BC Real Estate Trading Services Course Real Estate Law & Contracts 2 — Questions and Answers
Question 1: A contract for the sale of land in BC is unenforceable unless it is:
- Witnessed by a notary public
- In writing and signed by the party to be charged (Correct answer)
- Registered at the Land Title Office
- Approved by BCFSA
Correct answer: In writing and signed by the party to be charged
Under the Law and Equity Act BC (incorporating the Statute of Frauds), contracts for the sale of land must be in writing and signed by the party against whom enforcement is sought.
Question 2: In BC, 'time is of the essence' in a real estate contract means:
- The deal must close within 30 days
- All dates and deadlines in the contract are strict and must be met exactly (Correct answer)
- The subject removal period cannot be extended
- The contract expires at midnight on the completion date
Correct answer: All dates and deadlines in the contract are strict and must be met exactly
When 'time is of the essence' is included, all time limits in the contract are strict conditions. Missing a deadline (e.g., completion date) can entitle the other party to treat the contract as breached.
Question 3: Which of the following is NOT a requirement for a valid contract in BC?
- Offer and acceptance
- Consideration
- Registration at Land Title Office (Correct answer)
- Legal capacity of parties
Correct answer: Registration at Land Title Office
A valid contract requires offer and acceptance, consideration, capacity, and legal purpose. Registration at the Land Title Office is a step in completing the conveyance, not a requirement for contract validity.
Question 4: Under RESA, a brokerage that fails to maintain a trust account for client funds may face:
- A warning letter only
- Licence suspension or cancellation and fines (Correct answer)
- Mandatory retraining only
- Civil liability only, not regulatory action
Correct answer: Licence suspension or cancellation and fines
RESA requires brokerages to maintain trust accounts for client funds. Failure to do so is a serious breach that can result in licence suspension, cancellation, and significant administrative penalties.
Question 5: In BC, what does 'caveat emptor' mean in the context of real estate transactions?
- The seller must disclose all defects
- The buyer purchases at their own risk and must investigate the property (Correct answer)
- The agent has no liability for property defects
- The government guarantees title to all registered land
Correct answer: The buyer purchases at their own risk and must investigate the property
Caveat emptor ('buyer beware') means the buyer is responsible for investigating the property. However, this principle is modified by the seller's duty to disclose known latent defects.
Question 6: A 'latent defect' in a BC real estate transaction is best described as:
- A defect that is visible upon reasonable inspection
- A defect that is hidden and cannot be discovered through reasonable inspection (Correct answer)
- A defect the seller is not required to disclose
- A defect only affecting strata properties
Correct answer: A defect that is hidden and cannot be discovered through reasonable inspection
A latent defect is one that is not visible or discoverable through a reasonable inspection. Sellers in BC have a duty to disclose known latent defects that are material to the transaction.
BC Real Estate Trading Services Course Real Estate Law & Contracts 2
A contract for the sale of land in BC is unenforceable unless it is: