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RECA Exam practice questions

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Question 1Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

Which of the following best describes the fiduciary duty of a real estate agent to their client?

  1. Acting in the client's best interest above all other interests, including the agent's own. Correct answer.
  2. Maintaining confidentiality of the client's personal information after the transaction ends.
  3. Disclosing all known material facts about the property to the client.
  4. Providing the client with a list of comparable sales upon request.

Explanation

Fiduciary duty requires an agent to act with loyalty, good faith, and in the client's best interest, subordinating the agent's own interests. It encompasses confidentiality, disclosure, and obedience but is broader than any single duty.

Question 2Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

Which of the following is a fundamental element required for a valid contract?

  1. The property must be inspected by a licensed home inspector.
  2. The buyer must provide a deposit.
  3. The contract must be in writing.
  4. Both parties must have legal capacity to contract. Correct answer.

Explanation

A valid contract requires offer, acceptance, consideration, capacity, and legality. Capacity means parties are of legal age and sound mind. Writing is required for enforceability of land contracts but not for validity.

Question 3Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

Under Alberta's residential real estate disclosure rules, what must a seller disclose to a buyer?

  1. The existence of any registered easements on the title.
  2. The names of previous owners.
  3. Any latent defects that make the property dangerous or unfit for habitation. Correct answer.
  4. The seller's reason for selling.

Explanation

Sellers must disclose known latent defects that render the property dangerous or unfit for habitation. Patent defects, visible upon reasonable inspection, need not be disclosed. Registered encumbrances are discoverable through a title search.

Question 4Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

A real estate agent is representing a buyer in a transaction. The agent also has a listing agreement with the seller for the same property. What is this situation called and what is required?

  1. Designated agency; the agent can represent both parties without disclosure.
  2. Subagency; the agent works for the seller under the buyer's consent.
  3. Dual agency; the agent must obtain written consent from both parties and act impartially. Correct answer.
  4. Transaction brokerage; the agent represents neither party and only facilitates the deal.

Explanation

Dual agency arises when the same agent represents both buyer and seller in one transaction. Alberta rules require written consent from both clients and the agent must remain impartial, disclosing all material facts.

Question 5Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

In Alberta, how must a real estate brokerage handle trust funds received from a buyer's deposit?

  1. Hold in the agent's personal account until the transaction closes.
  2. Deposit into a separate interest-bearing trust account for each transaction.
  3. Deposit into a pooled trust account and disburse upon closing. Correct answer.
  4. Deposit into the brokerage's general operating account and track separately.

Explanation

Trust funds must be deposited into a trust account maintained by the brokerage, typically a pooled account, and cannot be mixed with operating funds. The brokerage must keep detailed records of each transaction's funds.

Question 6Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

Which federal law governs misleading advertising and deceptive marketing practices in real estate?

  1. The Competition Act Correct answer.
  2. The Personal Information Protection Act
  3. The Land Titles Act
  4. The Real Estate Act (Alberta)

Explanation

The federal Competition Act prohibits false or misleading advertising and deceptive marketing practices. It applies to real estate marketing, ensuring claims are accurate and not likely to mislead consumers.

Question 7Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

In Alberta's Torrens land title system, what does the register guarantee?

  1. The zoning and land use permissions.
  2. The market value of the property. Correct answer.
  3. The physical condition of the property.
  4. The accuracy of the title as to ownership and encumbrances.

Explanation

The Torrens system guarantees the accuracy of the title register regarding ownership and registered interests. A buyer can rely on the title search, and the government compensates for errors.

Question 8Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

A buyer obtains a high-ratio mortgage in Alberta. What does this typically require?

  1. A variable interest rate. Correct answer.
  2. A co-signer.
  3. Mortgage default insurance.
  4. A minimum down payment of 20%.

Explanation

A high-ratio mortgage has a down payment of less than 20% and must be insured by a mortgage default insurer such as CMHC. This protects the lender if the borrower defaults.

