RECA Residential Exam Questions with 100% Correct Answers | Verified | Latest Update 2024, Exams of Advanced Education

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RECA Residential Exam Questions with

100% Correct Answers | Verified | Latest

Update 2024

Fiduciary Representation - Correct Answer-- Trust and confidence

**- Best interests

• Loyalty 5 Ds of Role Clarity - Correct Answer-1. Discuss

2. Determine
3. Document
4. Disclose
5. Do Must disclose in writing - Correct Answer-- the nature of services provided

• whether professional has entered into representation relationship with other party
• any conflicts of interest**

**- any other facts that may influence consumers decision to proceed with relationship made to clarify and provide proof of undertanding in event issues or disputes arise Written Service Agreement vs Customer Acknowledgement Forms - Correct Answer- Written Service Agreement

• when consumer chooses a representation relationship
• becomes a client
• provide signed copy to brokerage Customer Acknowledge forms
• non-representation relationship
• becomes a customer
• provide signed copy to brokerage PIPEDA - Correct Answer-- Federal legislation**

PIPA - Correct Answer-Alberta's legislation, how private organizations use and disclose personal information. Power of Attorney - Correct Answer-a legal document authorizing someone to act on your behalf

**- must be 18

• POA must be written, dated and signed by both donor and witness
• donor must be mentally capable or contract is void
• only effective as long as donor is alive, will takes effect once death Types of POA - Correct Answer-General POA
• has no limits on powers of the attorney
• can make all decisions regarding financial and legal affairs
• exception where the donor resides and health care Special POA**

**- make certain decisions

• also called limited POA
• may grant authority to oversee sale, deals with land
• must be registered on Certificate of Title Immediate POA
• takes effect as soon as POA is signed, dated and witnessed
• terminates upon loss of mental capacity or death Enduring POA
• immediately upon being signed, dated and witnessed
• continues if donor becomes incapable, mentally incapacitated
• must include statement whether it takes effect immediately and continues... Judicial Sale - Correct Answer-Court ordered sale usually as a way to resolve legal matters**

**- primary debt recovery method for default mortgages Foreclosure - Correct Answer-legal action supervised by the court following a default on the mortgage. -transfers the real property from the borrower to the lender and erases interests on title. Alberta Building Code - Correct Answer- Legislation that establishes technical specifications for new building construction and construction materials Building Permit - Correct Answer-typically valid for one year during which construction process must be initiated Factory Built Construction - Correct Answer- Manufactured

• three sections that are 95% complete when they leave the factory.**

**- secure the sections to the foundation and join together

• can often move in the same day or within days
• saves time and mony Modular Construction
• manufacturing three dimensional units, 85 percent complete when they leave
• requires few weeks on site to be complete
• allows for creation of multi-story buildings Panelized construction
• creation of pre-fabricated wall, floor or roof panels
• panels may be completed fully or partially
• may consist of just the frame or fully complete with windows and siding Alberta Safety Codes Act - Correct Answer- provincial legislation that sets specifications for new building.**

Components of Construction - Correct Answer-Lot Substructure - building foundation Superstructure - above grade construction includes; envelope, service systems, interior

**- building envelope - everything that encloses the structure

• roof, exterior walls, windows, doors, and interior walls
• building service systems - supply's essential services
• heat, electricity, water
• interior - interior walls, features, finishes, and fixtures Pre-wired
• security systems, internet, fireplace controls, windows Preserved Wood foundation - Correct Answer- treated wood, must be certified with a stamp.**

**- must be examined by engineer or architect stating conforms to the Alberta Building Code requirements

• poured concrete is the most common foundation Subsurface Drainage - Correct Answer-Drain tiles - directs water to storm system or sump pit Sump Pump
• located in sump pit in the foundation, accessible
• submersible pump - installed within the sump pit
• pedestal/upright - set outside of the sump pit Parging - Correct Answer-Thin top coat that is applied to exterior finish, used to create smooth surface. can be cement or acrylic
• protects above grade foundation walls**

Building Floors - Correct Answer-Beams - structural components that create base Joist - support part of structure, placed horizontal - supports floor or ceiling Bridging/Blocking - ad ds to load carrying capabilities and red uces the potential for movement. R-Value or RSI - Correct Answer-the rate at which heat moves through insulation, the higher the value the more effective the material is at resisting the transfer of heat. R2000 - Correct Answer-Standard of insulation for new construction. Certified by Govt

- energy performance

• indoor air quality
• environmental responsibility Roofs - Correct Answer-Low slope - 14 degrees or less Steep slope - 15 degrees or more

