BC Real Estate Trading Services Course Real Estate Law & Contracts 4 — Questions and Answers
Question 1: In BC, which document transfers ownership of land from seller to buyer?
- Bill of Sale
- Form A Freehold Transfer (Correct answer)
- Assignment of Contract
- Land Transfer Certificate
Correct answer: Form A Freehold Transfer
In BC, a Form A Freehold Transfer is the standard Land Title Office form used to transfer registered ownership of freehold land from the seller to the buyer.
Question 2: A counter-offer in a BC real estate transaction has the legal effect of:
- Accepting the original offer with minor changes
- Rejecting the original offer and creating a new offer (Correct answer)
- Extending the irrevocability period of the original offer
- Binding both parties to the original terms
Correct answer: Rejecting the original offer and creating a new offer
A counter-offer legally rejects the original offer and replaces it with a new offer on different terms. The original offer no longer exists and cannot be accepted after a counter-offer is made.
Question 3: Under RESA in BC, a licensee must complete annual continuing education requirements in order to:
- Qualify for commission increases
- Renew their licence (Correct answer)
- Join a real estate board
- Advertise independently
Correct answer: Renew their licence
RESA requires licensees to complete prescribed continuing education as a condition of licence renewal. Failure to complete CE can result in the licence not being renewed.
Question 4: Which of the following best describes 'consideration' in a BC real estate contract?
- The seller's obligation to disclose defects
- Something of value exchanged by each party to support the contract (Correct answer)
- The buyer's right to a home inspection
- The deposit held in trust
Correct answer: Something of value exchanged by each party to support the contract
Consideration is something of value (money, promise, services) given by each party to a contract. In real estate, the buyer's consideration is the purchase price and the seller's is the promise to convey title.
Question 5: Under BC law, a person who is declared mentally incapable of managing their affairs cannot:
- Receive rental income
- Enter into a binding contract for the sale of real estate (Correct answer)
- Hold title to property
- Be a beneficiary in a will
Correct answer: Enter into a binding contract for the sale of real estate
Legal capacity is required to enter into contracts. A person declared mentally incapable lacks the capacity to enter into a binding contract, including contracts for the sale of real estate.
Question 6: In BC, the term 'completion date' in a Contract of Purchase and Sale refers to:
- The date the buyer moves in
- The date funds are paid and title is transferred at the Land Title Office (Correct answer)
- The date the home inspection occurs
- The date subjects are removed
Correct answer: The date funds are paid and title is transferred at the Land Title Office
Completion date (also called closing date) is when the transaction legally closes: the buyer's lawyer/notary pays the purchase funds and the title transfer is registered at the Land Title Office.
BC Real Estate Trading Services Course Real Estate Law & Contracts 4
In BC, which document transfers ownership of land from seller to buyer?