Question 9Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

An agent learns that a client's property was previously used as a methamphetamine lab. The client instructs the agent not to disclose this to potential buyers. What should the agent do?

  1. Disclose only if a buyer specifically asks about past drug use.
  2. Follow the client's instruction because the agent must obey lawful client directions. Correct answer.
  3. Withdraw from the listing without disclosing the reason.
  4. Disclose the information because it is a material latent defect affecting health and safety.

Explanation

A former meth lab is a material latent defect posing health risks. Agents have a duty to disclose such defects to potential buyers, and the obligation overrides a client's instruction to conceal.

Question 10Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

A brokerage's agent receives a deposit cheque made payable to the seller. What is the correct handling?

  1. The agent should endorse the cheque to the buyer.
  2. The agent should return the cheque to the buyer.
  3. The agent may hold the cheque personally until closing.
  4. The agent must give the cheque to the brokerage, which deposits it into trust. Correct answer.

Explanation

Deposit cheques must be made payable to the brokerage in trust or to the seller, but the agent must immediately deliver it to the brokerage for deposit into a trust account. Agents cannot hold deposits personally.

Question 11Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

Which organization is responsible for licensing real estate professionals and enforcing standards of conduct in Alberta?

  1. Alberta Real Estate Association (AREA)
  2. Real Estate Council of Alberta (RECA) Correct answer.
  3. Canadian Real Estate Association (CREA)
  4. Service Alberta

Explanation

The Real Estate Council of Alberta (RECA) is the delegated regulator under the Real Estate Act. It issues licences, sets standards, and handles complaints and discipline. Trade associations such as AREA and CREA do not have statutory licensing authority.

Question 12Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

Under Alberta advertising rules, which element must appear on all real estate advertisements published by a licensee?

  1. The listing price
  2. The name of the brokerage Correct answer.
  3. The seller's name
  4. The licensee's personal cell phone number

Explanation

Alberta advertising rules require every advertisement by a licensee to clearly identify the brokerage. This lets the public know which licensed brokerage is responsible for the ad. The licensee's personal contact details and the price are not mandatory.

Question 13Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

In which situation may a person trade in real estate in Alberta without a real estate licence?

  1. Repeatedly buying and selling properties for profit
  2. Selling a home on behalf of a family member for a fee
  3. Managing rental properties for a fee
  4. Selling a home they own as a private individual Correct answer.

Explanation

A private individual selling their own home is not trading in real estate for another person and does not need a licence. Licensing is required when someone trades on behalf of others for compensation or expects to profit from repeated dealings.

Question 14Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

A buyer gives a brokerage a $15,000 cash deposit for a home purchase. Under federal anti-money-laundering requirements, what must the brokerage do?

  1. Ask the buyer to convert the cash into a bank draft
  2. Deposit the cash into the brokerage's general operating account
  3. Nothing, because the amount is below $20,000
  4. Report the cash transaction to FINTRAC Correct answer.

Explanation

Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, brokerages must report cash transactions of $10,000 or more to FINTRAC. A $15,000 cash deposit therefore triggers a Large Cash Transaction Report. The funds must also go into a trust account, not an operating account.

Question 15Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

A licensed real estate agent receives a referral from an unlicensed mortgage broker. The agent wants to pay the broker a $500 referral fee. What is the agent's best course of action?

  1. Pay the fee only if the broker provides a written invoice
  2. Pay the fee if the amount is under $1,000
  3. Pay the fee because mortgage brokers are financial professionals
  4. Do not pay the fee because the broker is not licensed in real estate Correct answer.

Explanation

Only licensed real estate professionals may be paid referral fees for real estate trades. An unlicensed mortgage broker cannot receive a fee for referring a buyer to an agent. Paying such a fee could result in discipline for the agent and brokerage.

Question 16Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

Which of the following is required for a valid exclusive seller's listing agreement in Alberta?

