RECA Exam flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

RECA's regulatory authority

The Real Estate Council of Alberta administers the Real Estate Act and Rules, licenses industry members, sets standards, and disciplines licensees for breaches.

Brokerage licensing responsibility

In Alberta, a brokerage holds the real estate licence and is accountable for the licensed activities of its associates, including supervision and trust account compliance.

Trust money definition

Money received by a brokerage on behalf of a client, such as a deposit, rent, or sale proceeds, that must be held in a designated trust account separate from brokerage operating funds.

Unlicensed trading prohibition

Only a licensed brokerage may trade in real estate for others or charge a fee for trading; unlicensed individuals cannot provide real estate services for remuneration.

Agency relationship in writing

Alberta requires an agency relationship between a brokerage and a client to be established in writing and to identify the client, brokerage, and services provided.

Fiduciary duties to clients

A brokerage owes its client loyalty, confidentiality, full disclosure, accounting, and reasonable care and skill; these duties continue after the transaction ends.

Customer versus client

A customer is an unrepresented party entitled to honesty, fairness, and material fact disclosure, while a client receives fiduciary duties including loyalty and confidentiality from the brokerage.

Designated agency

A brokerage may represent both parties to a transaction by assigning different associates to each client, with written consent and full disclosure of the conflict.

Torrens land titles system

Alberta registers title in a central land titles office; the certificate of title is evidence of ownership, and a bona fide purchaser for value without notice is protected.

Joint tenancy survivorship

Joint tenants each own an undivided interest in the whole property; when one dies, the survivor automatically takes the deceased's interest outside the estate.

Dower Act consent

In Alberta, a married spouse must consent to a disposition of the homestead; a transfer without consent may be voidable by the non-owning spouse.

Restrictive covenant

A registered covenant that limits how land may be used for the benefit of other land; it runs with the land and can restrict building, use, or subdivision.

Statute of Frauds

A legal rule requiring contracts for the sale of land to be in writing and signed by the party to be charged, to be enforceable.

Condition precedent

A contract term that must be satisfied or waived before the agreement becomes binding; common examples are financing, inspection, and condominium document review.

Deposit in trust

A buyer's deposit is held in trust by the brokerage, credited to the purchase price on closing, and may be forfeited if the buyer breaches the agreement.

Material latent defect

A hidden property defect that affects use or value and is not discoverable by reasonable inspection; the seller must disclose it to the buyer.

High-ratio mortgage

A mortgage over 80% of the property value that requires mortgage default insurance from an approved insurer because the down payment is below 20%.

Mortgage default insurance

Insurance that protects the lender if a high-ratio borrower defaults; it does not protect the borrower and is paid for by the borrower.

Stress test qualification

Lenders qualify borrowers at the greater of the contract rate plus two percentage points or the minimum qualifying rate, to test affordability if rates rise.

Mortgage pre-approval

A lender's conditional estimate of how much it may lend; it is subject to income verification, property appraisal, and lender conditions and is not a guarantee.

Condominium corporation

A legal entity created on registration of a condominium plan; it manages common property, collects contributions, and is governed by an elected board and bylaws.

Reserve fund study

A periodic assessment of a condominium's future major repair and replacement costs, used to set reserve fund contributions and avoid special assessments.

Condominium disclosure statement

A document a developer must provide to a buyer of a new condominium unit, triggering a rescission period under the Condominium Property Act.

Special assessment

An additional charge levied by a condominium corporation on owners when the reserve fund is insufficient for major repairs or unexpected common expenses.

Conflict of interest disclosure

An industry member must disclose in writing any personal or financial interest that could influence a client's transaction, and obtain informed consent before proceeding.

Referral fee disclosure

Any commission, referral fee, or benefit paid to or received from a third party must be disclosed to the client; undisclosed kickbacks are prohibited.

Advertising requirements

Real estate advertising must include the brokerage's licensed name and the associate's name, and must be accurate, not misleading, and approved by the brokerage.

Confidentiality after transaction

A licensee must keep a client's confidential information secret after the agency relationship ends, unless the client consents or disclosure is required by law.

Residential Measurement Standard

Alberta's RMS measures above-grade living area using exterior dimensions; it excludes below-grade space, garages, and unfinished areas from the stated floor area.

Comparative market analysis

An estimate of a property's likely selling price based on recent comparable sales, adjusted for differences in location, size, condition, and features.

Market value definition

The most probable price a property should bring in a competitive open market between a willing buyer and seller, both informed and acting without undue pressure.

Listing agreement

A written contract between a seller and a brokerage authorizing the brokerage to market the property and setting commission, term, and services.