UNIT 4 - Real Estate Brokerage Flashcards
Amir is a real estate professional with Royal Peak Brokerage. He wants to sell his own home and asks his friend Melinda to list the property for him. Which of the following statements is correct in this scenario?
REIX would not cover Amir for any claim arising from the sale of his own property
REIX would not cover Melinda for an error or omission related the sale of Amir’s property
REIX would cover Melinda for an error or omission related to the sale of Amir’s house
Melinda would be covered by her comprehensive general liability assurance for any claim arising from the sale of Amir’s property
A) Statements 1 and 3
B) Statements 2 and 3
C Statements 3 and 4
D) Statements 1 and 4
E) All of the above
A) Statements 1 and 3
Which of the following are not covered under REIX?
- Activities that are not considered to be trades in real estates
- Damage to, or loss of, tangible property
- Disputes related to commissions or fees payable on a trade in real estate
- Personal trades by real estate professionals for their or their spouses’ benefit
A) Statements 1, 2 and 3
B) Statements 2, 3 and 4
C) Statements 1, 2 and 4
D) All of the above
D) All of the above
Which of the following actions may compromise REIX coverage?
- Failure to report incidents or disputes to REIX on a timely basis
- Failure to cooperate with REIX regarding the incident or dispute
- Admitting guilt or attempting to settle the incident or dispute without first consulting with REIX
- Involving REIX prior to going to court
A) Statements 1, 2 and 3
B) Statements 2, 3 and 4
C) Statements 1, 2 and 4
D) All of the above
A) Statements 1, 2 and 3
What is the limit of liability provided by REIX insurance policy?
one million / claim
Those that are engaged by the brokerage to trade in real-estate must ….
A) Be licensed by RECA and be registered with that brokerage
B) Trade in real estate only in the name of that brokerage
C) Receive commissions for trades in real estate only from that brokerage
D) All of the above
D
How many brokers can there be per brokerage?
One
But there is no restriction to the number of associate brokers and associates
True or False
The broker may be the owner of the brokerage or may be someone who manages the brokerage on behalf of the owner?
TRUE
What are the three steps to becoming a Real Estate Broker?
A) Complete REAP courses, Complete REBP Requirements and then Apply
B) Complete REBP Requirements, Complete REAP courses and then Apply
A) Complete REAP courses, Complete REBP Requirements and then Apply
True or False
In order to become a Broker you must have 3 years of Real estate experience as an associate within in previous 5 years in order to meet the requirements
False
In order to become a Broker you must have 2 years of Real estate experience as an associate within in previous 5 years in order to meet the requirements
Which of the following statements is correct for brokerages?
- A brokerage is the only legal entity authorized to trade in real estate by RECA
- A brokerage can have only one licenced broker
- There is no restriction on the number of brokers, associate brokers and associates that can be registered with the brokerage
- The broker, the associate brokers, and the associates can only trade in real estate in the name of the brokerage with which they are registered
Choose only ONE best answer.
A. Statements 1, 2 and 3
B. Statements 2, 3 and 4
C. Statements 1, 2 and 4
D. All of the above
C. Statements 1, 2 and 4
Which of the following statements is true for those engaged by the brokerage to trade in real estate?
- Be licensed by RECA and be registered with that brokerage
- Trade in real estate only in the name of that brokerage
- Receive commissions for trades in real estate only from that brokerage
- Receive referral fees from other industry professionals and brokerages
A
Statements 1, 2 and 3
B
Statements 2, 3 and 4
C
Statements 1, 2 and 4
D
All of the above
A
Statements 1, 2 and 3
What are the components of leadership?
- Authority
- Supervision
- Responsibility
- Accountability
Statements 1, 3 and 4
Authority, Responsibility and Accountability
Which of the following are the reasons because of which the broker has the authority to be the leader of the brokerage?