  1. A minimum commission of 3%
  2. A definite expiry date Correct answer.
  3. A home inspection report
  4. Approval by the local real estate board

Explanation

RECA requires every listing agreement to state a definite expiry date. This protects sellers from open-ended contracts and ensures the agreement is clear. Commission, board approval, and inspection reports are not required for validity.

Question 17Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

A buyer tells an agent that they have inflated their income on a mortgage application to qualify for financing. The agent knows the buyer cannot afford the home without the inflated income. What should the agent do?

  1. Refuse to participate and report the suspected fraud Correct answer.
  2. Continue with the transaction but document the conversation
  3. Ask the lender to ignore the discrepancy
  4. Advise the buyer to revise the application and proceed

Explanation

Assisting a buyer to obtain mortgage financing through false information is mortgage fraud. A licensee must not participate in or facilitate fraud and should refuse to proceed and report the matter. Continuing the transaction could expose the agent to serious disciplinary and legal consequences.

Question 18Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

Three competing brokerages meet and agree to charge a minimum commission of 5% on all residential listings. This agreement is most likely:

  1. Allowed if approved by RECA
  2. Acceptable if disclosed to clients
  3. A violation of the Competition Act (price-fixing) Correct answer.
  4. Permitted because commissions are negotiable

Explanation

Agreeing with competitors to set commission rates is price-fixing, which is a criminal offence under the Competition Act. Commissions must be independently set by each brokerage and are negotiable with clients. A RECA approval would not make such an agreement lawful.

Question 19Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

An agent collects a client's driver's licence number, income details, and birth date for a transaction. Under Alberta's Personal Information Protection Act (PIPA), what must the agent do before collecting this information?

  1. Report the collection to RECA
  2. Publish a notice in the local newspaper
  3. Obtain the client's consent Correct answer.
  4. Verify the information with a credit bureau

Explanation

PIPA generally requires an organization to obtain an individual's consent before collecting, using, or disclosing personal information. Driver's licence numbers, income, and birth date are personal information. The agent should explain the purpose and obtain consent, subject to limited legal exceptions.

Question 20Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

A seller receives two competing offers on a property. The listing agent's seller has not given written instructions about how to handle multiple offers. What must the listing agent do?

  1. Present both offers to the seller promptly Correct answer.
  2. Reject the lower offer without consulting the seller
  3. Disclose the amount of the highest offer to all buyers
  4. Hold both offers until the seller returns from vacation

Explanation

A listing agent must present every offer to the seller promptly and accurately. The seller decides how to respond, unless the seller has given written instructions for handling multiple offers. The agent cannot withhold or reject an offer without the seller's direction.

Question 21Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

A buyer purchases a resale home in Alberta. Which transfer-related cost applies to the change of ownership?

  1. A municipal property transfer tax collected at closing.
  2. A federal transfer levy administered by the CRA.
  3. A land titles registration fee only. Correct answer.
  4. A provincial land transfer tax based on purchase price.

Explanation

Alberta does not impose a land transfer tax on real property transfers. Instead, the purchaser pays a land titles registration fee based on the value of the interest being registered. Municipalities may charge annual property taxes, but these are not transfer taxes. Federal law does not create a real estate transfer levy.

Question 22Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

A seller lists a home and the buyer asks which items will remain. Which item is legally a fixture and therefore included unless the contract says otherwise?

  1. A freestanding microwave oven
  2. A wall-mounted television on a removable bracket
  3. A portable area rug
  4. A built-in dishwasher Correct answer.

Explanation

Fixtures are items permanently attached to the land or building and pass with the real property unless excluded in the contract. A built-in dishwasher is connected to plumbing and cabinetry and is ordinarily a fixture. Freestanding appliances, rugs, and removable electronics generally remain personal property. The parties can agree otherwise in writing.

Question 23Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

Under Alberta's real estate licensing framework, which licence category is required to act as the person in charge of a brokerage?

