RECA Exam| 2023/ 2024| Questions and
Verified Answers| Grade A
QUESTION
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?
Answer:
Disclosure level 3
QUESTION
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?
Answer:
Disclosure Level 2
QUESTION
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
Answer:
I, II, & III
QUESTION
Which of the following describes a lawful revocation?
Answer:
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
QUESTION
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
Answer:
Statements I, II, and IV
QUESTION
Which of the following statements is correct regarding breach of contract?
Answer:
The injured party must actually have suffered damages as a result of the breach of contract
QUESTION
Which statement is correct if a property is held in joint tenancy?
Answer:
If 2 individuals own a property, they both have an equal interest in the property as a whole
QUESTION
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
Answer:
Statements I, II, and III
QUESTION
Which Principle of Value identifies how economic, social, and political factors effect property
values?
Answer:
Principle of Change
QUESTION
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?
Answer:
An increase in the quantity supplied
QUESTION
Which of the following may RECA amend from time to time?
Answer:
The Rules
QUESTION
What statement best describes why real estate professionals have errors and omissions
insurance?
Answer:
To protect real estate professionals when they make a mistake regarding their business activities
RECA Exam| More than 200 Real Questions
and Verified Answers| Grade A| 2023/ 2024
Update
QUESTION
The Oleksiaks paid $410,000 ten years ago for a house in a small town. There is now an
economic downturn forcing the closure of a local industrial plant. As with many residents of the
town, the Oleksiaks were employed by the plant and will now have to relocate to the city. When
the Oleksiaks go to sell their home, the property is now valued at $350,000. Which of the
following Principles of Value best describes this scenario?
A) Principle of Regression
B) Principle of Surplus Productivity
C) Principle of External Factors
D) Principle of Increasing and Decreasing Return
Answer:
C
QUESTION
Which Principle of Value states that homes built in a similar style to others in the area may
increase property values?
A) Principle of Conformity
B) Principle of Balance
C) Principle of Substitution
D) Principle of Competition
Answer:
A
QUESTION
What is meant by the term ‘straw buyer’?
A) A buyer who participates in mortgage fraud for housing
B) Anyone who lets their identity be used to buy property
C) A person who knowingly participates in mortgage fraud
D) All statements are correct
Answer:
B
QUESTION
Which of the following statements best describes ‘fraud for housing’?
A) A buyer who completes a purchase contract for a property using an inflated amount
B) A buyer who purchases a property with the intention of using it for criminal activities
C) A buyer who uses illegal funds as part of the down payment for the purchase of a property
D) A buyer who attempts to qualify for mortgage financing by falsifying or misrepresenting
information required by the lender
Answer:
D
QUESTION
Zack wants to buy a house, but does not have enough of his own funds to cover the gap between
the required down payment and the amount for which he qualifies. He notices an ad offering
houses for sale with ‘low down payments’ and calls the number. Herbert, a mortgage investor,
answers the call and tells Zack that he can advance him the required funds and register a
mortgage once the title transfers. He tells Zack this is a private arrangement and not to mention it
to any mortgage lenders. What is this scheme called?
A) False deposit
B) Secret second
C) Equity access
D) Debt-consolidation
Answer:
B
QUESTION
Susan has been unable to work due to a recent illness and has missed making her mortgage
payments for the last two months. Steve contacts Susan and claims to be a mortgage specialist
working on behalf of the lending institution who provided Susan the mortgage loan. Steve
advises Susan that his company can make the mortgage payments until she can get back to work
but requires an upfront fee of $500 to transfer the title of the property. As Susan does not want to
default on her mortgage, she agrees to forward Steve the funds. Which mortgage fraud scheme
has Steve perpetrated?
A) Equity access
B) Private financing
C) Vendor cash-back
D) Debt consolidation or foreclosure
Answer:
D
QUESTION
Which of the following statements is a characteristic of a mortgage?
A) It is the lender’s security for repayment of a borrower’s debt
B) It is a transfer of an interest in land from the borrower to the lender
C) It is the pledging of real property by a borrower to a lender as security for a debt
D) All statements are correct
Answer:
D
QUESTION
Which of the following statements is correct regarding the remedy of quantum meruit?
A) The injured party cannot claim damages for any loss incurred
B) The injured party is entitled to the reasonable value of the services performed
C) The injured party is released from his or her contractual obligations
D) The injured party is compelled by court order to fulfill his or her contractual obligations
Answer:
B
QUESTION
Which of the following does NOT apply to consideration?
A) Consideration must be lawful
B) Past consideration is no consideration
C) Consideration always involves money
D) Consideration is anything of value promised to another
Answer:
C
Consideration is something of value, but not necessarily money
QUESTION
Which of the following applies to the payment of referral fees?
