RECA RESIDENTIAL UNIT 4 EXAM 2025
QUESTIONS AND ANSWERS
3 Types of property defects - ANS Patent, Latent, Material latent
What are Patent defects (on a property)? - ANS obvious flaw discovered upon reasonable
inspection. caveat emptor applies (meaning that the buyer should have inspected enough to
find anything like this). Unless the seller provides information or warranties regarding the
patent defects, it is the buyers responsibility to address them.
What are Latent defects (on a property)? - ANS Latent defects are physical deficiencies that
do not render the property dangerous or potentially dangerous, so caveat emptor applies.
Latent (or hidden). A true latent defect is one that is not known to either the seller or buyer at
the time of the sale.
Liability becomes an issue when it can be proven that a defect was known to the seller but
could not have been discovered by the buyer, even upon a reasonable inspection.
What are material latent defects (on a property)? - ANS A material latent defect is a "hidden"
defect that materially (largely) affects the use or value of the property.
1
Material latent defects are of significance because the seller is aware of them but the buyer will
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not discover them through a reasonable inspection. These effects may render the property
@COPYRIGHT SIRJOEL 2025/2026
, dangerous or potentially dangerous, unfit for habitation or unfit for the purpose that the buyer
is acquiring it.
What is caveat emptor? - ANS Let the buyer beware. However, this rule is often violated;
people are often required to speak up
Two types of patent defects - ANS Minor and material
8 examples of Minor patent defects - ANS Broken window pane, damage to entry
walkway/stairs, Ill-fitting or damaged doors, ill-fitting windows, cracks in cement driveway,
stained/damaged walls and ceilings, worn or damaged flooring, worn or damaged
faucets/fixtures.
7 examples of Material patent defects - ANS Roof requiring re-shingling, Large windows with
broken seals, cracked heat exchanger in furnace, easily observable foundation deterioration,
property located in flood hazard area, property located near a fertilizer plant, property
condemned by Alberta Health Services.
What are material patent defects? - ANS defects that could pose serious health and/or safety
concerns for occupants or visitors to the property.
5 examples of Latent defects - ANS 1. a hole in drywall hidden from view by a wall hanging. 2.
A dent in hardwood flooring hidden from view by an area carpet 3. Broken window latch hidden
from view by window covering 4. Water stains on carpeting hidden from view by a large plant
stand 5. Damage to the inside wall of a bedroom closet hidden from view by clothes.
8 examples of material latent defects - ANS 1. Significant structure damage that has been
concealed 2. Notices from local authorities that prejudicially affect the property 3. Any
renovation or repair work that lacks required/appropriate permits from the local municipality
or other authority 4. Concealed crack in the foundation wall 5. Concealed electrical wiring
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improperly installed 6. Environmental contamination not remediated and is concealed 7.
@COPYRIGHT SIRJOEL 2025/2026
, Properties formerly used as marijuana grow op or drug lab what were renovated but not
professionally remediated 8. Corroded post-tension cables
If the buyer is not represented, it is the seller's REP to communicate material latent defects to
the unrepresented buyer? - ANS Yes, as it in the best interest of the seller (or else the buyer
may sue the seller if it is not made clear).
What does misrepresentation refer to? - ANS a false or misleading statement or
representation made by one party to another
3 types of misrepresentation - ANS negligent, reckless and intentional
Negligent Misrepresentation - ANS a false or misleading statement made by a person, who
believed it to be true, and where the person carrying out the misrepresentation took
reasonable steps to assure the accuracy of the statement
Reckless Misrepresentation - ANS false or misleading statement made by a person who had
not intended to mislead but failed to take reasonable steps to confirm the statement's
truthfulness or accuracy
In general property inspectors should have in-depth knowledge on the following 6 areas -
ANS 1. New and old building service systems 2. How different building service systems
interact 3. Causes and effects of building systems deterioration and remedies 4. Applicable
legislation 5. Hazardous material 6. Current safety standards
In Alberta who governs residential property inspectors and inspection businesses? - ANS The
Fair Trade Act, Home Inspection Business Regulation
How to determine if a property inspector or business is currently licensed? - ANS Visit Service
3
Page
Alberta website at servicealberta.ca
@COPYRIGHT SIRJOEL 2025/2026
QUESTIONS AND ANSWERS
3 Types of property defects - ANS Patent, Latent, Material latent
What are Patent defects (on a property)? - ANS obvious flaw discovered upon reasonable
inspection. caveat emptor applies (meaning that the buyer should have inspected enough to
find anything like this). Unless the seller provides information or warranties regarding the
patent defects, it is the buyers responsibility to address them.