  1. Broker Correct answer.
  2. Associate
  3. Representative
  4. Associate broker

Explanation

A brokerage must have a broker who is responsible for the overall operation and supervision of the brokerage. Associates and associate brokers work under the brokerage but do not hold the person-in-charge role. The broker licence is the highest category and carries regulatory accountability for trust accounts, records, and licensee conduct.

Question 24Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

A seller signs an exclusive listing agreement providing for commission payable on completion. The agent finds a buyer who signs a firm offer with no conditions, but the buyer later defaults and the sale does not complete. What is the agent's commission position?

  1. Commission is payable only if the seller recovers damages from the buyer.
  2. Commission is doubled automatically when the buyer defaults.
  3. Commission may be owed for producing a ready, willing, and able buyer. Correct answer.
  4. No commission is payable because the transaction did not complete.

Explanation

The common law rule is that a brokerage earns its commission when it produces a buyer who is ready, willing, and able to complete on the seller's terms. The buyer's later default does not automatically erase the entitlement unless the listing agreement says otherwise. The seller may have a claim against the defaulting buyer, but that is separate from the commission question.

Question 25Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

A brokerage earns interest on funds held in its real estate trust account. Under Alberta's real estate rules, where does that interest go?

  1. To the individual client whose deposit earned the interest
  2. To the Alberta Real Estate Foundation Correct answer.
  3. To the Real Estate Council of Alberta's operating budget
  4. To the brokerage as additional income

Explanation

Alberta's Real Estate Act directs interest earned on real estate trust accounts to the Alberta Real Estate Foundation. The foundation uses the funds for research, education, and other public-interest initiatives related to real estate. The brokerage cannot keep the interest as revenue, and it is not paid back to individual clients. RECA's operations are funded through licence fees, not trust account interest.

Question 26Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

How often must a brokerage reconcile its real estate trust account records under Alberta's requirements?

  1. Every month Correct answer.
  2. At the end of each fiscal year
  3. Only when a client requests a statement
  4. Every time a deposit is received

Explanation

RECA requires brokerages to reconcile trust accounts monthly, comparing the trust ledger balances with the bank statement and the trust liability. This regular reconciliation helps detect shortages, errors, or unauthorized withdrawals promptly. Annual or transaction-by-transaction reconciliation would not provide adequate ongoing protection for consumer deposits.

Question 27Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

What is the main purpose of a holdover clause in an exclusive seller's listing agreement?

  1. It requires the buyer to pay the agent's commission directly.
  2. It automatically renews the listing agreement for another term.
  3. It preserves commission when a buyer introduced during the listing buys soon after expiry. Correct answer.
  4. It allows the seller to cancel the listing at any time without penalty.

Explanation

A holdover clause addresses the situation where the listing expires but the seller sells to someone the brokerage introduced during the listing term. It allows the brokerage to claim commission if that sale closes within the holdover period stated in the agreement. This prevents a seller from avoiding commission by waiting for the listing to expire. The clause must be clear and is subject to the terms of the contract.

Question 28Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

An Alberta licensee advertises the size of a residential property. Which measurement approach must be used?

  1. The municipal property tax assessment figure
  2. The Residential Measurement Standard Correct answer.
  3. The owner's estimate of usable space
  4. The floor area calculated by the listing agent without a standard

Explanation

RECA requires licensees to use the Residential Measurement Standard (RMS) when representing the size of residential properties. The RMS provides consistent rules for what is included in above-grade living area and how it is measured. Using an ad hoc or assessment-based figure can mislead consumers and breach advertising requirements. The standard helps buyers compare properties on a like-for-like basis.

Question 29Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

Under Alberta's new home warranty legislation, what minimum coverage applies to the building envelope of a new home?

  1. Ten years
  2. Two years
  3. Five years Correct answer.
  4. One year

Explanation

Alberta's New Home Buyer Protection Act sets minimum warranty coverage for new homes. The building envelope is covered for five years, while labour and materials are covered for one year, distribution systems for two years, and structural defects for ten years. Builders must provide at least this coverage and disclose it to buyers.