- The broker owns the brokerage and is responsible for the management of the brokerage
- They hold the applicable authorization issued by RECA
- This authorization is achieved through meeting the
education and experience requirements as established by RECA - A broker is registered with and approved to operate a real estate brokerage, and trade in real estate on behalf of that brokerage
Statements 2, 3 and 4 are correct - they do not need to OWN the brokerage (but they can)
John is a broker of Royal Oak Realty. He is leaving for vacation and delegates his duties to Priya, an associate broker with the brokerage. Which of the following is true about broker delegation of duties?
- The broker delegate must be capable of competently carrying out the duties
- The delegation details are clear, in writing, and understood by both the broker and the delegate
- The particulars of the delegation are communicated to the other brokerage licensees and the staff
- The delegate becomes accountable for the actions of the brokerage as well as the conduct of its administrative staff and real estate professionals
Statements 1, 2 and 3
Malaki is a real estate professional High Point Realty, just starting his real estate career. He has always been ambitious and would like to move up the career ladder in real estate. How many years of experience does Malaki need to become a broker?
A
5 years
B
10 years
C
2 years
D
3 years
C
2 years
Which of the following are the duties and obligations of Real estate professionals?
- To act on behalf of the brokerage
- To follow the policies and procedures of the brokerage
- To comply with the Real Estate Act, Rules, Regulations, and Bylaws
- To represent the themselves in the promise and provision of services
Statements 1, 2 and 3
Margaret is a real estate professional with Professional Realty Group. She is helping her buyer clients, Rob and Chantelle Thomas, purchase a property. After one of the showings, the front door of a property is left unlocked. The unsecured property is subsequently robbed and the sellers initiate a civil action against the real estate professional to compensate for their loss. Which insurance coverage will cover this incident?
A
Homeowners Insurance
B
Professional Liability Insurance.
C
Comprehensive General Liability Insurance
D
Real Estate Insurance exchange
C
Comprehensive General Liability Insurance
Explain Homeowners insurance
- buiz tools or equipment can be covered under this
- high potential for automobile accident claims driving to and from real estate appointments
Explain CGL insurance and give examples of when someone would need it
Comprehensive General Liability insurance
pertains to the insureds place of business and protects against
- falls / any civil liability action
- any damages or body injuries that the insureds business caused while at a customers location
- legal defense cost of the insured
examples:
- the front door of a property is left unlocked after a showing - the property is robbed and the sellers take a civil action against the real estate professional to compensate for their loss
following an open house the wood burning fireplace is not put out and house fills with smoke. sells take out a civil action against agent
a buyer meets her real estate agent at their home office to write an offer/ Which at the home office the buyer falls down on the icy front steps - breaks his ankle and is unable to work - take out a civil action against agent for lost wages
True or False Participation in Professional Liability insurance (REIX) is mandatory for all classes
also what’s REIX stand for
TRUE
Real Estate Insurance Exchange
What does the Comprehensive General Liability Insurance cover?
- Situations that may give rise to civil liability, such as a fall
- Disputes related to commissions or fees payable on a trade in real estate
- Any damages or bodily injury that the insured’s business caused while at a customer’s location
- Legal defense costs of the insured if the matter is within the scope of the policy
Statements 1, 3 and 4
Which of the following does Real Estate Insurance exchange (REIX) cover?
A
Fraud, breach of trust and failure to disburse money
B
Errors, omissions and negligent acts
C
Errors, omissions and breach of trust
D
Fraud, breach of trust and errors and omissions
B
Errors, omissions and negligent acts
Who is responsible for administering REIX?
A
RECA
B
The Council
C
The Advisory Board
D
Minister of Service Alberta
C
The Advisory Board
Sam is a real estate professional with Pro Realty Services. A buyer meets Sam at his home office to write an offer on a property. While exiting the home office, the buyer falls down the icy front steps, breaks his ankle, and is unable to work for five months. The buyer initiates a lawsuit against Sam for his lost wages. Which insurance coverage will cover this incident?
A
Homeowners Insurance
B
Professional Liability Insurance.
C
Comprehensive General Liability Insurance
D
Real Estate Insurance exchange
C
Comprehensive General Liability Insurance
Which of the following statements is correct for Real Estate Insurance exchange (REIX)?
