GET LICENSED

FAST!
GOBC Real Estate • Property Management • Strata Notes

“If you let yourself be successful, you will be successful”

Yaana

1.3
THE REAL ESTATE
SERVICES ACT

www.GOBCrealestate.com
 1.3 The Real Estate Service Act

Licensee Managing Broker

provides
services on The licensee responsible
behalf of the for:
brokerage • a brokerage exercising
A licensee -
responsible for
the rights conferred Managing Broker Responsibilities
Cancellation/ on the brokerage
the brokerage,
• Control and conduct • May employ agents
Suspension of
has control & • Maintain brokerage’s books, accounts and
brokerage license of the brokerage’s real
conducts & records (must keep these records in BC for
impacts all estate business
supervises agents 7 years)
licensees within the • Supervision of its
brokerage Representative licensees • Responsible for the agent’s actions
• Must have a managing broker, whose
license will determine the services the
brokerage is permitted to offer.
Qualification for Qualification for Managing Broker
Licensing ✓ 2 years licensed experience during the 5 years Liability
before the date of the application
✓ Be at least 19 years old • The brokerage will be vicariously liable for
✓ Be at least 19 years old
✓ Be of good reputation the fraud committed by the brokerage’s
✓ Be of good reputation
✓ Meet educational ✓ Must meet education and experience required
employee. It may also be disciplined by
requirements the BCFSA
by the Rules

Licensee Three “Real estate services” under RESA

Term of License – 2 years 1. Trading services (selling/buying, open houses, finding properties)
Can work for ONLY one brokerage at a time 2. Rental property management services (collecting rents, making
Can only do services permitted by the brokerage payments, collecting strata fees, negotiating)
Can only accept remuneration from your brokerage 3. Strata management services (managing on behalf of the owner, making
(bonuses, gifts) payments, negotiating, supervising contractors, managing tenant
All contracts with clients will be in the name of your matters)
brokerage
 when you take a listing, it is your brokerage’s listing Services are provided on behalf of your Brokerage (Clients, Buyers, Sellers belong
 when you help a buyer, it is your brokerage’s buyer to your brokerage office)

Exception to Real Estate License (no need to have real estate license)
Personal Real Estate Corporations
For sale by owner, Collection agents, Notaries, Accountants, Appraisers, persons
a personal real estate corporation can be
acting on behalf of developers
licensed as a managing broker, associate
broker, or representative.

 CAN: Unlicensed Assistant

• unlock a property in order to let
prospective buyers and their
 CANNOT:
representative enter;
Primary objective: better planning of income X Hosting an open house
• perform office filing and bookkeeping;
and tax streams. X Renewing a listing contract on
• draft documents and correspondence
Disadvantage: does not shield the controlling behalf of the licensee
for approval and signature by the
individual from liability from third parties X Presenting an offer to purchase
licensee;
real estate
• place or remove signs;
X negotiate lease agreements
© Copyright 2023/2024 GOBC Training LTD • witness signatures; 2
• arrange for repairs on a rental property
 1.3 The Real Estate Service Act
The Real Estate Services Act (RESA) aims:
• To ensure that real estate licensees are reasonably competent
• To ensure that real estate licensees are of good reputation
• To discipline and, where necessary, re-educate real estate licensees if they breach the provisions of the Act

Organizations created by the Real Estate Services Act (RESA)

Protection of the Public, Imposes Licensing Requirements, Establishes/Created these Organizations

o Real Estate Foundation Real Estate Errors and Real Estate

BCFSA
Real Estate Law Reform Omissions Insurance Compensation Fund
BC Financial Services
Indemnity Plan Corp.
Authority

BCFSA – Crown regulatory agency of the BC government Real Estate Foundation - Real Estate Law Reform
Main Objective: Strengthen consumer protection and ensure public can Education, research, Real Estate Law Reform
have confidence in the standards of practice provided by real estate
professionals. Receives the interest earned on monies in brokerage trust
accounts in BC to pay for their expenses and research
• Enforces the ACT - Ensuring agents meet the requirements of RESA
• Education- Supervising & advancing the educational qualifications &
programs of licensees
Real Estate Errors and Omissions Insurance Corp
• Licences – Issues, renews, suspends, reprimands & cancels licence – Protect against negligence
• Making orders against unlicensed persons who provide real estate “Indemnity plan” - insurance coverage and exclusions for real
services without a licence estate licensees in BC
• Levying fees on all licensees to meet BCFSA’s expenses • Protects against negligently performing or failing to perform
Real Estate duties
• Investigating before or after you receive your license ((no
• Levies different assessments on licensees
complaint/permission required)
• The Indemnity plan will cover the licensee up to $1 million for
• Inspects and copies records negligence but not for any fines, penalties imposed on a
• May apply to the Court for an order to seize records (no permission licensee by BCFSA
required)
• Require the licensee to pay part or all of the expenses incurred in NOT protected for/when:
relation to investigation and the discipline hearing  Dishonest, fraud, criminal matters
 Disputes concerning commission or fees
• Lobby the public NOT licensees
 The real estate agent is selling his own house
• Make bylaws about: info required on a license application, its  Claims for discrimination arising from the complains
business and affairs, hearing procedures, bylaw creation procedures  Bodily injury, sickness, disease or death
• Hold disciplinary hearings (by Discipline Committee) The decision to
discipline a licensee will be heard by the Financial Services Tribunal.
(NOT Supreme Court of BC) Real Estate Compensation Fund
Provides compensation in relation to a real estate transaction for
funds that were misappropriated
Superintendent of Real Estate
is appointed by the BCFSA board of directors
the chief executive officer of the BCFSA who possesses certain powers,
and must fulfill specific duties, under the Real Estate Services Act.
• Example:
➢ All licensing applications must be made to the Superintendent
© Copyright 2023/2024 will
➢ Superintendent GOBC Training
carry LTD
out investigations and disciplinary 3
functions in relation to licensees
NO Law Reform! NO Code of Ethics/ Realtor Code!
 1.3 The Real
OTHER Estate
REAL ESTATEService Act
ORGANIZATIONS

