RECA Exam 1 With Correct Solutions Already Passed A+

RECA Exam 1 With Correct Solutions Already Passed A+ Carl, a real estate professional, is registered with Prime Plus Real Estate Ltd. He has listed his brother's house for sale with the brokerage. A real estate professional with another brokerage contacts Carl and asks to preview the property as she has a potential buyer. What level of disclosure must Carl provide? *ANS* Disclosure level 1 When evaluating an ethical dilemma, the first step is awareness. An individual may become aware of an ethical dilemma through a variety of ways. Which one of the following is typically NOT one of the ways? *ANS* Others tell you that you have an ethical dilemma Which of the following statements is correct regarding the length of time that real estate professionals are obligated to keep client information confidential? *ANS* It continues without a time limit after real estate services are no longer provided Which of the following describes what is meant by a lawful instruction? *ANS* Any instruction that is reasonable and ordinary under the circumstances Which of the following types of authority involve describing (orally or in writing) the actions that may be taken by an agent on behalf of a principal? *ANS* Express Authority Which of the following describes the party that exists outside of a representation relationship? *ANS* Third Party Which of the following is NOT a type of authority an agent may hold? *ANS* Functional Authority Which of the following are the only entities authorized to trade in real estate? *ANS* Real Estate Brokerages Which of the following categories of brokerage services involves numerous services that require the greatest level of discretion or judgement? *ANS* Property Management Services Which of the following does NOT apply to consideration? *ANS* Consideration always involves money What is the difference between a condition and a term in a contract? *ANS* Conditions must be waived for the contract to proceed, while a contract can still proceed with unmet terms Which of the following is NOT an essential element of a contract? *ANS* The contract must be in written form to be enforceable The Ogami's have just completed their first English language course. They want to start a family business and take out a mortgage on their small townhouse to get funds for the business. However the business fails and they must repay the mortgage. Since the Ogami's struggle with English, they did not understand the mortgage contract. If they challenge the contract, what term describes the possible result? *ANS* The contract may be voidable Which of the following is NOT characteristic of value in relation to a commodity? *ANS* Pricing Advisory Note *ANS* Which of the following Professional Conduct Review outcomes is issued as a practice guideline for a technical breach of the legislation? B) Statements II, III and IV *ANS* Which of the following statements is correct regarding the Real Estate Act Rules? The Rules may only be amended by the provincial legislature RECA posts the most current version of the Rules on its website The Rules refer to the standards of practice for industry professionals When contemplating amendments to the Rules, RECA consults with industry professionals and stakeholders Social Reaction *ANS* Which of the following is NOT a type of reaction associated with conflicts or disputes? Personal Information Protection Act *ANS* Which of the following is the provincial privacy legislation in Alberta? Authority, responsibility and accountability *ANS* In terms of the brokerage, what are the 3 components of leadership that relate to the broker? It should state that the consumer received and understands the written disclosure made by a real estate professional *ANS* Which of the following best describes a written acknowledgement? Customary authority *ANS* Which of the following types of authority allow an agent to act according to the usual ways of performing an action as established by the profession? Only some general obligations *ANS* Which of the following responsibilities do real estate professionals owe customers? Statements I and IV *ANS* If a real estate professional cannot provide competent service to a client, which of the following statements describe actions that the real estate professional should take? The real estate professional may refer the client to another real estate professional who specializes in that area of practice or geographic region The real estate professional may continue to represent the client in a trade or potential trade and provide services to the best of their ability The real estate professional may terminate the representation relationship and refer the client to another real estate professional at a different brokerage The real estate professional may work under the supervision of another real estate professional at the same brokerage who possesses the relevant experience Frustration *ANS* If performance of a contract is impossible, what is the reason for the contract ending? A contract that was valid and has now ended *ANS* What is meant by a discharged contract? Unilateral mistake *ANS* Rodney has applied for a mortgage through Regional Mortgage