- REIX is mandatory for all classes of real estate licences in Alberta
- REIX is administered under the guidance of an Advisory Board appointed by RECA
- RECA collects the premiums for the program on behalf of REIX when licences are renewed on September 30 of each year
- REIX is a reciprocal insurance program represents a pooling of risk for all classes of licences in real estate
ALL OF THE ABOVE
What is the deductible for REIX?
A
$3,500 for the first claim and $7,000 for any subsequent claims within three years of the first claim
B
$2,500 for the first claim and $5,000 for any subsequent claims within three years of the first claim
C
$3,500 for the first claim and $7,000 for any subsequent claims within two years of the first claim
D
$2,500 for the first claim and $5,000 for any subsequent claims within two years of the first claim
A
$3,500 for the first claim and $7,000 for any subsequent claims within three years of the first claim
Rob, a real estate professional with Mozaic Realty, is holding an open house for his seller clients. Following the open house, there’s a rainstorm and water accumulates in the bedroom because a window is left open, ruining the brand-new carpet that the seller had installed. The seller files a civil action against the real estate professional for the damage to the property. Which insurance coverage will cover this incident?
A
Homeowners Insurance
B
Professional Liability Insurance.
C
Comprehensive General Liability Insurance
D
Real Estate Insurance exchange
C
Comprehensive General Liability Insurance
Which of the following are the benefits to the REIX program?
- The real estate profession has as active role in managing risk
- The program is independent of the commercial insurance market, therefore, incidents such as weather events or natural disasters do not affect the cost of the program
- Premiums reflect the activities of subscribes within their specific provincial jurisdiction
- There is a potential to save on insurance costs as the program is not focused on profit
All of the above
Amir is a real estate professional with Royal Peak Brokerage. He wants to sell his own home and asks his friend Melinda to list the property for him. Which of the following statements is correct in this scenario?
REIX would not cover Amir for any claim arising from the sale of his own property
REIX would not cover Melinda for an error or omission related the sale of Amir’s property
REIX would cover Melinda for an error or omission related to the sale of Amir’s house
Melinda would be covered by her comprehensive general liability assurance for any claim arising from the sale of Amir’s property
A
Statements 1 and 3
Which of the following are not covered under REIX?
Activities that are not considered to be trades in real estates
Damage to, or loss of, tangible property
Disputes related to commissions or fees payable on a trade in real estate
Personal trades by real estate professionals for their or their spouses’ benefit
All of the above
Which of the following actions may compromise REIX coverage?
Failure to report incidents or disputes to REIX on a timely basis
Failure to cooperate with REIX regarding the incident or dispute
Admitting guilt or attempting to settle the incident or dispute without first consulting with REIX
Involving REIX prior to going to court
Statements 1, 2 and 3
Reciprocal insurance represents?
A pooling of risk - subscribers agree to create a pool of money to be used to satisfy claims
Benefits of REIX ?
- The insurance program enhances the image of the real estate profession
- the real estate profession has an active role in managing risk by operating the program, resolving the claims and gathering loss information
- there is a protentional to save on insurance costs
- incidents such as weather events do not effect the cost of the program
- premiums reflect the activities of the subscribers within their province
TRUE OR FALSE
RECA collects the premiums on behalf of REIX in terms of licensing fees
TRUE
these fees are due when someone becomes authorized by RECA
- on Sept 30th each year with normal license
Anything a brokerage offers or gives to a person who is, or could be, a party to a real estate or mortgage transaction, meant to assist, persuade or cause that person to enter into a particular real estate or mortgage transaction describes which of the following ?
A) Inducement
B) Incentive
C) Referral
D) Enticement
A) Inducement
What is the difference between and inducement and an incentive ?
Incentives = bring business into the brokerage
Inducements = used to motivate clients to move forward with a deal
The term “Conduct deserving of sancation” can best be described by:
A) conduct that harms the integrity of the profession
B) conduct that breaches the Act, Rules, Regulation
C) conduct that falls below industry standards
D) all of the above
D) all of the above
Which of the following are covered under REIX ?