CREA- Canadian Real Estate Association

is a national organization comprised of licensees and real estate boards BCREA- BC Real Estate Association
across the country, as well as all of the provincial real estate associations

Developed a Code of Ethics (REALTOR® Code) 10 Real Estate Boards:

Guiding principle for all REALTORS®
= the Golden Rule: “Do unto others as you would have them do unto you.” Runs MLS

Enforces the REALTOR® Code of Ethics

Team Members
• At least two people, one of whom must be licensed. What does BCREA do?
Communications network
• All licensed team members must be licensed with the same brokerage.
Government relations
• A licensee can only be a member of one team at a time.
Economics forecasts
• Team names & team Members must be registered with BCFSA
Standard Forms
• It is the obligation to advise BCFSA, in writing, when any team member leaves the
Ongoing education (PDP, newsletters)
team or a new member joins.
Advancing the interests of real estate licensees
• All advertising that includes the names of unlicensed team members must identify
them as being unlicensed.
Real Estate Institute of BC
• Team is collectively the agent for the client (cannot separate agency relationships-
(Advanced Education, awards professional
one works for seller and other for buyer in the same transaction)
designation “RI”- NOT BCREA)

Real Estate Development Marketing Act (REDMA)

Subdivisions, Strata Properties, Cooperatives, Time Shares

REAL ESTATE DEVELOPMENT ACT – to impose Disclosure Statement - discloses material interests about property
Disclosure requirements on DEVELOPERS with the Required – when sold individually
Superintended of Real Estate Must be provided to a Buyer before an offer is made
Must indicate the right to rescind the purchase within 7 days
What is considered a “Development Property”?? Must be in the form prescribed by the Superintendent of Real Estate
o Subdivisions 5 or more Must be prepared and filed with the Superintendent of Real Estate
o Bare Land Strata lots 5 or more
o Cooperative interests 2 or more ❖ Developer MUST provide copies of Disclosure Statements to both
Purchasers are protected by REDMA requiring the Superintendent and the Purchaser
developers to: ❖ Developer must have a receipt of the DS signed by the Buyer (with
sufficient time to review)
✓ Meet requirements or approvals of the
property
✓ To assure the purchaser’s Title Disclosure Statement
✓ File disclosure statements in the form A document prepared by the Developer to ensure that purchasers have
required by the Superintended of Real Estate adequate information upon which to base a purchasing decision.

BCFSA Discipline Matters:

• Accepting remuneration directly from the developer and not
from the brokerage in relation to which the licensee was licensed
© Copyright 2023/2024 GOBC Training LTD • Failing to recommend legal advice to purchasers 4
 1.3 The Real Estate Service Act

A Brokerage must have at least one trust account in a bank and NOT one
Trust Account trust account for each client
Where money is deposited by one for the benefit of  Agent/brokerage collects deposit as stakeholder
another, in which the money is devoted to a particular
purpose and should not be diverted for other purposes Withdrawals from Trust Accounts

• By mistake
• Interest paid to the Real Estate Foundation
• Remuneration for a licensee if earned
• Accordance with the instructions of the principal

Can NOT take money out for brokerage business expenses or agent’s
personal expenses

Administrative Penalties NEW

providing measured and proportionate response to
particular instances of non-compliance and adds to a
progressive discipline system.
meant for offences that are LESS serious than offences
dealt with by a Notice of Disciplinary Hearing.
 Does Not apply to Fraud

Investigations

BCFSA can conduct an investigation to determine whether a licensee has

committed professional misconduct or conduct unbecoming a licensee

Licensee is required:
• Respond promptly to any inquiry addressed to the licensee by
BCFSA.
• Licensee’s response must be in writing and within the time limit
set for response.
• Promptly notify their managing broker of their own misconduct
❖ Even misconduct observed outside of one’s brokerage should be
reported

© Copyright 2023/2024 GOBC Training LTD 5

 1.3 The Real Estate Service Act

Questions
1). To qualify for a Managing Broker’s licence in BC, you have to provide real estate services within a Canadian province or the Yukon
for two out of the five years preceding the application
(1) True
(2) False

2). Real Estate Agent must possess a license in BC. This requirement set out by:
(1) The common Law
(2) Federal legislation
(3) Provincial statute

3). Which of the following are the three categories of real estate services, as defined in the Real Estate Services Act?

(1) Licensing services

(2) Brokerage services
(3) Strata management services
(4) Agency services
(5) Rental property management services
(6) Trading services

4). Which of the following is NOT a "real estate service" under the Real Estate Services Act?
(1) Constructing a commercial office building in Victoria
(2) Collecting rents from tenants in a residential building in Surrey
(3) Selling a Kelowna property for an owner who lives in Victoria
(4) Assisting in the sale of a condominium unit located in Vancouver but owned by a person who lives in Winnipeg

5). A Licensee is exempt from licensing when he rents his own/his family’s property & does Not use any information relating to their
brokerage.
(1) True
(2) False

6). Under the Regulations to the Real Estate Services Act , certain categories of persons are exempted from the licensing
requirements contained in the Act. Which of the following is NOT covered by an exemption?
(1) A business executive selling a neighbour’s house for a flat fee
(2) An individual providing a property inspection
(3) Accountants in relation to the purchase and sale of a business
(4) A full-time salaried employee of Mega Land Company selling houses in a 3,000 house tract developed by Mega Land
Company

© Copyright 2023/2024 GOBC Training LTD 6

 1.3 The Real Estate Service Act
7). 1. An individual may be registered independently as a real estate representative without being employed by a real estate
brokerage.
(1) True
(2) False

2. A real estate representative is engaged by his or her brokerage to trade in real estate services in the brokerage’s name,
on behalf of the brokerage’s clients.
(1) True
(2) False

8). BCFSA can conduct an investigation only at the request of the Superintendent of Real Estate
(1) True
(2) False

9). The Real Estate Services Act (RESA) empowers the Superintendent of Real Estate to carry out key functions with respect to real
estate licensing.
(1) True
(2) False

10). Which of the following is NOT a power or duty of the British Columbia Financial Services Authority?
(1) Issuance of real estate services licences
(2) Conduct formal disciplinary processes
(3) Require the licensees to pay part or all of the expenses incurred in relation to an investigation to which an
order relates
(4) Undertaking and carrying out real estate law reform

11). The Real Estate Errors and Omissions Insurance Corporation document that sets out the insurance coverage and exclusions for
real estate licensees in BC as known as the:

(1) Insurance rider

(2) Indemnity plan
(3) Insurance contract
(4) Feature sheet

12). The key purposes of the Indemnity Plan are to provide an affordable method of protecting licensees from financial loss due to
errors and omissions and reduce the risk that a consumer suffering a loss as the result of a licensee’s error(s) or omission(s) will
receive no compensation due to the licensee’s lack of funds.
(1) True
(2) False

13). The Indemnity Plan will cover disciplinary fines imposed by BCFSA up to a limit of $1 million
(1) True
(2) False

© Copyright 2023/2024 GOBC Training LTD 7

 1.3 The Real Estate Service Act
14). The REALTOR® Code of Ethics is enforced by the:

(1) Canadian Real Estate Association.

(2) Local real estate boards.
(3) British Columbia Real Estate Association.
(4) British Columbia Financial Services Authority.

15). Which of the following is NOT one of the powers and duties of the British Columbia Financial Services Authority?

(1) To conduct investigations relating to licensees

(2) To issue and renew licences
(3) To ensure compliance with the requirements of the Real Estate Services Act
(4) To enforce the Code of Ethics and Standards of Business Practice

16). Who is responsible for:

A. Establishing a fund for the use of the Real Estate Foundation _____________________________

B. Supervising the educational qualifications of licensees ____________________________________

C. Undertaking public education on real estate law reform ___________________________________

D. Advancing the interests of real estate licensees __________________________________________

17). Which of the following are general guidelines BCFSA follows with respect to teams and team names?
A. Licensed team members can be licensed by different brokerages
B. Licensed team members must advise BCFSA, in writing, when any team member leaves the team.
C. No team name will be approved that is identical to an existing, approved team name.
D. Unlicensed team members who appear in team advertising do not have to be identified as unlicensed.
(1) Only A and C are true
(2) Only A and D are true
(3) Only B and C are true
(4) Only B, C and D are true

18). Where a seller sells a unit of subdivided land in British Columbia and the subdivision is a development property:
(1) the Real Estate Development Marketing Act has no jurisdiction.
(2) the unit of subdivided land is called a subdivision unit.
(3) the buyer has the right to rescind the purchase agreement at any time by providing appropriate notice, if the seller has not
provided a disclosure statement to the buyer.
(4) None of the above are correct.

Answers: 1(1), 2(3), 3(3,5,6), 4(1), 5(1), 6(1), 7(1-2, 2-1), 8(2), 9(1), 10(4), 11(2), 12(1), 13(2). 14(2), 15(4),
17(3), 18(3)

© Copyright 2023/2024 GOBC Training LTD 8