RECA FUNDAMENTALS STUDY GUIDE 100% VERIFIED ANSWERS 2024/2025 CORRECT, Exams of Organization and Business Administration

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RECA FUNDAMENTALS STUDY

GUIDE 100% VERIFIED

ANSWERS 2024/

CORRECT

duty-based ethics Individual is expected to do the right thing cause it's the right thing to do, regardless of outcome utalitarian ethics Sells the optimal result for the greatest number of people Advisory note Punishment for a technical breach Administrative penalty/ fine One or two potentially serious infraction would cause this punishment Ratification- acting without authority or in excess of authority Implication- advice outside of objective These two ways of creating a representation relationship should not be done in real estate By Estoppel This representation relationship arises when a principal acts in a way that leads a third party to believe an agent has been given authority when in actuality the agent hasn't consented or even knows about it By operation of law

This type of representation relationship is created when someone takes action to save a property or person from imminent danger/ damages Ethics Voluntary set of rules and guiding principles an individual uses as their moral compass. Standard of conduct adopted and practiced within a culture or society li Morals A set of beliefs held by an individual and founded on fundamental principles of right and wrong. Ex. Religious Tort law What area of law deals with civil wrong doings for which the courts may grant a remedy. ( harm to a person or damage to property) 35,000$ Max the real estate assurance fund may pay per claimant for damages or losses to the services of a real estate professional Purpose of Real Estate Assurance Fund Compensate consumers who have received court judgement against a real estate professional for fraud or breach of trust Real estate insurance exchange REIX To protect real estate professionals when they make a mistake regarding their business Kohlbergs highest stage of moral development Where moral development is based on individual reflection and analysis of the issues ( level 3 stage

Right of Recission The ability of purchasers to cancel their purchase contract with a developer within 10 days

Condominium Ownership in common with others CADS If someone forgets the condo management company name for any reason where would they find it General power of attorney Can make all decisions about finances or legal affairs has no limit other then where they'll live or health care Yes Will power or at tourney be on the title building permit Permit that applies to specific project that is an improvement to the property development permit Permit that applies to overall use of the land It was legal at time of development Non conforming suite means? Waterworks Repair of roads Ambulance Municipal special taxes are for Business revitalization tax Taxes used in a business district to improve beauty, parking, or promote 24 hrs Landlord may enter without consent but with notice after giving how much notice

Assignment Tenant isn't returning to the property so all obligations and rights go to the new tenant Sublease Tenant will be returning to the property, and they're still liable to the landlord Condominium Property Act Condos are governed by the Agricultural and recreational land ownership act This act prevents non Canadians from buying significant amounts of prime land Personal information Refers to information that makes an individual identifiable FINTRAC Real Estate brokerages must report suspicious transactions to which organization Express Implied Opt-out Types of consent Guardian, Cause they're not entitled to make financial decisions regarding land Makes decisions like healthcare, living arrangements, diet, dress. And they're not on title search why? Physical Emotional Cognitive Reactions associated with conflicts or disputes

Authority Responsibility Accountability In terms of brokerage what 3 components of leadership relate to the broker Negotiator Brokers who use VBRP typically have experience in which role Assumptions Omissions - non act Commissions- over act Frequent causes of conflicts and disputes 3500$ 7000$ First claim with REIX Second claim within 3 years if first 40 days How many days does broker have to reach resolution in VBRP Do not collude Do not discriminate Do not mislead public through advertising 3 basic principles of competition act Written service agreement What do you use if a customer chooses a representation relationship therefore being a client Customer acknowledgment form What do you use if consumer chooses a non-representation relationship therefore being a customer Statue law

A law or act passed by either government provincial or federal Assets = Liabilities + Equity In regards to condo financial statements the balance sheet formula is Income Statement Balance sheet Cash flow statement Types of Financial statements for condo corporations Post tension cables Construction method that reinforces concrete Info found on estoppel certificate Monthly contributions assessed for the particular unit 2 Upon new creation Reserve fund study must be done within how many years Within 15 months How frequent must condo corporation hold annual general meeting Extraordinary General Annual general What types of meetings can the condo corporation change bylaws at Bare land Barely blended Conventional Types of condos in Alberta Court appointed manager