A) Acts that involve fraud or breach of trust
B). Personal trades of REP’s
C) Situations where there is personal injury or property taxes
D) Situations that involves errors, omissions or negligent acts
D) Situations that involves errors, omissions or negligent acts
REIX is a mandatory self-insurance program for which profession?
A) Home inspectors
B) Mortgage brokers
C) Real estate Appraisers
D) REP’s (Real Estate Professionals)
D) Real Estate Professionals
Which statement doesn’t apply to REIX as well as self insurance program?
A) Premiums are not affected by whether events or natural disasters
B) The profession operates the program and reviews the claims
C) The program covers claims for commissions related to trades
D) The program has some coverage exclusions related to trades
C) The program covers claims for commissions related to trades
Which of the following transactions is NOT excluded from the coverage under the REIX policy? aka which IS covered
A) REP’s who are selling or buying their own property
B) REP’s selling property of other REP’s
C) The spouses of REP’s selling or buying their own property
D) REP’s who are developers selling or buying their own
B) REP’s selling property of other REP’s
Walt a REP, left a large window open at a party where he recently held an open house. It rained heavily that evening and the interior of the property sustained water damage. Which type of insurance policy would typically apply in this situation.
A) Home insurance policy
B) General liability insurance
C) Professional liability insurance
D) Errors and omissions insurance
B) General liability insurance
If REIX has multiple claims from the same REP within a 3 year period, what would the detectable be for the second claim?
A) $1,500
B) $2,500
C) $5000
D) $7000
D) $7000
first would be 3,500
Which of the following organizations over seas the premium for REIX?
A) RECA
B) CREB
C) AREA
D) EREB
A) RECA
Which of the following statements is correct regarding participation in REIX?
I) Participation by Real estate Brokerages in the policy is voluntary
II) Participation as a subscriber is mandatory pursuant to the rules
III) Subscribers join when they become registered with a brokerage
IV) Subscribers must first be members of their local real estate board
Statements II & III
Which of the following activities may compromise REIX insurance coverage?
A) Late reporting of an incident
B) Failing to cooperate fully with REIX
C) Offering to settle without first involving REIX
D) All of these may compromise REIX Coverage
D) All of these may compromise REIX Coverage
When is the payment of REIX due? A) June 30 B) March 1 C) September 30 D) Oct 1
C) September 30
On what basis is the amount of the REIX premium determined?
A) By analysis of the current cost of money on the world market
B) By annual claims paid in the commercial insurance market
C) By annual review of defence costs and indemnities paid
D) By annual review indemnities paid and potential claims in progress
D) By annual review indemnities paid and potential claims in progress
Which of the following statements describes a benefit of the REIX insurance program
A) It enhances the image of the profession
B) The profession
C) It offers cost effective insurance coverage
D) All of these are benefits of the program
D) All of these are benefits of the program
Which of the following is correct regarding the terms of REIX program?
I) The amount of the first deductible is 3500
II) The second deductible is 7000 within a 3 year period
III) Deductibles for claims must be paid in order to re new a license
IV) The policy has a maximum liability limit per claim 1,000,000
All statements are true
Which of the following is NOT a risk reduction practice for REP’s
A) Making notes of discussions, meetings and actions for follow up
B) Keeping track of appointments using a paper/electric system
C) Relying on memory in order to recall facts or events if needed
D) Keeping the broker informed of incidents that may cause a claim
C) Relying on memory in order to recall facts or events if needed
Which of the following terms best describes the insurance program represented by REIX?
A) Government insurance program
B) Reciprocal insurance program
C) Residential insurance program
D) Commercial insurance program
B) Reciprocal insurance program
Which of the following statements is correct regarding REP’s and their insurance for the motor vehicle used in their Real estate practice?
A) They should review their vehicle insurance for sufficient coverage
B) They should advise their insurer regarding their business use of the vehicle
C) They may need to give the brokerage the details of their vehicle insurance
D) All of these statements are correct
D) All of these statements are correct
Amy and john buy a house together and are registered as tenants in common on the property. John passes away suddenly in a car accident. What happens to the house they purchased together?
