1000 questions

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706. Which of the following statements about federal legislation governing mortgage interest rates is TRUE? (1) The Interest Act requires that the rate of interest chargeable under a mortgage be "reasonable", in the prevailing market for funds. (2) The Criminal Code defines a criminal rate of interest as an effective annual rate in excess of 50%. (3) Section 10 of the Interest Act creates the right to tender prepayment of a mortgage after 5 years provided that the borrower is not a corporation, and the mortgage is not for a business purpose. (4) The Interest Act provides that if a mortgage agreement does not specify the rate of interest chargeable, the rate allowed by law is 5%.

710. RE/LAX Realty Inc. has ended the current year with a net income of $234,000. During the year, RE/LAX issued $14,000 in dividends, incurred $112,000 of operating expenses, and paid $15,000 in taxes. Which of the following most likely occurred on RE/LAX's balance sheet? (1) Owners' equity increased by $234,000. (2) Revenue decreased by $14,000. (3) Net income increased by $234,000. (4) Retained earnings increased by $220,000.

732. In the context of appraisal, which one of the following properties is likely to possess latent value? (1) a thirty-acre dairy farm in the Agricultural Land Reserve (2) a recently constructed duplex unit in a single-family residential area of the city (3) a bicycle store which is built on land zoned for commercial use (4) none of the above

798. In residential building construction, the term "rafter" refers to: (1) roof extensions used to provide extra floor area and windows for the upper level. (2) the structural member, usually wood, placed at the top of window openings. (3) a roof style commonly known as a hip roof. (4) none of the above.

831. A collateral advantage given with a mortgage will be declared unenforceable by the courts if: (1) it is unfair or oppressive. (2) it is in the nature of a penalty. (3) it is unduly restrictive. (4) any of the above applies.

919. Which of the following would NOT be available to a judgment creditor as a means of enforcing a judgment? (1) examination under oath, of the judgment debtor (2) obtaining a writ of execution so that the judgment debtor's personal car can be seized and sold (3) obtaining and serving a garnishing order on the judgment debtor's bank (4) registering a notice of civil claim in the appropriate land title office against the judgment debtor's property

927. Which of the following is NOT subject to the provisions of the Residential Tenancy Act? (1) a residential condominium rented out by the offshore owner (2) an apartment attached to a warehouse rented under a separate lease (3) a basement suite in a private residence (4) a house let for a 29 year term

142. On a straight line principal reduction loan, the monthly payment: (1) is a constant amount each month. (2) pays interest only. (3) pays principal only. (4) declines over time.

105. A mortgage loan with a face value of $150,000 is arranged through a mortgage broker. A commission of $4,000, appraisal fees of $450, as well as survey and legal fees totalling $700 will be deducted from the face value before the funds are advanced to the borrower. Calculate the cost of funds advanced to the borrower, expressed as an effective annual interest rate (j 1), if the loan is written at 6.75% per annum, compounded semi-annually, with monthly payments over a 20-year amortization period and a 5-year term? (1) 7.8033441949% (2) 7.5374227070% (3) 9.5812257178% (4) 8.5404525531%

124. Given the following information, calculate the minimum annual income a buyer must have in order to qualify for a $42,500 loan. Interest rate: 11 1/4% per annum, compounded semi-annually Term: 5 years Amortization period: 25 years Payments: Monthly Maximum Gross Debt Service Ratio: 27% Property Taxes: $600 per annum (1) $ 20,728.89 (2) $ 18,506.67 (3) $ 19,490.52 (4) $ 5,596.80

224. A local builder negotiates an interest only loan with ABC Finance Company. The face value of the loan is $450,000, the interest rate is j2 = 8%, the term of the loan is 3 years, and the interest only payments are to be made monthly. What will be the size of the monthly interest only payments? (1) $2,951.19 (2) $3,434.47 (3) $3,727.61 (4) $2,520.33

601. A central gas fired, forced hot water heating system with room baseboard units provides most of its heat transfer in which one of the following ways? (1) convection (2) combustion (3) collection (4) radiation

881. A company pays $97,835 for an asset on which the Income Tax Act allows capital cost allowance at 5% per year. The asset is expected to have a useful life of 25 years and will have no salvage value at the end of this time. Calculate the depreciation expense for accounting purposes for the asset's third year if the accountant chooses to use straight-line depreciation. (1) $3,913.40 (2) $4,414.80 (3) $4,891.75 (4) $4,505.41

see book question 840

489. Which one of the following does NOT fall within the body of public law? (1) tax law (2) criminal law (3) agency law (4) constitutional law

556. Using the comparative method of appraisal to value properties with redevelopment potential, it is NOT necessary that the comparables and the subject property: (1) have a similar highest and best use after redevelopment. (2) have a similar current use. (3) have a market value of zero in their current use. (4) expect to undergo redevelopment at a similar point in time.

608. Which one of the following is termed functional incurable depreciation in a building? (1) worn carpeting (2) no air conditioning (3) narrow hallways (4) poor landscaping

626. Joists are: (1) beams that support walls and floors. (2) beams that support the foundation. (3) beams that support floors and ceilings. (4) beams that support the foundation and ceilings.

630. Kevin wants to purchase an investment which will give him payments of $450 at the end of every quarter for the next four years. If Kevin wants to earn an interest rate of 6% per annum, compounded quarterly, how much should he pay today for this investment? (1) $8,069.57 (2) $7,224.92 (3) $6,359.07 (4) $6,983.29

635. Which of the following are NOT segments of the IC&I market? (1) Hotels (2) Nursing homes (3) Residential subdivisions (4) Warehouses

815. Of the following externalities, which would represent the BEST example of an externality which is both positive and negative? (1) Parks (2) Pollution (3) Proximity to a transportation facility (4) Golf course

193. Which one of the following is NOT essential in order to constitute a restrictive covenant in law? (1) It must be positive in nature. (2) It must be negative in nature. (3) At least 2 parcels of property must be involved. (4) The burden of the restriction must have been intended by the parties to bind the land.

581. A standard Multiple Listing Service® (MLS®) contract must: (1) be in writing. (2) be for a higher rate of commission than other listing contracts. (3) be submitted to the Real Estate Board before the property may be sold. (4) meet all of the above requirements.

598. An investor plans to pay $200,000 for a vacant lot which he feels will sell at the end of three years for $280,985.60. What is the monthly interest rate the investor will earn? (Ignore real property taxes) (1) 0.948879293% (2) 1.404928% (3) 12% (4) 2.87373447221%

742. A real estate developer has borrowed $60,000 by way of an interest accruing loan written at j = 8%. How 12 much will the developer owe at the end of 12 months? (1) $64,979.97 (2) $68,603.40 (3) $71,286.62 (4) $60,800.00

822. When a property possesses latent value, it is implied that: (1) the property is not currently employed in its highest and best use. (2) the current rent earned on the property is below market rent. (3) the property is unprofitable in its current use. (4) the property will need to be sold below replacement cost.

837. Under the Canadian Electrical Code, houses of more than 80 m2 must have an electrical service capacity of not less than: (1) 100 amps. (2) 125 amps. (3) 150 amps. (4) There is no minimum requirement of electrical service capacity; it is up to the discretion of the builder.

780. Where would one find sole plates, studs, and lintels? (1) in a ceiling truss (2) in a wall frame (3) under carpeting (4) in a roof

589. Constant payment repayment schemes developed in response to: (1) rapid inflation. (2) the federal government's desire to stimulate the demand for and supply of housing after World War II. (3) interest rate risk. (4) principal risk.

584. The Court Order usually obtained first in a foreclosure action is an: (1) Order Nisi. (2) Order Absolute. (3) Order for Sale. (4) Order for Specific Performance.

332. An invitation to treat is: (1) a request for offers. (2) a legal offer. (3) a request for information. (4) all of the above.

8. Which of the following might be the subject of a real property appraisal? (1) air space rights (2) a life insurance policy (3) a diamond (4) all of the above

978. The term stare decisis means: (1) on the surface. (2) let the former decision stand. (3) beyond the powers. (4) decisions must be equitable.

292. A mortgagor would prefer a straight line principal reduction plan to a constant payment plan if: (1) the mortgagor wishes to delay repayment as long as possible. (2) the mortgagor foresees his or her income decreasing. (3) the mortgagor foresees his or her income increasing. (4) the mortgagor wishes to keep his or her initial payments as low as possible.

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295. As a general principle, which one of the following is the proper method of communicating acceptance of an offer? (1) in writing (2) in the same form as the offer (3) by registered mail (4) by telephone

2...

220. Which of the following would NOT be included in a statement of profit and loss? (1) depreciation (2) rental revenue (3) current liabilities (4) interest on mortgage

482. An offer of $235,000 is accepted, comprised of a cash down payment of $85,000 and a vendor-supplied mortgage loan of $150,000 at 5% per annum, compounded semi-annually. The loan has an amortization period of 25 years, a term of 5 years, and calls for monthly payments rounded up to the next higher dollar. Market rates of interest for equivalent mortgages are currently 8% per annum, compounded semi-annually. The market value of the mortgage is: (1) $132,849.12 (2) $199,309.00 (3) $235,000.00 (4) $217,849.12

494. A developer is offering a mortgage loan of $102,000 at 5% per annum, compounded semi-annually, on each of sixteen units in a condominium development. The mortgages have monthly payments, 5-year terms, and 20-year amortization periods. Each unit is priced at $130,000 and the units have been selling over the past seven months. Even with a recent decrease in interest rates (currently at j2 = 4%), the property has attracted the attention of a buyer who has made a full price offer, and applied for the developer's financing on one of the condominium units. The market value of the offer is: (1) $134,191.60 (2) $132,975.00 (3) $130,000.00 (4) $106,191.60

51. When a mortgagor grants a mortgage subsequent to a first registered mortgage, the mortgagor has created: (1) an equitable mortgage. (2) a legal mortgage. (3) an assignment of the first mortgage. (4) none of the above

519. As a marketing incentive to speed up the sale of newly completed but unsold condominiums, a developer agrees to provide the buyers with first mortgages written at 8% rather than the going market rate of 13%, If they pay the $45,000 asking price. Under these circumstances, the developer would likely be equally satisfied (in cash equivalent terms) with an "all cash" offer: (1) less than $45,000. (2) more than $45,000. (3) of $45,000. (4) that includes an additional bonus in order to purchase the unit.

550. Where an agent with authority enters into a contract with a third party and does not disclose that he or she is acting as an agent: (1) the third party may sue either the agent or the principal to enforce the contract. (2) the principal may sue the agent to enforce the contract. (3) only the agent may sue the third party to enforce the contract. (4) there is no contract in existence because there is no disclosure.

551. In mortgage financing, a constant payment mortgage is one where: (1) each payment is identical to the preceding one. (2) the payments are comprised of a constant amount of principal plus interest due. (3) the payments decrease in size during the term of the loan. (4) principal and interest are the same amount for each payment.

572. Under the Residential Tenancy Act, the landlord is entitled to collect a security deposit equal to: (1) one half of one month's rent. (2) one month's rent. (3) the first and last month's rent. (4) six months' rent.

591. Bona Fide Brokerage Ltd. arranges a mortgage with a face value of $55,000 for Gina Griffiths. Gina is obliged to make monthly payments at j = 12% for 15 years in order to fully amortize the loan. The broker 2 deducts legal costs of $450 and a brokerage fee of $1,500 from the face value of the mortgage. Calculate the monthly payment. (1) $649.89 (2) $567.55 (3) $632.17 (4) $626.85

592. A mortgage broker has helped you set up a mortgage loan. The loan is for $350,000 at an interest rate of j = 4.75% and a 20-year amortization. The loan calls for monthly payments of $2,262 over a 2-year term 12 with $327,975.95 owing at the end of 2 years. If the lender pays the broker a fee of 2% of the funds advanced, what is the yield to lender, expressed as an effective annual rate (j )? 1 (1) 3.74259884413% (2) 6.00286575669% (3) 4.74999999999% (4) 5.25125125776%

600. Which of the following would be classified as a hard change to the metric standard of measurement? (1) Gyproc panelling is now 1200 2400 mm. (2) Framing studs are now 38 89 mm or 38 140 mm. (3) Both (1) and (2). (4) Neither (1) nor (2).

606. Consider the following data related to recently sold properties A and B. They are comparable to property C, whose value is to be appraised. Comparables Subject Property A B C Sale Price $190,000 $220,000 ? Gross Potential Revenue 38,000 49,000 $54,000 Current Operating Expenses 25,000 32,000 36,000 Vacancy 3,800 4,900 5,400 Using the limited data above, estimate a market value for property C, rounded to the nearest $100. (1) $243,700 (2) $540,000 (3) $229,100 (4) $348,100

640. All other things being equal, the type of loan with the most risk to the lender is: (1) an interest accruing loan. (2) an interest only loan. (3) a straight line principal reduction loan. (4) a constant, blended payment loan.

646. All other things being equal, a selling price less than the market value of a property is most likely to be obtained in a sale when: (1) real estate prices are increasing very quickly. (2) the seller is not in a hurry to sell. (3) the buyer is in a hurry to buy. (4) the property has been exposed to the market for more than two months.

650. An individual is planning to purchase a property that has a list price of $368,888. The proposed purchase price will be $365,000 and the lender will apply a lending value of $363,000. How large will the down payment need to be if the lender insists on a maximum loan-to-value ratio of 80%? (1) $74,600 (2) $73,000 (3) $75,300 (4) $76,888

675. Cornelius gave a life tenancy to Ruel which did not expressly state anything about Ruel's liability for waste. Ruel will NOT be liable to the remainderman for: (1) permissive waste. (2) voluntary waste. (3) ameliorating waste. (4) equitable waste.

715. Yuppie is the sole proprietor of The Mountain Bike Emporium. On her BALANCE SHEET as at December 31, 20xx, TOTAL ASSETS were $185,900. If the only LIABILITIES were Accounts Payable of $2,900 and Long-term Debt of $89,450, what is the amount of Owner's Equity: Ms. Yuppie, Capital account? (1) $93,550 (2) $92,350 (3) $185,900 (4) impossible to calculate with the information provided

73. The drawback of the percentage-of-sale method in budgeting for marketing is that it is linked to: (1) the revenue variable. (2) the market variable. (3) the product variable. (4) the objective/task variable.

731. Vanna has agreed to sell her summer cottage to Pat. Vanna and Pat used the standard Contract of Purchase and Sale on which they agreed to the following dates: Completion Date: August 31, 1999 Adjustment Date: January 1, 2000 Possession Date: June 1, 2000 Which one of the following statements is true? (1) There will be no adjustment for real property taxes on the buyer's statement of adjustments. (2) If Pat wishes to ensure that any risk to himself due to property damage is insured, he should insure the property as at May 31, 2000. (3) Neither statement (1) or (2) are true. (4) Both statement (1) and statement (2) are true.

733. In the comparative method of appraisal, one method of making final adjustments to price is to use a rating grid. In using a rating grid, it is MOST important that: (1) the subject property be the basis of comparison and all comparables be adjusted to it. (2) the final market value be determined by averaging the comparable sales prices (after adjustments). (3) the comparable properties have the same square footage of improvements as the subject property. (4) the comparable properties have the same lot size as the subject property.

736. A comparable has been identified to value a subject property. The 2,200 square foot subject property has 4 bedrooms, 4 bathrooms, an alarm system, and does not have a vendor-supplied mortgage. The 2,300 square foot comparable sold for $245,000 and has 3 bedrooms, 3 bathrooms, an alarm system, and no vendorsupplied mortgage. If the market value of a bathroom is $4,000, the market value of a bathroom is $5,700, the market value of an alarm system is $4,500, and above a 1,900 sq. ft. benchmark, each 100 sq. ft. is worth $6,000, the adjusted sale price for this comparable is: (1) $248,700 (2) $260,700 (3) $229,300 (4) $241,300

751. A real estate broker has listed a property for sale at a listing price of $100,000. The commission is agreed to be based on the difference between the listed price and the actual sales price. The agreement is: (1) contrary to the Real Estate Services Act. (2) lawful if the agreement is reduced to writing and signed by both parties. (3) specifically provided for as acceptable under the regulations to the Real Estate Services Act. (4) lawful if the buyer agrees.

771. An investor has decided to establish a bank account in order to accumulate sufficient capital at the end of seven years to purchase a boat. If the account pays interest at 6% per annum, compounded monthly and the investor makes deposits of $8,000 at the end of each year, how much capital will the investor have accumulated at the end of 7 years? (1) $67,495.21 (2) $83,123.84 (3) $113,920.74 (4) $91,310.99

772. Under the Land Title Act, in British Columbia a mortgage is registered on the title as: (1) a charge. (2) an agreement for sale. (3) a right to purchase. (4) a restrictive covenant.

775. An example of a wood frame exterior wall buildup (from the inside outwards) would include: (1) interior finish, vapour barrier, insulation, the wood frame, plywood sheathing, building paper, and exterior siding. (2) exterior siding, building paper, plywood sheathing, the wood frame, insulation, vapour barrier, and interior finish. (3) insulation, exterior siding, plywood sheathing, the wood frame, building paper, vapour barrier, and wallpaper. (4) vapour barrier, paint on drywall, insulation, building paper, the wood frame, insulation, and interior finish.

786. What is the purpose of having a firewall on your computer? (1) To prevent unauthorized electronic access to a networked computer system. (2) To remove viruses and malware that cause disturbances to the computer. (3) To separate malware and viruses within the computer's central processing unit. (4) To replace all hazardous viruses with user-friendly malware within the computer's hard drive.

834. Freddy May Ltd. purchased a small commercial building for $225,000 of which $100,000 was the value of the land. Freddy, the company president, felt this was an excellent deal because he would have been willing to pay as much as $250,000. One year later Freddy sold the property for $300,000. If, at the time of purchase, the expected economic life of the building was 10 years, there was an estimated salvage value of $25,000 at the end of that time, and Freddy uses the straight-line depreciation method, what is the depreciation expense for the year? According to generally accepted accounting principles, at the time of purchase, the value of the building in the question above should be recorded on Freddy May Ltd.'s Balance Sheet as: (1) $125,000 (2) $225,000 (3) $250,000 (4) a value determined by an objective appraiser.

847. You have recently listed a property for sale at $850,000. An offer of $843,000 was received this morning. At noon, a second offer of $845,000 was received with a "subject to financing" clause. This evening an offer of $850,000 was received, also with a "subject to financing" clause. Which of the offers must be presented? (1) all of the offers (2) only the offer of $850,000 (3) the two highest offers (4) none of the offers

858. Consider an asset with a purchase price of $185,000, economic life of 9 years, and $5,000 salvage value. If you purchase the asset today, what will be its book value in three years? (1) $125,000 (2) $150,000 (3) $175,000 (4) $190,000

862. Under the Regulations to the Real Estate Services Act certain categories of persons are exempted from the licensing requirements contained in the Act. Which of the following is NOT covered by an exemption? (1) An executive with the Hudson's Bay Company selling a neighbour's house for a flat fee. (2) An individual providing a property inspection. (3) Accountants in relation to the purchase and sale of a business. (4) A full-time salaried employee of Mega Land Company selling houses in a 3,000 house tract developed by Mega Land Company.

106. The principle of indefeasibility under the Torrens system means: (1) that a fee simple purchaser, in good faith, is not required to investigate how the owner got his title. (2) that no notice of trusts may appear on the title. (3) an applicant for registration does not need to give prior notice to the registrar. (4) a purchaser has deemed knowledge of all unregistered interests.