A condominium administrator is a 10 How many days does a condo management company have to provide a copy of management agreement upon receiving written request 5 A reserve study and plan must be repeated on existing condos every how many years Common law Laws made by the courts Discuss Determine Document Disclose Do The 5 D's of role clarity and consistency Professional Standards Professional norms and practices Expert testimony These measures are used to establish the standard of care Transaction brokerage A means to resolve a conflict of interest that occurs when a brokerage practices agency under common law or a real estate professional in designated agency, represents clients with opposing interests in the same transaction Express Authority Implied Authority Customary Authority Types of authority agent may hold in a representation relationship

Trust and confidence Best interests Loyalty 3 fundamental principles upon which fiduciary duties are based 1st degree relative A spouse, or children ate considered what degree of relative 3rd degree relative First cousins, great grandparents, great grandchildren are what degree of relative related to conflicts 2nd degree relative Grandparent, aunt, nephew, half-sibling, step sibling is what degree of relative related to conflicts Standard of care Is higher when representing clients over customer Property management Which service provided to a client is the highest standard of care By agreement By revocation By operation of law Ways to terminate representation relationship Lawful revocation When principal or agent fails to fulfill their responsibilities to the other party Unlawful Revocation When principal or agent terminate representation relationship even though the responsibilities have been fulfilled

Competing Opposing Brokerage Conflicts of interest arise in 3 types of circumstances what are they Direct Indirect When referring to conflicts of interest the Brokerage interests can be either Real conflict of interest An actual conflict between interests of the client and the brokerage apparent conflict of interest Conflict between the client and real estate professional or brokerage is perceived Nope Does a real estate professional have general obligations or fiduciary duties to a customer Mandate Authorization to act in a particular way Implied If given express authority they have _________ authority. All necessary actions to complete express authority. Capacity to contract Capacity to delegate Capacity to incur expenses Capacities for which an agent must have express authority from a principal to act. (Limits on authority) Some general obligations

What responsibilities do real estate professionals owe customers Non- exclusive representation relationship A relationship that allows multiple brokerages to act on behalf of an individual client Written agreement In real estate how are representation relationships typically established? Customer If an consumer enters into a non-representation relationship they'll be treated as a? To the buyer- material latent defects To the seller- buyers ability to purchase What must a transaction facilitator disclose the the clients As soon as confidential information is rec When are fiduciary duties owed by a real estate professional? Indemnification ( repay) from costs Remuneration ( payment) for services Disclosure or relevant info Responsibilities of clients based on common law are Mutual consent Expiry Completion / performance Methods by agreement for termination of representation relationship Breach What is the reason for a contract ending if performance is made impossible by one party

Sale or transfer of land To answer for the debt or duty of another That by agreement can't be completed within 1 year According to the statute of frauds which contracts are required to be in writing and signed by all parties Lawful or be of some value Consideration must be Conditions must be waived for contact to proceed A contract can still proceed with unmet terms Difference between conditions and terms in a contract They can make decisions on their own If two sisters are labelled "jointly and separately" to make decisions for their incapacitated mother how do they make decisions Concept of duress When a party enters into a contract due to threat or violence Posses Use Enjoy Sell the land What rights are included in the bundle of rights? privity of contract Legal action can only be taken by the contracting parties and only original parties are bound by the contract Unilateral contract One party makes an obligation to perform an act or promise without receiving anything in return

Conditions Precedent What type of contact condition do we use in Alberta for real estate purchase contracts Monetary damages Quantum Meruit Specific performance Injunction Remedies for breach of contract Specific performance Where damages are inadequate courts may make the party carry out their promise injunction Contractural promise was to refrain from doing something, so this may be awarded to restrain the offending party form doing that act Bilateral Contract It specifies one party's duty to act in exchange for another party's duty to act Quantum Meruit Seller decides not to sell anymore so brokerage may be entitled to recover advertising costs Frustration Type of termination or discharge of contract where the house catches fire or it's destroyed making it impossible to fulfill Voidable Contract One party challenges the contract that's lacking one or more essential elements Real Property Refers to land, real estate and property rights Tenancy in common

In this type of real property ownership owners can have unequal shares, can be willed, involves two or more property owners Joint Tenancy In this type of real property ownership if one dies the shares go to the surviving owners and all shares are equal and 4 conditions must be present Time, title, interest, possession. If any are absent it changes to tenancy in common. Most common for married couples. Condo fees Property taxes What encumbrances take priority over the mortgage Meridians Longitudinal lines running north an south 24 miles apart Ranges Longitudinal lines that run between meridians 6 miles apart Townships East and west lines running 6 miles apart numbered 1 at southern Alberta and 126 at northern Alberta Sections Townships are divided into Mirror principle This principle means that the current certificate of title accurately shows the current facts of the property Curtain Principle This principle contains all info about the title; current interests and past interests