What are Latent defects (on a property)? - ANS Latent defects are physical deficiencies that
do not render the property dangerous or potentially dangerous, so caveat emptor applies.
Latent (or hidden). A true latent defect is one that is not known to either the seller or buyer at
the time of the sale.
Liability becomes an issue when it can be proven that a defect was known to the seller but
could not have been discovered by the buyer, even upon a reasonable inspection.
What are material latent defects (on a property)? - ANS A material latent defect is a "hidden"
defect that materially (largely) affects the use or value of the property.
1
Material latent defects are of significance because the seller is aware of them but the buyer will
Page
not discover them through a reasonable inspection. These effects may render the property
@COPYRIGHT SIRJOEL 2025/2026
, dangerous or potentially dangerous, unfit for habitation or unfit for the purpose that the buyer
is acquiring it.
What is caveat emptor? - ANS Let the buyer beware. However, this rule is often violated;
people are often required to speak up
Two types of patent defects - ANS Minor and material
8 examples of Minor patent defects - ANS Broken window pane, damage to entry
walkway/stairs, Ill-fitting or damaged doors, ill-fitting windows, cracks in cement driveway,
stained/damaged walls and ceilings, worn or damaged flooring, worn or damaged
faucets/fixtures.
7 examples of Material patent defects - ANS Roof requiring re-shingling, Large windows with
broken seals, cracked heat exchanger in furnace, easily observable foundation deterioration,
property located in flood hazard area, property located near a fertilizer plant, property
condemned by Alberta Health Services.
What are material patent defects? - ANS defects that could pose serious health and/or safety
concerns for occupants or visitors to the property.
5 examples of Latent defects - ANS 1. a hole in drywall hidden from view by a wall hanging. 2.
A dent in hardwood flooring hidden from view by an area carpet 3. Broken window latch hidden
from view by window covering 4. Water stains on carpeting hidden from view by a large plant
stand 5. Damage to the inside wall of a bedroom closet hidden from view by clothes.
8 examples of material latent defects - ANS 1. Significant structure damage that has been
concealed 2. Notices from local authorities that prejudicially affect the property 3. Any
renovation or repair work that lacks required/appropriate permits from the local municipality
or other authority 4. Concealed crack in the foundation wall 5. Concealed electrical wiring
2
Page
improperly installed 6. Environmental contamination not remediated and is concealed 7.
@COPYRIGHT SIRJOEL 2025/2026
, Properties formerly used as marijuana grow op or drug lab what were renovated but not
professionally remediated 8. Corroded post-tension cables
If the buyer is not represented, it is the seller's REP to communicate material latent defects to
the unrepresented buyer? - ANS Yes, as it in the best interest of the seller (or else the buyer
may sue the seller if it is not made clear).
What does misrepresentation refer to? - ANS a false or misleading statement or
representation made by one party to another
3 types of misrepresentation - ANS negligent, reckless and intentional
Negligent Misrepresentation - ANS a false or misleading statement made by a person, who
believed it to be true, and where the person carrying out the misrepresentation took
reasonable steps to assure the accuracy of the statement
Reckless Misrepresentation - ANS false or misleading statement made by a person who had
not intended to mislead but failed to take reasonable steps to confirm the statement's
truthfulness or accuracy
In general property inspectors should have in-depth knowledge on the following 6 areas -
ANS 1. New and old building service systems 2. How different building service systems
interact 3. Causes and effects of building systems deterioration and remedies 4. Applicable
legislation 5. Hazardous material 6. Current safety standards
In Alberta who governs residential property inspectors and inspection businesses? - ANS The
Fair Trade Act, Home Inspection Business Regulation
How to determine if a property inspector or business is currently licensed? - ANS Visit Service
3
Page
Alberta website at servicealberta.ca
@COPYRIGHT SIRJOEL 2025/2026