Brokers Ltd. The mortgage associate there explains that the term of the mortgage is for 3 years and Rodney is in agreement. While signing the mortgage document with the lawyer, Rodney sees that the term is for 5 years. Rodney does not mention the misunderstanding and accepts the 5-year term. Based on an understanding of contracts, what type of mistake is this? Owners may have unequal ownership interest in the property *ANS* Which statement is true when the ownership of a property is referred to as 'tenancy in common'? Statements I, II, and III *ANS* Which of the following statements defines the purpose of unit factors? Sets unit responsibility for common area expenses Defines the voting rights of the unit owner Determines the monthly contribution for the unit Sets the value of the unit for property tax purposes Within 15 months of the last one *ANS* How often must a condominium corporation hold an annual general meeting? Statements I, II, and III *ANS* Which of the following statements are associated with the Principle of Highest and Best Use? Legal permissibility based on municipal land use classifications and bylaws Physical potential of the land based on its size, shape, and topography Financial feasibility and maximum productivity potential for development Political possibility based on the ability to achieve development approvals All Statements Apply *ANS* Why is the value of a property based on a property valuation often different from that of a property assessment? Assessments are based on sales as far back as a year ago Property valuations rely on the most recent sales Assessments are done for taxation as opposed to a sale Assessments use a different process referred to as mass appraisal I, II, III *ANS* Which of the following indicators are used to calculate the Gross Domestic Product (GDP)? Imports Consumer spending Business spending Net income from foreign residents Disclosure level 3 *ANS* Stan, a real estate professional registered with McAgent Real Estate Brokerage has just listed his commercial property for lease with his brokerage. Jim, another real estate professional registered with the same brokerage tells Stan that he has a client interested in leasing the property. What level of disclosure is required in this situation? Disclosure Level 2 *ANS* Mary, a real estate professional registered with ABC Real Estate Brokerage, has agreed to purchase her neighbour's ranch. The seller of the property is not represented by a real estate professional. What level of disclosure does Mary need to provide? I, II, & III *ANS* Which of the following statements include actions that may be considered suspicious by a real estate brokerage? A buyer purchases a property without first viewing it A buyer purchases a property in the name of another person A buyer uses cash to purchase a property A buyer is slow to confirm their identity B) It occurs when either the principal or agent fails to fulfil their responsibilities to the other party who terminates the representation relationship as a result *ANS* Which of the following describes a lawful revocation? Statements I, II, and IV *ANS* Which of the following statements is a benefit of designated agency? It is consistent with consumer expectations The brokerage can represent more consumers It allows the broker to advocate for clients to the trade The brokerage can resolve more conflicts ofinterest The injured party must actually have suffered damages as a result of the breach of contract *ANS* Which of the following statements is correct regarding breach of contract? If 2 individuals own a property, they both have an equal interest in the property as a whole *ANS* Which statement is correct if a property is held in joint tenancy? Statements I, II, and III *ANS* When owners rent or lease their units, which of the following may be required of the owners by the condominium corporation? Names of the tenants and the amount of the rent they will pay Address of service and a deposit equal to one month's rent Dates for the start and end of the rental/lease agreement Permission from the condominium corporation to rent/lease the unit Principle of Change *ANS* Which Principle of Value identifies how economic, social, and political factors effect property values? An increase in the quantity supplied *ANS* Which of the following will occur to the supply of a good when there is a change in quantity supplied due to a price increase? The Rules *ANS* Which of the following may RECA amend from time to time? To protect real estate professionals when they make a mistake regarding their business activities *ANS* What statement best describes why real estate professionals have errors and omissions insurance? As negotiators *ANS* Brokers who use the VBRP typically have experience in which of the following roles? Both clients provide their informed consent *ANS* Transaction brokerage may only proceed if which of the following occurs? Conditions precedent *ANS* Which of the following are the types of conditions used in Alberta for real estate purchase contracts? Quantum meruit, specific performance, injunction *ANS* What are some of the remedies for breach of contract? The land use conforms with the permitted use for that classification *ANS* Under Land Use Bylaws, what is meant by a 'permitted use'? The Mirror Principle *ANS* Under the Torrens System, which principle ensures that the current Certificate of Title accurately shows the current facts about the property? Principle of Surplus Productivity *ANS* Which Principle of Value is represented by the following formula: Net income - operation expenses Statements II, III and IV *ANS* What are the objectives of RECA's Professional Conduct Review procedures? To sanction industry professionals To gather all the relevant information To treat parties fairly and courteously To gather the information efficiently Personal trades involving real estate professionals *ANS* Which of the following activities is excluded from coverage under the REIX policy? Implied authority *ANS* Which of the following types of authority allow an agent to undertake any activities needed to carry out an express authority? An accumulation of laws enacted by various levels of government *ANS* Which of the following best describes statute law? Right to the property as long as the property taxes are paid *ANS* Which of the following is included in fee simple ownership? Principle of Consistent Use *ANS* Maureen has been approached by David, a real estate professional, to sell the rundown house she owns in an older neighbourhood. David advised Maureen that a developer is interested in the plot as the future location for a low-rise office building. David informs Maureen that when compared to other residential properties her house is worth $125,000 and the lot is worth $150,000 for a total of $275,000. He also tells her that similar lots have be been purchased by developers for $350,000. Maureen would like to sell her house for $125,000 plus the new development value of the lot for a total of $475,000. David advised Maureen she cannot apply the potential commercial value of the land to her residential property. This scenario is an example of which Principle of Value? Written service agreements must clearly indicate the names of all parties to the agreement *ANS* According to the Rules, which of the following statements is correct regarding written service agreements? Statements III and IV *ANS* Which of the following statements best describe the concept of confidential information? It is information that the brokerage has deemed to be confidential It is information individuals identify to others as being confidential It may include both personal information and business information It is not readily available information which may have some sort of value Statements II and IV *ANS* Of the following, what must a transaction facilitator disclose to the clients to the trade? To the buyer, the seller's motivation for offering the property for sale To the buyer, all known material latent defects affecting the property To the seller, the amount the buyer is willing to pay for the property To the seller, the facts as to the buyer's ability to purchase the property One real estate professional represents current clients with opposing interests *ANS* Which of the following gives rise to a conflict of interest in brokerages that practice agency under the common law or designated agency? Possess, use, enjoy and sell the land *ANS* Which rights of ownership of land are included in the Bundle of Rights? Tangible attributes of the land plus rights of ownership *ANS* What is meant by the term 'real property'? 2 years *ANS* Which of the following statements is correct regarding how soon a Reserve Fund Study must be completed for a new condominium? The guideline for selecting appropriate comparable properties *ANS* Which of the following statements best describes what is being referred by: "The basic test is whether or not the comparable could be equivalent to the subject property in the mind of the typical buyer, subject to some adjustments?" Admissions made by real estate professionals *ANS* Which of the following is NOT considered a frequent cause of conflicts and disputes? Errors, omissions and negligent acts *ANS* REIX covers which of the following liabilities? Statements I, II and IV *ANS* Which of the following statements indicate the 3 fundamental principles upon which fiduciary duties are based? Loyalty Best interests Act in person Trust and confidence When a perceived conflict arises between the interests of a client and the brokerage *ANS* Which of the following describes an apparent conflict of interest? Statements II, III, and IV *ANS* According to the Rules, which of the following should occur before a real estate professional may act as a transaction facilitator? They must verbally agree to act as a transaction facilitator with each client They must enter into a written transaction brokerage agreement with each client The clients must have the opportunity to review their respective transaction brokerage agreement before signing it The clients must have the opportunity to get any questions answered before signing their respective transaction brokerage agreement The Municipal Government Act *ANS* The assessment of property for taxation purposes is carried out under which provincial statute? Balance *ANS* Which of the following is NOT a stage in the life cycle of an area?