13. Where a commercial tenancy is expressed as lasting for a period of one year and terminating on a fixed date, how much notice must be given to terminate the tenancy? (1) No notice is required. (2) Thirty days' notice is required. (3) Six months' notice is required. (4) Reasonable notice is required.

179. With fully amortized constant payment mortgages, when payments are rounded up to the next higher cent, the final payment necessary to repay the loan amount will be: (1) smaller than the regular payments. (2) larger than the regular payments. (3) will be the same as the regular payments. (4) impossible to determine.

307. Which of the following has the greatest storage capacity? (1) External Hard Disk Drive (2) Blue Ray Disc (3) Flash Drive (4) Compact Disc-Recordable (CD-R)

318. Happy Valley Trust Company arranges a mortgage with Morley Mortgagor. Morley's budget constraints are such that he feels he can pay up to $1,200 per month on the mortgage. Assuming that Morley arranges a loan with an amortization period of 20 years and an interest rate of j = 10%, what is the maximum amount that 2 he can borrow based on his budget constraint? (1) $126,094.87 (2) $132,056.68 (3) $134,155.07 (4) $117,898.23

412. A seller refuses to sign a subject removal form to strike out a condition precedent from a contract of purchase and sale. Assuming that the condition was made exclusively for the benefit of the buyer, the agreement is: (1) binding. (2) unenforceable. (3) voidable at the option of the seller. (4) void.

413. Before valuing a house, an appraiser should assume that: (1) the registered owner is not the ultimate source of data on the property. (2) the registered owner has a fee simple interest in the land. (3) "value to owner" equals "market value". (4) the property is unencumbered.

431. At common law, which of the following statements is TRUE regarding the liability of an occupier? (1) An occupier of land owes a duty to an invitee to take reasonable precautions to protect the invitee from any "unexpected" dangers or hazards on the land of which he or she is aware or ought to be aware. (2) An occupier of land owes no duty of care under the common law to trespassers and may deal with them as he or she chooses. (3) The duty of care owed by an occupier of land at common law to children is somewhat less than that owed to invitees and licensees. (4) An invitee is owed a lesser standard of care by an occupier than that owed to a licensee.

474. An individual is planning to purchase a property that has a list price of $69,000. The proposed purchase price will be $67,000 and the lender will apply a lending value of $66,000. How large will the downpayment be if the lender insists on a maximum loan to value ratio of 80%? (1) $14,200 (2) $16,500 (3) $50,250 (4) $52,800

901. In the case of a proprietorship, which one of the following accounts represents the "link between the income statement and the balance sheet"? (1) net income (2) net assets (3) depreciation expense (4) retained earnings

923. In which of the following circumstances will an agent NOT be personally liable for his or her actions? (1) The agent, identified as such, is mistakenly believed by a third party to be contracting as a principal. (2) The agent has no authority to act as an agent. (3) The agent commits a tort. (4) The agent fails to disclose that he or she is an agent.

931. Which of the following does NOT relate to the topic of contract law? (1) depreciation (2) consideration (3) voidability (4) quantum meruit

265. Who determines the real property tax rate for general tax purposes in organized territories of British Columbia? (1) the local municipal council (2) the federal government (3) the Assessor (4) the Lieutenant-Governor in Council

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286. A "subject to" clause in a contract of purchase and sale is correctly known as a: (1) condition precedent. (2) warranty. (3) condition subsequent. (4) penalty clause.

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347. Which of the following is NOT a procedure commonly used by a large institutional lender in order to reduce the risk associated with a particular mortgage loan? (1) reduction of the loan-to-value ratio (2) increase in the interest rate charged (3) reduction in the gross debt service ratio (4) all of the above methods are commonly used

399. The income approach is generally NOT used for the valuation of: (1) warehouses. (2) single-family residences. (3) leasehold interests. (4) any of the above.

567. Sections 15 and 18(1) of the Manufactured Home Act provide that no person shall move a manufactured home UNLESS: (1) the manufactured home is registered in the land titles office. (2) the manufactured home is registered in the manufactured homes registry, and a transport permit has been obtained from the registrar. (3) the manufactured home is free of any security interests registered against it in the personal property registry. (4) he or she is the registered owner of the manufactured home.

704. A borrower wishes to make monthly payments totalling no more than $625 per month for 300 months. If interest rates are currently 10 1/2% per annum, compounded semi-annually, what is the maximum amount that should be lent? (1) $64,212.47 (2) $67,325.22 (3) $66,194.89 (4) $63,069.39

723. A mortgage broker will advance $97,000 to a borrower who has agreed to pay a bonus of $2,200. As a consequence, the face value of the loan will be $99,200. The loan will be amortized over 25 years with monthly payments at j = 6%. Calculate the monthly payment required to amortize the loan. 2 (1) $620.62 (2) $634.69 (3) $690.83 (4) $650.74

758. When the amortization period of a loan is lengthened: (1) the interest portion of the periodic payments will be reduced. (2) the amount of outstanding principal at any point in time will be increased. (3) the interest rate on the mortgage will be reduced. (4) there is reduced risk to the lender.

172. Which of the following displays numbers in rows and columns and is especially useful for budgeting and statistical data analysis? (1) Email management software (2) Word processing software (3) Spreadsheet software (4) All of the above

194. The common practice of "rounding" mortgage payments to the next higher cent: (1) has the effect of increasing the cost to the borrower. (2) usually results in a higher yield to the lender. (3) usually results in a lower final payment. (4) usually results in a decrease in the number of payments.

223. Which party to a court proceeding files a response to civil claim? (1) the plaintiff (2) the accused (3) the defendant (4) the prosecutor

345. Sam and Sally recently negotiated a second mortgage in the amount of $25,000 at an interest rate of 9% per annum, compounded semi-annually. The loan is to be amortized over 20 years by monthly payments. As a result of a $3,000 brokerage fee, assume that only $22,000 of the loan's $25,000 face value is advanced to Sam and Sally. The effective annual rate of interest charged on the funds advanced will be: (1) less than the effective annual equivalent of the contract interest rate. (2) equal to the effective annual equivalent of the contract interest rate. (3) greater than the effective annual equivalent of the contract interest rate. (4) impossible to determine with the information provided.

355. A lease granted by a tenant for a term which is less than the whole of his remaining interest granted in the original lease is referred to as: (1) an assignment. (2) a tenancy by sufferance. (3) a sub-lease. (4) a tenancy at will.

368. In commercial mortgage underwriting, the factor calculated by dividing the annual net operating income by the annual sum of monthly mortgage payments is referred to as the: (1) safety margin factor. (2) mortgage ratio. (3) debt coverage ratio. (4) annual mortgage constant.

380. Which one of the following items is deducted from gross realized income to arrive at net operating income when preparing an appraisal using the income method? (1) income tax (2) interest on the mortgage (3) real property taxes (4) depreciation expense

394. A borrower wishes to make payments of no more than $500 per month for 360 months. If interest rates are currently 10.5% per annum, compounded semi-annually, what is the maximum amount that should be lent? (1) $55,500.00 (2) $54,660.38 (3) $55,670.60 (4) $56,675.77

396. Which one of the following will NOT be found on the Balance Sheet of a corporation? (1) number of shares issued (2) original cost of the property owned by the corporation (3) names of the corporation's shareholders (4) retained earnings to date

404. When using the cost method of appraisal to estimate the value of a building which currently contains urea formaldehyde foam insulation (UFFI), insulation should be considered in your calculation as: (1) part of the overall replacement costs (2) a deduction for depreciation (3) both (1) and (2) (4) none of the above

424. Two mortgages requiring level blended payments are identical in all respects except that one has a five-year term and the other has a two-year term. The monthly payments on the five-year term mortgage would be: (1) higher than those required on the two-year term mortgage. (2) lower than those required on the two-year term mortgage. (3) the same as those required on the two-year term mortgage. (4) Monthly payments cannot be compared with the information presented.

429. Professional email etiquette consists of all of the following EXCEPT: (1) Keeping messages short and getting to the point quickly. (2) Using humour sparingly and avoiding sarcasm. (3) Using only lowercase and emoticons. (4) Refraining from using clichés or cheeky tag-lines in an email signature.

604. In the comparative approach, it is MOST important that the subject building and the comparable buildings be: (1) recently constructed of average quality construction. (2) of the same general architectural style. (3) similar with respect to factors judged important by buyers and sellers. (4) inclusive of similar types and quality of fixtures.

623. Bernadette has agreed to purchase Steve's home for $438,000. However, before the sale completes she discovers that she has been the subject of an innocent misrepresentation which materially affects the contract. Bernadette may go to court and ask for the application of which of the following legal principles? (1) revocation (2) rectification (3) rescission (4) None of the above

644. Amperage is defined as: (1) a measure of electrical potential. (2) a measure of electrical consumption. (3) a measure of electrical flow. (4) none of the above.

68. Ally has recently received an interest only loan for $75,000 to operate a food cart in downtown Vancouver. The loan has an interest rate of 6% per annum, compounded monthly, and requires interest only payments every month. How much are the monthly interest only payments that Ally makes if the duration of the loan is two years? (1) $750 (2) $500 (3) $375 (4) $1,000

686. Which one of the following is NOT a mortgagor covenant? (1) pay all taxes on the land and on the improvements (2) keep the premises in a reasonable state of repair (3) to convey the property to the mortgagee, at its option, in exchange for an amount equal to current market value (4) pay the debt and accrued interest according to the agreed upon schedule

773. In residential building construction, the term "truss" refers to: (1) roof extensions used to provide extra floor area and windows for the upper level. (2) the structural member, usually wood, placed at the top of window openings. (3) a prefabricated frame component supporting the roof. (4) part of a septic tank water disposal field.

783. The courts will never allow the remedy of specific performance where: (1) the plaintiff is a limited company. (2) the defendant is without means. (3) damages are considered to be an adequate remedy. (4) the contract has already been partially performed.

794. Which of the following is NOT an exception to the principle of indefeasibility under the B.C. Torrens system of land registration? (1) a lien for unpaid provincial taxes (2) a public right-of-way in favour of B.C. Hydro and Power Authority (3) a registered mortgage where the registered mortgagee effected registration by fraud (4) a registered claim of builder's lien

844. Which of the following was created by Canada Mortgage and Housing Corporation (CMHC)? (1) Virtual banks (2) Ginnie Mae Mortgage-Backed Securities (3) Canada Housing Trust Bonds (4) Credit unions

928. Which of the following heating systems offers rapid response to extreme outside temperature changes? (1) electric baseboard heating (2) electric heated hot water radiant unit (3) central gas fired forced hot air (4) central gas fired forced hot water

992. A new furnace that Sally installed in her house exploded 6 months after installation. Sally intends to bring a lawsuit against the manufacturer. The first document that Sally's lawyer will file is: (1) a response to civil claim. (2) a notice of trial. (3) a notice of civil claim. (4) a garnishing order.

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232. A person appointed by a partnership or corporation to represent it for all purposes under the Real Estate Services Act is referred to as: (1) a brokerage. (2) an associate broker. (3) a managing broker. (4) a director.

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264. Which of the following statements is/are TRUE? A. On the completion date of the sale of real property, the buyer is usually entitled to the transfer of title. B. The total of the debit column on the seller's statement must be identical to the total of the credit column on the buyer's statement. C. The practice is to hold the seller responsible for the taxes on the adjustment date itself. D. The adjustment date and the possession date must be the same day. (1) All of the above statements are true. (2) Only A and B are true. (3) Only A is true. (4) None of the above statements are true.

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271. As one lowers a discount (or expected yield) rate, the present value of a given series of future payments: (1) decreases. (2) could go up or down depending on the timing of the payments. (3) increases. (4) remains constant.

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277. On March 7 Allan contracts, in writing, to sell his home to Bob for the price of $100,000. The sale is to complete on March 31. Unknown to either Bob or Allan, the house was destroyed on March 6. Accordingly, there has been: (1) a mutual mistake. (2) a frustration of the contract. (3) a common mistake. (4) none of the above.

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139. In British Columbia, before approving a conversion of a rental building to a condominium, the approving authority must consider a number of factors. Which one of the following is NOT a mandatory consideration? (1) the priority of rental accommodation over private ownership in the area (2) the proposal to relocate existing tenants (3) the life expectancy of the building (4) the potential increase in real property tax revenue

364. An assignment of a commercial lease may be made by a tenant to a third party: (1) only if there is an express provision in the lease allowing the tenant to do so. (2) only if the tenant has a licence to do so from the landlord. (3) only if the landlord's consent can be implied from the course of dealings leading up to the execution of the lease. (4) unless the tenant is specifically prevented from doing so by a covenant in the lease.

370. Which of the following events will terminate an agency relationship? (1) revocation of the agency by the principal (2) frustration (3) performance (4) all of the above

387. Which of the following would generally be found in the current liabilities section of a balance sheet? (1) Current portion of long-term debt (2) Property taxes payable (3) Income taxes payable (4) All of the above

632. A borrower who makes biweekly payments: (1) will make a smaller number of payments in a calendar year than a borrower who makes constant monthly payments (all other loan terms being equal). (2) will pay more interest over the life of the loan than a than a borrower who makes constant monthly payments (all other loan terms being equal). (3) pays one-twelfth of the annual payment every two weeks. (4) pays one-half of the monthly payment every two weeks.

634. You are determining the market value of a subject property using the capitalization process. The gross potential rent for the subject property is $430,000, operating expenses are $130,000, and the long-term vacancy rate is 4%. If immediate repairs of $65,000 are required on the property and the appropriate capitalization rate is 6%, the market value of the property is approximately: (1) $4,713,000 (2) $3,630,000 (3) $2,900,000 (4) $4,648,000

636. The Real Estate Services Act stipulates that the Real Estate Council is made up of: (1) nine individuals from seven districts. (2) seventeen members from seventeen districts. (3) five representatives and eleven managing brokers, plus two government appointees. (4) three representatives, nine managing brokers, one rental property or strata management licensee and three government appointees.

668. When a borrower is unable to make the mortgage payments (in part or full), this may occur because of: (1) changes in market conditions. (2) sickness or accident. (3) loss of employment. (4) all of the above.

673. Jonathan Wong has offered $231,000 for a house, providing he is able to obtain acceptable financing. The house lists for $242,000, but the lender has set the lending value at $238,000. The lender requires a loan-tovalue ratio of 80% and a gross debt service ratio of 30%. Property taxes are $1,750 per year and Mr. Wong's annual gross income is $65,000. If the interest rate is 6.5% per annum, compounded annually, the amortization period is 20 years, and payments are made monthly, what is the maximum amount this lender will advance, rounded to the nearest $100? (1) $201,300 (2) $196,800 (3) $215,200 (4) $190,400

676. Depreciation expense is: (1) another name for capital cost allowance. (2) a deductible expense in computing income for purposes of income taxation. (3) usually calculated on land by the straight-line method. (4) none of the above.

753. Short term national general economic factors include some of the following: A. Interest rates on treasury bills B. Consumer expectations C. Shifts in population D. Number of public housing projects Which of the following are included? (1) Only A and C are included. (2) Only A, B and D are included. (3) Only A and D are included. (4) Only A and B are included.

821. The shareholder of a corporation may: (1) terminate the existence of the corporation by selling her shares. (2) vote to elect the board of directors of the corporation. (3) receive taxable dividend payments. (4) (2) and (3) but not (1).

827. Which of the following is NOT one of the powers and duties of the Real Estate Council: (1) to establish the education and experience requirements for licensing. (2) to issue and renew licences. (3) to ensure compliance with the requirements of the Real Estate Services Act. (4) the enforce the Code of Ethics and Standards of Business Practice.

983. Which of the following is NOT one of the three main classifications of interests in land that are less than estates? (1) easements (2) profits-a-prendre (3) restrictive covenants (4) life tenancies

294. Which of the following would appear as a debit on the seller's statement of adjustment? (1) the amount of a mortgage which the buyer will assume (2) the legal fees involved in discharging a judgment from the seller's title (3) the amount of a penalty owing for overdue taxes (4) all of the above would appear as a debit on the seller's statement

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21. Alan is Peter's agent with the express authority to rent Peter's cottage for the summer months. However, in his capacity as Peter's agent, Alan accepts an offer to purchase the cottage instead. When Peter discovers the incident, he is so impressed by the price, he calls and tells the buyers that he adopts Alan's act. Which of the following is the result of these actions at law? (1) Peter has ratified Alan's actions, therefore the buyers cannot sue Alan for breach of warranty of authority. (2) When Peter adopted Alan's act, he created legal authority by means of revocation. (3) Peter did not need to adopt Alan's act because Alan had apparent authority. (4) None of the above.

27. In order for a trading services representative to be liable for a negligent misrepresentation certain facts must be proven. Which of the following is NOT a requirement for establishing a claim based upon negligent misrepresentation? (1) A contractual relationship must exist between the representative and the person to whom the representation is made. (2) The statement may be either one of fact or an opinion given by the representative. (3) The statement must be reasonably relied upon by the person to whom it was made, and damage must result from that reliance. (4) The representative must make no clear disclaimer of liability for the accuracy of the statement.

29. The book value of an asset can be best defined as: (1) the purchase price of that asset less any depreciation taken to date. (2) the price for which a similar asset could currently be purchased in the market. (3) the price for which that asset could be sold. (4) a value which is subjectively arrived at by an appraiser.

3. Which of the following is NOT a "real estate service" under the Real Estate Services Act? (1) constructing a commercial office building in Prince George for an owner who lives in B.C. (2) collecting rents from tenants in a residential building in Burnaby for an owner who lives in Singapore (3) selling a Penticton property for an owner who lives in Victoria (4) assisting in the sale of a condominium unit located in Vancouver but owned by a person who lives in Calgary

30. In the situation where a residential tenant under a fixed term tenancy abandons the premises prior to the end of the term, the obligation imposed on the landlord to try to re-rent the premises as quickly as possible is referred to as: (1) the duty to mitigate damages. (2) the covenant of quiet enjoyment. (3) derogation from the grant. (4) the doctrine of interesse termini.

33. Which of the following statements are FALSE? A. Form reports often meet the needs of financial institutions, insurance companies and government agencies. B. An appraiser is only responsible to the person who pays the appraiser's fees. C. An appraisal mistake of $3,000 on a $276,000 house is beyond the margin of allowable error. D. The burden of proof is on the appraiser to explain an apparent over-valuation of a property. (1) Only statements B and C are false. (2) Only statements A and C are false. (3) Only statements A, B, and D are false. (4) None of the above statements are false.

36. An investor plans to pay $200,000 for a vacant lot which the investor feels will sell at the end of three years for $280,985.60. What yield, expressed as an annual rate with semi-annual compounding, will the investor earn? (Assume that these are the only cash flows for this investment.) (1) 11.6601048852% (2) 11.3865515215% (3) 12% (4) There is no possible solution for this problem.

42. Which of the following statements about the B.C. Torrens system are FALSE? A. Trustees are shown on title as the registered owners of an estate or interest in land with no indication of the existence of the trust and beneficiaries are protected only by a caveat registered on title. B. A charge registered on title is indefeasible. C. Registered documents must be in the form prescribed by statute law to be enforceable between the parties. D. A caveat will automatically lapse two months after it is registered on title. (1) A, B and C are false. (2) A and C are false. (3) A, C and D are false. (4) B and D are false.