A) Real estate brokerages may be paid referral fees by mortgage brokerages
B) Real estate professionals may pay referral fees to mortgage brokerage professionals
C) Real estate professionals may pay referral fees to unlicensed individuals if the broker
approves
D) Real estate professionals may be paid referral fees by mortgage brokerages
Answer:
A
QUESTION
Which of the following statements identifies the circumstances under which an individual is
NOT eligible for licensing?
A) The individual is not at least 18 years of age
B) The individual fails to obtain the appropriate insurance coverage
C) The individual fails to submit the required fees, levies or premiums
D) All the statements are correct
Answer:
D
QUESTION
Michael, a real estate professional with Prime Plus Real Estate Brokerage Ltd., has an assistant,
Marie, who used to be an industry professional. As Michael is very busy, Marie prepares
promotional information for upcoming open houses that Michael will host. According to the
Rules related to support personnel and assistants, choose the best answer regarding the actions
Marie is performing.
A) Marie can prepare the promotional information if the broker has given his/her permission
B) Marie can prepare the promotional information if she has written permission from Michael
RECA Fundamentals Exam| 2023/ 2024|
Questions and Verified Answers|100%
Correct
QUESTION
Errors and Omissions Insurance?
Answer:
real estate equivalent of malpractice coverage
QUESTION
Comprehensive General Liability Insurance?
Answer:
- broad coverage for claims against injury/damage
- civil liability (a fall)
- any damages or injuries
- legal defense costs
- does not cover issues related to real estate transactions
QUESTION
Voluntary Broker Resolution Process (VBRP)?
Answer: - enables broker to take the lead in resolving complaints and disputes
- prior to RECA + Formal courts
- brokers confer with REIX before proceeding
QUESTION
Privacy Law?
Answer:
- Brokerages must designate a privacy officer to be accountable for compliance
- must be consistent with the applicable privacy legislation
QUESTION
Benefits of Voluntary Broker Resolution Process?
Answer: - avoids time and intrusion involved with RECA investigation
- identifies deficient brokerage practices that need improvement
- allows participation in the process to achieve acceptable resolution
- opportunity to mend relationship with consumer
QUESTION
Three components of broker leadership?
Answer:
Authority, responsibility, and accountability
QUESTION
Reactions to conflict?
Answer:
Physical, Cognitive, Emotional
QUESTION
Principles of Competition Act?
Answer: - Do not collude with competitors
- do not discriminate against or refuse to do business with competitors
- do not mislead the public through advertisement or representation
QUESTION
Proceeds of Crime (Money Laundering) and Terrorist Financing Act?
Answer:
- Federal act
- specific measures to detect and deter money laundering
- facilitates investigations
- responds to threats posed by organized crime
- fulfill international commitments to fight multi-national crime
QUESTION
Financial Transactions and Reports Analysis Center of Canada (FINTRAC)?
Answer: - responsible for collection, analysis and disclosure of information
- identifies lists of groups under their watch
- brokers must report suspicious transactions
QUESTION
Safeguards to protect personal information?
Answer:
Administrative, Technological, Physical
QUESTION
Confidential information?
Answer:
includes both personal and business information - not readily available info, may have value
QUESTION
Civil liability?
Answer:
- private legal action between disputing parties
- involves and plaintiff and defendant appearing in court
- established by the courts at the conclusion of legal proceedings
QUESTION
Types of Consent?
Answer:
Express (most important) - given verbally or in writing
Implied - does not specifically give, but volunteers personal information
Opt-out - unless the individual takes action, can assume consent is given
QUESTION
Legacy Information?
Answer: - personal information collected before application privacy legislation came into effect
- considered to be collected with consent
- may be used for a new purpose other than original purpose if new consent is obtained
QUESTION
Disputes come from:?
Answer:
Assumptions
Omissions (non actions)
RECA Residential Exam | Latest 2023/ 2024 |
Guide with Verified and Detailed
Answers|100% Correct
QUESTION
Property inspection report aspects:?
Answer:
-Current condition of inspected items
-Inspected items that are deemed unsafe or require repair or replacement.
-Estimation of approximate replacements/repairs are needed.
-Preventative measures to remedy current issues/extend life of inspected items.
*should never include estimates or quotes for repairs, replacements or improvements.
QUESTION
Property inspection inclusions?
Answer:
-Roof
-walls, floors
-Insulation
-Windows/doors
-Foundation
-Exterior
-Heating/ventilation/AC
-Plumbing/electrical
-Interior
-Asbestos/mould
QUESTION
Property inspection exclusions?
Answer:
-Alarm/smoke systems
-Wood burning appliances
-Sprinkler/pool/spas
-Underground items (IE storage)
-Decorative items
-Telephone/ other cables
-Outbuildings (things not attached to main building).
QUESTION
Environmental site assessments (ESA)?
Answer:
Determines if property is contaminated, level of contamination and how it is to be remediated.
QUESTION
ESA Phase 1?
