorist Financing Act (federal legislation)
What does FINTRAC stand for?
Financial Transactions and Reports Analysis Centre of Canada (federal agency)
Brokerages must report all cash transactions over ___________ to FINTRAC
$10,000
Brokerages must report transactions to FINTRAC that meet the following criteria:
1) Any aspects that make them suspicious
2) Are all cash or largely composed of cash
3) Include international money transfers
Suspicious transactions may include:
- ones that include a cash deposit with the contract
- ones where the buyer/seller is an unregistered charity
- ones where the buyer / seller identity is not clear
- if a series of similar transactions has been made by the same or related parties
Conviction for failure to retain records of the identities of buyers/sellers could lead to fines of _________ or ____ years imprisonment (or both)
$500,000 and 5 years
What identification is required from clients?
Government issued ID with a clear, unique identified number (and ideally photo id)
If a buyer is a corporation what ID is necessary?
Confirmation of registration and where it is registered. Also checking that the individual is an officer that has authorization to complete the transaction on the company’s behalf.
Employers must conduct a ____________ that includes identifying any existing / potential risks in the workplace.
Hazard Assessment