69. In answer to the ringing of her doorbell, Kim opened the front door of her house to find a door-to-door vacuum salesperson on her doorstep. The salesperson walked into Kim's house uninvited. Before Kim could stop him, he dumped some dirt onto her carpet for use in a demonstration of the vacuum cleaner he was selling. The dirt stained Kim's carpet. Her lawyer correctly advises Kim that: (1) the salesperson may be liable in negligence for the damage he caused to the carpet. (2) the salesperson may be liable to Kim under the common law of occupier's liability. (3) Kim will not recover any damages in a lawsuit against the salesperson because he was a trespasser. (4) she will probably succeed in a lawsuit based on the tort of private nuisance

75. To calculate income taxes payable for a corporation: (1) depreciation expense cannot be treated as a deductible expense. (2) capital cost allowance cannot be treated as a deductible expense. (3) the computation of taxable income is irrelevant. (4) it is necessary to know what the amount of declared dividends will be.

82. A strata lot in British Columbia in an exclusively residential complex is owned by two persons as joint tenants. At every meeting of the strata corporation the owners are: (1) entitled to a total of one vote. (2) entitled to the number of votes which is calculated in proportion to their unit entitlement. (3) individually entitled to one vote each. (4) entitled to a total of one vote where the matter involves a special resolution, but individually entitled to one vote on all other matters.

83. Which of the following is NOT an example of a breach of contract? (1) After Don contracted with Toni to buy his car, the night before Don was supposed to pay the price and take the car, it was struck by lightning in Toni's driveway and destroyed. (2) After Babs contracted with Quin in May to rent his motorhome for one week in July, Quin telephoned Babs and told her that he was going to be using the home himself that week, and that she would not be able to rent it. (3) Fred contracted with Jordan to sell him his collection of hockey cards, but one day later Fred sold them to Andrew, who paid him $15 more than Jordan had agreed to pay. (4) Adrian contracted to paint Woodie's house starting on September 1 for a price of $500. On September 1 Adrian failed to turn up, and did not return any of the messages that Woodie left on his answering machine.

93. An amendment to a contract of purchase and sale (1) is not legally binding on the seller and buyer until finalized in writing and signed by all parties to the original contract. (2) must be signed by at least the seller and selling licensee who negotiated the original contract. (3) automatically terminates the contract of purchase and sale. (4) can be made only before a buyer's offer is accepted by a seller.

98. Victor has agreed to sell his home to Pamela for $75,900. The completion and adjustment date is set at November 14th. The real estate commission payable by Victor is 7% of the selling price. Pamela has made a deposit of $2,000, which the real estate brokerage has passed to Pamela's lawyer to be deposited in a trust account until the completion date. Victor has agreed to accept Pamela's diamond ring as part payment equal to $7,500. Pamela is borrowing $65,000 from the Bank of Dad as a first mortgage loan. Victor paid the current year's property taxes on the date they were due in the amount of $896. Pamela's lawyer will charge $600 to cover both legal and registration fees. Victor will be paying out a judgment registered against the title to his house in the amount of $6,225 and the legal fee to remove it will be $85. Victor is relying on Pamela's lawyer to handle this transaction for him. As no exemptions apply to this transaction, property transfer tax will be payable upon completion. It is NOT a leap year. The balance due to complete required from Pamela is: (1) $2,876.83. (2) $56,894.83. (3) $3,112.49. (4) $2,117.83.

100. A fee simple owner in B.C. who is the victim of a fraudulent conveyance of his or her land will lose the right to have the transfer set aside when: (1) the transfer of the property to the dishonest person has been registered in the land title office. (2) the title to the property has been transferred to a good faith purchaser for valuable consideration. (3) the guilty party has been convicted of fraud by a court. (4) he or she notifies the registrar of land titles that fraud has occurred.

15. On May 3, Mary offered to buy Harvey's house, and the offer was stated to be open for acceptance until 2:00 p.m. May 4. Which one of the following statements is FALSE? (1) Mary can revoke her offer prior to 2:00 p.m. on May 4. (2) Mary's offer represents an option agreement. (3) If Harvey makes any changes to the offer, Mary's original offer is terminated. (4) If Mary mails a notice of revocation to Harvey, the offer is only revoked if the notice is received by Harvey before he accepts.

16. Mike bought a house two years ago at which time he arranged a $110,000 mortgage. This loan was written at a nominal rate of 9.5% per annum, compounded semi-annually, with a ten year term and amortization period, and monthly payments. Today Mike has received an offer from Andre to buy his house for $50,000 cash plus assumption of his mortgage. If current mortgage rates for similar mortgages are 12% per annum, compounded semi-annually, what is the market value of Andre's offer? (1) $149,603.19 (2) $137,758.18 (3) $ 90,312.16 (4) $138,440.41

19. A developer is selling a development unit of subdivided land situated in British Columbia and the developer has obtained a written statement from the purchaser acknowledging that the buyer has read the appropriate disclosure statement. If the purchase agreement is then entered into, the buyer: (1) may serve notice to rescind the contract no later than three days from the date of the contract. (2) may serve notice to rescind the contract no later than seven days from the date of the contract. (3) may serve notice to rescind the contract no later than one year from the date of the contract. (4) may not rescind the contract.

28. Sally, an appraiser, has been asked to provide an estimate of the market value of a farmhouse and the surrounding property. Which one of the following would NOT affect her estimate of market value? (1) One of the pastures on the property has been leased for two years to the owner of a racehorse. (2) The owner of the farmhouse is anxious to move and would like to sell as soon as possible. (3) The farmhouse and its surrounding property is located between the main road and the next door neighbour's property. Therefore, the neighbour gets the benefit of access to his house by means of a road that runs through the farmhouse property. (4) Homehold Finance Company recently loaned some money, at a below-market interest rate, to the owner of the farmhouse and secured the debt with a mortgage on the farmhouse. This mortgage is assumable.

34. An investment corporation purchased an apartment building on March 31, 2003 for $2,800,000. Of that $2,800,000, $1,700,000 was attributed to the building and $1,100,000 to the land. Depreciation was to be claimed at $50,000 per year for the life of the building. The building component of the property was valued on March 31, 2013, to be $2,400,000. What would be the net amount of the building appearing on the corporation's Statement of Assets and Liabilities as at March 31, 2013? (1) $1,700,000 (2) $1,200,000 (3) $2,400,000 (4) $1,900,000

43. In the context of appraisal, which one of the following properties is most likely to possess latent value? (1) a 3-storey condominium development which has recently been completed, all units having been sold before completion of construction (2) a single-family residence which is the only house on the block not yet converted to the commercial use which is permitted by zoning (3) a large shopping mall/office tower complex which occupies a location at the intersection of two main streets in a B.C. municipality (4) All of the above properties are equally likely to possess latent value.

46. Allison Gunther, a prospective home buyer, has applied for a mortgage loan to finance the purchase of a townhouse listed at $276,000. The market value of the townhouse is $275,000 and the lender has assigned a $270,000 lending value to it. The lender requires a loan-to-value ratio of 80%. Calculate the maximum loan allowable under the lender's loan-to-value ratio constraint. (1) $220,000 (2) $216,000 (3) $221,000 (4) $225,000

48. The Real Estate Council is made up of: (1) seventeen real estate boards. (2) licensed representatives, brokers and lay members. (3) civil servants. (4) fourteen agents and three government appointees.

5. Consider a situation in which the principal is the seller, the agent is the listing agent, and there is no dual agency. Which of the following events will terminate the real estate agency relationship? (1) the principal's refusal to accept an offer to purchase presented by the agent where the offer exactly complies with the requirements in the listing contract (2) an act of the principal that is inconsistent with the continuation of the agent's authority (3) an offer by the agent to personally purchase the principal's property (4) the revocation of an offer to purchase by the offeror before the principal can accept it

50. In B.C., a lender who holds a mortgage registered as a charge on an otherwise clear title to a borrower's land has: (1) the equitable right to redeem the mortgage. (2) an interest in land created by contract. (3) priority over every other subsequent creditor and lienholder in respect of the mortgaged land. (4) the right to retain the mortgagor's duplicate certificate of title to the mortgaged land until the loan is repaid in full.

57. Coralee asked Tim to sell her car and her mountain bike for her while she was away on holiday. She gave Tim the keys to the car and told him to accept any price in excess of $1,700 for the car, and $300 for the bike. Which of the following is an example of implied authority? (1) Tim sold the car to Cherise for $1,750. (2) Before Cherise was willing to purchase the car, she insisted that she test drive the car and have it checked by the automobile association, which Tim allowed her to do. (3) When Cherise was viewing the car, she noticed a small roof rack sitting in Coralee's garage. She said that she would like to buy the rack to carry her camping gear on Coralee's car. Tim said that he would include the rack in the sale for an additional $75, to which Cherise agreed. When Coralee returned, she told Tim that she was pleased that he had sold the rack, since she had no more use for it. (4) After advertising the bike for sale at $300 in vain, Tim sold the bike to Sandra, the only person to make an offer, for $260. Coralee accepted the money when she returned, although she was disappointed not to get the full price.

62. The "possession date" in a standard form contract of purchase and sale is: A. the date on which the buyer takes vacant possession of the property, subject to any existing tenancy agreements. B. the date on which adjustments are made between the parties for property taxes, etc. C. always the same day as the completion date. D. the date on which the buyer must assume responsibility for risk of loss or damage to the property. Which of the above statements are TRUE? (1) Only A and D are true. (2) Only A is true. (3) Only B is true. (4) Only C is true.

63. The "term" of a mortgage ALWAYS: (1) necessitates the payment of an outstanding balance payment. (2) specifies the duration of the contractual relationship. (3) is equal to the amortization period. (4) is shorter than the amortization period.

64. A building scheme: (1) will be found to be enforceable as long as all lots in the building scheme are the same size. (2) is a group of restrictive covenants usually applying to all lots in the same subdivision. (3) is a builder's plan to make sure that some lot owners in a subdivision abide by the aesthetic guidelines the builder considers attractive. (4) can be registered after three or more lots have been sold.

67. A comparable has been identified to value a subject property. The 2,700 square foot subject property has 4 bedrooms, 5 bathrooms, an air conditioner, and does not have a vendor-supplied mortgage. The 2,500 square foot comparable sold for $321,000 and has 3 bedrooms, 4 bathrooms, an air conditioner, and no vendorsupplied mortgage. If the market value of a bedroom is $3,200, the market value of a bathroom is $2,700, the market value of an air conditioner is $1,500, and above an 1,800 sq. ft. benchmark, each 100 sq. ft. is worth $5,000, this comparable will have to be adjusted for bedrooms and bathrooms by: (1) +$3,200 and -$2,700 respectively. (2) +$3,200 and +$2,700 respectively. (3) $0 and -$5,400 respectively. (4) -$3,200 and +$5,400 respectively.

70. A property is listed for $133,333 but the market value, as estimated in a recent appraisal, is $127,500. The property's lending value is estimated to be $120,000. Jay and Joan purchase the home for $128,500 subject to mortgage of $84,000. What loan to value ratio was applied by the lender with whom Jay and Joan negotiated the mortgage? (Assume that the loan to value ratio was the binding constraint on the loan size.) (1) 67.5% (2) 70% (3) 72% (4) 75%

72. Flower Garden Company wants to borrow money to build a head office building in Victoria. The company plans to occupy one floor of the building and rent out the rest. They project that the building's net operating income for the next five years will be $600,000 per year. Current mortgage terms on office building projects are j1 = 5.5%, amortized over 20 years with quarterly payments. Orca Bank feels that Flower Garden Company is optimistic in their net operating income projections and has therefore set the required debt coverage ratio at 1.4. Which of the following represents Flower Garden's maximum allowable loan (rounded to the nearest $1,000). (1) $ 7,218,000 (2) $ 5,226,000 (3) $ 4,043,000 (4) $10,243,000

74. Using the cost approach of appraisal, what will be the market value of a property with a 50,000 square foot building if construction costs new are $48 per square foot, land value is $900,000, and total depreciation on the structure to date is estimated to be 10%? (1) $3,105,000 (2) $3,060,000 (3) $3,000,000 (4) $3,300,000

77. When a bidder's ceiling price for a lot is $30,500 and the owner's floor price is $32,500: (1) the parties could negotiate and produce a sale. (2) a sale can not take place. (3) the sale price of the lot will be $31,500. (4) neither party is behaving reasonably.

79. Which of the following is a peripheral device for a computer? (1) Internet and world wide web. (2) Digital cameras. (3) Digital versatile discs (DVD) and compact disc recordable (CD-R). (4) All of the above.

81. The principle of substitution in the comparative approach of appraisal states that: (1) "market value" equals "value to owner". (2) similar properties which have recently sold are comparable. (3) properties have to be identical in order to be comparable. (4) the market value of land plus the cost of a newly constructed building equals the market value of a property.

84. Which one of the following would NOT be included in the operating expenses of a commercial property for purposes of determining its market value? (1) reserve for replacement of equipment (2) interest on the mortgage (3) property taxes (4) advertising of vacant suites

89. Which one of the following statements is TRUE? (1) In order to appraise real property one needs a minimum of a real estate trading services licence. (2) The complexity of real estate as a product requires the involvement of an expert appraiser. (3) Real estate can be classified as a homogeneous commodity. (4) Due to the low turnover of real estate it is easy to collect information regarding recent transactions.

92. One or more of the following statements are TRUE. A. A listing contract is a specialized form of agency contract. B. Real estate brokerages always work on behalf of the seller in respect of a real estate transaction. C. Both real estate services representatives and real estate brokerages are "agents" under the common law of agency, when acting on behalf of a "principal". D. An agent's authority to bind his or her principal depends entirely on the express authority given by the principal, and not upon implied, usual or customary authority. Which of the above statements are TRUE? (1) All of the above statements are true. (2) Only statements A and C are true. (3) Only statements B, C and D are true. (4) Only statement D is true.

95. The transfer by the borrower of the equity of redemption to a subsequent buyer does not always relieve the borrower of the covenant to repay the debt. However, there are circumstances where the borrower may be relieved of liability on the personal covenant. Which one of the following events would NOT relieve the borrower from this liability? (1) The borrower has received a release from the lender. (2) The borrower has sold the property with the knowledge of the lender. (3) The Property Law Act releases the borrower. (4) The lender has become disabled from restoring the property unimpaired.

99. Valerie has agreed to sell her home to Phil for $75,900. The real estate commission payable by Valerie is 7% of the selling price. The real estate commission will appear: (1) as a debit on Phil's statement and a credit on Valerie's statement. (2) on Valerie's statement only. (3) as a debit on Phil's statement. (4) as a credit on Phil's statement and a debit on Valerie's statement.

11. In the event that the tenant abandons a commercial premises, the landlord is best advised to notify the tenant that the landlord intends to enter into possession of the premises solely to re-let on the tenant's account: (1) or else the doctrine of frustration will be applied to the situation. (2) to avoid the tenant having grounds for an action in trespass. (3) so that all of the landlord's rights against the tenant will be preserved. (4) because otherwise the landlord will be breaching the covenant of quiet enjoyment

14. Which of the following is NOT a possible meaning of the term "common law"? (1) The law created by the courts as opposed to statute law. (2) The principles derived from the common law courts in England as opposed to the principles derived from the courts of Chancery. (3) The laws created by the Federal government in accordance with its power under the Constitution. (4) The system of law which relies upon the principle of stare decisis for its development.

2. Real property is said to be more subject to the effects of externalities than most assets. This vulnerability is principally due to: (1) the relatively high cost of real property. (2) the fact that land is fixed in supply. (3) the immobility of land. (4) the lack of effective government regulations.

22. A comparable has been identified to value a subject property. The 2,200 square foot subject property has 4 bedrooms, 4 bathrooms, an air conditioner, and does not have a vendor-supplied mortgage. The comparable has a sale price of $334,000, a +$3,700 adjustment for bathrooms, a -$10,000 adjustment for square footage, and a -$1,000 adjustment for a vendor-supplied mortgage. If the market value of a bathroom is $3,700, the market value of a bedroom is $3,200, the market value of an air conditioner is $1,500, and above an 1,800 sq. ft. benchmark, each 100 sq. ft. is worth $5,000, it can be concluded that this comparable has: (1) 4 bedrooms, 3 bathrooms, no air conditioner, and no vendor-supplied mortgage. (2) 3 bedrooms, 3 bathrooms, an air conditioner, and no vendor-supplied mortgage. (3) 4 bedrooms, 3 bathrooms, an air conditioner, and a vendor-supplied mortgage. (4) 3 bedrooms, 4 bathrooms, no air conditioner, and a vendor-supplied mortgage.

25. Zelda was in a good mood one day, and she went over to her next door neighbour Herb's house and cleaned all his gutters. When Herb returned home from work, he was thrilled by what Zelda had done, and he said "Zelda, I am going to give you a case of wine for doing this." Weeks passed, and finally Zelda asked Herb when she could expect to receive her wine. Herb said that he had changed his mind. Zelda is now furious and wants to sue Herb in small claims court. Which of the following statements is most relevant to these facts? (1) The law will not examine the adequacy of consideration. (2) A voidable contract exists until it is repudiated by the party entitled to do so. (3) Past consideration is no consideration. (4) Breach of a condition of a contract entitles the injured party to terminate the contract

31. Scrambling credit card information into an unreadable format is best known as: (1) cryptomizing. (2) digitizing. (3) encrypting. (4) instilling.

38. Which of the following falls within the category of law called "public law"? (1) breach of contract (2) trespass (3) constitutional law (4) None of the above.

39. Which of the following is NOT required in a notice of the end of the tenancy agreement by a tenant under the Residential Tenancy Act? (1) written notice signed by the tenant (2) the address of the premises for which the notice is given (3) the occupations of the parties (4) the date of termination of the tenancy

41. Adel is a trading services licensee acting for a developer who is purchasing large blocks of land in Vancouver for a large development. Adel purchases some lots in the area for himself and discloses his identity to the sellers as required by the Real Estate Services Act on those purchases. He does not mention the purchases to his principal, the developer. Shortly thereafter, Adel makes a profit on the resale of his lots due to the effects of his principal's development on the real estate market. What is this an example of? (1) a good business deal which is perfectly acceptable at law (2) a use of information that will always, even with disclosure to the principal, be prohibited (3) a profit for which Adel must account to his principal (4) Adel's activities are examples of both (2) and (3)

44. Which of the following statements about the Competition Act offence of misleading advertising is FALSE? (1) The offence involves the making of a representation to the public that is false or misleading in a material respect, for the purpose of promoting any business interest. (2) To escape liability, one must show that he or she took all the care a reasonable person would to determine if the representation were true and that he or she honestly believed it to be true. (3) A "representation to the public" would include any print, radio or television advertising, but would not include oral representations made privately to an individual buyer. (4) The requirement that the representation be false in a material respect refers to the extent that the representation influenced the person to whom it was made in deciding whether or not to purchase the product or service.

47. Brad Jones, a prospective home buyer, has applied for a mortgage loan to finance the purchase of a townhouse listed at $276,000. The market value of the townhouse is $275,000 and the lender has assigned a $270,000 lending value to it. Assume that the monthly payments on Mr. Jones' loan are agreed to be $1,120 and annual property taxes are $2,500. Calculate the minimum level of the borrower's annual income necessary to support these monthly payments, if the lender's gross debt service ratio is 32%. (1) $50,000.00 (2) $75,000.00 (3) $49,812.50 (4) insufficient information to calculate

52. Which of the following statements about the fee simple estate are true? A. The fee simple is a type of leasehold estate. B. If a fee simple owner dies without a will the property will escheat to the crown. C. The term fee simple indicates an estate that can be inherited without qualification. D. The fee simple estate was created by the Torrens system of registration. (1) Only B and C are true. (2) Only A and C are true. (3) Only C is true. (4) Only A and D are true.