A) Amy now owns 100% of the house
B) Johns share passes to his heirs though his will
C) Johns share goes to his son
D) Johns share returns to the crown
B) Johns share passes to his heirs though his will
because they are TENANTS IN COMMON and not JOINT TENANTS (if they were joint Amy would get 100% of the house)
If a real estate assoc. takes a year off - how long do they have to register again with the brokerage before their license expires ?
A) By September 30th of the following year
B) Within 24 months after her license expires
C) Within 36 months from the last date of her registration
D) By Dec 31 after termination of her registration
C) Within 36 months from the last date of her registration
Dispute involving REP’s and consumers may be the result of which of the following?
A) Assumptions made by one party about the other
B) Omissions made by one party that affects the other
C) Commissions (act) done by one party that impacts the other
D) Disputes may be caused by any of these
D) Disputes may be caused by any of these
Timely & Friendly communication between Real Estate misinformation, errors or minor breaches of the act or R terms? A) Dispute identification B) Professional courtesy C) Professional dispute resolution D) Voluntary Broker resolution process
B) Professional courtesy
Which of the following statements is correct regarding the obligation of the broker?
A) To actively manage the brokerage and supervise staff
B) To have a system to deal with disputes and complaints
C) To have written policies and procedures for the brokerage
D) All of the statements apply
D) All of the statements apply
Anita, a REP, failed to include the name of the brokerage when advertising her new listing. RECA determined that her conduct contravened the requirements of the Rules to always advertise in the name of the brokerage. As a result…,
A) RECA found Anita’s conduct deserving of sanction
B) Anita got suspended
C) Anita will be fired
D) RECA will hold Anita’s commissions for this sale
A) RECA found Anita’s conduct deserving of sanction
What’s VBRP stand for?
voluntary broker resolution process
Conduct by REP’s that causes financial loss to consumers may give rise to which of the following?
I) Meditation
II) Arbitration
III) Civil liability
IV) Conduct Sanctions
III) Civil liability
IV) Conduct Sanctions
Which of the following statements best describe the benefits of the voluntary broker resolution process for the brokerage
I) May help avoid RECA investigation and or civill proceedings
II) Helps the broker to avoid cost of appointing a mediator or
arbitrator
III) Helps protect the brokerage reputation and mean the consumer relation ship
IV) May identify the need to improve the brokerage policies or procedures
All
Which of the following is a benefit of the voluntary broker resolution process by RECA?
A) The process promotes the professionalism within the industry
B) Industry professionals can self identify areas for improvement
C) Its investigation resources are allocated to more serious matters
D) All of these are benefits
D) All of these are benefits
Which of the following statements applies to the voluntary broker resolution process ?
I) The broker may have a number of ideas to resolve disputes
II) There must be a willingness by all parties to seek a win win solutuon
III) If no unanimous solution is reached, the investigation will be dropped by reca
IV) If any party refuses to participate in the VBRP, RECA will make the final decision
I) The broker may have a number of ideas to resolve disputes
II) There must be a willingness by all parties to seek a win win solutuon
Which of the following statements is NOT attributed to the voluntary broker resolution process?
A) It deals with investigation into minor misconduct issues
B) It allows up to 60 days to complete the resolution process
C) It recognizes the broker / broker delegate role in self regulation
D) All parties must agree to participate in the process
B) It allows up to 60 days to complete the resolution process
Personal info is the same as confidential info
False
Personal information is any information about an individual that can be used to identify that individual (T/F)
TRUE
In AB, Personal info is regulated by what two pieces of privacy legislation ?
A) PIPEDA & PIPA (Personal information protection and electronic documents act ( Federal) and Personal Information protection Act (Provincial)
B) PIPA and PIPPPDE
C) PIPEDA & Primacy law
D) all of the above
A) PIPEDA & PIPA (Personal information protection and electronic documents act ( Federal) and Personal Information protection Act (Provincial)
T/F PIPA (Personal Info Protection Act) is Provincial Legislation?
True
PIPEDA - personal info protection and electronic documents act is federal or provincial legislation?
federal
All provinces must comply with the Personal protection act
T/F
False - this is a provincial law in Alberta
Privacy legislation Requires each brokerage to have an individual responsible for privacy
T/F
True
In order for the consent to collect personal info to be valid, it must be in writing.
