RECA FUNDAMENTALS EXAM
QUESTIONS AND ANSWERS 100%
CORRECT
Which of the following is NOT a RECA educational resource for industry professionals?
- ANSWER-Spatial Information System (Spin 2)
Who is responsible for producing the "Real Property Report"? - ANSWER-Alberta Land
Surveyor
Benefits of RECAS trust assurance and practice review program - ANSWER-- effective
record keeping and administrative procedures
- education and advice in relation to brokerage trust accounting
- identifies and resolves potential problems regarding brokerage trust accounting
requirements
Responsibilities of RECA - ANSWER-- Handling professional conduct review
- establishing industry standards of practice
- issuing authorization to trade in real estate
Four factors of production - ANSWER-land, labor, capital, entrepreneurship
RECA provides the following annual reports - ANSWER-- financial reports
- industry statistics
- reports for the previous year
Who has the power to amend the Rules of the RE Act? - ANSWER-Council (not the
Provincial Legislature, their job is to amend the RE Act itself - two very different things)
Who has the power to suspend / revoke a license? - ANSWER-The Executive Director
- determines the length of suspension
- serves the decision on the industry professional
- will consider the evidence when making the decision
What's included in written service agreements? - ANSWER-- the services to be
provided by the brokerage
- the responsibilities of each party to the agreement (i.e. remuneration from client to
brokerage)
- the names of the parties to the agreement
,Failure to immediately notify Executive Director of changes to information provided in
support of license results in: - ANSWER-- Exec. Director may refer the matter for a
professional conduct review
- Exec. Director may suspend industry professionals license
- Exec. director may cancel the industry professionals license
Length of time a license is valid for if NOT registered w a brokerage - ANSWER-36
months
Level of Disclosure: Other party represented by another brokerage - ANSWER-Level 1
Level of Disclosure: Other party not represented - ANSWER-Level 2
Level of Disclosure: Other party represented by same brokerage - ANSWER-Level 3
Inducement vs incentives - ANSWER-- Inducement is client specific
- Incentive is offered by the brokerage to any potential client
Records must be: - ANSWER-- kept in Alberta
- maintained in electronic form
- kept by brokerage for 3 years
- accessible to RECA for inspection
- they can be held in multiple locations, provided they're all in Alberta
Personal Ethics - ANSWER-Morals - held by individual
Ethics - Standard of Conduct (values/beliefs that guide actions)
Professional Standards - Rules and Regulations
Real Estate Insurance Exchange (REIX) - ANSWER-- provides financial protection
- compensates consumers up to $35,000
- mandatory errors & omissions insurance + negligence
- excludes injuries or death, transfers of title, commission/fees
- $3,500 is the first deductible
- $7,000 if second claim.
- RECA collects premiums with licensing fees
Tort Law - ANSWER-Compensation for civil wrongs that result in harm
- Negligent Tort
- carelessness, failure to exercise reasonable care
- Intentional Tort
- assault, fraud, theft, defamation
- strict liability Tort
- the act itself, producting defective products, using hazardous materials
Ethical Decision Making - ANSWER-1. Recognize
2. Analyze
, 3. Test
3A. Seek assistance if needed
4. Implement
What is express consent? - ANSWER-Consent given verbally or in writing (Think of your
relationship with your lawyer)
What is implied consent? - ANSWER-Consent where personal information is
volunteered without being specifically given (think of you giving your doctor confidential
information)
What is opt-out consent? - ANSWER-Consent assumed to be given unless the
individual takes action (think of Swedish organ donor laws)
Legacy Information - ANSWER-- personal information collected before application
privacy legislation came into effect
- considered to be collected with consent
- may be used for a new purpose other than original purpose if new consent is obtained
What is Express Authority? - ANSWER-written or verbal
What is Implied Authority? - ANSWER-whatever needed to accomplish action
What is Customary Authority? - ANSWER-widely accepted way of behaving or
performing action
Duty based approach to ethical decision making - ANSWER-- individuals intentions or
motives
- belief in universal moral system of ethical reasoning
- individuals should do the right thing because its the right thing to do
Benefits of REIX - ANSWER-- enhances the image of the profession
- has the potential to save on insurance costs
- The profession is active in managing the program and its risks
Errors and Omissions Insurance - ANSWER-real estate equivalent of malpractice
coverage
Comprehensive General Liability Insurance - ANSWER-- broad coverage for claims
against injury/damage
- civil liability (a fall)
- any damages or injuries
- legal defense costs
- does not cover issues related to real estate transactions
QUESTIONS AND ANSWERS 100%
CORRECT
Which of the following is NOT a RECA educational resource for industry professionals?