54. A pre-approved mortgage for a residential property: (1) will always guarantee the borrower's interest rate for 365 days. (2) calculates the minimum loan that the borrower qualifies for. (3) is based on the borrower's current financial situation and a satisfactory credit review. (4) is based on a formula provided by the Fair Isaac Corporation

56. The court will not normally grant the remedy of specific performance where: (1) the plaintiff is a limited company. (2) the defendant is without means. (3) damages are considered to be an adequate remedy. (4) the contract has already been partially performed.

85. Diana leased an apartment from Horst for 12 months commencing January 1. On April 1, Horst conveyed the building to Bing. On April 15, Bing gave Diana a notice of end of the tenancy agreement effective May 15. The reason for the termination was that Bing wanted the apartment for his daughter, who had recently been married. Under the Residential Tenancy Act, what is the earliest date by which Bing can require Diana to leave? (1) May 31 (2) May 15 (3) December 31 (4) June 30

86. Which one of the following items is NOT likely to be available to an appraiser valuing a commercial property? (1) current lease conditions at the time of sale of the property (2) the amount of any registered mortgages (3) the buyer's expected rent and expense forecasts (4) physical characteristics of the building

87. A board of variance is: (1) a provincial board charged with the responsibility of seeing that actions by municipalities comply with the Local Government Act. (2) a board established by municipalities with the power to amend property assessments. (3) a board established by municipalities to determine whether a zoning bylaw creates undue hardships on property owners. (4) a board established by municipalities to settle boundary line disputes between private parties.

88. If Jeff applies for a mortgage loan with gross income of $3,000 per month, property taxes are estimated at $200 per month, and the lender's permitted gross debt service ratio is 30%, what can Jeff afford to pay for monthly principal and interest? (1) $840 (2) $750 (3) $700 (4) $620

9. When commencing a law suit in small claims court, the plaintiff may originate the action in the jurisdiction where: (1) either the plaintiff resides or the defendant resides. (2) the plaintiff resides. (3) either the cause of action arose or the defendant resides. (4) either the plaintiff resides or the cause of action arose.

91. A disadvantage of using a central, gas-fired, forced air heating system is: (1) a lack of air filtration. (2) its slow response time to temperature changes. (3) that it requires ductwork under the main floor. (4) that heat transmission is by radiation which is ineffective

97. Vince has agreed to sell his home to Pedro for $75,900. To assist in the purchase, Pedro is borrowing $65,000 from his uncle as a first mortgage loan. Pedro's loan from his uncle will appear: (1) as a debit on Pedro's statement and a credit on Vince's statement. (2) as a credit on Pedro's statement and a debit on Vince's statement. (3) only on Pedro's statement. (4) only on Vince's statement.

1. Latent defects are defects which are unknown to the buyer and are so material to the enjoyment of the property that he might not have entered into the contract had he or she known that they existed. Latent defects are those which are: (1) immediately visible to the eye of the average person. (2) discoverable upon a reasonable inspection of the property. (3) the responsibility of the licensee to discover. (4) none of the above statements describe latent defects.

10. Which of the following is NOT an exception to the principle of indefeasibility under the B.C. Torrens system of land registration? (1) a reservation contained in the original Crown grant (2) a lease for a period of eighteen months where the tenant is in occupation (3) the right of any person to show fraud, by which the registered owner derived his or her title otherwise than bona fide for value (4) an existing unregistered interest which will expire in five years

12. Which of the following elements are considered in determining appropriate rates of interest on loans? (1) the credit rating of the borrower (2) the type of property used for security (3) the amount of administrative attention required on the loan (4) all of the above

17. Which of the following contractual clauses in a mortgage could apply where a borrower defaults? (1) an "omnibus" clause (2) a "mortgagee in possession" clause (3) an "acceleration" clause (4) All of the above clauses could apply.

18. You have decided that you should have a presence on the Web. Which type of computer language would you use to create your website? (1) Personal Data Assistant (2) Hypertext Transfer Protocol (HTTP) (3) What You See Is What You Get (WYSIWYG) (4) Hyper-Text Markup Language (HTML)

20. Of the following four statements, which are TRUE and which are FALSE? A. Real estate appraisers must be licensed in British Columbia. B. Courts have recognized a margin of permissive error of 25% in assessing damages arising as a result of a negligent appraisal. C. A licensed real estate representative can give an appraisal of real property. D. The market value of real property as determined by an experienced appraiser may be greater than the ceiling price of the buyer. (1) A and B are true; C and D are false. (2) B and C are true; A and D are false. (3) A and C are true; B and D are false. (4) C and D are true; A and B are false.

24. What will be the maximum loan granted on a commercial building with a lending value of $5,550,000 and yielding a net operating income of $360,000 per year, where the lender requires a debt coverage ratio of 1.35 and a 60% loan-to-value ratio. The loan will be amortized over 20 years with annual payments and the interest rate is 7% per annum, compounded annually. Round your answer to the nearest $1,000. (1) $2,814,000 (2) $3,330,000 (3) $3,592,000 (4) $2,825,000

26. Which one of the following is the generally accepted accounting principle which determines what amount will be recorded on the company's balance sheet as the value of a building at the time of purchase? (1) the objectivity principle (2) the consistency principle (3) the revenue recognition principle (4) the cost principle

35. A brokerage licence will not be issued to a corporation if: A. the managing broker is licensed in both the real estate trading services and rental property management service catagories. B. the financial statement accompanying the licence application is that of the corporation — and not of the managing broker. C. the corporation was incorporated in B.C. after 1974. D. the managing broker has been employed as a licensee in B.C. for less than 5 years. Which of the above statements are true? (1) Only A is true. (2) A, B and C are true. (3) A, C and D are true. (4) None of A, B, C or D is true.

4. Which of the following statements is TRUE? (1) Only sole proprietors need to report business income on their personal income tax returns. (2) Only partners must report business income on their personal tax returns. (3) Sole proprietorships, partnerships and corporations are identical in terms of taxation of owner's income. (4) None of the above three statements are true.

40. Which one of the following is NOT a method of appraisal? (1) the residual method (2) the cost method (3) the income method (4) the depreciation method

45. Which of the following correctly completes the sentence: In a strata plan, the term "unit entitlement" refers to: A. the value of each condominium unit relative to other units. B. the share of the value on demolition owned by each condominium unit owner. C. the share of real property taxes payable by each condominium unit owner. D. the figure used to calculate a strata owner's contribution to the common expenses of the strata corporation. (1) B, C and D only (2) A and C only (3) C and D only (4) Only D

49. Johnny Collins tried to design and build his new home to be as energy efficient in heating as possible. Which one of the following decisions was a mistake? (1) using metal framed windows with a thermal break (2) including an air to heat exchanger to bring in cold exterior air (3) following R2000 standards (4) installing sliding glass doors to a north facing patio

53. In British Columbia there are three basic requirements for an easement. Which one of the following is a requirement? (1) The easement must be negative in nature. (2) The easement must accommodate the servient tenement. (3) The dominant and servient tenements must be owned by different parties. (4) The easement must be capable of forming the subject matter of a grant.

55. Consider the following four properties: A. a pulp mill in Squamish B. a small single-family house in the central business district of Vancouver C. a multi-unit apartment complex in Burnaby D. a residential condominium in Victoria Which appraisal method would be most suitable to appraise each of these properties? (1) A) market comparison; B) income; C) cost; D) residual (2) A) cost; B) market comparison; C) residual; D) income (3) A) income; B) residual; C) market comparison; D) cost (4) A) cost; B) residual; C) income; D) market comparison

58. In order to advertise to a wider audience, you have decided to create your own website. Based on the information in the Real Estate Council of BC's Guidelines for Advertising and the internet, which of the following are general guidelines that you should follow? A. The name of the brokerage can be excluded in online advertising. B. Listing information should be kept current and accurate and licensees must ensure that when listings have expired, they are immediately removed from the website. C. If linking to an outside database of available properties, it should be clear to consumers which listings are the licensees and which are not. D. Licensees can advertise other licensee's listings directly on their own website without permission from the listing brokerage in order to increase business. (1) Only A and B (2) Only C and D (3) Only A and D (4) Only B and C

59. Common property in a strata title development is: (1) owned equally by all members of the strata corporation. (2) owned by the strata corporation. (3) owned jointly by the strata corporation and the strata council. (4) any property not designated as strata lots on a strata plan.

6. A $170,000 mortgage loan, written at a nominal rate of 7% per annum, compounded annually, has a two year contractual term. Payments are made monthly and are based on a 20-year amortization period. Payments are rounded to the next higher dollar. What is the size of the required payments? (1) $1,307 (2) $1,319 (3) $1,275 (4) $1,297

60. Which of the following are included in the residential borrower qualification process? A. The collection of information about the borrower and the property. B. The evaluation of the applicants' ability to meet the terms of a mortgage and the amount of their income. C. The analysis of the real property pledged as security for the loan. D. The analysis of the applicants' credit report. (1) A and C only (2) B and C only (3) A and D only (4) All of the above

65. A mortgage broker is arranging a fully amortized mortgage loan with a face value of $240,000. The loan contract is to be written at 8% per annum, compounded semi-annually. The repayment of the loan is to take place over 15 years with monthly payments. The borrower is to receive $228,400 as a result of a broker's commission of $8,000, a survey fee of $2,000, an appraisal fee of $600, and legal fees of $1,000, all of which are to be deducted from the face value. Calculate the cost of funds advanced to the borrower, expressed as an effective annual interest rate (j ) . 1 (1) 9.683451416% (2) 8.696794967% (3) 10.55680164% (4) 9.051964525%

7. Before adopting, amending or repealing a zoning bylaw, a municipal council as a matter of policy will: (1) obtain the approval of the federal government. (2) obtain the approval of the provincial government. (3) give three months' written notice to the public. (4) hold a public hearing.

71. For purposes of assessment and taxation: (1) the strata development is assessed as a whole and each strata lot owner pays taxes in proportion to his value on destruction. (2) each strata lot is assessed and taxed separately from the common areas which are assessed and taxed to the strata corporation. (3) the strata development is assessed as a whole and each strata lot owner pays taxes in accordance with his unit entitlement. (4) each strata lot, together with the owner's share in the common property, is deemed to be a separate parcel of land and improvement.

76. Gheeta was out walking and saw a "For Sale" sign on the lawn of a house called Green Acres. She decided to ask the owners about the price of the property. Unknown to Gheeta, the owners of Green Acres were away on a long vacation in Jamaica. As Gheeta was walking across the lawn of Green Acres a long branch from an old tree which grew in a neighbouring yard fell down and hit her. As a result, Gheeta broke her leg and could not return to work for two months. Which of the following statements is TRUE? (1) Gheeta can sue the owners of Green Acres for her lost wages only if she can prove that they knew of the hazard presented by the old tree. (2) The owners of Green Acres are not liable to Gheeta because they were not home at the time of the accident. (3) Only the owners of the tree are liable to Gheeta for her lost wages. (4) None of the above is true.

78. Which one of the following is NOT a requirement to establish misrepresentation in contract law? (1) There must be an assertion of fact. (2) The assertion must be false. (3) The assertion must have been material to the formation of the contract. (4) The assertion must be in writing.

80. A life tenancy has been granted to Avon "without impeachment for waste". For which of the following actions would Avon be liable? (1) putting new shingles on the garage roof (2) allowing the tool shed to deteriorate and collapse (3) cutting down some trees on the property (4) Avon would not be liable in any of the above situations

90. Mary and John own a piece of real property as joint tenants. Which of the following is TRUE? (1) Mary could sever the joint tenancy without John's knowledge. (2) Mary and John each have an undivided interest in the property. (3) Mary and John each have a right of survivorship. (4) All of the above statements are true.

94. A mortgage contract with a face value of $175,000 requires monthly payments of $1,103.21 over a 20-year amortization period. However, the mortgage broker advances only $171,000 after deducting a commission of $2,500, legal fees of $1,000, and an appraisal fee of $500. Calculate the cost of funds advanced for the borrower, expressed as an effective annual rate (j1 ) (1) 4.730369997666% (2) 4.777233243888% (3) 3.972254832144% (4) 4.834288135755%

96. Veronica has agreed to sell her home to Patty for $75,900. The completion and adjustment date is set at November 14th. Veronica paid the current year's property taxes on the date they were due in the amount of $896. It is NOT a leap year. Patty's share of the year's property taxes will appear on the seller's statement of adjustments as a: (1) debit of $115.38. (2) credit of $115.38. (3) debit of $41.73. (4) credit of $117.83.

207. There were three categories of "waste" at common law with respect to real property. Which one of the following is NOT one of those categories? (1) equitable (2) voluntary (3) permissive (4) ameliorating

344. Given that all other factors are identical, the longer the term of the contract on a bonused, partially amortized mortgage (where the bonus is paid by the borrower): (1) the lower the effective interest rate paid by the borrower. (2) the higher the effective interest rate paid by the borrower. (3) the higher the required monthly payment. (4) the lower the outstanding balance at the term's end.

348. Where an offer has been made by post, an acceptance by post will be effective: (1) when posted. (2) when received. (3) when received, provided it is not lost in the mail. (4) when posted, provided it is not lost in the mail.

428. Suppose XYZ Ltd. is located in a building that was purchased two years ago for $1,000,000. The building has an economic life of 10 years with no salvage value. Annual depreciation is calculated using the straightline method. If XYZ Ltd. earned a net income of $450,000 this year and claimed $38,400 of capital cost allowance this past year, what is XYZ's taxable income this year? (1) $511,600 (2) $488,400 (3) $394,600 (4) $387,400

450. Paul signed a power of attorney giving Audrey the right to sell his sailboat for a minimum price of $25,000 in his absence. Audrey sold the boat to Teresa for $20,000. What is the legal result? (1) Paul would succeed against Audrey for damages for breach of the agency contract. (2) Paul would succeed against Audrey for breach of her warranty of authority. (3) Audrey has done nothing wrong. (4) Both (1) and (2) are legal results.

665. A strata plan is: (1) filed in the Land Title Office and designates which parts of a strata project are strata lots and which are common property. (2) used only for condominium or cooperative developments. (3) required only when creating five or more strata lots. (4) all of the above.

666. The purpose of a credit analysis of a mortgagor is: (1) to ensure that the borrower has both the ability and the intention of complying with the mortgage agreement. (2) to determine if the borrower is worth suing if he defaults on the mortgage. (3) to determine the proper interest rate to charge the borrower. (4) all of the above.

272. Mary Smith has offered to purchase a house from a selelr who is willing to provide partial financing. Her offer is a $75,000 down payment plus a mortgage of $125,000 at 4% per annum, compounded semiannually. The loan is to be fully amortized with monthly payments over 20 years. What is the market value of this offer if the market rate for similar mortgage loans is 7.5% per annum, compounded semi-annually? (1) $ 169,579.01 (2) $ 108,617.81 (3) $ 94,579.01 (4) $ 183,617.81

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128. Of the following four statements, which are TRUE, and which are FALSE? A. Appraisers must be licensed in British Columbia. B. Courts have recognized an acceptable range of error in the determination of market value by appraisers. C. A licensed trading services representative can give an appraisal of real property. D. The market value of real property as determined by an experienced appraiser will always be greater than the floor price of the owner. (1) A and B are true; C and D are false (2) B and C are true; A and D are false (3) A and C are true; B and D are false (4) C and D are true; A and B are false

316. A lease of real property is a contract by which the landlord conveys: (1) an easement to the tenant. (2) exclusive possession to the tenant. (3) a licence to occupy to the tenant. (4) none of the above.

583. A mortgage of the mortgagor's equity of redemption is called: (1) a lien. (2) an equitable mortgage. (3) an agreement for sale. (4) a lease.

585. Which one of the following is a liability on a financial statement? (1) accumulated depreciation (2) mortgages payable (3) wages paid (4) prepaid expense

609. A smaller firm can offer a full-line market strategy and increase their product mix by employing people who: (1) have extensive management backgrounds. (2) have different expertise. (3) have no experience. (4) have clients from their previous employment.

807. A holding property was purchased 10 years ago for $23,000. How much must it sell for now if the owner is to realize a pre-tax yield of j = 6%? 2 (1) $30,910.08 (2) $41,540.56 (3) $45,189.50 (4) $38,246.54

857. Which of the following two statements is/are TRUE? Two identical houses in Amble Greene, a neighbourhood in Surrey, B.C., may have different appraised values because: A. one property has a neatly cut lawn and the other grows tall grass. B. one property faces North; the other South. (1) Only A is true. (2) Only B is true. (3) Both A and B are true. (4) Neither A nor B are true.

896. Which of the following is NOT a component of the British Columbia land title registration system? (1) the assurance principle (2) the doctrine of the void deed (3) abolition of the doctrine of notice (4) indefeasibility of registered fee simple titles

517. The Annual Percentage Rate (APR) is: (1) a requirement under the Federal Interest Act. (2) also known as the stated interest rate. (3) the borrower's contractual interest rate plus any non-interest finance charges. (4) an interest rate that must be expressed with semi-annual compounding.

588. An investor wants to decide whether to buy a mortgage written for $100,000 at j = 3.5% which calls for 12 monthly payments, a 20-year amortization, and a 5-year term. If the investor can earn j = 6% in other 12 investments, at what price should the mortgage be purchased? (1) $ 80,951.26 (2) $110,669.93 (3) $ 90,143.73 (4) $ 89,602.21

529. Which of the following people may require an appraisal of real property? A. the executor of an estate B. a property assessment appellant C. a mortgagee D. an expropriation authority (1) C only (2) A and C only (3) A, B and D only (4) A, B, C and D

787. Which of the following is NOT a common covenant of the borrower? (1) provision to pay all property taxes (2) provision to keep the property well maintained (3) provision to insure the property to replacement value or such lesser amount as the mortgagee determines (4) provision to waive the rescission rights under the Mortgage Brokers Act

912. The "subject clauses" have just been removed from a contract of purchase and sale, but the sale will not complete for another 17 days. Sandy Salesperson has already recorded the commission from the sale as income. Which of the Generally Accepted Accounting Principles was she following? (1) The matching principle (2) The cost principle (3) The consistency principle (4) The revenue recognition principle

969. In the absence of a priority agreement, which of the following would NOT be named as respondents in a foreclosure action? (1) the borrower (2) a buyer from the borrower under an agreement for sale (3) a guarantor (4) prior mortgage lenders

SEE 982

275. Which answer most accurately describes an official community plan? (1) An official community plan is a policy statement regarding the planning of a community which, when adopted by bylaw, must be carried out in every detail by the council. (2) When a local government officially adopts a community plan, existing zoning bylaws which do not conform are suspended and land owners' rights are then directly subject to the official community plan. (3) An official community plan is a plan which a regional district board has designed and adopted for one of its member municipalities, regardless of the views of the council of the municipality in question. (4) A community plan defines the policy of a local government in terms of existing and proposed land use and servicing requirements and contains specific policies in that regard.

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296. Which one of the following transactions does NOT affect the amount of owner(s) equity? (1) investment by the owner(s) (2) personal withdrawals from the business (3) net incomes earned (4) purchase of assets by the business

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473. An interest accruing mortgage loan requires that $300,000 be paid at the end of a five year term. If the rate of interest on the loan is j = 8%, calculate the amount of funds advanced. 2 (1) $246,578.13 (2) $202,669.25 (3) $226,965.28 (4) $364,995.87

479. Vince sold his property to Paula with a possession and adjustment date of May 1. Vince has not yet received his current year's tax notice, but last year's taxes were $847.00. Paula's lawyer feels taxes will increase 20%. Which of the following is correct? (1) Paula should be given a credit for the estimated taxes between May 1 and December 31. (2) Vince should be charged the estimated taxes from January 1 to April 30. (3) There is no way to attempt a tax adjustment until the actual bill arrives. (4) The taxes will appear as a debit on Paula's statement of adjustment and a credit on Vince's statement of adjustment.