Insurance principle This principle means that the government provides compensation for any losses caused by errors or fraud with title Torrens System Land conveyance system used for land ownership and land transfer, governed by Land Titles Act Monthly periodic tenancy Tenant must give 1 month notice to landlord to terminate periodic tenancy Yearly periodic tenancy Tenant must give 60 days notice to landlord to terminate periodic tenancy Monthly Landlord must give 3 months to tenant to terminate periodic tenancy Easement Right to use land in common with others. Access roads, overland drainage Caveat Notice of claim or warning that someone is claiming interest in the land Encroachment A result of an item being built, placed or erected on an adjoining property. Soffits , eaves overhanging adjoining land Real property report would show this Restrictive covenants Places restriction or limitations on the use or architectural detail of the property. You can't build unless it's brick, restrict building height Liens

legal claim on someones property as a security for a debt Builders Lien a claim registered against the title to land by a contractor, supplier of materials or workman with respect to work done or materials supplied to improve that land 180 days Builder has how many days to go to court to register a certificate of lis pendens Writs of enforcement A title registration regarding judgement against the owner (debtor) Certificate of Lis Pendens Notice on title that a court action or litigation is in progress regarding the land Municipal Certificate of Compliance Confirms building location (setbacks) confirms with requirements Mill rate Municipal tax rate which is an amount per 1000$ Real Property Land and any permanent improvements to the land and property rights to go with the land Land Titles Assurance Fund Provides owners compensation if they suffer a loss due to an error on title Water license According to the water act requirement must be met for the individual to be able to divert water Land use districts Land use jurisdiction classifications are referred to as

Permitted use The land use confirms with the permitted use for that classification Right to lease Sell Use Giveaway Retain Which rights are included in real property ownership bundle of right so Incentive Anything advertised to a person or the public for the purpose of attracting business to the brokerage. Promise, good, service, game of chance or contest. Inducement Anything offered by the brokerage to a specific person who is a party to a specific real estate trade with intent to persuade or cause them to enter into such a transaction Certificate of Title Document that records the information about the land such as legal land description, municipal description, ownership, and registered internists Land The ground and that which is beneath it and above it Physical Economic Political/ govt Social What forces affect property values

Direct Comparison Income approach Cost approach Different types of approaches used by real estate appraisers Comparative Market Analysis Income analysis Cost analysis Types of property analysis that contribute to property valuation Income analysis This type of property valuation report heavily relies on accurate record keeping and examines revenue/ expenses associated with the property, typically used in commercial real estate Cost Analysis This type of property valuation analysis relies on a solid in depth cost of construction and ability to calculate depreciation Comparative Market Analysis (CMA) This type of property valuation analysis compares recent sales of similar properties. Used in residential legal permissibility Physical possibility Financial feasibility Maximally productive Key criteria for highest and best use Contract kiting In this type of mortgage fraud there's two purchase contracts and the lower one is given to the financial institute Mortgagee

A lender in a mortgage loan transaction Mortgagor A borrower in a mortgage loan transaction High ratio mortgage Occurs when the loan amount exceeds 80% of the property value or sale price whichever is less Production order A formal written direction specifying that a party with relevant documents produce those documents for the purpose of a professional conduct review Condition A aspect of a contract that serves an impediment to an enforceable contract, until it's been satisfied or waived Conditions Subsequent A contractual condition that is presumed to have been met by the deadline stated in the contract if no notice has been provided Conditions Precedent A contractural condition that must be removed before the deadline in or order for the contract to proceed Condominium Additional Plan Sheet A document in which instruments for or against a condo plan and condo corporation are registered with Alberta land titles Condominium plan A two or three dimensional plan that outlines the size, location and boundaries of the land. Also divides the property into units and common areas Confidential information

Information that's not readily accessible and posses some sort of value Consideration Element of a contract that shows what each party receives in exchange for promised actions Consumer Price Index (CPI) Economic indicator that measures over time the change in cost of a fixed basket of goods purchased by families living in urban and rural households Conventional condo plan A type of condo plan in which units are defined spaces within a building, boundaries are determined by floors, walls and ceilings. All areas not included are considered to be common property Conventional mortgage A mortgage load that doesn't exceed 80% of appraised value Conveyancing Formal process of transferring legal title of land and recording interests Estoppel Certificate A signed statement from the condo corp that confirms the financial info provided regarding a unit is correct as of the date on statement Extraordinary meeting A meeting with board of directors and all members of condo corp to address a specific issues that needs immediate attention Gross Debt Service Ratio A measure used by lenders to asses the borrowers ability to carry the debt load for a mortgage Guarantor A person bound by promise to pay a debt or perform an obligation of another individual