- ANSWER-Spatial Information System (Spin 2)
Who is responsible for producing the "Real Property Report"? - ANSWER-Alberta Land
Surveyor
Benefits of RECAS trust assurance and practice review program - ANSWER-- effective
record keeping and administrative procedures
- education and advice in relation to brokerage trust accounting
- identifies and resolves potential problems regarding brokerage trust accounting
requirements
Responsibilities of RECA - ANSWER-- Handling professional conduct review
- establishing industry standards of practice
- issuing authorization to trade in real estate
Four factors of production - ANSWER-land, labor, capital, entrepreneurship
RECA provides the following annual reports - ANSWER-- financial reports
- industry statistics
- reports for the previous year
Who has the power to amend the Rules of the RE Act? - ANSWER-Council (not the
Provincial Legislature, their job is to amend the RE Act itself - two very different things)
Who has the power to suspend / revoke a license? - ANSWER-The Executive Director
- determines the length of suspension
- serves the decision on the industry professional
- will consider the evidence when making the decision
What's included in written service agreements? - ANSWER-- the services to be
provided by the brokerage
- the responsibilities of each party to the agreement (i.e. remuneration from client to
brokerage)
- the names of the parties to the agreement
,Failure to immediately notify Executive Director of changes to information provided in
support of license results in: - ANSWER-- Exec. Director may refer the matter for a
professional conduct review
- Exec. Director may suspend industry professionals license
- Exec. director may cancel the industry professionals license
Length of time a license is valid for if NOT registered w a brokerage - ANSWER-36
months
Level of Disclosure: Other party represented by another brokerage - ANSWER-Level 1
Level of Disclosure: Other party not represented - ANSWER-Level 2
Level of Disclosure: Other party represented by same brokerage - ANSWER-Level 3
Inducement vs incentives - ANSWER-- Inducement is client specific
- Incentive is offered by the brokerage to any potential client
Records must be: - ANSWER-- kept in Alberta
- maintained in electronic form
- kept by brokerage for 3 years
- accessible to RECA for inspection
- they can be held in multiple locations, provided they're all in Alberta
Personal Ethics - ANSWER-Morals - held by individual
Ethics - Standard of Conduct (values/beliefs that guide actions)
Professional Standards - Rules and Regulations
Real Estate Insurance Exchange (REIX) - ANSWER-- provides financial protection
- compensates consumers up to $35,000
- mandatory errors & omissions insurance + negligence
- excludes injuries or death, transfers of title, commission/fees
- $3,500 is the first deductible
- $7,000 if second claim.
- RECA collects premiums with licensing fees
Tort Law - ANSWER-Compensation for civil wrongs that result in harm
- Negligent Tort
- carelessness, failure to exercise reasonable care
- Intentional Tort
- assault, fraud, theft, defamation
- strict liability Tort
- the act itself, producting defective products, using hazardous materials
Ethical Decision Making - ANSWER-1. Recognize
2. Analyze
, 3. Test
3A. Seek assistance if needed
4. Implement
What is express consent? - ANSWER-Consent given verbally or in writing (Think of your
relationship with your lawyer)
What is implied consent? - ANSWER-Consent where personal information is
volunteered without being specifically given (think of you giving your doctor confidential
information)
What is opt-out consent? - ANSWER-Consent assumed to be given unless the
individual takes action (think of Swedish organ donor laws)
Legacy Information - ANSWER-- personal information collected before application
privacy legislation came into effect
- considered to be collected with consent
- may be used for a new purpose other than original purpose if new consent is obtained
What is Express Authority? - ANSWER-written or verbal
What is Implied Authority? - ANSWER-whatever needed to accomplish action
What is Customary Authority? - ANSWER-widely accepted way of behaving or
performing action
Duty based approach to ethical decision making - ANSWER-- individuals intentions or
motives
- belief in universal moral system of ethical reasoning
- individuals should do the right thing because its the right thing to do
Benefits of REIX - ANSWER-- enhances the image of the profession
- has the potential to save on insurance costs
- The profession is active in managing the program and its risks
Errors and Omissions Insurance - ANSWER-real estate equivalent of malpractice
coverage
Comprehensive General Liability Insurance - ANSWER-- broad coverage for claims
against injury/damage
- civil liability (a fall)
- any damages or injuries
- legal defense costs
- does not cover issues related to real estate transactions