480. Of the following methods, which one must be used to determine the market value of an unused vacant site: (1) the cost method of appraisal (2) the comparative method of appraisal (3) the income method of appraisal (4) the depreciation method of appraisal

481. A holding property was purchased ten years ago for $23,000. How much must it sell for now if the owner is to realize a pre-tax yield of j = 14%? 2 (1) $85,266.09 (2) $89,002.74 (3) $92,516.82 (4) $83,144.22

488. Depreciation expense is: (1) another name for capital cost allowance. (2) an accounting concept which attempts to allocate the cost of an asset over its useful life. (3) usually calculated on land by the straight-line method. (4) never permitted on a single-family residence.

205. A voidable contract is: (1) one which never existed at all, even if the parties want it to exist. (2) a contract which one of the parties can cancel. (3) unenforceable. (4) one which offends against public policy or against a particular statute.

206. Josie Purchaser arranged a mortgage loan for $75,000 at 9.5% per annum, compounded semi-annually, with a 25-year amortization period and monthly payments. What is her interest cost for the first month? (1) $645.78 (2) $582.33 (3) $612.27 (4) $63.45

211. The abolition of the doctrine of notice by the Land Title Act is subject to the exception of: (1) innocent misrepresentation. (2) fraud. (3) breach of contract. (4) quantum meruit.

108. The main difference between a lease and a licence is: (1) licenses are governed by the ordinary law of contract and confer no estate in land whereas leases convey an estate in land. (2) licenses are oral contracts whereas leases must be in writing pursuant to the Law and Equity Act. (3) the terminology used to describe the parties, i.e., landlord & tenant/licensor & licensee. (4) licenses provide exclusive possession whereas leases only give the rights described in the lease document.

132. A property recently sold for $800,000. The stabilized annual net operating income for the property is $88,000. The yield on this property is: (1) 11% (2) 9.09090909091% (3) 12.3595506% (4) None of the above.

140. Which one of the following does NOT result from the immobility of land? (1) the need for debt financing (2) a vulnerability to outside environmental factors (3) an inability to move a listed property to a better resale market (4) the necessity for owners to travel in order to take advantage of services provided by different parcels of land

143. Vanessa has agreed to sell her home to Paul for a price of $150,000. Paul has paid a deposit of $15,000 directly to his brokerage. There is a mortgage registered against title that has an outstanding balance of $71,000, which Paul will assume. Paul will also be receiving financing, by way of a second mortgage, for $34,000. Property taxes of $1,095 were not paid by Vanessa by the due date; therefore, a penalty of $105 has been assessed. The outstanding property taxes and penalty will be paid by the conveyancer from the sale proceeds. A real estate commission of 6% of the purchase price is payable. Conveyancing fees for this transaction are $600. The adjustment, completion and possession date is August 31st. It is NOT a leap year and property transfer tax is payable. What are the cash proceeds of sale to Vanessa? (1) $69,169.00 (2) $69,538.00 (3) $69,204.38 (4) $140,169.00

147. A local mortgage broker arranged a mortgage in the amount of $210,000. The borrower has agreed to pay a brokerage fee in the amount of $7,200 which is to be added to the loan amount, giving a face value of $217,200 for the loan. The mortgage bears interest at a contract rate of 4.5% per annum, compounded semiannually. The mortgage has an amortization period and term of 20 years and calls for monthly payments rounded to the next higher cent. If the mortgage is sold to an investor for $225,000 immediately after the loan is initiated, the investor will earn the following nominal interest rate, with semi-annual compounding: (1) 4.08303377614% (2) 4.06228586295% (3) 4.04872932244% (4) 4.12471168818%

150. Karen's neighbour, Jack, is a gas barbecue enthusiast who cooks two meals a day, seven days a week, on his outdoor gas barbecue. As a result, the smoke, fumes and even ashes (from charred meats) are carried onto Karen's property where they interfere with her use and enjoyment of her backyard. The barbecue smoke has discoloured Karen's dining room curtains and killed her rare Japanese shrubs. Which of the following statements are TRUE? A. This scenario reveals a cause of action for interference with the airspace rights of a fee simple owner. B. If Karen chooses to sue Jack for negligence she must prove that he has breached the standard of care owed to her by a reasonable person in Jack's situation. C. Jack is probably liable to Karen for private nuisance and Karen may seek an injunction to prevent Jack from continuing the nuisance. D. Karen need not prove that she has suffered any form of damage to succeed in her lawsuit against Jack because her cause of action is "actionable per se" (i.e., without proof of damage). (1) Only B and C are true. (2) Only C is true. (3) None of the above statements is true. (4) All of the above are true.

161. Which one of the following statements regarding digital signatures is TRUE? (1) Digital signatures are used to authenticate the individual sending the message so as to ensure the integrity of the data. (2) Digital signatures are codes recorded on to a CD to ensure copy protection and discourage multiple users. (3) Digital signatures are codes built into modems which notify receivers of where a message is coming from. (4) Digital signatures are tags in HTML that tell search engines information about your webpage.

165. When a property possesses latent value: (1) higher value may result through a change of use. (2) the existing property should undergo renovation for continued similar use. (3) the buyer should have it rezoned. (4) it should not be offered for sale.

168. In residential building construction, the term "dormer" refers to: (1) roof extensions used to provide extra floor area and windows for the upper level. (2) the structural member, usually wood, placed at the top of window openings. (3) a roof style commonly known as a hip roof. (4) a component of a septic waste water system.

178. Lenders who are attempting to ration mortgage funds could: (1) decrease their gross debt service ratio. (2) decrease their interest rate on mortgage loans. (3) increase their maximum loan to value ratio. (4) increase the maximum amortization period available on mortgage loans.

181. A comparable has been identified to value a subject property. The 2,600 square foot subject property has 4 bedrooms, 4 bathrooms, an alarm system, and does not have a vendor-supplied mortgage. The comparable has a sale price of $234,000, a +$2,700 adjustment for bathrooms, a +$4,500 for an alarm system, a - $10,000 adjustment for square footage, and a -$700 adjustment for a vendor mortgage. If the market value of a bedroom is $4,000, the market value of a bathroom is $5,700, the market value of an alarm system is $4,500, and above a 1,900 sq. ft. benchmark, each 100 sq. ft. is worth $5,000, it can be concluded that this comparable has: (1) 4 bedrooms, 3 bathrooms, and no alarm system. (2) 3 bedrooms, 3 bathrooms, and an alarm system. (3) 4 bedrooms, 3 bathrooms, and an alarm system. (4) 3 bedrooms, 4 bathrooms, and no alarm system.

192. If a property owner considers that the actual value assessment of his property is too high, he must first submit his complaint to: (1) a Property Assessment Review Panel. (2) the Board of Variance. (3) the Municipal Finance Authority. (4) the Property Assessment Appeal Board.

195. There are two ways to surrender a lease under a commercial tenancy. One is by an act of the parties; the other is: (1) by operation of law. (2) by the order of an arbitrator. (3) by the order of the Public Trustee. (4) not described above.

198. Which one of the following BEST describes the effect that profitable operations have on the balance sheet of a business? (1) owner's equity is increased (2) assets are increased (3) cash is increased (4) liabilities are decreased

202. Two identical houses located next to one another in the same neighbourhood sell within one week of each other. Ms. Brown sells hers for $112,000, while Mr. Fisher is only able to sell his for $100,000. Which of the following could account for the difference in selling price? (1) The listing brokerage representing Ms. Brown spent an extraordinary amount of money on advertising her property. (2) Mr. Fisher supplied a vendor take-back mortgage at 9% while the current market rates were 12%. (3) Ms. Brown was promoted to a new position in Edmonton and her expertise was required immediately. (4) All of the above factors could account for the difference in selling price.

215. When using the cost method of appraisal, cost of the improvements is normally determined by utilizing: (1) current replacement cost. (2) current reproduction cost. (3) current value based on historic cost. (4) actual cost.

218. Which one of the following is NOT a qualification for a trading services representative's licence in British Columbia? (1) must have a minimum of three references from currently licensed managing or associate brokers (2) must have attained the age of 19 years (3) must be of good reputation (4) must have met the educational and experience requirements established by the Council Rules.

219. Which one of the following statements correctly describes the manner in which taxes are adjusted? (1) If the seller has already paid the current year's taxes, the seller must be given a credit of the taxes from the adjustment date to December 31. (2) If the taxes are overdue and a penalty is owing, both the amount of the taxes and the penalty must be apportioned between the buyer and the seller. (3) If the taxes are not yet due, no adjustment is made until the tax bill arrives. (4) All of the above are correct.

303. What will be the purchase price of a mortgage which will provide the buyer with 48 payments of $650 plus an outstanding balance of $55,858.13 at the end of 48 months, if the buyer of the mortgage requires an effective annual yield of 15%? (1) $55,698.26 (2) $54,867.08 (3) $52,536.87 (4) $58,989.30

306. A property recently sold for $378,500. The stabilized net operating income for the property was estimated to be $75,700 per annum. The estimated yield to the buyer is: (1) 20% (2) 11% (3) 5% (4) There is insufficient information to calculate an estimated yield.

308. The West Coast Contemporary is a housing style which: (1) is composed of angular roof components and broken rectangular walls. (2) draws its appearance from the pioneer era. (3) is usually a two-storey structure with a low sloping roof. (4) has an A-Frame roof design.

309. Steve Johnson purchased a home two years ago, at which time he arranged for a mortgage in the amount of $175,000 amortized over 20 years with a 5-year term and monthly payments. The interest rate on the mortgage was 7% per annum, compounded monthly, calling for monthly payments of $1,356.78 and an outstanding balance of $150,948.60 due at the end of the 5-year term. Steve has just received an offer on his house from Linda. Linda's offer consists of $45,000 cash and assumption of the existing mortgage for the remainder of the term. If current market rates for 3-year term mortgages are 5% per annum, compounded monthly, what is the market value of Linda's offer? (1) $220,233.07 (2) $254,367.37 (3) $237,989.28 (4) $243,966.11

321. Angus wishes to sell his residence. He has entered into a multiple listing agreement with a licensee at Castle Rock Realty. Which of the following statements is true? (1) The Multiple Listing Service® is managed by the real estate boards. (2) Angus may employ other real estate companies to assist him in selling his house. (3) Under this type of agreement, Angus is not obligated to pay a commission if he sells the house himself. (4) All of the above items are true.

329. As a marketing incentive to speed up the sale of newly completed but unsold condominiums, a developer agrees to provide the purchasers with first mortgages with a contract rate that is lower than the market rate of interest. Under these circumstances, it can be said that this is an offer involving: (1) below-market rate financing. (2) market rate financing. (3) above-market rate financing. (4) interest only financing.

331. A mortgage broker is arranging a partially amortized mortgage loan with a face value of $350,000. The loan contract is to be written at 6% per annum, compounded monthly. The repayment of the loan is to take place with monthly payments over an amortization period 15 years and a 5-year term. The borrower is to receive $336,000 as a result of a broker's commission of $10,000, a survey fee of $2,500, an appraisal fee of $500, and legal fees of $1,000, all of which are to be deducted from the face value. Calculate the cost of funds advanced to the borrower, expressed as an effective annual interest rate (j1). (1) 7.29680073432% (2) 9.94209578009% (3) 10.4078845477% (4) 7.06357268077%

436. As a trading services licensee, you know that downloading speed is important so that information can be sent to your clients quickly. What is the term used for internet connection speed? (1) bandwidth (2) hyper-speed (3) gigahertz (4) megabytes

338. A comparable has been identified to value a subject property. The 2,300 square foot subject property has 4 bedrooms, 4 bathrooms, an air conditioner, and does not have a vendor-supplied mortgage. The 2,300 square foot comparable sold for $321,000 and has 3 bedrooms, 4 bathrooms, an air conditioner, and no vendorsupplied mortgage. If the market value of a bedroom is $3,200, the market value of a bathroom is $2,700, the market value of an air conditioner is $1,500, and above an 1,800 sq. ft. benchmark, each 100 sq. ft. is worth $5,000, the adjusted sale price for this comparable is: (1) $324,200 (2) $317,800 (3) $323,700 (4) $318,300

342. On an interest accruing mortgage, which one of the following interest rates would result in the highest outstanding balance? (1) j12 = 14% (2) j6 = 14% (3) j4= 14% (4) j2 = 14%

356. Benson has purchased a home from Vanessa. The sale is completed on April 15 and the property taxes are adjusted on the completion date. Property taxes are due on July 1. In this case: (1) Vanessa will have to pay Benson for the share of the taxes from January 1 through April 14. (2) Vanessa and Benson will each pay 1/2 of the current year's taxes on July 1st when they are due. (3) Benson will have to pay Vanessa for his share of the year's taxes after she pays them on July 1st. (4) neither Vanessa nor Benson will have to pay any taxes on July 1st because the sale completed on April 15th.

358. The greatest bundle of rights and responsibilities that an individual can hold with respect to land is: (1) a fee simple interest. (2) a 99-year lease. (3) an easement. (4) none of the above

362. Joanne Carmichael borrows $15,000 at a periodic interest rate of 0.5% per month. She agrees to repay $450 per month. For how many FULL years will Joanne have to make payments? (1) 3 (2) 9 (3) 27 (4) 37

365. A developer of land not located in a municipality filed the necessary disclosure statement with the office of the B.C. Superintendent of Real Estate with respect to his 20 lot subdivision. After foreclosure proceedings the developer's bank became the owner of the subdivision. The bank wishes to sell the lots on an individual basis. Which one of the following statements is TRUE? (1) Because the bank is selling more than 5 lots it should file a disclosure statement with the Superintendent's office. (2) A further disclosure statement is not necessary. (3) The disclosure statement filed by the developer will satisfactorily protect people who purchase lots from the bank. (4) Because there has been a foreclosure the bank is obligated to file a prospectus rather than a disclosure statement.

374. Sue purchased a townhouse in December 2006 for $145,000. In December 2011, it was appraised at $260,000. In December 2013, Sue sold the townhouse for $190,000. What was the pre-tax yield on her investment expressed as an effective annual rate? (1) 3.93680708046% (2) 8.69994769391% (3) 12.3882914801% (4) 4.58272747378%

379. The relationship between a brokerage and its related licensees is recognized and reinforced by certain provisions of the Real Estate Services Act. According to the Act: (1) when a licensee advertises real estate on behalf of a client, the brokerage's name must be displayed in a prominent way. (2) a licensee is entitled to advertise real estate on behalf of a client without the name of the listing brokerage appearing in the advertisement, providing the licensee's name is displayed in a prominent way. (3) when a property is listed by one brokerage and sold through a cooperating brokerage, both the listing and selling licensees are paid their commission directly from the listing brokerage. (4) real estate brokerages that charge only desk fees and pay 100% of the commission to their representatives are not responsible for the actions of the representatives.

384. When a judge "distinguishes" a case on its facts, this means: (1) the judge decides that facts crucial to a former decision are not present in the case at hand, and does not follow the former decision. (2) the judge formally reports the case before him or her because it is a crucial decision. (3) the judge follows a former decision because the same facts exist in the case which is being decided. (4) None of the above.

409. Which one of the following best describes shareholders' equity? (1) share capital plus retained earnings (2) retained earnings plus dividends (3) share capital plus retained earnings plus dividends (4) net income less dividends

411. Which statute requires that a brokerage keep at least one trust account in a savings institution in British Columbia? (1) The Real Estate Services Act (2) The B.C. Property Manager's Act (3) The Bonding Act (4) The Bank Act

417. Functional depreciation can be defined as: (1) the loss in value caused by an outmoded or inadequate design. (2) the loss in value caused by changing market conditions which reduce demand for the property. (3) the loss in value caused by physical wear. (4) None of the above

419. Ownership in the land includes not only the surface of the land, but also: (1) the column of airspace above it insofar as the owner can make effective use of it. (2) the branches of any of the neighbour's trees that hang over the owner's property. (3) anything that comes over the boundary line. (4) all of the above aspects.

432. Which of the following security measures would best prevent unauthorized internet users from accessing your computer when connected to the internet? (1) Firewalls (2) Passwords (3) Spam (4) Protecting Hardware

443. An agreement for sale in the amount of $150,000 requires the buyer to make payments of $1,250 per month for as long as necessary to fully amortize the loan at 8% per annum, compounded semi-annually. How many FULL payments of $1,250 will be required? (1) 236 (2) 237 (3) 242 (4) 243

446. Duress, in law, consists of: (1) actual or threatened violence or imprisonment. (2) difficulty of performance. (3) undue influence. (4) a misrepresentation made knowingly or recklessly, not caring whether it be true or false.

454. The Law and Equity Act contains provisions for the unilateral waiver by a party of a condition precedent. Which one of the following is NOT one of the requirements? (1) The condition precedent has been satisfied. (2) The condition precedent benefits only that party to the contract. (3) The contract is capable of being performed without fulfillment of the condition precedent. (4) Where a time is stipulated for fulfillment of the condition precedent, the waiver is made before the time stipulated.

455. Bernadette offers to purchase Steve's home for $438,000. However, before Steve has a chance to respond to the offer, Bernadette advises that she is withdrawing the offer. Which of the following legal terms describes what has occurred? (1) revocation (2) rectification (3) rescission (4) none of the above

456. When borrowers increase their maximum allowable loan by accepting a shorter term and a lower interest rate, the borrowers have: (1) an increased degree of risk regarding changes in the interest rate over time. (2) the security of never having to incur another set of transaction costs (legal, appraisal) when arranging a new loan with another lender. (3) a decreased degree of risk regarding changes in the interest rate over time. (4) committed to paying more interest during the shorter term loan than the longer term loan.

468. The duty of care imposed by the Occupiers Liability Act does NOT apply to: (1) risks willingly accepted by a person as his/her own risks. (2) the condition of the premises. (3) activities on the premises. (4) the conduct of third parties on the premises.

477. Which one of the following was NOT considered a void deed at common law? (1) a deed executed by a limited company (2) a forged deed (3) a deed given for illegal consideration (4) a deed signed in circumstances where the party could plead non est factum

500. Which one of the following is NOT a provision of the Interest Act? (1) No interest rate higher than 25% shall be provided for in a mortgage document. (2) Where a mortgage requires blended payments of principal and interest, the mortgage document must contain a statement of the interest rate calculated "yearly or half-yearly not in advance". (3) If a mortgage document calls for interest without specifying the rate, then the rate of interest specified by law is 5% per annum. (4) The interest rate on arrears under a mortgage may not exceed the rate payable on the principal monies not in arrears.

536. Which one of the following is a defence to a nuisance causing physical damage to property? (1) The nuisance is the unavoidable result of a statutorily authorized activity. (2) All reasonable care was taken to prevent the nuisance. (3) The activity causing the nuisance benefited the public. (4) A reasonable use was made of the property.

540. The income approach is NOT usually used for the valuation of: (1) single-family residences. (2) warehouses. (3) leasehold interests in real property. (4) single-storey retail complexes.

552. A trading services representative must never promise to buy or sell any real estate belonging to a prospective buyer: (1) unless at the time of making the promise, a signed statement setting forth the details of the promise is given to the person to whom the promise has been made. (2) unless at the time of making the promise, the representative has in fact lined up a buyer for the property. (3) unless he or she has been authorized to make such a promise. (4) unless the buyer is also a licensee.

553. An official community plan: (1) comes into force when adopted by bylaw. (2) requires the municipality to carry out the provisions of the plan. (3) has no official status whatsoever. (4) none of the above.

