RECA Exam cheat sheet

RECA administers the Real Estate Act and Real Estate Act Rules and licenses real estate, mortgage, property management, and condominium management industry members.

A real estate associate must be licensed with a brokerage; the brokerage holds the licence and is accountable for the associate's licensed activities.

Trust money includes client deposits, rents, and other funds held on behalf of clients; it must be kept in a designated trust account separate from operating funds.

A brokerage must keep transaction and trust records for the period required by the Rules and produce them to RECA on request.

Industry members must maintain required errors and omissions insurance and satisfy RECA continuing education requirements to renew a licence.

Licence renewal requires disclosure of criminal charges, disciplinary actions, bankruptcy, and changes to personal information; false statements are grounds for discipline.

Only a licensed brokerage may trade in real estate for others or charge remuneration for trading; unlicensed trading is prohibited.

RECA may suspend or cancel a licence and impose fines, conditions, or education requirements for breaches of the Act, Rules, or bylaws.

An agency relationship in Alberta must be created in writing and must identify the client, the brokerage, and the scope of services.

The brokerage, not the individual associate, is the agent; associates act on behalf of the brokerage.

A brokerage may represent both buyer and seller only after full written disclosure of the conflict and with written consent; designated agency assigns different associates.

Fiduciary duties to a client include loyalty, confidentiality, full disclosure, accounting, and reasonable care and skill.

A customer is an unrepresented party entitled to honesty, fairness, and disclosure of material facts, but not to loyalty or confidentiality.

Confidential information learned from a client continues to be protected after the agency relationship ends unless disclosure is required by law or the client consents.

A seller's associate must not disclose the seller's bottom-line price or motivation without authorization; a buyer's associate must not disclose the buyer's maximum price.

Agency disclosure must occur at the earliest reasonable opportunity and before receiving confidential information.

Alberta uses the Torrens land titles system; the certificate of title is evidence of ownership, and a bona fide purchaser for value without notice is protected by indefeasibility.

Estates in land include fee simple, life estate, and leasehold; co-ownership may be held as joint tenants or tenants in common.

Joint tenants have a right of survivorship; tenants in common do not, and their shares pass to their estates.

Encumbrances include mortgages, caveats, easements, restrictive covenants, and liens; they are registered on title and may limit use or transfer.

The Dower Act requires a married spouse's consent to dispose of a homestead; a disposition without consent may be voidable by the non-owning spouse.

A caveat registered against title gives notice of a claimed interest and can prevent dealing with the land until the claim is resolved.

An easement grants a right to use another's land for a specific purpose; a restrictive covenant limits use of the land for the benefit of other land.

A condominium unit title includes the unit and a share of common property as defined by the registered condominium plan.

An agreement of purchase and sale for land must be in writing and signed by the parties to satisfy the Statute of Frauds.

Essential terms include parties, property description, price, closing date, and conditions; missing essential terms can make a contract unenforceable.

Conditions precedent such as financing, inspection, and condominium document review must be waived or satisfied by stated deadlines.

A deposit is trust money; it is credited to the purchase price on closing and may be forfeited if the buyer breaches the contract.

The closing process includes document preparation, title search, financing, adjustments, and registration of the transfer.

Remedies for breach include damages, specific performance, rescission, and forfeiture of deposit, depending on the contract terms and circumstances.

A seller must disclose material latent defects that affect the property's use or value and are not discoverable by reasonable inspection.

A waiver of a condition must be clear and communicated; silence or inaction generally does not waive a condition.

A mortgage is a charge on land securing repayment of a debt; in Alberta the borrower gives the lender a mortgage and generally retains title.

A high-ratio mortgage exceeds 80% of the property value and requires mortgage default insurance from an approved insurer.

Mortgage default insurance protects the lender, not the borrower, if the borrower defaults on a high-ratio mortgage.

A down payment of 20% or more avoids the requirement for mortgage default insurance.

The stress test requires borrowers to qualify at the greater of the contract rate plus two percentage points or the minimum qualifying rate.

A mortgage pre-approval is conditional and subject to income verification, property appraisal, and lender conditions; it is not a guarantee of financing.

Alberta lenders offer fixed and variable rate mortgages; prepayment privileges and penalties are set by the lender and mortgage terms.

The federal Interest Act requires certain mortgage disclosures, including the annual interest rate and prepayment rights.

A condominium is created by registering a condominium plan; owners hold title to their units and share common property.

The condominium corporation is governed by a board and bylaws; it maintains common property and collects contributions from owners.

A buyer of a resale condominium should receive condominium documents, including bylaws, financial statements, and reserve fund information, before completing the purchase.

A developer selling a new condominium unit must provide a disclosure statement, and the buyer has a rescission period under the Condominium Property Act.

Condominium contributions cover common expenses; special assessments may be levied for major repairs not covered by the reserve fund.

A reserve fund study estimates future major repair and replacement costs and is used to set reserve fund contributions.

The condominium plan defines unit boundaries, common property, and parking or storage assignments.

A bare land condominium involves separate title to a unit that may include land and a building, with shared common property.

Industry members must act honestly and with integrity, avoid misleading advertising, and disclose conflicts of interest in writing.

Confidential information must not be used for personal benefit or disclosed without consent, except as required by law or RECA.

Commissions and referral fees must be disclosed; undisclosed referral fees or kickbacks are prohibited.

Advertising must include the brokerage's licensed name and the associate's name and must be accurate and not misleading.

An industry member must not provide legal, tax, or accounting advice unless qualified and authorized; referral to an appropriate professional is required.

Discrimination in the provision of services is prohibited under human rights legislation, and accommodation must be provided where required.

Bullying, harassment, and abusive conduct are subject to discipline, and RECA conduct standards apply to all licensees.

A licensee must report certain events to RECA, including criminal charges, bankruptcy, and disciplinary action by another regulator.

The Residential Measurement Standard measures above-grade living area using exterior dimensions; below-grade space is excluded from RMS area.

RMS area includes finished rooms and may include extensions, but excludes garages, open decks, and unfinished space.

Listing information must be accurate; misstating RMS area or property features can constitute misleading advertising.

Market value is the most probable price in an open market between a willing buyer and seller, both informed and acting without undue pressure.

A comparative market analysis estimates value using recent comparable sales, adjusted for differences in location, size, condition, and features.

A property appraisal is an opinion of value prepared by a qualified appraiser; lenders use appraisals to confirm value for mortgage security.

Marketing a property requires seller consent to advertise; the listing contract sets commission, term, and services.

Only the brokerage may enter into a listing agreement; associates conduct marketing under the brokerage's supervision.