Answer:
Determine through inquiry if contamination exists on property.
QUESTION
ESA Phase 2?
Answer:
Testing to confirm contamination, if contaminated, further testing to identify level of
contamination.
QUESTION
ESA Phase 3?
Answer:
Any further testing to deal with any outstanding issues, determination of remediation options,
and development of remediation plan.
-Carrying out remediation plan is not a part of ESA P3.
QUESTION
RMS Principles?
Answer:
-RE agents must use it.
-Identify measurement system, use consistently.
-For single detached, measure exterior wall at foundation.
-Semi-attached, measure interior perimeter walls (paint to paint) at floor level. Additional area
assumed with exterior measurements.
-Include floor levels entirely above grade, exclude floor levels below floor grade. Below grade
may be measured but must not be included.
-Include all additions above grade areas within structure, must be weatherproof and suitable for
year-round use.
QUESTION
RMS Principles continued.?
Answer:
-Minimum floor-to-ceiling height of 2.13 meters (7ft).
-When ceiling sloped, area with floor-to-ceiling of at least 1.52 meters (5ft) may be included as
long as there is 2.13 meters(7ft) in the same room.
-Include extensions from main structure with minimum floor-to-ceiling of 1.52 meters(5ft),
cantilevers, bay/bow/dormer windows.
-Exclude open areas that have no floor, vaulted areas.
-Additional areas can be included as long as they are: Permanent, connected to main electrical,
and has main heating or self that can maintain 22 degrees year round.
-Box window can be included if it is 1.52 meters(5ft).
QUESTION
RMS: Detached properties.?
Answer:
-Take exterior measurements at foundation.
-Extrapolate exterior measurements from interior when foundation is inaccessible.
-Take interior measurements at floor level.
QUESTION
Permitted additional property measurements:?
Answer:
-Below grade areas.
-Area of structures not connected to property.
-Area of structures connected but do not meet year-round requirements.
-Attached properties: assumed exterior size.
QUESTION
Condominium units: RMS?
Answer:
-Registered size not to be used as RMS.
-Use standard RMS measurement practices.
QUESTION
RMS & client.?
Answer:
-Retain measurements, calculations, notes, and date to be reported to brokerage.
-Retain measurement report if a qualified professional does RMS, submit to brokerage.
-Check measurements are up to standards and accurate/error free.
QUESTION
Patent defects?
Answer:
-Obvious flaw discovered upon reasonable inspection.
Minor: Broken window pane, damage to entry walkway, cracks in cement etc.
Material: Roof re-shingling, large windows broken seals.
-Caveat emptor applies “Buyer beware” buyer is responsible to see suitability to their needs.
RECA Exam | 2023/ 2024 Update| Real
Questions and Verified Answers|100%
Correct- Grade A
QUESTION
Which of the following are benefits of professional courtesy? It helps avoid legal proceedings
against real estate professionals
It helps avoid a professional conduct review being conducted by RECA It helps avoid the
issuance of disciplinary outcomes by RECA
It helps avoid claims being made against REIX
A) Statements I, II and III B) Statements II, III and IV C) Statements I, III and IV D) All
statements apply
Answer:
D
QUESTION
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
A) Statements I, II, and III B) Statements II, III, and IV C) Statements I, III, and IV D) All
statements apply
Answer:
B
QUESTION
Which of the following measures are used to determine the standard of care for real estate
professionals?
A) Professionals standards
B) Professional norms and practices
C) Expert testimony
D) All measures are used
Answer:
D
QUESTION
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
A) Statements I, II and III B) Statements II, III and IV C) Statements I, III and IV
D) Statements I, II and IV
Answer:
D
QUESTION
Which of the following describes the party being represented by another party in a representation
relationship?
A) Agent
B) Third party
C) Principal
D) Customer
Answer:
C
QUESTION
When are fiduciary duties owed by a real estate professional? A) As soon as they receive
confidential information from a client
B) As soon as they establish a representation relationship with a customer C) As soon as they
enter into a written service agreement with a customer D) As soon as they are granted express
authorities from a client
Answer:
A
QUESTION
Which of the following categories of brokerage services involves numer- ous services that
require the greatest level of discretion or judgement?
A) Mere posting service
B) Limited brokerage services
C) Full brokerage services
D) Property management services
Answer:
D
QUESTION
Which of the following best describes statute law?
A) An accumulation of laws enacted by various levels of government
B) An accumulation of laws enacted by the courts
C) A rigid code of rules enacted by the provincial government
D) A rigid code of rules enacted by the federal government
Answer:
A
QUESTION
Which of the following situations is an example of an injunction?
A) The court forces a party to complete its contract with the another party
B) The court prevents the party from selling the property to another party
C) The court forces a landlord to pay the tenant damages for ending the lease without cause
D) A tenant does basic repairs on a property and sues the landlord for reimbursement
Answer: