Term
Anybody working as a managing broker, rental property manager or trading services rep in BC must be currently licensed. Serval exemptions from this basic rule are contained in s. 3 of the Real Estate Services Act or in the regulations. Which of the following people is NOT covered by an expemtion?
1) an accountant who arranges the sale of a business along with the premises in which the business operates
2) a person who is employed full time on salary by a licensed devloper and who sells only the developer's real estate
3) An executor selling the property of the deceased as provided by the will
4) a lawyer who arranges a sale of property for a client and receives, in addition to legal fees, a commission of 5% of the sale price |
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Definition
| 4) a lawyer is only exempt fro the basic rule in s. 3 if the transaction in question occurs in the course of his or her legal practice. The receipt of a commission in addition to legal fees would suggest the transaction was not in the regular course of practice. |
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Term
Which of the following is NOT a purpose of the Real Estate Services Act?
1) to protect the public by suspending or cancelling the licenses of those licensees who do not adhere to the requirements of the Act
2) to consolidiate all the remedies available to a person who has suffered damages due to the imcompetence of a licensee
3) to prevent unethical practices in the real estate industry
4) to ensure that all real estate brokers and representatives are reasonably competent and qualified for their jobs. |
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Definition
| 2) the purpose of the Real Estate Services Act is to protect the public and to maintain a consistent licensing system which is only available to persons who can prove their integrity and good reputation. These objectives are achieved through the licensing system set out in the Act. While the Act does provide a number of disciplinary actions, it does not encompass all the remedies available at law. For example, a person who suffers a loss because of a licensee's fraudulent actions will have legal rights under the common law to recover the loss |
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Term
Which of the following cirmcumstances could result in the loss of a licence by a licensee?
1) a representative is let go by the brokerage employing her and is looking for a new borkerage.
2) a representatvie gets licensed in high school at the age of sixteen.
3) a representatvie works four days a week for one brokerage and the other three days a week for a friend who has a small real estate brokerage.
4) In all of the above situations the licensee would be liable to lose his or her licence. |
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Definition
| 4) sec 7 of the Real Estate Services Act provides that a manageing broker, associate broker or a representative must be licensed in relation to a single brokerage, and engaged by that brokerage. If a repesentavitve ceases to be employed by a brokerage their license must be returned to the Real Estate Council. A real estate licensee must be a least 19 years of age. Sec 7(3) of the Real Estate Service Act provides that a representative cannot act for any brokerage other than the brokerage in realtion to which they are licensed. |
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Term
| Why would a purchaser use financing by means of 'agreement of sale' |
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Definition
| The purchaser most likely does not have the resources to either purchase the property outright or obtain necessary financing from an instituational lender. |
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Term
| Who retains the legal title when using financing by 'Agreement for Sale' |
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Definition
| The vendor retains legal title. The purchaser will pay the vendor for the fee simple interest over a period of time. During this period the purchaser in entitiled to possession of the property and has most of the rights of fee simple ownership. |
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Term
| By financing by Agreement for Sale, how do both parties gain the security offered by the land title registry. |
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Definition
| The vendor remains the registered owner of the property and the purchaser has a registered right to purchase on title. |
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Term
| When would Vendor Financing come into play? |
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Definition
| When the purchaser does not have the means for conventional financing and the vendor is not willing to finance the entire purchase price of the property, or even a significant portion, and therefore an agreement for sale is not appropriate. |
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Term
| How would 'Vendor financing benefit a purchaser? |
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Definition
| In a case where there purchaser does not have a down payment, the vendor might assist the purchaser by financing a smaller portion of the purchase price through advancing the funds to the purchaser, or to be put correctly, by deferring payment of part of the purchase price |
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Term
| How would a vendor have their 'vendor financing' secureed? |
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Definition
| Usually the purchaser will obtain the bulk of his purchase monies by having a lender grant a first mortgage to the purchaser. The vendor offering vendor financing would then have to have his loan secured by way of a second mortgage, subsequent in priority to the lender's mortgage. |
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Term
| The most common government assistance offered to a homeowner is Canada Mortgage and House Corporation (CMHC) high ration mortgage insurance. What are the two private companies that offer high ratio insurance? |
