UNITS 1 - 3 REVIEW Flashcards
What is the Dower Act?
It protects the rights of an untitled spouse (on the certificate of title) in a matrimonial home.
The titled spouse can NOT dispose of (sell/mortgage/lease) the property without the consent of the untitled spouse
What are the 3 things to consider RE: The Dower Act?
- If the person is legally married
- If there is only ONE name of the Certificate of Title
- If either spouse has resided in the home after getting married
Which of the following best describes the term Dower Act?
A) it protects the rights of the titled spouse in the matrimonial home when there’s a sole owner on the Certificate of Title
B) it protects the rights of the untitled spouse in the matrimonial home when the property is held in joint tenancy
C) it protects the rights of the untitled spouse in the matrimonial home when there is a sole owner on the Certificate of Title
D) it protects the rights of the untitled spouse in the matrimonial home when property is held as tenants in common
C) it protects the rights of the untitled spouse in the matrimonial home when there is a sole owner on the Certificate of Title
What happens when the titled spouse dies in relation to The Dower Act?
It creates a lifetime estate for the untitled spouse
What 3 things do you have to do before listing a house where the Dower Act applies?
- Check the Certificate of Title
- Get the Dower release / consent from the untitled spouse
- Add release / consent to the brokerage file
What is Joint Tenancy ?
When two people are listed on the Certificate of Title of a home
John is a real estate professional with Prime Brokerage helping Sam and Melissa buy their new home. On pulling the title for the property, John sees that Melissa is the sole owner of the property as she had purchased the place prior to their marriage.
Which of the following statements apply here?
A) Dower Act dose not apply as Melissa had purchased the property prior to their marriage
B) Dower act does not apply as Sam and Melissa plan to use the property as a rental
C) Melissa needs to sign a Dower Release and register it on the title of the property
D) Sam will need to sign a Dower Consent so Melissa can sell the property
D) Sam will need to sign a Dower Consent so Melissa can sell the property
Define Land
- Land refers to the ground and that which is above and beneath it
- Includes the surface resources (soil, sand, gravel) - above it
- May or may not include the deep resources (coal, gas, oil) depending on the
description of the ownership rights and any exclusions found on the certificate
of Title - beneath it
Define Real Estate
Real Estate includes the land as well as the improvements to the land
What are Fixed Improvements to the land?
Fix improvements are items permanently attached to the land
Examples: A house, garage, barns, shed, shop, fence, pool, landscaping
Define Real Property
Real property is the land, any fixed improvements to the land, and the property ownership rights that go with the ownership of the land.
THINK: Real estate + property ownership rights
Tangible attributes of real estate (Land, fixed improvements) + intangible attributes (property ownership rights)
What is Incentive?
Anything that is advertised or offered by a brokerage to attract business + listings to that brokerage
CAN ONLY BE OFFERED BY A BROKERAGE AND NOT BY A REAL ESTATE PROFESSIONAL
What is an Inducement ?
Inducement - something that is offered to SIGN + CLOSE a DEAL
Anything offered by a brokerage to persuade a person to enter into a real estate or mortgage transaction
EG. Customer doesn’t want a corner lot due to snow removal - Brokerage could offer to gift a snow blower if customer will sign the deal on corner lot
CAN ONLY BE OFFERED BY A BROKERAGE AND NOT BY A REAL ESTATE PROFESSIONAL
What is the difference btwn Inducement Vs Incentive?
Incentive - something that is offered to BRING business to a brokerage
Inducement - something that is offered to SIGN a DEAL
Define Money Laundering
The process of taking money from illegal sources (eg. selling drugs) and making it appear as if it is coming from a legitimate source
Converting the proceeds of a crime into a less suspicious form
If someone sells drugs and owns a restaurant - Restaurant is actually only making 10,000$/month but they are saying that 50,000$/month is being made
they are laundering 40,000$/month
What are Ethics?
A voluntary set of conduct rules, values and beliefs held by an individual that guide their behavior
2 Types:
1) Utilitarian Ethics (Consequence) - Promote conduct that maximizes others welfare while reducing harm or injury. Focus is on consequence of persons actions not on intention
2) Duty -based Ethics (Intention) - focuses on the intention behind an individuals actions as opposed to the consequences of the actions
Eg. someone is driving on ice an accidently hits a person - the drivers intention was NOT to hit the person, the car slid on ice and it was an accident.
- Utilitarian Ethics would not care that this was an accident
- Duty- based Ethics would care and punishment would be less
What is the difference btwn Utilitarian and Duty-based Ethics?
1) Utilitarian Ethics (Consequence) - Promote conduct that maximizes others welfare while reducing harm or injury. Focus is on consequence of persons actions not on intention
2) Duty -based Ethics (Intention) - focuses on the intention behind an individuals actions as opposed to the consequences of the actions
Eg. someone is driving on ice an accidently hits a person - the drivers intention was NOT to hit the person, the car slid on ice and it was an accident.
- Utilitarian Ethics would not care that this was an accident
- Duty- based Ethics would care and punishment would be less
What is the Statue of Frauds?
According to the STATUE OF FRAUDS, certain contracts must be in writing and be signed by all parties who will be bound by that contract
Examples: (Know these!)
- Contracts for the SALE of an interest in land
- Contracts for Debt or Duty (LOANS)
- Contracts that can not be preformed within one year
All real estate contracts have to be in writing
What are Surface Rights?
When dealing with Real Estate we are ONLY dealing with SURFACE RIGHTS
Include the rights to:
- The physical ground
- The air space above the ground
- Any materials from the top layer of land eg. sand, gravel (not what’s deep below the ground eg, coal, oil ect.)
Eg. If diamond mine is found within sub-surface of property - property owner dose not own those diamonds, the government does
What are Mineral Rights?
Mineral rights are the rights to the natural resources below the top layer of land (Coal, Oil, Diamonds, Gold)
NOT apart of the Real Estate transaction - All mineral rights belong to government
In common law, what does the term “real estate” refer to?
A) Land and fixed improvements to the land
B) An item that can be removed from the property without causing damage to the property
C) Items not securely affixed to the land or buildings
D) Land, fixed improvements to the land and intangible rights of ownership
A) Land and fixed improvements to the land
In common law, what does the term “real property” refer to?
A) Land and fixed improvements to the land
B) An item that can be removed from the property without causing damage to the property
C) Items not securely affixed to the land or buildings
D) Land, fixed improvements to the land and intangible rights of ownership
D) Land, fixed improvements to the land and intangible rights of ownership
Which of the following statements best describes the term “personal property”?
A) Land and fixed improvements to the land
B) An item that can be removed from the property without causing damage to the property
C) Items not securely affixed to the land or buildings
D) Land, fixed improvements to the land and intangible rights of ownership
B) An item that can be removed from the property without causing damage to the property
Which of the following industries are self-regulated through RECA?
I. Real estate
II. Mortgage brokerage
III. Real estate appraisals
IV. Property Inspectors
A) Statements I, II and III
B) Statements I, II and IV
C) Statements II, III and IV
D) Statements I, III and IV
A) Statements I, II and III
What are the factors of production?
- Land
- Labour
- Capital
- Entrepreneurship
Canadian economy is referred to as?
- Capitalist economy
- Socialist economy
- Mixed economy
- Traditional economy
- Mixed economy
Which of the following statements best defines quantity SUPPLIED?
- The quantity of a good or service that would be bought at a certain price
- The amount of good or service the market can offer at a certain price.
- The quantity of a commodity that people are willing to buy at a particular price at a particular point of time
- All of the above
- The amount of good or service the market can offer at a certain price.
Which of the following statements best defines quantity DEMANDED?
- The quantity of a good or service that would be bought at a certain price
- The amount of good or service the market can offer at a certain price.
- The quantity of a commodity that producers provide over a given interval of time
- All of the above
- The quantity of a good or service that would be bought at a certain price
Which of the following statements is correct?
- Movements along the supply line occur when a change in quantity supplied is caused only by a change in price
- Shifts in supply line occur when there are changes in influencing factors other than price
- Movements along the supply line occur when there’s a change in the price of the product or service which leads to a change quantity demanded
- Shifts in supply line occur when there’s a change in quantity demanded is due to an influencing factor other than price
- Movements along the supply line occur when a change in quantity supplied is caused only by a change in price
- Shifts in supply line occur when there are changes in influencing factors other than price
Which of the following statements best describe Market Equilibrium?
- When the prices for a product become grossly over inflated beyond its realistic value primarily due to excessive consumer confidence
- When the quantity demanded exceeds the quantity supplied at the current price
- When the quantity supplied exceeds the quantity demanded at the current price
- When the quantity of goods supplied is equal to the quantity demanded
- When the quantity of goods supplied is equal to the quantity demanded
Describe Market Surplus
When the quantity supplied exceeds the quantity demanded at the current price
Which of the following statements best describe Market Surplus?
- When the prices for a product become grossly over inflated beyond its realistic value primarily due to excessive consumer confidence
- When the quantity demanded exceeds the quantity supplied at the current price
- When the quantity supplied exceeds the quantity demanded at the current price
- When the quantity of goods supplied is equal to the quantity demanded
- When the quantity supplied exceeds the quantity demanded at the current price
Which of the following statements best describe Market Bubble?
- When the prices for a product become grossly over inflated beyond its realistic value primarily due to excessive consumer confidence
- When the quantity demanded exceeds the quantity supplied at the current price
- When the quantity supplied exceeds the quantity demanded at the current price
- When the quantity of goods supplied is equal to the quantity demanded
1) When the prices for a product become grossly over inflated beyond its realistic value primarily due to excessive consumer confidence
What is GDP and what does it stand for
Gross Domestic Product
The monetary value of all finished goods and services produced within the country in a given period
GDP = includes all consumer, government and business spending + the exports - imports
What is GNP ?
Gross National Product
The monetary value of all finished goods produced by a country’s citizens and enterprises whether physically located in its borders or abroad
GNP does not include income earned within a country’s borders by foreign residents.
Which of the following are the stages of a business cycle?
- Expansion, Prosperity, Peak, Contraction, Recession, Trough and Recovery
- Expansion, Prosperity, Recession, Trough and Recovery
- Introduction, growth, maturity and decline
- Growth, maturity, regeneration and decline
- Expansion, Prosperity, Peak, Contraction, Recession, Trough and Recovery
Who is responsible for the Real Estate Act?
The Minister of Service Alberta
What are the phases of a business cycle in the correct order?
Expansion Prosperity Peak Contraction Recession Trough Recovery
What is a market bubble?
Market bubble is a temporary situation in the business cycle where prices for a product become grossly inflated beyond its realistic value
How do you calculate the Vacancy Rate?
multiply the number of vacant units by 100 before dividing by the total number of units.
A commercial building has 4,400 square metres of available office space for rent. By year end, 1,200 square metres remains vacant.
What is the Vacancy Rate?
# of vacant units = 1,200 1,200 * 100 = 120,000 120,000 / 4,400 = 27.27
Vacancy Rate = 27.27
What are the physical characteristics of Real Estate?
A) Unique, Durable, Scarce
B) Unique, Dynamic, Standardized
C) Unique, Fixed, Durable, Scarce
D) Stable, Rigid, Durable
C) Unique, Fixed, Durable, Scarce
What are the 3 types of real estate markets?
- Balanced Market
- Buyers Market
- Sellers Market
What type of the market is it when the inventory of properties (i.e. supply) in the market exceeds the number of buyers competing for that inventory.
Buyers Market
Chattels are also referred to as what type of property?
A) Private property
B) Individual property
C) Personal property
D) Exclusive property
C) Personal property
What are the 4 factors of production?
Land, labor, capital, entrepreneurship
What causes a MOVMENT along the supply line?
When a change in quantity is caused by a change in PRICE (and price only)
Shifts in the supply line occur when….?
When something other than price causes the supply to change.
Some factors that can cause a shift in the supply line are:
•A change in Production costs
•A change In Technology
•A change in Producer expectations
•A change in Number of suppliers in the market
•A change in Government taxes
What is CPI?
Consumer Price Index
It measures the cost of a fixed basket of goods and services purchased by families and individuals over time.
Changes in Economic Activity are caused by what 3 reasons?
- Seasonal changes
- Business cycles
- Secular trends
Which of the following statements is true about The Real Estate Act?
Choose only ONE best answer.
A) The Real Estate Act is the provincial legislation
B) The Real Estate Act is the federal legislation
C) The Real Estate Act is enacted by RECA
D) Minister of Service Canada is responsible for the real Estate Act
A) The Real Estate Act is the PROVINCIAL legislation
Which of the following is true about The Real Estate Act?
A) The Real Estate Act establishes the framework for regulating the real estate, mortgage brokerage and real estate appraisal professionals in Alberta
B) The Real Estate Act can be amended by the provincial legislature
C) The Act provides the mechanism for self regulation of the industries
D) RECA is responsible for updating the Real Estate Act
A B + C are true
What are the 4 components of the Real Estate Act
The Act, The Rules, The Regulations & The By Laws
Who is responsible for the Real Estate Act?
The Minister of Service Alberta
Which of the following statements is true for the Rules?
- Rules can only be amended by the provincial legislature
- Rules are the standards of practice for industry professionals
- Rules affect the day-to-day business of the industry professional
- Rules can be established and amended by the Council
2,3,4 are true statements
Which of the following statements is true for the Bylaws?
1) Bylaws are guidelines that specify how RECA conducts and operates its business
2) Bylaws set policy in regards to the organization and administration of the Alberta Real Estate Foundation and the Real Estate Assurance Fund
3) Bylaws contain most of the requirements affecting licensee business activities
4) RECA can create and amend Bylaws
1) Bylaws are guidelines that specify how RECA conducts and operates its business
4) RECA can create and amend Bylaws
Which of the following are purposes of RECA?
1) Administer the Act
2) Set and enforce standards of conduct for the industry and the business of industry professionals
3) To protect against investigate, detect and suppress mortgage fraud
4) To protect consumers affected by the industry
ALL OF THE ABOVE
What is needed to be authorized to trade in real estate?
Licence and registration certificate
What are the three industries regulated by RECA?
- Real Estate
- Mortgage Brokerage
- Real Estate Appraisers