566. Which of the following information is NOT necessary for a brokerage to keep in the real estate trade record sheet? (1) the date of the MLS® listing (2) the sale price or other consideration for the trade in real estate (3) the nature of the trade in real estate (4) the names and addresses of all parties to the trade in real estate

569. There are three common types of void deeds. Which one is considered NOT to be a void deed? (1) an unregistered deed (2) a forged deed (3) a deed given for illegal consideration (4) a deed signed in circumstances where the party can plead non est factum

573. Joe Carmichael borrows $11,000 at a periodic interest rate of 0.75% per month. He agrees to repay $335 per month. For how many FULL years will Joe have to make payments? (1) 3 (2) 9 (3) 27 (4) 37

580. At common law and unless the agreement stipulates to the contrary, as soon as a contract is signed for the purchase and sale of real property, the risk of loss or damage suffered between the signing of the contract and the completion falls on: (1) the buyer. (2) the seller. (3) the seller's insurance company. (4) no one.

582. You, as a trading services licensee working in a "hot" market, have recently listed a property for sale at $850,000. An offer of $840,000 was received at 8:30 this morning . At noon, a second offer of $845,000 was received and a third offer of $850,000 at 2:30 in the afternoon. You will be seeing the seller at 7:00 this evening. Which offer is to be presented? (1) all of the offers (2) the offer of $840,000 (3) the offer of $845,000 (4) the offer of $850,000

594. Jim Dickson is interested in purchasing Josephine Topanga's condominium for the listed price of $250,000. Jim proposes to pay $80,000 in cash and he wants Josephine to take back a mortgage for the balance. The rate on the suggested mortgage is j = 5% and the loan is to be fully amortized with monthly payments over 2 20 years. The market rate for similar mortgages is j = 8%. What is the market value of Jim's offer? 2 (1) $214,859.65 (2) $146,057.65 (3) $226,057.65 (4) $134,859.65

621. Vivian has agreed to sell her home to Peggy for $140,000. Peggy has saved up $15,000, which she paid to her brokerage as a deposit. In addition, she has obtained $92,000 in new mortgage financing from her bank. Legal fees of $690 and a mortgage administration fee of $250 are payable by Peggy. Vivian is paying a 6% real estate commission to her real estate brokerage. The adjustment and possession date is December 28th. Vivian has agreed to take back a short term mortgage in the amount of $8,000 in order to help Peggy finance the purchase. In addition, Vivian will be paying off the $12,000 outstanding balance of her mortgage on the property. Because she is discharging the mortgage herself, she does not have any legal fees to pay. Finally, property taxes of $2,300 have been assessed and were paid in full by Vivian on July 15th. These taxes are to be adjusted between the parties. There is an outstanding late payment penalty of $85, which Vivian has not yet paid. No one is entitled to a Homeowner Grant, and, as no exemptions apply, Peggy will be responsible for paying the property transfer tax on completion. Assume that it is NOT a leap year. The cash proceeds of the sale which will be received by Vivian are: (1) $111,540.21. (2) $140,025.21. (3) $111,533.90. (4) $111,515.21.

627. Which of the following situations are consistent with the existence of a joint tenancy under current British Columbia law? A. Bert and Ernest are co-owners of Whiteacre. The front half of the property is Bert's and the back half is owned by Ernest. B. Joan and Anna are co-owners of Greenacre. The document transferring the property to them does not expressly state how they hold the property or what interest each owns. C. Paul, a co-owner of Blackacre together with Peggy, transferred his interest in the property to his son and registered the transfer in the land title office. Paul's son is now a co-owner together with Peggy. D. Herman was a co-owner of Blueacre. When Herman died, the surviving co-owners of Blueacre automatically became its only co-owners. (1) Only D (2) B and D (3) B, C and D (4) A, B and C

641. Assume that it is not a leap year. A property is sold on the following terms: Price: $195,000 (cash) Commission: 5% on the first $100,000 of the sale price and 2 1/2% on the balance Adjustment, possession and completion date: August 28th Taxes for the current year were paid by the seller on July 1st in the amount of $1,015 The buyer has paid a deposit of $20,000 Legal fees for conveyance = $491 Where would the tax adjustment appear on the Statements of Adjustment? (1) as a credit on the Seller' Statement and a debit on the Buyer's Statement (2) as a credit on the Buyer's Statement and a debit on the Seller's Statement (3) as a credit on both statements (4) as a debit on both statements

661. Elly, a licensed real estate representative, entered into a written exclusive listing contract with Laura to list Laura's house for $300,800. Shortly after entering into this agreement, Ellyls licence expired. Unaware of the expiration of her licence, Elly proceeded to hold three open houses and numerous other showings of the house, eventually finding a buyer who made an offer of $300,800. Laura accepted the offer, but when she learned about Elly's licence expiry, she refused to pay any commission to Elly. Which of the following statements is/are true? A. The Real Estate Services Act permits Elly to sue Laura for commission in this situation whether or not the listing contract specified the amount Elly was to receive. B. A lawsuit to recover damages against Laura for breach of the listing contract will probably succeed even if Laura later refuses to complete the sale of her house. C. A court will not award Elly any form of remuneration in this situation. D. Based on the limited facts in this situation, it appears that the listing contract complies with the statutory requirements of the Real Estate Services Act. (1) Only C and D are true. (2) Only A, B and D are true. (3) Only D is true. (4) Only A and B are true.

671. Wally Walters wants to determine the market value of his property. Unfortunately, he lives in a sparsely inhabited region where there are no recently-sold, similar properties. However, he does know that the replacement cost (new) of his 2,600 square foot house is $42.50 per square foot. The land value estimate using the comparative method of appraisal is $41,500. Mr. Walters has not taken adequate care of his house: it has depreciated in value. There has been $16,300 of curable physical depreciation. In addition, the bathroom and kitchen fixtures are outdated; their replacement cost is $13,200. Based on the above information, what is the market value of Mr. Walters' property? (1) $122,500 (2) $ 81,000 (3) $152,000 (4) $135,700

672. A comparable has been identified to value a subject property. The 3,200 square foot subject property has 5 bedrooms, 3 bathrooms, an alarm system, and does not have a vendor-supplied mortgage. The 3,100 square foot comparable has a sale price of $445,500, a +$3,500 adjustment for bedrooms, and a +$5,500 adjustment for an alarm system. If the market value of a bedroom is $3,500, the market value of a bathroom is $4,700, the market value of an alarm system is $5,500, and above a 2,000 sq. ft. benchmark, each 100 sq. ft. is worth $6,000, it can be concluded that this comparable has: (1) 4 bedrooms, 3 bathrooms, and no alarm system. (2) 3 bedrooms, 3 bathrooms, and no alarm system. (3) 4 bedrooms, 3 bathrooms, and an alarm system. (4) 5 bedrooms, 2 bathrooms, and an alarm system.

683. Which one of the following will NOT release an offer? (1) the illiteracy of the offeree (2) the expiry of a specified time limit in the offer prior to acceptance (3) a counter-offer by the offeree (4) revocation of the offer, communicated to the offeree by the offeror

685. Precedents form a major part of the common law system. Another major source of our law is legislation. Which of the following could be called "legislation"? (1) the Land Title Act (2) the Principle of Specific Performance (3) the Equity of Redemption (4) all of the above

703. Which of the following statements about fixtures and chattels is FALSE? (1) Where an item has been affixed for the enhancement of the use of the premises, that is evidence the item is a chattel. (2) Where an item is affixed slightly to the premises it will be considered, based on the first impression, to be a fixture. (3) To determine whether an item is a fixture or a chattel, the courts have devised a two part test. (4) The two part test examines the degree of affixation of an item and the purpose of affixation of the item.

718. The offence of misleading advertising under the federal Competition Act has several elements. Which of the following is one element of this offence? (1) a written or oral representation to the public (2) the general impression test (3) the influence test (4) an agreement to lower prices

720. Assume that a seller instructs his real estate licensee to make certain oral representations regarding a property which both the seller and the licensee know to be false. If the purchaser later sues the seller and the licensee on the basis of this misrepresentation, then: (1) the seller will be liable to the buyer because he explicitly authorized the tort. (2) the licensee can escape personal liability by arguing that he was authorized to commit the tort. (3) the seller and the licensee will not be liable if there is a clause in the contract of purchase and sale reading, "There are no representations, warranties, guarantees, promises, or collateral agreements other than those contained in this written agreement". (4) the buyer's only remedy will be a court order against the seller for damages.

747. A young executive has applied to her bank for a mortgage loan to enable her to purchase a house. Her income is $55,000 per year. The bank informs her that they will apply a 32% gross debt service ratio when calculating her maximum loan, and that current mortgage rates are 7% per annum, compounded semiannually for 20-year amortization mortgages. Given that annual property taxes are $2,000 and mortgage payments are to be made monthly, what is the maximum mortgage loan the bank will grant? (1) $168,982.46 (2) $183,932.97 (3) $163,246.79 (4) $200,937.47

761. Steve-Ann, a trading services licensee, has been asked by her friend Jean to find a house and, if successful, Jean has agreed to pay Steve-Ann the sum of $3,000, over and above any commission that Steve-Ann would earn on the sale of the property. When Steve-Ann finds a house acceptable to Jean, Steve-Ann shares the commission with the other licensees involved and receives $3,000 directly from Jean. Steve-Ann does not tell anyone of this $3,000 payment. Which of the following statements are TRUE? (1) Steve-Ann has breached the provisions of the Real Estate Services Act. (2) Steve-Ann has breached the common law principles of agency law. (3) Both (1) and (2) are true. (4) Neither (1) nor (2) is true.

762. Which of the following best describes the "strata corporation"? (1) the individual strata owners collectively, once the strata plan has been deposited at the land title office (2) a body of three to seven elected representatives from among the owners of the strata lots (3) a corporation formed by a group of individuals who possess an undivided joint ownership interest in the land and/or buildings (4) a group of professional managers hired by a condominium project to handle the matters affecting the security and maintenance of the common property, facilities and assets of the condominiums

764. Ron, a developer, wanted to convert a 15 unit three-story apartment he owned into a condominium, in order to realize a greater profit on the sale of condo units than he would if he sold the building as a single entity. Which of the following factors would the municipal council NOT be required to consider in deciding whether to give approval to the conversion application? (1) The fact that the construction of a large shopping mall four blocks from the building had caused land values to rise to an extent where it was no longer economical to maintain the property as a small apartment. (2) The fact that there was a relatively high rental vacancy rate in the area, as compared with the city as a whole. (3) The fact that Ron had promised, as part of his conversion proposal, to make a voluntary payment of $500 to each of the tenants, as a contribution to their moving costs. (4) The fact that the building had a limited life expectancy due to its aging construction and the need for replumbing throughout the entire building.

766. According to the Real Estate Council of British Columbia, the most common advertising contravention, for which a penalty may be imposed: (1) is failing to display the name of a licensee's brokerage on an advertisement in a prominent and easily readable way. (2) is the advertising of a team name for a group of related licensees that has not been approved by and registered with the Council. (3) relates to the advertising of and signage on personal offices. (4) occurs when licensees maintain personal offices and signage indicates that real estate services are provided from the office.

767. Ernie Parent, an investor in mortgages, would prefer to have a mortgage contract written at which of the following interest rates? (1) j = 14.75% 2 (2) j = 14.75% 1 (3) j = 14% 4 (4) Ernie would be indifferent amongst the three yields.

776. Between 1900-1920, _______________ were the primary form of repayment for residential mortgage financing, whereas after the Depression, ________________ were the primary form of repayment for residential mortgage financing. (1) interest only loans; long-term fully amortized mortgages (2) long-term fully amortized mortgages; interest only loans (3) interest only loans; graduated payment mortgages (4) partially amortized mortgages, straight line principal reduction loans

789. One simple, effective and reliable method of protecting your computer against viruses is to use proven antivirus software. Many anti-virus programs include an auto-update feature which: (1) instructs the program to download profiles of new viruses from the manufacturer's website. (2) instructs the user to save their work because a virus threat is imminent. (3) instructs the user to purchase the newest version of "automatic update" so that they can install new profiles. (4) instructs the program to erase all definitions of new viruses so that your computer will be protected.

792. A developer is offering a mortgage loan of $102,000 at 9.25% per annum, compounded semi-annually, on each of sixteen units in a condominium development. The mortgages have monthly payments, 5-year terms and 20-year amortization periods. Each unit is priced at $132,000 and the units have been selling over the past seven months. Even with a recent decrease in interest rates (currently at j 2 = 8%), the property has attracted the attention of a buyer who has made a full price offer, and applied for the developer's financing on one of the condominium units. The market value of the offer is: (1) $136,834.60 (2) $115,224.00 (3) $130,000.00 (4) $106,300.17

797. An investor has decided to establish a bank account in order to accumulate sufficient capital at the end of four years to purchase a boat. If the account pays interest at 2.5% per annum, compounded annually and the investor makes deposits of $6,000 at the end of each year, how much capital will she have accumulated at the end of four years? (1) $24,915.09 (2) $26,491.51 (3) $28,018.91 (4) $25,357.92

802. A comparable has been identified to value a subject property. The 2,300 square foot comparable has 3 bedrooms, 3 bathrooms, a garage, no view, and sold for $247,400. The comparable has a +$4,200 adjustment for bedrooms, a -$2,600 for bathrooms, a +$9,000 for a view, and a +$15,000 adjustment for square footage. If the market value of a bedroom is $4,200, the market value of a bathroom is $2,600, the market value of a garage is $13,500, the market value of a view is $9,000, and above a 1,900 sq. ft. benchmark, each 100 sq. ft. is worth $5,000, it can be concluded that the subject property has: (1) 4 bedrooms, a garage, and a view. (2) 4 bedrooms, 1 bathroom, and no garage. (3) 2 bedrooms, 3 bathrooms, and a view. (4) 3 bedrooms, no garage, and a view.

808. Which of the following is NOT a requirement for an enforceable contract of purchase and sale? (1) deposit (2) description of property sold (3) names of the parties (4) description of the price and financing

812. Governments pass statutes in order to: (1) change the common law. (2) develop a system of precedent. (3) alter the constitutional allocation of legislative authority between the federal and provincial governments. (4) do all of the above.

813. When a property is taken in trade by the seller as part payment of the purchase price: (1) the value of the traded property is listed as a credit to the buyer and a debit to the seller. (2) there must be two separate statements of adjustment made for each of the properties. (3) the value of the traded property must be confirmed by the Registrar of the Land Title Office. (4) all of the above are true.

824. The term "fee simple" A. refers to a type of estate in land. B. indicates something less than absolute ownership of land. C. describes an unencumbered or clear title to land. D. was abolished by the Land Title Act. Which of the above statements are TRUE? (1) A and B are true. (2) Only A is true. (3) A and C are true. (4) All of the above are true.

833. Fanny Mac Ltd. purchased a small commercial building for $225,000 of which $100,000 was the value of the land. Fanny, the company president, felt this was an excellent deal because she would have been willing to pay as much as $250,000. One year later Fanny sold the property for $300,000. If, at the time of purchase, the expected economic life of the building was 10 years, there was an estimated salvage value of $25,000 at the end of that time, and Fanny uses the straight-line depreciation method, what is the depreciation expense for the year? (1) $10,000 (2) $12,500 (3) $20,000 (4) $25,000

863. A trading services representative must never promise to buy or sell any real estate belonging to a prospective buyer: (1) unless at the time of making the promise, a signed statement setting forth the details of the promise is given to the person to whom the promise has been made. (2) unless at the time of making the promise, the representative has in fact lined up a buyer for the property. (3) unless the representative has been authorized by the brokerage to make such a promise. (4) because such promises are expressly forbidden under the Real Estate Services Act.

868. A borrower approaches Ripley Finance Company about a mortgage on an income-producing property. The property produces an annual net operating income of $112,500. The lending value of the property is $880,000. Ripley will only lend to a maximum of 80% loan-to-value ratio, and requires a minimum debt coverage ratio of 1.25. Ripley's terms are: j 12 = 12%, a term and amortization period of 15 years, and monthly payments. Given these constraints, calculate the maximum allowable loan (rounded to the nearest dollar). (1) $624,912 (2) $660,000 (3) $976,426 (4) $634,728

875. Under the law of contract, which of the following is NOT an element of a misrepresentation by a seller that will entitle a buyer to rescind the contract of purchase and sale and claim damages? (1) The statement must be one of opinion. (2) The statement must have induced the buyer to enter the contract. (3) The statement must have been one on which a reasonable person would have relied. (4) The statement must have been made by the seller knowing it to be false, or recklessly as to its truth or falsehood.

129. The principle on which the comparative method of appraisal is based is: (1) indefeasibility. (2) substitution. (3) capitalization. (4) accessibility.

878. George bought two units in a ten unit condominium project. Within one week of the completion of this purchase some other condominium owners, the Smithe family, were killed in an accident in the jacuzzi whirlpool. Mrs. Smithe was the sole survivor of this family. The pool is located on the common property in which George now owns an interest. Mrs. Smithe is suing the strata corporation and George is concerned about the extent of his liability for any damage award she may receive. Assuming that the strata corporation is found liable to Mrs. Smithe, which of the following statements correctly describes George's liability? A. George must pay his proportionate liability for any judgment registered against the common property of the strata corporation. B. George will owe Mrs. Smithe absolutely nothing as the Strata Property Act contains provisions requiring all strata corporations to obtain and maintain liability insurance to insure against this type of occupiers liability. C. The Strata Property Act requires the strata corporation to pay out Mrs. Smithe's judgment from its contingency reserve fund. George will pay only his proportionate share of any amount left unpaid after the reserve fund is used up. D. Because George has not owned the units for a minimum of two weeks before the accident occurred, he is not responsible to pay any proportionate amount of the judgment. Which of the above statements correctly describe George's liability? (1) Only A is correct. (2) A and B are correct. (3) A, B and D are correct. (4) Only C is correct.

887. Which of the following statements comparing condominiums and cooperatives is FALSE? (1) Buyers of both condominiums and cooperatives acquire ownership of a fee simple interest in land. (2) The requirement for a disclosure statement may apply to both condominiums and cooperatives. (3) Condominiums are generally easier to sell than cooperatives. (4) Where an existing building is being converted to either a condominium or a non-profit cooperative, the existing tenants are covered by the protections afforded by the B.C. Residential Tenancy Act.

888. Which of the following statements about trust accounts under the Real Estate Services Act is FALSE? (1) A brokerage must have a trust account for each client. (2) All client funds must be placed in a trust account as soon as they are received by the brokerage. (3) Money paid by mistake into trust may be withdrawn from the trust account. (4) Money paid for expenses incurred on behalf of a client and according to the client's instructions may be withdrawn from the trust account.

903. Mombasa Logging Company wants to borrow money to build a head office building in Victoria. The company plans to occupy one floor of the building and rent out the rest. They project that the building's net operating income for the next five years will be $637,500 per year. Current mortgage terms on office building projects are j = 14%, amortized over 30 years with quarterly payments. River Bank feels that 1 Mombasa Logging is optimistic in their net operating income projections and has therefore set the required debt coverage ratio at 1.5. Which of the following represents Mombasa's maximum allowable loan (rounded to the nearest $1,000). (1) $3,128,000 (2) $7,038,000 (3) $1,043,000 (4) $12,512,000

904. A company has just bought a truck for $22,500. It is expected that the truck can be sold for $3,000 fifteen years from now. The current market value of the vehicle is $27,000. Using the straight-line method, what is the annual depreciation expense? (1) $1,300 (2) $1,500 (3) $1,600 (4) $1,800

908. Which of the following statements concerning occupiers liability is FALSE? (1) Under the B.C. Occupiers Liability Act, the common law categories of visitor are explicitly retained. (2) At common law, an occupier owed a greater duty to invitees than to licensees. (3) Merely warning children of a danger may not meet the necessary standard of care: an occupier may be obliged to take positive steps to prevent injury to children on his or her premises. (4) There may be more than one occupier of premises at the same time, under the B.C. Occupiers Liability Act.