T/F
False
Which of the following statements best describes personal info?
A) All info about an individual
B) Info that identified an individual
C) info not available in the public domain
D) All of the above
B) Info that identified an individual
Which of the following terms refers to personal info and business info that is shared within a client relationship and that they may not be shared outside of that relationship without the clients consent
A) Legacy info
B) Private info
C) Personal info
D) Confidential info
D) Confidential info
Which of the following statements has best describes the concept of informed consent
I) It is consent related to sharing an individuals informed decisions
II) It is requires an understanding of facts, implications and consequences of giving consent
III) It is required based on the type and amount of personal info being shared
IV) It must not be obtained based on misinformation, dishonesty or deception
II & IV
Which of the following is NOT one of the types of consent related to personal info?
A) Affirmed consent
B) Express consent
C) Implied consent
D) Opt out consen
A) Affirmed consent
Which of the following is not an example of an individuals personal info?
A) Photograph and marital status
B) Name and home address
C) Office phone number and email
D) Home phone number & Email
C) Office phone number and email
The PIPEDA applies to which of the following commercial activities?
A) Commercial activities which are international
B) Commercial activities which are federally regulated
C) Commercial activities which are interprovincial
D) All these commercial activities are applicable
D) All these commercial activities are applicable
Which of the following statements is correct regarding the maximum fines if convicted of an offence under PIPA?
A) $1,000 for individuals and $10,000 for business
B) $10,000 for individuals & $25,000 for business
C) $10,000 for individuals & 100,000 for business
C) $10,000 for individuals & 100,000 for business
The area of competition law attempts to balance which of the following aspects of the marketplace
A) Needs of local businesses with growth in international competition
B) Division of market share between small businesses and large businesses
C) Business innovation and enterprises with consumer choice and protection
D) Business survival in the long term is highly competitive market place
C) Business innovation and enterprises with consumer choice and protection
The Competition Act is concerned with two key issues. Which of the following statements identifies these issues?
A) Anti competitive advertising and market share identification
B) Anti competitive services and false misleading advertising
C) Conspiracy among competitors and false misleading advertising
D) Collusion between advertisers and false or misleading conspiracies
C) Conspiracy among competitors and false misleading advertising
The competition Act is concerned with conspiracies between businesses. Which of the following topic does this include ? A) Price fixing B) Market division C) Service restriction D) All of these are issues
D) All of these are issues
According to the telecommunications act, telemarketing may include which of the following methods of communication?
A) Telephone, cell phone, pager, mobile device and radio
B) Pager, fax, telephone , cell, mobile device
C) Pager, fax, internet, cell, television, mobile phone
D) Telephone, cell, pager, fax, mobile device, television
B) Pager, fax, telephone , cell, mobile device
Which of the following statements best describes the concept of institutional advertising ?
A) General advertising to the public done by their brokerage
B) The advertising of client properties done by the brokerage
C) Advertising done by REP’s on behalf of their brokerage
D) The advertising of institutional properties listed for sale by the brokerage
A) General advertising to the public done by their brokerage
Which of the following techniques helps money launders distance themselves from their money laundering transactions?
I) Use of cash transactions
II) Use of a nominee for transactions
III) Use of straw buyer for transactions
IV) Use of fictitious or stolen identity for transactions
I,II & IV
Which of the following terms refers to the process of taking money from illicit sources making it look like it is from legitimate sources? A) Bait & Switch B) Criminal activity C) Organized crime D) Money laundering
D) Money laundering
RE Brokerages are required to report suspicious RE transactions. Which of the following transactions have the potential to be suspicious ?
A) The buyer purchases multiple properties in a short time
B) The buyer purchases a property without bothering to view it
C) The buyer purchases property in someone else’s name
D) All of these may be suspicious transactions
D) All of these may be suspicious transactions
RE Brokerages must report suspicious transactions to which of the following organizations? A) CREA B) PIPDA C) FINTRAC D) PCMLTFA
C) FINTRAC