Flashing - used to create weatherproof seal Soffits - underside of roof, ventilation for the attic Fascia - trim the ends of the roof eaves - form connection between roof and exterior walls Windows - Correct Answer-Bay - angled Bow- smoother rounder than bay Dormer - built into the main roof Clerestory - high windows located on the upper part of wall Sky lights Fuel Utilization - Correct Answer-Low - Less than 77% Mid - 78-89% High - 90% + Electrical - Correct Answer-residential properties with less than 100 amp may be difficult to insure

- permits needed for installation Hot water - Correct Answer-hot water tanks Tankless hot water heaters

**- central - designed to supply hot water throughout whole building

• point of use - only supply to plumbing fixture they are attached to. Efficient to use but expensive to install Plumbing - Correct Answer-includes fresh water, hot water, and waste water
• materials used include copper, rigid plastic, and flexible plastic Heating - Correct Answer-The main types of residential heating include; Forced air hot water radiant - uses hot water or electricity electric systems High efficiency vents out the buildings exterior wall Ceilings - Correct Answer-Valuted - follow roofline, unequal sides Cathedral - two equal sides (Aframe)**

Drop- covers pipes and wires Coffered - insets, waffle like Main principals of water - Correct Answer-Reduce, Retrofit, repair Remediation - Correct Answer-return a contaminated area to a level that does not impair or damage the environment, health or safety Legislation - Correct Answer-Safety Codes Act - Permit regulation Fair Trading Act - Home inspection business regulation Energy Efficiency Act and Regulations - minimum energy performance requirements Alberta Building Code - specifications for new construction and building materials Property Inspections - Correct Answer-an examination of various building systems in order to provide an opinion Should include

**- current conditions of all items inspected by the property

• Inspected items listed as unsafe or requires repairs**

**- preventative measures needed to remedy or extend life of inspected items

• do not look at building permits Home inspection business regulation Environmental Risks - Correct Answer-- are situations in which a property and/or its occupants are exposed to danger
• only limited exposure is possibly before irreparable damage
• becomes risk only if a conduit to facilitate the transaction is present Environmental Hazard
• could cause harm to health or safety with exposure RMS - Correct Answer-Detached house - measure from exterior wall at foundation Attached/semi attached - measure from interior walls at floor level. Exclude any floors where portion is below grade.**

include anything above grade + any additions if they have permanent foundation/footings, connected to main electrical, heated by main heating or has its own 5 ft ceiling height may be included as long as 7ft is somewhere stairs are added to level they lead to Correlation between property size and price - Correct Answer-- not proportional, many other factors.

- no direct correlation Measurement tips - Correct Answer-interior measurements are used to extrapolate exterior measurements - when exterior is inaccessible extrapolated measurements should be included as additional measurements Professionals Sanctions - Correct Answer-Advisory Note - measures property but makes mistake (math error, data entry error) - not technically a sanction

Letter of Reprimand - measures property but makes error (failing to maintain diagram, failing to use correct methods, not discussing RMS with client, measuring outside of knowledge) Administrative Penalties - fails to measure or disregards process (not measuring properly, disregarding advice, choosing to not discuss with client) Property Defects - Correct Answer-Patent Defects - obvious flaws discovered upon reasonable inspection. Buyer is responsible to discover and makes steps to satisfy. Latent Defects - not known to the seller or buyer at time of sale. Physical deficiencies that are not dangerous. Liability is an issue - common law doctrine of Caveat Emptor (buyer beware - protect own interests) Material Latent Defects - not visible upon ordinary inspection. Affects use or value. Seller must disclose

• sellers may decide whether or not to disclose if has been remedied Flooding - Correct Answer-Floodways - deepest fastest, highest risk (red)

Flood Fringes - shallower, slower (pink) Found on flood hazard map Disaster Recovery Program - provides funding for uninsured property damage. registers on property title, can only qualify every 100 years.

• administered by Alberta Municipal Affairs Secondary Suites - Correct Answer-Not usually permitted in duplexes, semi-detached or attached.
• must have seperate entrance with direct access to outside
• at least one window in each bedroom
• fire protection between suite and dwelloing
• interconnected smoke alarm, carbon monoxide
• enclosed furnace room
• independent heating, ventilation and electrical Property Inspectors - Correct Answer-exclude alarm system, smoke alarm, sprinkler, telephone, wood burning, underground items, outbuildings

Land Use - urban population growth - Correct Answer- Subdivision - division of larger lot into two or more smaller lots Intensification- change in intensity of use within the same land use classification. involves development of higher occupancy than what currently exists. Assmblage - involves purchase of continuous lots to create a larger single lot. Densification - increased concentration of residents, increase in the maximum allowable occupants. usually involves land use change Types of Estates in Land - on certificate of title - Correct Answer-Fee Simple(freehold ownership) - highest form of ownership with the most rights. closest to absolute ownership. owns property until they sell it or pass away, can control who inherits through the will. Leasehold - right to exclusive use of property for set period of time. may obtain leasehold title if more than three years.