Question 30Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

A licensee buys a list of email addresses and sends a mass promotional email about a new listing. Under Canada's anti-spam legislation, what must the licensee have?

  1. Consent, sender identification, and an unsubscribe mechanism Correct answer.
  2. Approval from the local real estate board only
  3. A disclaimer that the email is not legal advice
  4. A signed listing agreement with each recipient

Explanation

Canada's Anti-Spam Legislation requires commercial electronic messages to be sent only with express or implied consent. The message must also identify the sender and include a functioning unsubscribe mechanism. Purchased email lists generally do not provide valid consent, so the licensee must obtain consent in a compliant way. Provincial real estate board approval would not satisfy the federal requirements.

Question 31Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

A married homeowner in Alberta wants to sell the family home, which is registered in their name alone. The homeowner's spouse does not want to sign any documents. Under Alberta's Dower Act, what is the consequence for the sale?

  1. The sale can complete if the homeowner provides an affidavit that the property is not a homestead.
  2. The sale can complete if the buyer waives dower rights in writing.
  3. The sale cannot complete without the spouse's written consent, unless a court order dispenses with it. Correct answer.
  4. The sale can complete because title is in the homeowner's name alone.

Explanation

Under the Dower Act, a spouse has dower rights in the homestead. The spouse's written consent is required for a disposition of the homestead, unless a court orders otherwise. Without consent, the sale may be set aside or the spouse may claim against the proceeds.

Question 32Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

In Alberta, when a seller sells a resale condominium unit, what document must the seller provide to the buyer to disclose the corporation's financial and governance information?

  1. A certificate of title from Alberta Land Titles.
  2. A condominium resale certificate (estoppel certificate) from the condominium corporation. Correct answer.
  3. A current real property report.
  4. A home inspection report.

Explanation

Under the Condominium Property Act, a seller of a resale condominium unit must provide the buyer with a resale certificate from the condominium corporation. The certificate contains information such as financial statements, budget, bylaws, and pending litigation. The buyer has a right to rescind if the certificate is not provided or is inaccurate.

Question 33Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

A brokerage has a seller's listing agreement and also agrees to represent a buyer who wants to purchase that same property. What must the brokerage do to comply with Alberta real estate rules?

  1. Obtain written consent from both the seller and the buyer after full written disclosure of the conflict. Correct answer.
  2. Nothing, because the brokerage can represent both parties as long as it is fair.
  3. Obtain verbal consent from the seller only, since the seller pays the commission.
  4. Refer the buyer to another brokerage because dual representation is prohibited.

Explanation

When a brokerage represents both buyer and seller in the same transaction, it is multiple representation. Under RECA rules, the brokerage must disclose the conflict in writing to both parties and obtain their written consent before proceeding. Verbal consent or no consent is insufficient.

Question 34Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

Under Alberta's real estate licensing requirements, which type of insurance must a brokerage maintain to cover errors and omissions in the services it provides?

  1. Errors and omissions (professional liability) insurance. Correct answer.
  2. Home warranty insurance.
  3. Commercial general liability insurance.
  4. Automobile liability insurance.

Explanation

RECA requires every licensed brokerage to maintain errors and omissions (E&O) insurance. This insurance protects against claims of negligence or errors in real estate services. It is a condition of licensing.

Question 35Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

Alberta's land title system is based on the Torrens system. What does this mean for a buyer of real estate?

  1. Title is transferred only when the physical deed is delivered to the buyer.
  2. The buyer must personally search all historical documents to prove ownership.
  3. The government guarantees the title, so the buyer does not need to investigate the chain of title. Correct answer.
  4. The seller's solicitor holds the title in trust until the mortgage is paid.

Explanation

Under the Torrens system, the province maintains a register of land titles and guarantees the title. A buyer can rely on the certificate of title rather than investigating historical deeds. This reduces the need for extensive title searches.

Question 36Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

Under Alberta's Real Estate Act Rules, how long must a brokerage retain its real estate transaction records, including contracts and trust account records?

  1. 25 years.
  2. 10 years.
  3. 2 years.
  4. 7 years. Correct answer.

Explanation

The Real Estate Act Rules require brokerages to keep records for at least 7 years from the date of the transaction or the end of the fiscal year. This includes trade records, trust account records, and other prescribed documents. This retention period supports audits and complaint investigations.

Question 37Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

Who may file a complaint with the Real Estate Council of Alberta (RECA) about the conduct of a licensed real estate professional?

  1. Only a client who suffered a financial loss.
  2. Only another licensed real estate professional.
  3. Any person who has a concern about a licensee's conduct. Correct answer.
  4. Only the Minister of Service Alberta.

Explanation

RECA accepts complaints from any member of the public, not just clients or other licensees. A complaint can be about a licensee's conduct or the services provided. RECA then assesses the complaint and may investigate.

Question 38Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

In Alberta, which element must be included in a written buyer's brokerage agreement to make it enforceable?

  1. The property's legal description.
  2. The seller's asking price.
  3. The duration of the agreement and the brokerage's remuneration. Correct answer.
  4. The buyer's mortgage pre-approval amount.

Explanation

A written buyer's brokerage agreement must include essential terms such as the duration of the agreement, the services to be provided, and the remuneration. Without these, the agreement may not be enforceable. The other items are not required at the time of signing.

Question 39Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

An Alberta brokerage maintains a real estate trust account. Which of the following funds may properly be deposited into that trust account?

  1. The brokerage's commission earned on a completed sale.
  2. The brokerage's operating expenses float.
  3. A buyer's deposit for a residential purchase. Correct answer.
  4. A licensee's personal savings.

Explanation

A real estate trust account may only hold funds that belong to clients and relate to real estate transactions, such as a buyer's deposit. Commissions, operating funds, and personal funds must be kept in the brokerage's general account. Mixing trust funds with other money is prohibited.

Question 40Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

In Alberta, which statement about a residential seller's property disclosure statement is correct?

  1. It is a mandatory form required by the Real Estate Act for every resale.
  2. It is not required by statute, but sellers often provide one voluntarily or as agreed in the contract. Correct answer.
  3. It must be completed by a home inspector.
  4. It replaces the need for a real property report.

Explanation

Alberta does not have a statutory requirement for a seller's property disclosure statement in residential resale. However, sellers commonly provide one voluntarily, and a contract may require it. It is not a government-mandated form.

Question 41Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

An Alberta licensee places a newspaper advertisement for a listing. Which item must appear in the advertisement?

  1. The brokerage's registered name Correct answer.
  2. The property's annual tax bill
  3. The licensee's home address
  4. The seller's asking price

Explanation

In Alberta, a licensee's advertisement must clearly identify the brokerage by its registered name. This tells consumers which brokerage is accountable for the ad. Price, tax amounts, and the licensee's home address are not mandatory advertising elements.

Question 42Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

What is the primary purpose of the Real Estate Council of Alberta (RECA)?

  1. To provide free legal advice to buyers
  2. To set mortgage interest rates
  3. To protect the public and regulate the industry Correct answer.
  4. To guarantee sellers a minimum price

Explanation

RECA is the delegated regulator that licenses real estate industry members and enforces standards to protect the public. It does not set interest rates, give legal advice, or guarantee sale prices.

Question 43Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

A buyer contacts a licensee to view a home but signs no written service agreement. The licensee shows the home and provides factual information. What is the buyer's status?

  1. A client of the brokerage
  2. An unlicensed assistant
  3. A partner in the transaction
  4. A customer of the brokerage Correct answer.

Explanation

A buyer who receives services without a written agency agreement is a customer, not a client. The brokerage may provide factual help but does not represent the customer. Client status and agency duties arise only from a written service agreement.

Question 44Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

While preparing a home for sale, a seller paints over a wall to hide a known crack in the foundation. The buyer does not inspect the basement. What must the seller disclose?

  1. Only defects visible from the street
  2. Only the crack if the buyer asks
  3. Nothing, because the buyer did not inspect
  4. The hidden material latent defect Correct answer.

Explanation

Sellers must disclose material latent defects that a reasonable inspection would not reveal and that make the property dangerous or unfit. Painting over a known foundation crack does not remove that duty. Caveat emptor covers patent defects the buyer can see, not hidden serious defects.

Question 45Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

An Alberta brokerage handles a cash purchase of a home and notices the buyer is using funds from an unusual source. What is the brokerage's obligation under federal anti-money laundering rules?

  1. Report the suspicious transaction to FINTRAC Correct answer.
  2. Report the buyer to the police immediately
  3. Ignore it because the buyer is not a client
  4. Refuse to complete the transaction without a court order

Explanation

Real estate brokerages are reporting entities under Canada's anti-money-laundering regime and must send suspicious transaction reports to FINTRAC. They must also verify identity and keep records. A court order is not needed to make a required report.

Question 46Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

A brokerage wants to collect a buyer's personal information for a marketing list. What must the brokerage generally do under Canadian privacy law?

  1. Publish the information on its website
  2. Obtain consent and state the purpose Correct answer.
  3. Share it with other brokerages freely
  4. Collect it without telling the buyer

Explanation

Canadian privacy law requires an organization to obtain consent when collecting personal information and to identify the purpose. Consent can be express or implied depending on the situation. Information should not be used for unrelated purposes without new consent.

Question 47Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

A licensee receives a deposit cheque from a buyer under a purchase contract. What should the licensee do with the cheque?

  1. Keep it in a desk drawer until closing
  2. Deposit it into the seller's account
  3. Deliver it promptly to the trust account Correct answer.
  4. Cash it and hold the cash personally

Explanation

A deposit is trust money and must be delivered to the brokerage and placed in its trust account without delay. A licensee must not cash or personally hold trust funds. Trust account handling protects the buyer and seller if the transaction fails.

Question 48Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

A buyer signs a purchase contract that says the sale is "subject to the buyer obtaining financing." What does this condition mean?

  1. The buyer is bound even if financing is refused
  2. The buyer may cancel if financing fails Correct answer.
  3. The seller must provide the financing
  4. The contract is void after one week

Explanation

A condition precedent makes the buyer's obligation depend on obtaining financing by the stated deadline. If the condition is not met, the buyer may terminate without breach. If the buyer waives or satisfies the condition, the contract becomes binding.

Question 49Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

A seller provides a real property report that shows a deck built without a permit crossing the property line. What is the most appropriate next step?

  1. Remove the RPR from the listing file
  2. Resolve the encroachment and obtain compliance Correct answer.
  3. Ask the buyer to pay for a new survey
  4. Ignore it because the deck is a fixture

Explanation

A real property report shows improvements relative to property boundaries. If it reveals an encroachment or unpermitted work, the seller should resolve the problem or obtain a municipal compliance certificate. Buyers and lenders usually require a compliant report before closing.

Question 50Content domains not enumerated in the official source (see Exam Blueprints and Exam Weighted Charts in the Resource Hub)

A licensee receives a $1,000 referral fee from a mortgage broker for sending a client. What is required?

  1. Keep the fee without telling anyone
  2. Disclose the fee to the client and brokerage Correct answer.
  3. Do not disclose because it is not a commission
  4. Refuse all referral fees

Explanation

A referral fee received in connection with a transaction must be disclosed to the client and the brokerage. Undisclosed compensation creates a conflict of interest and breaches licensing duties. Disclosure lets the client assess the arrangement.