Humber Real Estate - Course 1, Module 5 Introducing the Real Estate and Business Brokers Act (REBBA) 59 questions and answers

- Attend a listing or offer presentation in a support role with a salesperson (i.e. taking photos or measuring rooms) - Set up listing files, complete marketing sheets, submit listings & changes to the MLS - Witness a seller or buyer signature - Schedule appts for a broker / salesperson - Draft offers based on directions of a broker / salesperson - Provide listing info to consumers (i.e. a flyer) - Prepare promo material or place "For Sale" or "Sold" sign on property - Install lockboxes - Attend open house w/broker or salesperson What activities ARE permitted without a license? - Be active participant in listing or offer presentation - Explain or advise seller on changes to the listing agreement - Receive/acknowledge a notice on behalf of a seller or buyer - Show a property to a buyer - Negotiate an offer w/seller or buyer - Answer questions re: the listing info on a property - Prospecting of any kind (i.e. phone solicitation or door knocking) - Access a property to assist a buyer or third-party professional during an inspection - Host an open house - Blog about the real estate market What activities are NOT permitted without a license? - An auctioneer auctioning the property, equipment, livestock etc. of a retired farmer - Full-time salaried employee at a new home builder's site representing the builder in negotiations - Lawyer settling an estate - Financial institution disposing of a property under a mortgage default - Property owner selling their home privately - Property manager leasing an apartment on behalf of a landlord Who is exempt from registration to trade in real estate? Yes, as the exemption only applies to a person who trades solely for the purpose of arranging leases under the Residential Tenancies Act. Does a person trading in seasonal / vacation rentals and commercial leases require registration? When they are notified in writing that they are registered with RECO. When can a salesperson begin trading in real estate? - Substantial unpaid debts and have not shown financial responsibility in resolving the matter - Unpaid judgements - Bankruptcy - Personal insolvency - Past conduct (that they may not conduct business with integrity, honesty and in accordance with the law) - Pending criminal charges - Whether a license or registration of any kind has been refused, suspended or revoked - Non-disclosure or false statements When there is an application for registration or renewal of a broker's license, what might become an issue? No. RECO cannot refuse registration on the assumption that the applicant is considering bankruptcy. The applicant can have the ability to rectify the situation. Can RECO refuse to grant registration if the applicant does not disclose they have substantial debt and are considering declaring bankruptcy? An initial screening process determines if a complaint is frivolous, outside RECO's jurisdiction or could be resolved informally. What are the first steps when RECO receives a complaint? Progressive discipline 1st offence - Warning 2nd offence - Warning & Course 3rd offence - Discipline hearing / potential fine of up to $25k What style of discipline does RECO use? - Award compensation or damages to complainants - Cancel a contract between a seller or buyer and a brokerage When it comes to discipline decisions, what does RECO NOT have the power to do? - Acknowledgement and undertaking - Apply voluntary conditions - Request a meeting - Mediate or resolve the complaint - Issue a written warning - Require educational courses What are the procedures the Registrar of RECO can take when handling a complaint? - Immediate suspension (temporary suspension to protect the public) - Registrar proposal (i.e. revoking, suspending or refusing to register along with the reasons for this action) - Director's action (The Director may appoint investigators to conduct investigations under the Act, issue a search warrant or a freeze order) - Provincial offences prosecution (conducting trials, sentencing & appeals - individuals can be fined up to $50k and $250k for corporations) - Refer to a law enforcement agency (fraud is one example of a serious offence that can ultimately lead to criminal prosecution) What are the procedures RECO imposes when there are more serious complaints made? - Ensuring compliance with REBBA - Dealing with a complaint - Ensuring a registrant remains entitled to registration What are the reasons RECO can conduct a brokerage inspection? - To inspect a brokerage during reasonable hours - To be provided access to all documents, records, money and other valuables relevant to the inspection. - No person may obstruct an inspector in carrying out their duties. What specific rights does RECO have during brokerage inspections? The Discipline Committee (of 3 or more members) If a registrant is accused of violating the Code of Ethics, who is assigned to evaluate the case? - An order for the individual to take educational courses - Pay a fine up to $50k and fix / impose costs for a salesperson - For a brokerage, fines can be up to $100k If a registrant is judged by The Discipline Committee of breaching the Code of Ethics, what is the result? Overturn, affirm or modify the order of the Discipline Committee What can the Appeals Committe do when making judgements on appeals? No. Decisions are posted publicly on the RECO website. Are the disciplinary decisions of RECO private? No. Only a potential contravention of the Code of Ethics is referred to the Discipline Committee. Are all breaches of any section of the Act and the Code of Ethics referred to a Discipline Committee? To deposit all money received by the brokerage in trust for other persons in connection with the brokerage's trade. What is a real estate trust account used for? Broker of Record All transactions in a real estate trust account must be authorized and cheques signed by by who? Held in a real estate trust account and covered by the RECO Insurance Program. How is a buyer's deposit safeguarded before closing? 5 Under REBBA, a brokerage must deposit funds into the real estate trust account within how many business days of receipt? The listing brokerage Which brokerage usually holds the buyer's deposit? As soon as possible. 5 days is the absolutely maximum only. How quickly should funds from a buyer be deposited? - Seller and buyer signing a mutual release or direction agreeing to the disbursement - A court order authorizing the disbursement if the seller and buyer did not agree If a transaction does not close, the deposit funds can only be disbursed how? The beneficial owner of the trust money (the interest rate and who gets paid the interest must be disclosed in the Agreement of Purchase and Sale) Who is paid any interest earned on the deposit earned in an interest-bearing trust account? Cheque, money order or bank draft What are the acceptable forms of payment for a deposit? No. Deposits must be exactly the amount listed in the Agreement of Purchase and Sale. Can the amount of a deposit cheque be rounded up to the nearest $10? No. Can a cheque be post-dated for a deposit? A receipt If a co-operating brokerage receives a deposit that is director to another party (i.e. the listing brokerage), what should be obtained? The offer identifies who the deposit holder will be (typically the listing brokerage). Who should a buyer's cheque be made out to? No. Can a salesperson be employed by more than one brokerage (i.e. in different areas?) True A commission percentage can decrease as the sale price goes up. True or False? False. A commission based on the difference between the listing price and the selling price is not allowed. A commission percentage can increase as the sale price goes up. True or False? The commission that is commonly charged for the particular services based on the property type in the marketplace. What is the 'Prevailing Rate' in reference to commission amounts? No Can a salesperson charge commission based on the difference between the price listed for sale and what the property sells for? Full disclosure to all other parties prior to making an offer. The salesperson must obtain written acknowledgement from the other parties that they have received the required disclosure before the offer can proceed. If a salesperson either sells their own home (direct interest) or sells a home for a friend/family member or partner/shareholder of the corporation selling (indirect interest), what steps must the salesperson first take?