Life Estate - right to exclusive possession for period of time (typically lifetime). after land reverts to fee simple or to assignee. Dower Act applies Types of Ownerships/rights - found on certificate of title - Correct Answer-Sole ownership - only one name appears, Dower Act may apply (creates interest for unnamed spouse) can prevent disposal of property by spouse. Joint Tenancy - equal interest, interest passes down to surviving owners upon death. All receive interests at the same time, obtain titles from same document, all have same interest, undivided interest. Tenancy in Common - equal or unequal shares. no right of survivorship (can give to anyone), ownership can be sold, all tenants must agree to dispose Caveats - Correct Answer-- notice by another party claiming an interest in the land

• may prevent the transfer of land to a new owner
• the land titles office must provide notice of the caveat to the registered owners

Torrens Sytem - Correct Answer-Mirror Principal - Certificate of Title accurately and completely shows current facts. Curtain Principal - contains all information about the title. Insurance principal - reflects correct status. Got compensated for loss or damage through land titles assurance fund if inaccurate. Land Titles - Correct Answer-Certificate of Title - key document. Identifies owners, type of ownership, interests registered against property, type of property, legal discription, LINC number. obtained from SPIN Priority of Registered Interests - Correct Answer-1. Property Taxes

2. Condo Fees
3. Mortgages

Real Property Report - Correct Answer-illustrates boundaries of a property and the location of improvements relative to the boundaries.

• includes written statement detailing land surveyors opinion or concerns.
• required for bare land condominiums. Title Insurance - Correct Answer-protects insured against losses as a result of some title related and some non-title related matters. ex. fraud, forgery, building permits
• some lenders accept title insurance in lieu of RPR for property Insurance.
• provides gap coverage
• may facilitate a transaction when RPR is unavailable or issues cannot be resolved in a timely manner
• some policies may extend coverage to insured heirs
• title insurance has a duty to defend insured's interest

CADS - Correct Answer-document used to register encumbrances, financial obligations, and pending litigations

• includes legal description, name of condo corp and address, number of units, registered bylaws, any financial obligations found on SPIN2 Discharge of Contracts - Correct Answer-Performance - complete Mutual agreement Frustration - impossibility of performance, out of parties control Operation of Law - Bankruptcy Breach - fails to fulfil obligation subject to Quantum Meruit (entitled to reasonable value) Percentage changes - Correct Answer-new-old/old Preparing a comparative market analysis - Correct Answer-

1. communicate with client
2. do background research - view property, learn land use, search certificate of title, search history, otain the RPR, search active and archived listings

3. View property
4. Select comparable sales (recently sold, same area, similar features)
5. make adjustments to comparable properties (principal of contribution) no adjustments made to subject property. Superior property (-) Inferior property (+) make equal with subject property
6. Determine value of subject property Calculations for Adjustments to Comparable Properties - Correct Answer-Percent adjustments = ((New-old)/old X 100)/ number of months between sales ex. overall time adjust of -4% = sale price x 96% ex. four months ago with time adjustment of 1/2% 1/2% x 4 = 2% overall time adjustment sale price x 1.02 = Property Assessments vs Property Valuations - Correct Answer-- based on sales as far back as a year

• done for taxation purposes opposed to a sale
• uses mass appraisal process

Property Valuations

• relies on most recent sales
• based on factual and relevant information
• include disclaimer in written property valuation report Financial terminology - Correct Answer-Financial statement
• operational transactions for specific period
• evaluated financial strength, profitability, and future prospects Income statement - statement of income and expenses
• reflects how much an operation makes or loses during given period Cash accounting - records cash when received and expenses when paid accrual - records transactions when they occur Income Properties - Correct Answer-Monthly Rental Factor (MRF) - for income properties with a single rental unit MRF = Value(Price)/gross monthly income

Gross Income Multiplier (GIM)- for smaller revenue properties with limited number of rental units GIM= Value/Effective Gross income (gross income- allowance for vacancy/bad debt) Cap rate - used for properties with multiple rental units Comparable Market Analysis (CMA) - Correct Answer- present topics

• sold properties -active properties -brokerage services uses principal of substitution (pay no more than cost of acquiring similar property) Mortgage (Terminology) - Correct Answer-Amortization period - length of time required to repay a mortgage using equal periodic payments Guarantor - person bound by promise to pay another's debt

Mortgage Term - period of time borrower is committed to a specific rate, lender and obligations. high volume of loans reflects confidence mortgage market Interest Rates - Correct Answer-Simple Interest interest = loan amount x interest rate Compound interest interest = loan amount x interest rate

interest = (loan amount + accum. int) x interest rate Forces that affect interest rates - Correct Answer-supply and demand Investor Options Market Risk Govt Intervention