OREA Real Estate and Business Brokers Act 3 — Questions and Answers
Question 1: Under REBBA 2002, when must a registrant provide a written disclosure to a buyer or seller about the nature of the services they will provide?
- After the transaction closes
- At the first substantive contact or as soon as practicable (Correct answer)
- Only if the client specifically requests it
- Within 30 days of closing
Correct answer: At the first substantive contact or as soon as practicable
Registrants must provide disclosure about the nature of services and representation at the earliest practicable opportunity, typically at the first substantive contact with a buyer or seller.
Question 2: What is the purpose of the Discipline Committee under REBBA 2002?
- To set commission rates for the industry
- To hear and decide complaints of professional misconduct or incompetence against registrants (Correct answer)
- To approve new real estate developments
- To manage RECO's annual budget
Correct answer: To hear and decide complaints of professional misconduct or incompetence against registrants
The Discipline Committee hears matters referred by the Registrar involving allegations of professional misconduct, incompetence, or breaches of the Code of Ethics by registrants.
Question 3: Under REBBA 2002, what obligation does a registrant have regarding material facts?
- Material facts only need to be disclosed if asked about directly
- A registrant must take reasonable steps to determine and disclose material facts to clients (Correct answer)
- Material facts are only relevant in commercial transactions
- Only the Broker of Record has an obligation regarding material facts
Correct answer: A registrant must take reasonable steps to determine and disclose material facts to clients
Registrants have a duty to take reasonable steps to determine material facts relating to a transaction and to disclose them to their clients. A material fact is any fact that could affect a reasonable person's decision to purchase or sell.
Question 4: Which of the following is true about advertising under REBBA 2002?
- Salespersons can advertise independently without mentioning their brokerage
- All advertising must include the brokerage name as registered with RECO (Correct answer)
- Only brokers are permitted to advertise
- Advertising rules only apply to print media, not online
Correct answer: All advertising must include the brokerage name as registered with RECO
Under REBBA 2002, all advertising by registrants must be under the name of and on behalf of the brokerage and must include the registered name of the brokerage. This applies to all forms of advertising.
Question 5: What is the Consumer Deposit Insurance Program under REBBA 2002?
- An optional insurance plan for high-value transactions
- A program that provides coverage if a brokerage misappropriates deposit funds held in trust (Correct answer)
- Insurance that covers property defects discovered after closing
- A savings plan for first-time homebuyers
Correct answer: A program that provides coverage if a brokerage misappropriates deposit funds held in trust
The Consumer Deposit Insurance Program protects consumers if their deposit is lost due to misappropriation or fraud by a brokerage. It is funded by registrant contributions.
Question 6: Under REBBA 2002, what is the consequence of a registrant failing to comply with a Discipline Committee order?
- A written warning only
- The registrant's registration may be suspended or revoked (Correct answer)
- The registrant receives a 30-day grace period
- No consequences unless the offence is repeated
Correct answer: The registrant's registration may be suspended or revoked
Failure to comply with a Discipline Committee order is a serious matter that can result in suspension or revocation of registration, additional fines, and other penalties.
OREA Real Estate and Business Brokers Act 3
Under REBBA 2002, when must a registrant provide a written disclosure to a buyer or seller about the nature of the services they will provide?