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Definition
| Currently, mortgage insurance is also available from Genworth Financial Canada and Canada guaranty Mortgage Insurance Company. |
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Term
| Name 4 methods that joint tenancy can be severed and thereby converted into a tenancy in common. |
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Definition
| * sale of a joint tenant's interest to a third party. * bankruptcy of a joint tenant * severance by mutual agreement; or * the conduct of a joint tenant who acts so as to treat his interests as separate and apart from the other joint tenant. |
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Term
| Often people will form a partnership to invest in a particular property together. How many people must the partnership consist of? |
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Definition
| The partnership may consist of 2 or more individuals, partnerships, or companies, or a combination of the all 3 |
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Term
| In a partnership, does each of the partners have to take title to an undivided interest in the property, equivalent to their interest in the partnership, as a tenant in common? |
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Definition
| No. One partner, or a company can take title to the land and hold its interest for the partnership by way of a registered or unregistered declaration of trust or under the terms set out in the partnership agreement. |
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Term
| Besides forming a partnership, what is another common method of combining resources to purchase a property? |
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Definition
| To have a company acquire the property in question and then have the investors purchase shares in the company. |
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Term
| There are many legal and financial advantages to having a company acquire a property. What is the main advantage? |
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Definition
| The main advantage is the limited liability of the company which shields the shareholders from liability to third parties. |
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Term
| Will a tenant usually have any right to obtain a fee simple interest in a property? |
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Definition
| No, whether the tenancy is a simple month to month rental of an apartment or a long term lease of residential or commercial space, the tenant usually does not have any right to obtain a fee simple interest in the property. |
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Term
| How could a tenant be in the position to purchase leased lands? |
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Definition
| A tenant may negotiate an option to purchase leased lands. The option will allow the tenant for a specified period of time, the sole option to purchase the leased premises for a specified price. These options are relatively uncommon features of a lease. |
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Term
| Why are options to purchase relatively uncommon features in a lease? |
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Definition
| The landlord is usually unwilling to allow a tenant to restrict the landlord's flexibility in marketing the property and most tenants are either not in a position to purchase the property or have, for their own business reasons, decided not to invest their capital in real estate. |
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Term
| What is more common then a tenant negotiating an option to purchase leased lands? |
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Definition
| A right of first refusal provision in a lease. This provides the tenant with the right to consider the purchase of the property should the landlord decide to sell. Most often this will provide that if the landlord receives an offer from a third party that the landlord wishes to accept, the tenant will have a specified time period to match the offer. |
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Term
| How do purchasers combine many of the features of leasehold interests with those of fee simple interests? |
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Definition
| Strata title interest often allows them to do so. When purchasing a unit in a strata title development, the investor acquires a fee simple interest in the strata lot and an undivided interest, as a tenant in common with the other strata lot owners, in the common property of the develpment. |
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Term
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Definition
| One measure of our national economic performance is known as the 'gross domestic product (GDP). The GDP represents money value of all final goods and services that our economy produces during a specific period (usually 1 year) and includes returns on foreign capital invested in Canada. In can be expressed either in current dollars or in real terms using a given base year (eg. in millions of 2002 dollars, seasonally adjusted at annual rates) |
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Term
| What are the 5 'Goods Producing Industry Sectors?' |
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Definition
* agriculture, foresty, fishing and hunting
* mining and oil and gas extraction
* utilities
* construction
* manufacturing |
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Term
| The Service Producing Industries is "home" to the real estate industry. What group of leading industries is Real Estate apart of? |
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Definition
| Finance, Insurance and real estate (FIRE) |
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Term
| What form of business is taken on when a Real Estate broker carries on a business alone without incorporating? |
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Definition
| The business takes the form of a sole proprietorship. |
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Term
| In the case of a broker operating as a sole proprietorship, what are the licensing requirements of the Real Estate Services Act? |
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Definition
| The broker is licensed as a brokerage, not as a managing broker. |
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Term
| The sole proprietorship has a number of disadvantages which discourage its use. What is the most important disadvantage? |
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Definition
| A person operating a business as a sole proprietorship has unlimited personal liability. They are liable to all individuals or businesses with whom they contact. |
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Term
| When 2 or more people operate a business together with the benefit of a formal legal relationship they will probably be a partnership. What is the key to determining whether there is or isn't a partnership? |
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Definition
| The key to determining whether or not there is a partnership is whether or not the parties are acting as agents for and on behalf of each other and whether there is any sharing of profits of the business. |
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Term
| What are the requirements if 2 or more people form a partnership? |
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Definition
| They are required under the Partnership Act to file a declaration of partnership with the Registrar of Companies, giving a brief description of the partnership. This is much easier and less expensive than incorporating a company under the company act. |
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Term
| Does a partnership itself pay income taxes? |
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Definition
| No, Canada Revenue Agency treat a partnership in much the same way it treats a sole proprietorship. |
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Term
| What is the main disadvantage of a partnership? |
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Definition
| A partnership has a number of disadvantages, many of which it shares with the sole proprietorship. The acts of 1 partner in conducting the business may bring liability upon all the partners even if the actions were not authorized by the other partners. |
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Term
| What is the most common form of business organization used by small, medium and large businesses in Canada. |
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Definition
| Corporations are the most common form of business and are formed by complying with the requirements of varius provincial or federal statutes. In B.C. most corporations are incorporated pursuant to either the Company Act (BC) or the Canadian Business Corporation Act (Canada) |
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Term
| What are 3 of the tax reasons for forming a corporation? |
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Definition
*estate planning;
*income splitting; and
*income averaging |
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Term
Which of the following statements is FALSE?
(1) To maintain a valid licence, a representative must annually file a certificate signed by an accountant verifying that the representative's books and accounts are in order.
(2) Licenses must be renewed every two years by making application to the Real Estate Council prior to the expiry of the licence.
(3) A brokerage must file an accountant's report with the Council within 120 days of his or her financial year end.
(4) The accountant's report must certify whether the brokerage has properly maintained its account balances for all month ends during the reporting period. |
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Definition
Answer:1
All licenses are issued for a two year period and must be renewed by application to the Council prior to their expiry. Brokerages are required to file the report and have the certifcations outlined in options (3) and (4); however, representatives are not required to file an annual accountant's certificate. |
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Term
| In May 2004 2 new Statutes that govern real estate in BC were introduced and in 2005 the Real Estate Act was replaced by 2 new acts. What are they? |
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Definition
| The Real Estate Services Act and the Real Estate Development Marketing Act. |
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Term
| What does the Real Estate Services Act impose? |
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Definition
| Licenseing requirements on persons who provide trading services related to real estate, rental management services, and strata management services. |
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Term
| What does the Real Estate Develoment Marketing Act impose? |
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Definition
| disclosure requirements on developers marketing various forms of real estate developments, such as strata lots, cooperatives, times shares and shared interests. |
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Term
| Which Act regulates the Real Estate Council's business and affairs? |
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Definition
| The Real Estate Services Act, which reference Regulations, Rules and Bylaws and also regulate the licensing and conduct of licensees. |
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Term
| The purpose of the Real Estate Services Act is to protect the public by: |
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Definition
* ensuring licensees meet certain minimum reasonable competency requirements
* setting out standards to ensure licensees conduct themselves appropriately while licensed.
* establishing the Real Estate Council of BC which administers the Act, including issuing the licences, investigating complaints and providing for diciplinary action of licensees if required. |
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Term
| Real Estate services is defined in the Act to mean: |
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Definition
* rental property management services,
* strata management services, or
* trading services. |
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Term
| The Real Estate Services Act defines "trading services" to mean any of the following 8 services: |
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Definition
1) advising on the appropriate price for real estate;
2) making representations about real estate;
3) finding real estate for a party to acquire;
4) finding a party to acquire real estate;
5) showing real estate;
6) negotiating the price of real estate or the terms of the trade in real estate;
7) presenting offer to dispose of acquire real estate;
8) receiving deposit money paid in respect to real estate. |
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Term
| The Act defines "real estate" to mean: |
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Definition
a) real property,
b) regardless of whether it is or not an interest in real property, a cooperative interest, shared interest in land or time share interest and
c) a right in relation to real property that is defined by regulation to be real estate. |
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Term
| The Real Estate Services Act defines rental property management services to mean any of what services provided to or on behalf of an owner of rental real estate? |
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Definition
a) trading services in relation to the rental of real estate;
b) collectiang rents or security deposits for the use of real estate;
c) managing the real estate on behalf of an owner by:
(i) making payments to third parties
(ii)negotiating or entering into contracts
(iii) supervising employees or contractors hired or engaged by the owner, or
(iv) managing landlord and tenant matters. |
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Term
| The Real Estate Services Act defines strata management services to mean what services are provided to or on behalf of a strata corporation? |
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Definition
a) collecting or holding strata fees, contributions, levies or other amounts levied by, or due to, the strata corporation under the Strata Property Act;
b) exercising delegated powers and duties of a strata corporation or strata council, including:
i) making payments to third parties on behalf of the strata corporation,
ii) negotiating or entering into contracts on behalf of the strata corporation, or
iii) supervising employees or contractors hired or engaged by the strata corporaton. |
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Term
Which of the following statements concerning disclosure statements in BC is FALSE?
(1) A disclosure statement must be provided by a developer to a buyer where an offer of sale or lease relates to a time share interest in a development unit.
(2) A disclosure statement must indicate that the purchaser has the right to rescind the purchase agreement by serving written notice of the rescission on the developer.
(3) A strata plan must be filed in the land title office or a building permit issued in relation to the strata lot before a strata lot may be offered for sale.
(4) One of the supporting documents which must accompany the disclosure statement is a certificate from a lawyer who is a member of the Law Society of British Columbia confirming that a true copy of the disclosure statement will be delivered to the prospective purchaser or lessee. |
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Definition
Answer:4
A disclosure statement must be in the form required by the Superintendent of Real Estate but it need not contain a certificate from a lawyer. The other responses are all true. |
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Term
Where a licensee receives a deposit on account of a trade in real estate under the Real Estate Services Act and puts it into a trust account, it may only be withdrawn before completion for which one of the following reasons?
1) To pay it to the seller or the party for whom the licensee is acting.
2) To pay the money into court under s.33 of the Real Estate Services Act.
3) To pay the brokerage to cover the amount of the commission once the offer has been accepted and any conditions precedent removed.
4) To cover any expenses incurred on behalf of the brokerage's principal. |
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Definition
Answer:2
A brokerage holds deposit money as a stakeholder and not on account for either party to a real estate transaction. Prior to completion of a transaction, a deposit is held in a brokersge's trust account and cannot be released in the situation in options 1,3 or 4. Sections 28 and 33 of the Real Estate Services Act apply to deposit fund release and only option 2 is true. |
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Term
Which of the following statement is TRUE?
1) The amount of commission payable for a real estate sale must either be a percentage of the sale price or be based on a "net" listing.
2) A representative must not act for any brokerage other than the brokerage who, according to the Real Estate Council's records is his or her employer.
3) The Real Estate Services Act only permits licensees to be paid by their brokerage on a commission basis, and prohibits salaried employment.
4) Real estate boards are responsible for setting the rates of commission to be charged by their members. |
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Definition
Answer 2:
Under Council Rule 5-14 "net" listings are prohibited. The Act does not restrict licensees from receiving a salary, as opposed to commission. In fact, the Council policy statement on licensee remuneration specifially recognizes that some licensees will receive remuneration based upon a salary rather than commission. Finally, any attempt by a local real estate board to fix the rate of commission is a criminal offence contrary to the Competition Act. |
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Term
Which of the following statements regarding the national economy is FALSE?
1) Finance, insurance, and real estate (FIRE) are basic components of the service producing industries of the economy.
2) An increase in the importance of the service sector's contribution to GDP has been a trend in all industrialized nations.
3) The GDP (gross domestic product) represents the number of Canadian made items exported to other parts of the world.
4) Construction is very interest rate sensitive, therefore, changes in construction loan and mortgage rates have huge impacts on the industry. |
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Definition
Answer:3
Statement 1,2 and 4 are true. Gross Domestic Product (GDP) represents the money value of all final goods and services that our economy produces during a specific period (usually one year) and includes returns on foreign capital invested in Canada. |
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Term
Julia recently received her brokerage licence and has opened up an office with a single representative, David. Which of the following statements regarding the similarities and differences between brokers and representatives is TRUE?
1) Both Julia and David may form corporations or partnerships as licensees. David's corporation or partnership would also require a brokerage licence to work as a representative for Julia.
2) Both David and Julia may employ other representatives to work under them.
3) Both David and Julia may be vicariously liable for the professional actions of each other.
4) Both Julia and David act for or in expectation of a fee on behalf of others in real estate transactions. |
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Definition
Answer 4:
Julia may form an brokerage corporation or partnership; however, brokerage licences and representative licences are two different entities, and David only needs a representative's licence. As a senior licensee under the Real Estate Services Act, Julia may employ representatives, but as a representative David may not. Julia may be vicariously liable for the acts of David, but David cannot be vicariously liable for the acts of Julia, the brokerage employing him. |
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Term
Steal-It Realty Incorporated recently hired Karen to be its managing broker. As part of her employment contract Karen received stock options in Steal-It in exchange for personally guaranteeing some of Steal-Its's startup loans. The personal guarantee was necessary to secure the loan because of the poor financial condition of Steal-It. Further, Karen's employment contract provided that she would receive the salary of a full-time employee, but that she would only be required to work 1 hour per week for Steal-It. Karen is not presently qualified to be a managing broker but anticipates becoming qualified within four months after commencing with Steal-It. Which of the following statements are TRUE?
A) If Karen worked according to the employment contract, it would likely be a violation of Council Rule 3-1, which requires that a managing broker be actively engaged in the management of their related brokerage.
B) Steal-It will be in breach of the Real Estate Services Act for as long as it employs Karen as its managing broker while Karen is unlicensed.
1) Both A and B are true.
2) Neither A nor B is true.
3) Only A is true.
4) Only B is true. |
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Definition
Answer:1
If Karen only worked 1 hour per week she would probably not be considered to be actively engaged in the management of the brokerage and would therefore be in violation of Council Rule 3-1. Section 7 of the Act provides that a managing broker, associate broker or a representative must be licensed in relation to a single brokerage, and engaged by that brokerage. |
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Term
Which of the following statements is NOT true with respect to deciding whether a brokerage will be found vicariously liable for the acts of its licensees?
1) The determination of whether a brokerage is vicariously liable for the acts of its licensees is a question of fact in each instance.
2) If the third party relied upon the licensee, then it must be determined in what capacity the licensee was acting when the statements and/or conduct relied upon occurred.
3) One must determine the size of the licensee's commission on the transaction which is the subject of the litigation.
4) One must determine if the offended third party relied upon the licensee to his or her detriment. |
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Definition
Answer:3
A determination of the size of a licensee's commission on the transaction which is the subject of the litigation is not a consideration that determines whether a brokerage will be liable for the acts of its licensees. The other statements are all true regarding vicarious liability. |
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Term
Which of the following statements regarding business organizations are TRUE?
A. The only legal steps required for initiating a sole proprietorship are the registration of the business name (if any) with the Registrar of Companies and the issuing of shares to shareholders.
B. The cost of franchise fees and ongoing royalty fees are one of the disadvantages of franchises.
C. One of the disadvantages to small corporations is that personal guarantees are sometimes required by lenders and other creditors.
D. Corporations and sole proprietorshiops both have the advantage of limited personal liability.
1) Only A, B and D are true.
2) Only A, C and D are true.
3) Only B and D are true.
4) Only B and C are true. |
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Definition
Answer:4
Option A is false because the issuing of shares to shareholders is not one of the legal steps required for initiaitn a sole proprietorship. Option D is false because sole proprietorships do not share with corporations the advantage of limited personal liability. |
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Term
Which of the following statements regarding voluntary organizations is TRUE?
1) The Code of Ethics and Standards of Business Practice were developed by the Canadian Real Estate Association as the legal standard of permissible performance.
2) One of the primary obligations of the British Columbia Real Estate Association is the continuing education of licensed realtors.
3) The Real Estate Institute of Canada advises and assists the Superintendent of Real Estate in BC on all real property issues.
4) Although the real estate baords maintain the Multiple Listing Service for their members, only a small percentage of the brokerages in the province are members of a real estate board. |
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Definition
Answer:2
The code of Ethics and Standards of Business Practice are adhered to voluntarily and are not a legal standard of permissible performance; rather they describe the performance "the public may reasonably expect" and make that performance the "norm" for all members. The Real Estate Institute of Canada is the major national professional body for the real estate brokerage industry. It is likely that 95% or more of real estate brokerages belong to a board. |
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Term
Which of the following statements regarding organizations in the real estate industry are TRUE?
A) All licensees are entitled to participate in the nomination and voting process for the election of Real Estate Council members.
B) The Superintendent of Real Estate in BC has the authority to refuse, to renew, to suspend or to cancel any licence at his or her discretion in non-disciplinary situations.
C) The Real Estate Foundation is made up of 16 members, 13 of whom are elected in accoardance with the Act.
D. The mandate of the Real Estate Council of British Columbia is to maintain high professional standards in the conduct of real estate transactions, and to advise and assist the Superintendent of Real Estate.
1) Only A, B and D are true.
2) Only A and D Are true.
3) Only B and C are true.
4) Only B, C and D are true. |
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Definition
Answer:2
Statements A and D are true. The Council, rather than the Superintendent, has the authority to refuse, to renew, to suspend, or to cancel any licence, therefore Statement B is false. It is the Real Estate Council, rather than the Foundation, which is made up of 16 members, 13 of whom are elected in accordance with the Act. |
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Term
Heather recently acquired a brokerage licence and has decided to open her own office. She expects to run the office at an operating loss for the first two years. Although Heather has savings to last the first two years, the office would be Heather's only source of income. Heather plans to specialize in environmental "hot spot" properties and as a result there will be a constant risk to her of serious liabilty. It is Heather's intention to work alone for the first six months but she would then like to advertise for someone to join her in the business. Further, her two daughters are presently licensed as representatives and Heather would like them to eventually take over the business upon her death or retirement. Heather's only personal asset is an art collection valued at $5 million which she wants to protect for her daughters' inheritance. Without knowing anything further about Heather's situation, what is Heather's best choice for a business organization?
1) The best business organization for Heather is the sole proprietorship because she can write off the business losses against other income.
2)Since Heather plans to eventually invite someone to join her in the business, the best form of organization would be a sole proprietorship now, followed by a partnership.
3) Heather should incorporate her agency given the high risk of liability in practice and her desire to have her children take over the agency in the event of her death or retirement.
4) Heather should franchise her agency because then she will be able to offset her expected business losses against any personal income she may have in future years, protecting her future tax liability. |
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Definition
Answer: 3
Heather should not organize her brokerage as a sole proprietorship or partnership because her art collection will be exposed to liabilities incurred by the business. A proprietorship or partnership does not seem to offer any benefit, as Heather has no personal income against which to offset her expected losses. Additionally, a proprietorship or partnership will expire upon her death, making the passing on of the brokerage upon her death or retirement more problematic. The personal exposure to liability is also a reason why a partnership or porprietorship is not appropriate. Franchising is not a viable option for a one-person real estate brokerage. |
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Term
Which of the following statements is TRUE?
1) The Real Estate Council can request but does not have the right to make a police check on all aspiring real estate licensees to ascertain whether they have had any criminal convictions.
2) The content of a disclosure statement should comply with the Policy Statements published by the Superintendent of Real Estate office.
3) One of the documents that must accompany any disclosure statement is a true copy of the original deed for the property being subdivided.
4) A managing broker must meet a higher standard of qualification than an associate broker. |
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Definition
Answer:2
Option 1 is false because the Council does in fact have this right. Option 3 is false because there is no such requirement. Option 4 is false because the Act provides that the qualifications for a managing broker are the same as those for an associate broker. |
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Term
Which of the following courses of action taken or proposed to be taken by George, a managing broker, represents a violation of the Real Estate Services Act?
A) George tells his best representative, Elaine, that in addition to their current work selling commercial property, they will also have to do business together as mortgage brokers in order to meet their high office rent.
B) In an effort to earn even more money on the side, George decides to expand into supplying high quality office furniture, hoping that his work selling both commercial property and office furniture will have synergistic effects.
C) George tries to keep his financial and trust account records reasonably up to date. He devotes several hours updating every receipt or disbursement of money once a month.
D) George initially gave explicit instructions to his bank to designate his old company bank account as a trust account. George has noticed that the bank failed to do so, but he has never bothered to inform them of their neglect.
1) A and C only.
2) B and D only.
3) A and B only.
4) C and D only. |
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Definition
Answer:4
Nothing in statement A or B cause problems under the Real Estate Services Act for George or his representative. Statement C is a violation because the Rules require that records of receipt or disbursement of money must be up to date which, for trust accounts, should be daily and for general accounts, weekly. Statement D is also a violation, as the Act requires a brokerage to have an account designated as a trust account. |
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Term
In which of the following situations does Bruce, a managing broker, correctly handle the money of his brokerage's clients?
1) A deal for the sale of a warehouse between Jackie and Jean-Claude breaks down. Bruce therefore returns the deposit money to Jackie after deciding that Jean-Claude was clearly at fault for the deal falling through.
2) Bruce receives a deposit of $15,000 from the purchaser and, as orally instructed by the purchaser, will not deposit it until 24 hours after the offer is accepted by the vendor.
3) Bruce deposits a sum of money into a trust account to the cresit of Pauline, his client. Bruce withdraws money from this sum to make a payment on her behalf.
4) Due to a dispute over entitlement to the deposit, Bruce pays money into court. However, he withholds an amount equal to his rightful commission. |
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Definition
Answer:3
Section 30 of the Act itemizes the situations in which money can be properly withdrawn from a trust account. Option 1 is incorrect because it is not up to the managing broker to decide whether the deposit belongs rightfully to the vendor or to the purchaser. Option 2 is incorrect because all money received for or on behalf of a principal in relation to real estate services must promptly be put into a brokerage trust account (s.27). Option 4 is incorrect because where a disputed deposit is being paid into court in order to discharge the brokerage's obligations, the brokerage should not withhold commission. |
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Term
Donna wishes to obtain her brokerage licence and intends to also be the managing broker of the brokerage. Once the licence has been obtained, which of the following rights and resposibilities does she have?
A) If she active in the industry, she may employ representatives to work for her.
B) Each year she must file an accountant's report specifying that she has properly maintained her books, accounts and other records.
C) The real estate service categories that Donna is permitted to provide will determine the services that her employees are permitted to provide.
D) She will be responsible for the acts of her employees in carrying out their duties as representatives.
1) A, B, C and D.
2) A and B only.
3) A, B, and D only.
4) B and C only. |
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Definition
Answer:1
Active brokerages may employ representatives to work for them but they are responsible for the acts of such employees while carrying out their duties. If she has any restrictions on her licence they will also apply to her representatives. In addition, brokerages must prove annually that they have complied with the provisions in the Act for the maintenance of accounting records. |
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Term
Under the Real Estate Services Act, disciplinary action against a licensee normally begins with an investigation by the Real Estate Council. Which of the following statements concerning an investigation to determine if disciplinary action should be taken against a licensee are TRUE?
A) The Real Estate Council may conduct an investigation to determine whether a licensee may have committed professional misconduct or conduct unbecoming a licensee.
B) The Real Estate Council can conduct an investigation only at the request of the Superintendent.
C) At any time during business hours, the Real Estate Council investigator can inspect the records that are located on the business premises of a licensee.