909. Johnny F. Lane wants to purchase a sports car which will be introduced to the market 10 months from now for $19,800. How much money should Johnny deposit in the bank today if he can earn 9% per annum, compounded monthly in his savings account? (1) $18,374.46 (2) $ 7,856.84 (3) $19,800.00 (4) $18,018.00

924. Which of the following statements about deposits is FALSE? (1) A binding contract of purchase and sale cannot be formed unless the offer is accompanied by a deposit. (2) Where an offer is presented with a deposit cheque after banking hours, and the offer is refused by the seller before the banks open, the deposit cheque may be returned directly to the offeror by the agent. (3) An agent holds deposits as a stakeholder. (4) Agents are not allowed to wait until an offer is accepted before depositing the deposit cheque in the agent's trust account.

932. Section 52 of the Competition Act prohibits false or misleading advertising. Consider the following statements about that offence. A. An element of the offence is a "representation to the public", which could include statements made by a licensee over the phone to a purchaser of real estate. B. For a misrepresentation to be contrary to the Act it must be false or misleading in a material respect. C. The Competition Act applies to both oral and written representations. D. To avoid liability where a false or misleading representation has been made, the person accused of the offence must show that he or she took all reasonable care in the circumstances to ensure that the representation was accurate. Which of the following is correct? (1) All of the above statements are true. (2) Only B, C and D are true. (3) Only B and D are true. (4) Only A, B and C are true.

935. An investor has negotiated to purchase a piece of raw land for $375,000. The investor believes that the land will increase substantially in value, and that at the end of 3 years the land will sell for $483,400. What yield expressed as an effective annual rate will the investor earn on this investment? (1) 8.83246339998% (2) 8.49386771967% (3) 17.6649268% (4) 8.64559750925%

942. Which of the following statements concerning mortgages is FALSE? (1) A mortgage is a loan. (2) A mortgage is an interest in land created by contract. (3) The relationship of the parties to a mortgage is that of debtor and creditor. (4) At common law a first mortgage transferred legal title to the mortgagee.

946. Mac O'Rooney plans to build a small restaurant and requires $275,000 in construction financing. First Mortgage Co. has agreed to lend the funds in the form of an interest accruing loan. Interest is to be charged at a rate of 11.25% per annum, compounded semi-annually. How much will Mac owe at the end of the 12 month term? (1) $306,807.62 (2) $340,355.45 (3) $305,937.50 (4) unable to determine from the information given.

947. An appraiser has located a comparable property which sold for $173,000 three weeks ago. The comparable and the subject are similar in all respects except the following: Comparable Subject No. of bedrooms 3 4 Square footage 2,400 2,600 Garage yes no The appraiser also knows that the market value of a bedroom is $1,100, the value of a garage is $7,000, and above a 2,000 sq. ft. benchmark, each 100 sq. ft. is worth $3,000. What should the appraiser regard as the adjusted sales price of the comparable? (1) $173,100 (2) $187,100 (3) $191,000 (4) Unable to determine from the information given.

948. Mr. Johnston's house in Burnville, B.C. has been assessed at $110,000 for property tax purposes. The following tax rates have been set by the municipality and other taxing authorities: General Tax Rate 5.13 School Tax Rate 4.24 Hospital District Tax Rate 0.137 What will be Mr. Johnston's gross taxes payable on this property? (1) $1,045.77 (2) $ 564.30 (3) $ 950.70 (4) Not enough information is given to determine the gross taxes payable.

949. A comparable has been identified to value a subject property. The 2,000 square foot subject property has 4 bedrooms, 4 bathrooms, an alarm system, and does not have a vendor-supplied mortgage. The comparable has a sale price of $234,000, a +$5,700 adjustment for bathrooms, a -$12,000 adjustment for square footage, and a -$700 adjustment for a vendor mortgage. If the market value of a bedroom is $4,000, the market value of a bathroom is $5,700, the market value of an alarm system is $4,500, and above an 1,800 sq. ft. benchmark, each 100 sq. ft. is worth $6,000, it can be concluded that this comparable has: (1) 4 bedrooms, 3 bathrooms, and 2,200 square feet. (2) 3 bedrooms, 3 bathrooms, and 1,800 square feet. (3) 4 bedrooms, 3 bathrooms, and 1,800 square feet. (4) 3 bedrooms, 4 bathrooms, and 2,200 square feet.

950. Sophisticated investors will ultimately determine the value of undeveloped land by: (1) estimating the value of the land when improved and subtracting the costs of undertaking such a development. (2) consulting with the owner of the undeveloped land as to his estimate of the land's value. (3) asking the advice of a mortgage broker as to the availability of debt financing. (4) considering the proximity of the property to positive externalities.

954. A comparable has been identified to value a subject property. The 2,200 square foot subject property has 4 bedrooms, 3 bathrooms, an alarm system, and does not have a vendor-supplied mortgage. The 2,300 square foot comparable has a sale price of $245,500, 4 bedrooms, 3 bathrooms, no alarm system, and no vendorsupplied mortgage. If the market value of a bedroom is $3,200, the market value of a bathroom is $2,700, the market value of an alarm system is $4,500, and above a 2,000 sq. ft. benchmark, each 100 sq. ft. is worth $6,000, this comparable will have to be adjusted for alarm system and square footage by: (1) +$4,500 and -$6,000 respectively. (2) +$4,500 and $0 respectively. (3) -$4,500 and +$6,000 respectively. (4) -$6,000 and +$4,500 respectively.

955. Two years ago, Ernie bought a beautiful lakefront estate for $750,000. Ernie made the purchase with a $250,000 down payment and financed the remainder with a mortgage loan written at a contract rate of j = 2 7.5%, calling for monthly payments of $3,994 and an outstanding balance of $433,709.14 due at the end of the 5-year term. Ernie has made an offer of a $240,000 down payment and assumption of the existing financing for the remainder of the term. If the current market interest rates for 3-year term mortgages is j1 = 10%, what is the market value of Ernie's offer? (1) $690,410.81 (2) $526,899.31 (3) $650,783.33 (4) $685,478.28

956. Which of the following statements is TRUE with respect to residential tenancies under the provisions of the Residential Tenancy Act? A. A landlord is entitled to give not less than one month written notice of the end of the tenancy agreement to a tenant who, after two months of entering into the tenancy agreement, has failed to give the security deposit required under the agreement. B. In cases of emergency, a landlord has a right of entry to leased premises. C. A landlord is entitled to demand a security deposit not exceeding one-half month's rent. D. With the consent of the landlord, a residential tenant can assign or sublet all or part of the leased premises at any time during the term of the tenancy. E. The Act has imposed on residential tenants a slightly higher duty to repair and maintain leased premises than exists under the common law. (1) All of the above (2) Only C (3) B,D and E (4) B, C, D and E

958. Which of the following is TRUE? Specific performance is: A. an equitable remedy which may be granted at the discretion of the court. B. often sought in cases of contracts for the sale of land. C. not granted by a court in cases where monetary damages are an adequate remedy. D. a remedy for a breach of contract, requiring the terms of the contract to be performed. (1) All of the above (2) A and C (3) B and D (4) A, C and D

960. Assume the net operating incomes of office buildings in your area have remained steady while the market capitalization rate has gradually fallen over the last year. This would mean: (1) the sale prices of office buildings have risen. (2) the sale prices of office buildings have fallen. (3) recent buyers anticipate an impending fall in net operating incomes. (4) None of the above.

962. The purpose of a code of ethics is to: A. provide guidelines to ensure that human actions are morally fair as well as lawful. B. replace the rigidity of the legal system for professionals. C. provide a remedy through the courts to people who have been wronged by a professional. D. maintain the reputation of the profession in the eyes of the public. (1) A and D only. (2) A and B only. (3) B and C only. (4) All of the above.

964. Which of the following is FALSE with respect to strata lot ownership? (1) The sole purpose of creating a strata corporation is to limit the liability of the corporation members. (2) The concept of ownership of part of a building is an ancient one, now recognized by provincial legislation. (3) A strata development is a special way of subdividing land and buildings into parts for separate ownership with common features. (4) A strata corporation is permitted to pass a bylaw limiting the number of strata lots which may be leased by the corporation members, where the strata plan is entirely or partially residential.

965. The total assessed value of all properties in the municipality of Grand River, B.C. is $2,900,765,800. The municipality needs to raise $13,623,500 through its general tax on real properties to finance its anticipated expenditures this year. All classes of property will be taxed at the same rate. Other taxing authorities have set the following tax rates for taxes to be collected by the municipality of Grand River: School 6.1340 Hospital 0.3728 Regional District 0.0912 Hans Sum purchased his first home in Grand River last year; its assessed value is $123,729. Presuming that no taxes other than the above-mentioned taxes are collected, what will be Hans' gross taxes payable on this property? (1) $ 1,397.46 (2) $ 816.36 (3) $ 1,523.72 (4) $ 581.10

979. Tina had a listing on a house that she wanted to sell to Tom. Tom didn't want to make an offer on Tina's listing because his own house had not sold. Tina offered to buy Tom's present house if it did not sell in time to close on her listing. Tina signed a statement containing the details of her promise and gave it to Tom. Tom then signed an offer on Tina's listing, which was accepted. Tom, now suffering from buyer's remorse, is unhappy with the arrangement, and has reported Tina to the Real Estate Council. Which of the following statements is TRUE? (1) Tina did nothing wrong in making this promise because she provided all the terms of the promise in writing, to Tom, prior to his entering the contract of purchase and sale. (2) Tina is in breach of the Real Estate Services Act, because it prohibits licensees from promising to purchase property in order to induce a buyer to enter a contract. (3) Tina is liable to be disciplined by the Real Estate Council, since her behaviour qualifies as misconduct as a licensee. (4) Both (2) and (3) are true.

985. A restrictive covenant imposes a restriction on the use of one person's land for the benefit of another piece of land. Which of the following statements concerning restrictive covenants is FALSE? (1) The covenant must be worded in negative terms. (2) The restriction must be intended by the parties to bind the land. (3) The person who agrees to be bound is called the covenantor. (4) A restrictive covenant will not be enforceable where the character of the neighbourhood has changed so as to make enforcement useless.

988. What will be the maximum loan granted on a commercial building with a lending value of $4,250,000 and yielding a net operating income of $212,500 per year, where the lender requires a debt coverage ratio of 1.3 and a 65% loan-to-value ratio. The loan will be amortized over 25 years with annual payments and the interest rate is 6.5% per annum, compounded annually. Round your answer to the nearest $1,000. (1) $1,994,000 (2) $2,997,000 (3) $1,592,000 (4) $2,762,500

989. Jake has owned an industrial toxic waste disposal plant in Vancouver for a number of years. The area in which the plant is located was rezoned one year ago and the applicable zoning bylaws do not permit a waste disposal land use. The residents of Vancouver are lobbying the city council to close down the plant. Which of the following statements are TRUE? A. The Planning Act establishes the circumstances under which non-conforming uses may continue. B. Jake can add to or alter the structure of the plant in future only if required by law or permitted by the board of variance. C. The plant is a legal non-conforming use of the land which may continue indefinitely. D. If Jake wants to sell the plant, most buyers will require him to take steps to make the use a legal one by obtaining for the site a bylaw amendment called a land use contract. (1) Only B and C are true. (2) Only A, B and C are true. (3) Only A and D are true. (4) All of the above are true.

227. A local mortgage broker has arranged a mortgage in the amount of $240,000. The borrower has agreed to pay a brokerage fee of $5,000 which is to be added to the loan amount, giving a face value of $245,000 for the loan. The mortgage bears interest at a contract rate of 8% per annum, compounded quarterly. The mortgage has a term and amortization period of 25 years. The loan is to be repaid using monthly payments. The equivalent periodic interest rate, expressed as a rate per month on the funds advanced is: (1) 0.682360677% (2) 0.821546214% (3) 0.752513212% (4) 0.514235189%

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228. Focusing on client needs and using need satisfaction as the starting point for the development of a marketing program is known as: (1) the marketing concept. (2) personal selling. (3) the promotional mix. (4) differentiated marketing.

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229. In which of the following situations where express authority exists would an agent have authority to act? (1) the agent is an infant (2) the agent is insane (3) the agent is sane but the principal is insane (4) None of the above-mentioned agents has authority to act on behalf of the principal.

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236. If you consider the value shown on your assessment notice too high, you may make a formal complaint to: (1) the Property Assessment Review Panel. (2) the Board of Variance any time prior to the end of the year. (3) the Municipal Council. (4) the Assessment Appeal Court.

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237. What is an assessment notice? (1) an extract of the assessment roll concerning a specific property (2) a notice issued by the municipality stating the date on which the assessor will appraise your property (3) a demand for payment of a specified amount of property taxes (4) a notice of the cost to the property owner of a local improvement project

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239. Douglas Maxwell, a prospective home buyer, has applied for a mortgage loan to finance the purchase of a townhouse listed at $176,000. The market value of the townhouse is $175,000 and the lender has assigned a $170,000 lending value to it. The lender requires a loan-to-value ratio of 80%. Calculate the maximum loan allowable under the lender's loan-to-value ratio constraint. (1) $136,000 (2) $140,800 (3) $139,000 (4) $127,000

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240. Allison Lee, a prospective home buyer, has applied for a mortgage loan to finance the purchase of a townhouse listed at $176,000. The market value of the townhouse is $175,000 and the lender has assigned a $172,000 lending value to it. The lender requires a 30% gross debt service ratio and an 80% loan-to-value ratio. The purchaser's annual income is $55,000, property taxes are $1,500 per annum and, if approved, the loan is to be repaid with monthly payments over 25 years. The interest rate is j2 = 6%. Calculate the size of the monthly payment necessary to fully amortize the maximum loan amount based on the loan-to-value ratio constraint. (1) $880.38 (2) $1,120.00 (3) $895.73 (4) $992.58

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241. Allison Gunther, a prospective home buyer, has applied for a mortgage loan to finance the purchase of atownhouse for $175,000. Assume that the monthly payments on Ms. Gunther's loan are agreed to be $1,200 and property taxes are $1,500 per annum. Calculate the minimum level of borrower's annual income necessary to support these monthly payments based on the lender's gross debt service ratio of 30%. (1) $53,000 (2) $48,000 (3) $50,500 (4) insufficient information to calculate

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244. In a particular real estate transaction, taxes for the current year, in the amount of $516, were paid by the seller on July 1st. The adjustment, possession and completion date is July 28th. It is NOT a leap year. Based on these facts, what amount of tax would appear on the seller's statement of adjustments? (1) $221.95 (2) $294.05 (3) $220.54 (4) None of the above would appear.

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131. Where a single-family residence in Vancouver contains a wood burning furnace as its primary heating system, this would be considered an element of: (1) physical curable depreciation. (2) functional curable depreciation. (3) functional incurable depreciation. (4) physical incurable depreciation.

245. A loan contract was written for a face value of $50,000 at j2 = 10 3/4% with a 20-year amortization and a five-year term. Payments were to be made monthly in the amount of $499.76 and the outstanding balance at the end of the term was $45,167.50. A brokerage fee of $2,000 was deducted from the face value, so the funds actually advanced to the borrower were $48,000.00. What is the effective annual rate of interest on the funds advanced? (1) 12.2570937172% (2) 11.0389057614% (3) 11.6180341755% (4) 10.5168632947%

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252. A quit claim deed: (1) terminates a borrower's interest in a property in favour of a lender. (2) is enforceable by either party to a mortgage provided that the deed is signed at the time of signing of the mortgage. (3) prevents a mortgage from being assigned to or assumed by any person except with the lender's consent. (4) is an implied term or covenant in residential mortgages.

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262. Which of the following is a FALSE statement regarding the Code of Ethics of the Canadian Real Estate Association? (1) The Code stresses that a REALTOR®'s highest duty is owed to his or her client regardless of the nature of the client's instructions. (2) All provincial real estate association REALTORS® and regional real estate board REALTORS® are bound to abide by the Code. (3) The Code resolves conflicts between a REALTOR®'s instructions from a client and the REALTOR®'s responsibility to the community in favour of the interests of the community. (4) The Code includes the Golden Rule — "Do unto others as you would have them do unto you."

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270. Which of the following are required in order for a trading services representative to maintain his or her licence? A. The representative must be employed by an active brokerage at all times. B. The representative cannot act for any brokerage other than the brokerage with whom he or she is employed. C. The representative must annually file a certificate signed by a chartered accountant certifying that the books and records required by the Act have been maintained. D. The representative can act for a brokerage other than his or her employing brokerage, provided the representative obtains written authorization. (1) A and B (2) A and D (3) B and C (4) C and D

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281. Where a representative has misconducted him or herself and a member of the public has accordingly suffered damages: (1) both the representative and the brokerage may be investigated by the Real Estate Council. (2) only the representative may be sued in a civil action. (3) only the representative may be charged with a breach of the Real Estate Services Act. (4) the representative's licence may be cancelled but the brokerage's licence may only be suspended.

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282. A comparable has been identified to value a subject property. The 2,600 square foot subject property has 4 bedrooms, 4 bathrooms, an alarm system, and does not have a vendor-supplied mortgage. The 2,600 square foot comparable sold for $221,000 and has 3 bedrooms, 3 bathrooms, an alarm system, and no vendorsupplied mortgage. If the market value of a bedroom is $4,000, the market value of a bathroom is $5,700, the market value of an alarm system is $4,500, and above an 1,800 sq. ft. benchmark, each 100 sq. ft. is worth $6,000, the adjusted sale price for this comparable is: (1) $230,700 (2) $211,300 (3) $219,300 (4) $222,700

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102. In Canada, the power to make laws is divided between the federal and provincial levels of government. Which of the following have been assigned to the federal government? A. Jurisdiction over harbours B. Jurisdiction over the regulation of the heights of buildings and structures around airports C. Jurisdiction over matters affecting private property and the power to delegate some provincial authority to a third level of government D. Jurisdiction over the regulations to protect fisheries (1) A, C and D only. (2) A, B and D only. (3) B, C and D only. (4) Only A and B.

104. To qualify for a managing broker's licence in B.C., a person must meet which of the following requirements? (1) Submit personal financial statements for each licensee they intend to hire (2) Be of good reputation (3) Three years' licensed experience in British Columbia (4) All of the above are requirements for a managing broker's licence.

112. Which one of the following statements about the revocation of an offer is TRUE? (1) If an offer has a specified time for expiry, it cannot be revoked prior to that time. (2) Unless consideration is paid to keep an offer open for a specific time, revocation can be made at any time prior to acceptance. (3) Revocation can be made prior to or after acceptance. (4) The method of revocation must be exactly the same as the method used in the offer.

117. Which of the following is characteristic of a mortgage as an investment? (1) mortgages are not "unique", which makes them easy to trade (2) requires a high degree of administrative work (3) requires a low initial outlay of capital (4) All of the above are characteristics of a mortgage as an investment.

