Ethics and Professional Standards Flashcards
6 cards from real BC Real Estate Trading Services Course practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Ethics and Professional Standards flashcards as text
Under RESA, what is a real estate licensee's primary duty?
Answer: To act in the best interests of the client while treating all parties honestly and with reasonable care and skill
A licensee's primary duty is to act in the best interests of their client while also treating all parties to the transaction honestly and with reasonable care and skill. This dual obligation means that while the licensee advocates for their client, they must not deceive or act unfairly towards the other party.
What is 'dual agency' and what are its restrictions in BC?
Answer: When one licensee represents both the buyer and seller in the same transaction, which is now prohibited in BC
Dual agency (now called 'limited dual agency') has been prohibited in BC since June 2018. A single licensee cannot represent both the buyer and the seller in the same transaction. If a buyer client is interested in a property listed by their agent, the agent must refer one party to another licensee. This protects both parties from conflicts of interest.
What are a BC real estate licensee's obligations regarding the disclosure of material facts?
Answer: Disclose all known material facts that could affect a reasonable buyer's decision, including latent defects known to the licensee
Licensees must disclose all known material facts that could reasonably affect a buyer's decision to purchase or the price they would offer. This includes latent (hidden) defects, environmental issues, legal restrictions, and neighbourhood factors. Failure to disclose material facts can result in disciplinary action and civil liability.
What must a real estate licensee do with a deposit received from a buyer?
Answer: Place it in the brokerage's trust account in accordance with RESA and the brokerage's policies, within the prescribed time
All deposits must be placed in the brokerage's trust account within the time prescribed by RESA (generally within one banking day). Trust funds must be kept separate from the brokerage's operating funds. Mishandling trust funds is one of the most serious violations a licensee can commit and can result in licence revocation.
What constitutes 'conflict of interest' for a real estate licensee in BC?
Answer: Any situation where the licensee's personal interests, or interests of another client, compete with the interests of the client they are serving
A conflict of interest arises when a licensee's personal interests (e.g., purchasing the property themselves) or the interests of another client compete with their current client's interests. Licensees must identify, disclose, and manage conflicts. Examples include buying a client's listing, representing competing buyers, or having a financial interest in the transaction.
What is 'phantom' or 'shadow' bidding and why is it prohibited?
Answer: Creating fictitious offers to drive up the price or pressure a buyer into making a higher offer, which is fraudulent and violates RESA
Phantom bidding involves fabricating non-existent offers to create a false sense of competition and drive up the price. This is illegal and constitutes fraud. Licensees who engage in or assist with phantom bidding face disciplinary action, licence revocation, and criminal prosecution. All offers must be genuine and verifiable.