D) A misleading statement in an accountant's report is not enough to trigger an investigation.
1) A, B and C only.
2) A and C only.
3) B and D only.
4) All of the above are true. |
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Definition
Answer:2
The Real Estate Services Act (S.37) permits the Real Estate Council to conduct an investigation to determine whether a licensee has committed professional misconduct or conduct unbecoming a licensee. Such investigations can be initiated on the Council's own initiative or on receipt of a complaint, and could be initiated because of a misleading statement on an accountant's report. For the purposes of an investigation the Act authorizes the Council to inspect the records kept on the licensee's business premises at any time during business hours. |
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Term
| What are some of the exemptions from the requirement to provide rental property management services, strata management services, or trading services for a fee without the need for a license? |
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Definition
a) a person acting under the authority of a court;
b) a trustee in bankruptcy, custodian, receiver, receiver manager or liquidator who is appointed under a provincial or federal enactment, in respect to services undertaken by the person in that capacity;
c) an executor or adminsistrator of an estate, in respect of services provided in relation to real estate owned or held by the estate;
d) a trustee, in respect of services provided under the terms of a will, marriage settlement or deed of trust;
e) a financial institution that has a trust business authoriziation under the Financial Institutions Act, in respect of services provided in relation to real estate it owns, holds or administer;
f) a practising lawyer in repsect of services provided in the course of the persons practice. |
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Term
| Can a licensee provide rental property management services on their own behalf in relation to their own real estate? |
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Definition
| Yes, providing the licensee satisfies certain requirements, including disclosing to all potential tenants prior to entering into an tenant agreement, that the licensee is not acting as a licensee in the circumstances and that they are therefore not regulated in relation to the rental real estate. The licensee may not use the name of their related brokerage nor in any advertising relating to the real estate. |
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Term
| Can a licensee provide rental management services to the licensee's family? |
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Definition
| Yes, under the same stipulations that they would if they were providing services for their own real estate and providing those services are not provided in expectation of remuneration. |
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Term
| The 3 objectives of the Real Estate Council are: |
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Definition
1) administering the Act, and the Regulations, Rules and Bylaws;
2) maintaining and advancing the knowledge, skill and competency of its licensees; and
3) upholding and protecting the public interest in relation to the conduct and intergrity of its licensees. |
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Term
| How many members make up the Real Estate Council? |
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Definition
| 16 - 13 of whom are elected by licensees and 3 members who are appointed by the Lieutenant Governor in Council. |
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Term
| What is the breakdown of the 13 elected licensees of the Real Estate Council? |
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Definition
| 9 must be licensed as managing brokers from 7 geographical districts, 3 must hold representative licenses and the 13th may be either a managing broker or a representative, but must be licensed to provide rental property or strata property management services. |
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Term
| How long is a Council memebers term and how many consecutive years may there serve? |
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Definition
| A term is for 2 years, and a Council member may serve for 6 consectutive years. They may run for re-election again after a break of 1 year. |
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Term
| How long is the Chair and Vice Chair's term on Council? |
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Definition
| It is limited to 1 year. The other members of Council elect the Chair and Vice Chair annually. |
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Term
| The Real Estate Services Act continues the Real Estate Foundation under the name " Real Esate Foundation of British Columbia" and is administered by a board of Governors consisting of how many members? |
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Definition
| 5 members. The BC Real Estate Associaion, The R.E. Council and the R.E. institue of B.C. each appoint 1 Governor. The Minister of Finance appoints 1 person who does not hold a license under the Act and the 5th member is the Minister of Finance, or the Minister's appointee. |
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Term
| What is the most commone wat to obtain an interest in land in B.C. |
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Definition
| To purchase a fee simple interest. (1.1) |
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Term
| In B.C. the fee simple interest does not usually entitle the owner the right to exploit: |
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Definition
| the minerals, oil and natural gas beneath the land. (1.1) |
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Term
| Fee simple interest entitles owners to use the land anyway they please, subject to only: |
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Definition
| to compliance with statutory land use controls and the common law of principles relating to nuisance and negligence. |
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