Indefensibility An estate or right in the land that can't be defeated, revoked or made void Letter of Reprimand Least severe form of discipline following a professional conduct review Patent defect A physical deficiency in a property that is visible through property inspection real and substantial connection Legal test under common law that uses a set of connecting factors for determining the jurisdiction over a certain claim Real Estate Act Alberta legislation regulating real estate, mortgage brokerage and real estate appraisers The Act Bylaws Guidelines adopted by council for its governance and administrative functions The Act regulations Amendments or interpretations to sections of the act made by minister or lieutenant governor in council The Act Rules Standards of practice for industry professionals amended by council Strata plan A plan defining boundaries and subdividing volumetric space into (layered space) substantial interest Ownership in real estate of more then 25% Tort

An activity either intentional or non intentional by a person that results in wrong being committed a against another person. May be personal injury, damage to reputation or property Voluntary broker resolution process A process that enables brokers to resolve consumer complaints and disputes Real estate Unimproved or raw land plus any improvements that are permanent or fixed to the land GDP Represents the monetary value of all finished goods and services produced within a country in a given period. GNP Monetary value of all finished goods and services produced by a country's citizens and enterprises whether physically located within its borders or abroad Addendum Document that is attached to and made part of an original contract as a result of making changes to elements already agreed to Spin2 Land titles online database with a wide range of property documents. Titles, registered interests, historical titles, condo bylaws brokerage interests When the interests of the brokerage are at odds with the interests of a client of the brokerage Principle of Substitution A rational informed buyer would pay no more for a property then it would cost to purchase another property that's equally desirable Titled

Parking stall or storage lockers that use bold lines on condo plan are Exclusive use Parking stalls or storage lockers that use dashed lines on condo plan are Bylaws The _________ provide for the operations and administration of the council 1 year If you don't renew your registration how long is it before you have to get a new criminal record check 36 months If you cease to be registered with a brokerage how long is your licence valid for Agency Law an area of law dealing with representation relationships created between two principals and agents Specific Authority Limited authority granted to an agent by a principal general authority Broad authority granted to an agent by a principal Trough lowest point of a business cycle Grey What colour is the screen if you're not authorized on the find a professional Yellow What colour is the screen if you're renewal period has started or you're eligible to renew brokerage

If an unauthorized assistant deals with the public who has to hire them A payment of consideration(buying a property) A chance to win a prize Prize being awarded A lottery exists when which 3 elements are present ( must get a license) Legacy information Information connected before the privacy legislation was implemented is called Buyers If the local market is declining what type of housing market would there be Sellers If the local market is booming what kind of housing market would there be Reckless misrepresentation When a false statement is made by a person who fails to confirm its truthfulness Negligent Misrepresentation When a false statement is made by a person who believed it to be true 10,000 for individual 100,000 for business Max fines from PIPA if convicted of an offence institutional advertising General advertising to the public done by the brokerage Conspiracy among competitors False or misleading advertising The competition act is concerned with two key issues, what are they

Offer Acceptance Communication This best describes the protocol for a mutual agreement Appendix Form used along with listing agreement identifying info about sellers property - mortgage specifics, residential leases Schedule Form used along with purchase contract to specify info for the benefit of the buyer - condo documents to review Taxation Eminent domain Police power Escheat Powers of govt that limit private land ownership rights Fee Simple Condominium Strata Types of survey plans that can be registered at land titles office Barely blended condominium plans Which condo plan includes includes common property unit Assigned storage areas What type of storage area can be redistributed at discretion of board of directors Intent of security agreement Registration of a security interest against an individuals personal property

Value in exchange The value of a commodity as expressed in monetary terms Objective value The value of a commodity as determined by the cost of creation Form Letter of opinion Narrative 3 types of real estate appraisal reports Cost to replace structure with exact same one that's currently exists Describe what is meant by reproduction costs Cost to replace structure with similar ones Describe what is meant by replacement cost Narrative report Which appraisal report is most detailed Errors and omissions insurance known as professional liability insurance Covers claims from financial losses or damages related to errors, omissions and negligence Civil liability Private legal action between two parties reciprocal insurance Under the insurance act what kind of insurance is REIX. To account When a real estate professional holds money, documents, keys to home, or personal belongings they have __ _______ and safeguard them.