118. A borrower has arranged a $159,900 mortgage at j12=12% with a 25-year amortization, 5-year term and monthly payments. If all payments are paid when due, how much principal was paid off during the 5-year term? (1) $89,583.15 (2) $6,950.91 (3) $152,949.09 (4) $6,529.15

122. In a mortgage contract, the promise by the borrower to pay the installments of principal and interest as they fall due entitles the lender to exercise the remedy of an ordinary creditor, separately from a foreclosure application, in the case of default. This promise is known as: (1) the equity of redemption. (2) the personal covenant. (3) the insurance covenant. (4) a collateral advantage.

127. What is the purpose of a zinc strip along the peak of a roof? (1) For added support, and to extend the service period for cedar shakes and shingles (2) To discourage the growth of moss on roof coverings (3) To prevent leakage and thus water stains on the ceilings (4) To prevent the penetration of frost under the roof covering

135. A strata plan is: (1) a plan contained in the disclosure statement filed with the superintendent which shows the developer's goals for the development. (2) filed in the land title office and designates which parts of a strata project are strata lots and which are common property. (3) used for all condominiums or cooperative developments. (4) only necessary when creating five or more strata lots.

152. Which one of the following occupiers of real property would NOT be liable, by statute, for the real property taxes? (1) the registered owner of a life estate (2) the registered holder of a long-term lease (3) the registered owner of an estate in fee simple (4) the registered holder of an agreement for sale

154. Which of the following statements is FALSE under the common law of agency? (1) An agency relationship is created when two persons agree that one will act on behalf of the other. (2) Where the agent does not disclose that she is an agent and enters into a contract with a third party, the principal can have no liability for the contract. (3) An agent who would not have capacity to enter a contract herself may be able to make a valid contract on her principal's behalf. (4) An agency agreement may be either written or oral or partly written and partly oral.

156. Calculate the monthly payment required for the following mortgage: Principal of $40,000; 14% per annum, compounded semi-annually; amortization period of 20 years. (1) $486.47 (2) $486.08 (3) $469.56 (4) $497.41

157. Jason Buyer offers $345,000 to purchase a house, subject to obtaining an acceptable first mortgage. A lender has appraised the property at $340,000, requires an 80% loan to value ratio, and a 28% gross debt service ratio. Property taxes are $2,200 per annum and Mr. Buyer's gross income is $75,000 per year. What is the maximum amount (rounded to the nearest dollar) this lender will advance if the interest rate is j = 5%, the amortization period is 25 years, and payments are made monthly? 2 (1) $272,000 (2) $269,370 (3) $275,280 (4) $267,420

162. A property is listed for $133,333 but the market value, as estimated in a recent appraisal is $125,000. The property's lending value is estimated to be $120,000. Jay and Joan purchase the home for $128,500 subject to a mortgage of $84,000. What loan to value ratio was applied by the lender with whom Jay and Joan negotiated the mortgage? (Assume that the loan to value ratio was the binding constraint on the loan size.) (1) 67.5% (2) 70% (3) 72% (4) 75%

166. A potential borrower with an annual income of $58,000 and property taxes of $2,000 per annum has been told by a mortgage lender that the largest loan available will be $190,451. What is the maximum gross debt service ratio allowed by the lender given that the loan has monthly payments and is to be written at 5.5% per annum, compounded semi-annually and amortized over 25 years? (1) 25% (2) 27.5% (3) 28.5% (4) 30%

171. Brad has recently received an interest only loan for $100,000 to operate a food cart in downtown Vancouver. The loan has an interest rate of 8% per annum, compounded monthly, and requires interest only payments every month. How much are the monthly interest only payments that Brad makes if the duration of the loan is two years? (1) $1,333.33 (2) $666.67 (3) $500.33 (4) $1,200.67

173. Prepayment in a mortgage refers to: (1) the right of lenders to demand full repayment of the outstanding principal if the payments fall into arrears. (2) the right of the borrower to pay off all (or some) of the outstanding balance during the term of the mortgage. (3) the lender's right to demand full payment of the outstanding balance at the end of the term of a partially amortized mortgage. (4) the payment of a finder's fee to a mortgage broker (as compensation for arranging a mortgage loan) which is made prior to the advancing of mortgage funds.

174. For which one of the following properties would an appraiser be MOST justified in employing the cost method to determine market value? (1) a 40-year old bungalow which represents the highest and best use (2) a newly-constructed church of contemporary design (3) a vacant lot which possesses latent value (4) a high rise office tower located in an outer suburb

182. An option to purchase the mortgaged property given by the borrower to the lender at the time the mortgage is negotiated is: (1) enforceable if the borrower has independent legal advice. (2) void. (3) enforceable in all cases. (4) a collateral advantage.

186. What will be the maximum loan granted on a commercial building with a lending value of $3,500,000 and yielding a net operating income of $360,000 per year, where the lender requires a debt coverage ratio of 1.25 and an 80% loan-to-value ratio. The loan will be amortized over 20 years with annual payments and the interest rate is 7.5% per annum, compounded annually. Round your answer to the nearest $1,000. (1) $ 2,936,000 (2) $ 2,800,000 (3) $ 3,036,000 (4) $2,590,000

190. A person whom an agent represents is known in law as the: (1) buyer. (2) principal. (3) client. (4) seller.

212. Which of the following statements is TRUE? (1) Only sole proprietors need to report business income on their personal income tax returns. (2) Both sole proprietors and partners must report business income on their personal tax returns. (3) Sole proprietorships, partnerships and corporations are identical in terms of taxation of owner's income. (4) None of the above three statements are true.

214. A mortgage was written for $48,000.00 with an interest rate of j = 8%, an amortization period of 15 years 2 and equal monthly payments. Calculate the balance owing at the end of five years. (1) $38,506.94 (2) $37,724.15 (3) $47,289.10 (4) $46,181.28

225. Section 59 of the Law and Equity Act of British Columbia is intended to prevent frauds from occurring in respect of the disposition of land. Section 59 provides that: A. an oral contract respecting land is unenforceable. B. a contract respecting land must be in writing to be enforceable by a court. C. a written contract in respect of land is unenforceable if a term is left out or is wrongly stated. D. where a person acts to his or her detriment in reliance on an oral contract respecting land, a court will enforce the contract if it would be inequitable not to do so. Which of the above statements are TRUE? (1) All of the above statements are true. (2) Only D is true. (3) B, C and D are true. (4) A and C are true.

226. For purposes of assessment and taxation: (1) the strata corporation is assessed as a whole. (2) each strata lot, together with the owner's share in the common property, is deemed to be a separate parcel of land and improvements. (3) all strata lots are lumped together. (4) None of the above are correct.

301. When a listing contract has expired, and the listed property is later sold to a buyer who was first introduced to the property by the listing brokerage during the listing period, the brokerage will: (1) always be entitled to commission in these circumstances. (2) be entitled to commission where the seller and buyer have conspired to sell after the expiry of the listing to avoid commission. (3) be entitled to commission if he/she can prove the buyer inspected the house with one of its licensees. (4) never be entitled to commission in these circumstances.

302. It is a violation of the Real Estate Council's Rules to promise: to acquire or resell or otherwise dispose of any real estate offered for sale by the brokerage or representative UNLESS: (1) full disclosure is made to both seller and buyer. (2) a signed statement setting forth the details of the promise is given to the person to whom the promise is made when the promise is made. (3) a copy of such promise is sent to the Council. (4) a statement under oath is provided to the person to whom the promise is made.

314. Which of the following is NOT within the powers granted to the Land Reserve Commission under the Agricultural Land Commission Act? (1) The ability to exclude land from an agricultural land reserve. (2) The ability to add land to the agricultural land reserve. (3) The ability to pass regulations affecting agricultural reserve land. (4) The ability to allow subdivision of agricultural reserve land.

327. When a property is taken in trade by the seller as part payment of the buyer price: (1) the value of the traded property is listed as a debit to the buyer and a credit to the seller. (2) there must be two separate adjustments for property taxes. (3) the value of the traded property must be confirmed by the registrar of titles. (4) all of the above are true.

328. A mortgage loan with a face value of $100,000 is arranged through a mortgage broker. A commission of $3,500, appraisal fees of $450, as well as survey and legal fees totalling $600 will be deducted from the face value before the funds are advanced to the borrower. Calculate the cost of funds advanced to the borrower, expressed as an effective annual interest rate (j ), if the loan is written at 7.75% per annum, compounded 1 semi-annually, with monthly payments over a 20-year amortization period and term? (1) 8.25222543632% (2) 8.57161352745% (3) 8.25222543631% (4) 9.43988464354%

337. You are to appraise a single attached dwelling in an ordinary neighbourhood. If supply and demand factors have remained relatively stable for the last three months, a good comparable property is a similar property which: (1) has just been sold at a below market price through a court ordered sale. (2) after two months exposure to the market, was sold one week ago. (3) is currently listed for sale as $125,000. (4) (1) and (2) are correct.

340. Which one of the following statements is FALSE? (1) A deposit is held by the brokerage as a stakeholder until the real estate transaction is completed. (2) Unless a deposit is paid when an offer to purchase is made, there is not a binding contract for purchase and sale. (3) If a deposit is made by uncertified cheque, the brokerage should only issue a cheque on its trust account when the brokerage knows that the deposit cheque has been honoured. (4) Once an offer has been accepted, the brokerage may only return the deposit if it has the seller's written permission.

350. Which one of the following is NOT a remedy available to the owner of a strata lot who is dissatisfied with certain actions of the strata corporation? (1) The owner may obtain a mandatory injunction. (2) The owner may file a lien against the strata corporation. (3) The owner may have an arbitrator appointed. (4) The owner may apply to the Supreme Court of B.C. for an order requiring the strata corporation to comply with the Strata Property Act.

354. When an agent acting within the scope of his authority and having disclosed that he is acting as an agent enters into a contract with a third party, the parties to that contract are: (1) the agent and the principal. (2) the principal and the third party. (3) the third party and the agent. (4) the principal, the agent and the third party.

357. A statement of profit and loss measures: (1) assets acquired during a certain period of time. (2) revenues and expenses for a certain period of time. (3) revenues accrued at a single point in time. (4) assets and liabilities held at a single point in time.

366. Which one of the following statements is FALSE? (1) Given that the net operating income remains constant, the market value of a property falls as the required yield rises. (2) The market value of an income producing property is best determined by averaging the sales prices of any three other income producing properties which have recently sold. (3) In the determination of an income producing property's market value, an appraiser should not confuse gross realized income with net operating income. (4) The capitalization rate applied to the net operating income of an investment property is related to the yield on comparable investment properties.

369. A counter-offer has the effect in law of: (1) leaving the original offer open for acceptance if the counter-offer is refused. (2) terminating the original offer so that later it cannot be accepted. (3) terminating all negotiations at that time. (4) accepting the original offer.

371. A property listed for sale has a net operating income of $15,763 per annum which is assumed to be perpetual and constant. The market capitalization rate is 9.5% per annum. What is the maximum price a prudent investor should pay for this property? (1) $149,748.50 (2) $165,926.32 (3) an amount lower than $149,748.50 (4) not possible to determine with the information provided

378. From the point of view of the lender, the interest charged on a mortgage does NOT represent: (1) a payment for a portion of the general overhead and operating costs of the lender. (2) the cost of financing the lender's debt. (3) an incentive to accept uncertainty or risk. (4) a return on capital invested.

383. An appraiser has located a comparable where the sale price was $350,000, comprised of $185,000 cash and a $165,000 vendor take-back mortgage written at 4% per annum, compounded semi-annually, with monthly payments rounded to the next higher dollar, a 25-year amortization, and a 4-year term. Assuming that the market rate for similar financing is 6% per annum, compounded semi-annually, what should the appraiser regard as the sale price of the house? (Round answer to the nearest $100). (1) $154,000 (2) $339,000 (3) $350,000 (4) $165,000

385. Which one of the following statements is FALSE? (1) The principle of indefeasibility protects an innocent fee simple purchaser dealing with the registered owner of a fee simple interest. (2) The principle of indefeasibility extends to charges registered against property. (3) A registered owner of property may lose an interest in land through the operation of the principle of indefeasibility even though nothing has been done to deserve the loss. (4) An exception to the principle of indefeasibility is a lease of 3 years or less where there is a tenant in occupation.

386. Max Smith runs a small grocery store. The balance sheet as of March 31, 20xx shows land of $180,000 and building of $72,000 under the ASSET column. He bought the land and building exactly three years prior to this statement's date. Each year Max claimed 5% depreciation expense. What was the purchase price of the land? (1) $208,373 (2) $180,000 (3) $209,943 (4) Impossible to calculate with the information provided

390. Under Sections 37 and 35 of the Real Estate Services Act, the Real Estate Council is empowered to investigate all but one of the following. Select the activity the Council is NOT empowered to investigate. (1) wrongful taking or deceptive dealing (2) excessive sales commission rates (3) breaches of the Act (4) incompetence as a licensee

392. Which of the following statements is TRUE? (1) Taxes always appear as a credit on the seller's statement of adjustments and as a debit on the buyer's statement of adjustments. (2) Where the licensee acts only for the seller, real estate commission always appears as a debit on the seller's statement of adjustments and does not appear on the buyer's statement of adjustments. (3) Legal fees always appear as a debit on the buyer's statement of adjustments and as a credit on the seller's statement of adjustments. (4) None of the above are true.

397. Which of the following statements regarding the law of occupier's liability in British Columbia is TRUE: (1) The Occupiers Liability Act has made no changes to the common law. (2) The common law distinction between an invitee and a licensee may still be relevant under the Occupiers Liability Act. (3) Only the registered owner of a property may be held liable for occupier's liability. (4) Trading services representatives do not need to concern themselves with occupier's liability except in respect to their own property.

402. At the time a transaction is completed which one of the following items will be the responsibility of the buyer? (1) tax penalty with respect to overdue taxes (2) costs of preparing a first mortgage (3) unpaid taxes to possession date (4) commission

408. Which one of the following is FALSE? An agent's authority to act on behalf of the principal may arise: (1) expressly. (2) contingently. (3) by implication. (4) by ratification.

414. A borrower has arranged a $159,000 mortgage at j =12% with a 20-year amortization, 5-year term and 2 monthly payments. If all payments are paid when due, how much principal was paid off during the 5-year term? (1) $89,583.16 (2) $13,541.84 (3) $145,458.16 (4) $296.36

416. A mortgage for $300,000 is written at 6.5% per annum, compounded monthly. The mortgage calls for monthly payments rounded to the next higher dollar, a 5-year term, and a 25-year amortization. The mortgage contract permits the borrower to prepay the full amount of the loan at any time subject to the payment of an interest rate differential penalty. At the time of prepayment, the current comparable interest rate is 4.5% per annum, compounded monthly. If the borrower wishes to prepay this loan at the end of the second year (with the 24th payment), calculate the amount of the interest rate differential penalty. (1) $1,448.76 (2) $17,385.12 (3) $14,708.47 (4) $23,180.16

422. Where a deposit is paid directly to a seller on account of the purchase price: (1) the amount of the deposit will appear only on the buyer's statement of adjustments. (2) the amount of the deposit will appear on both the buyer's and the seller's statement of adjustments. (3) the deposit will only appear on the seller's statement of adjustments. (4) the deposit will not appear on either statement of adjustment.

427. If there is no listing contract in existence but the agent effects a sale of the principal's property at the request of the principal, the courts will: (1) not imply an undertaking to pay the agent remuneration. (2) imply a promise to pay the agent remuneration. (3) allow the agent to collect only his/her out of pocket expenses. (4) hold the agent liable for any default of the buyer.

434. Operating expenses for appraisal purposes include: (1) income taxes. (2) property taxes. (3) mortgage payments. (4) capital cost allowance.

435. Given that all other factors are identical, the shorter the term of the contract on a bonused, partially amortized mortgage (where the bonus is paid by the borrower): (1) the lower the effective interest rate paid by the borrower. (2) the higher the effective interest rate paid by the borrower. (3) the higher the required monthly payment. (4) the lower the outstanding balance at the term's end.

438. As a western platform frame house is being constructed, a polyethylene vapour barrier is used immediately under: (1) exterior brick veneer. (2) interior wood panelling on perimeter walls. (3) cedar shingles. (4) sub-floors.

439. A mortgage is arranged on the following terms: Mortgage Face Value $170,000 Funds Advanced $163,500 Interest Rate j2 = 6.5% Amortization Period 20 years Term 20 years Payments monthly What would be the rate of interest, expressed as an effective annual rate, paid on funds advanced? (1) 7.90421329396% (2) 7.13379663244% (3) 8.19694565481% (4) 6.95214562327%

440. Anton holds a life estate pur autre vie based on Bentley's life. Charles has the remainder interest in fee simple. Anton's interest will terminate when: (1) Anton dies. (2) Bentley dies. (3) Charles dies. (4) all three men die.

445. Lending value is: (1) equal to market value. (2) a long term conservative estimate of the value of the interest in land pledged as security. (3) an estimate of the mortgage loan a buyer will be able to obtain. (4) equal to 95% of purchase price.

448. You have sold your property with the adjustment date on September 20. You had paid the taxes on July 2. The buyer should be responsible for that share of the tax bill from and including: (1) January 1 - September 20. (2) September 20 - December 31. (3) September 21 - December 31. (4) July 2 - December 31.

449. The cost method of appraisal may NOT be used to value: (1) airport hangars. (2) vacant lots. (3) condominiums. (4) single-family residences.

451. An agent's authority can be created retroactively by his principal by an action called: (1) rectification. (2) ratification. (3) rescission. (4) revocation.

457. Which of the following statements regarding financial covenants of the mortgagor (borrower) is FALSE? (1) The three main financial obligations of the borrower in addition to repayment of the loan amount include payment of property taxes, property insurance, and property maintenance. (2) Lenders always make the property tax payments for the borrower to ensure that the property taxes do not fall into arrears. (3) The mortgage loan agreement should contain a covenant by the borrower to insure the property against fire and other specified hazards to the full insurable value of the security. (4) The borrower should maintain the property in a manner that will preserve the value of the security in order to reduce the capital risk.

458. Mary and John own a piece of real property as joint tenants. Which of the following is TRUE? (1) Mary cannot sell or mortgage her interest without John's consent. (2) Mary and John must each have an undivided interest in the whole of the property. (3) Because Mary and John are married, they were required by law to register their co-ownership as joint tenants. (4) All of the above three statements are true.

466. Which of the following transactions could provide good evidence of market value to an appraiser? (1) A custom designed home containing an elevator and several ramps is sold by Mr. Smith to his nephew, a paraplegic. (2) A pre-fabricated home situated in a large subdivision of similar homes is sold after three months on the market. (3) Miss Jones receives an urgent telegram stating that she has been accepted as a nursemaid to children in Nigeria. In the course of one week, she arranges the sale of her two bedroom condominium and leaves for Africa. (4) All of the above could be good indications of market value.

491. Which of the following statements regarding trusts and real estate investment trusts (REITs) is FALSE? (1) Beneficial owners are liable only for the amount committed to the purchase of the trust units. (2) Income earned by a family trust is taxed at the tax rate of the youngest beneficiary. (3) Family trusts allow a parent to deposit assets with a trustee and distribute the income to other members of the family. (4) Mortgage trusts and equity trusts are two types of REITs.

502. Trespass is: (1) actionable only upon proof of damage. (2) actionable per se. (3) not actionable. (4) none of the above.

503. The market value of a vacant site can be determined by: (1) the cost method of appraisal. (2) the comparative method of appraisal. (3) the accrual method of appraisal. (4) any of the above three appraisal methods.

508. Current assets on the financial statements of a business include: (1) land. (2) rents receivable. (3) real property at its historic cost. (4) accounts payable.

509. Which of the following statements is TRUE regarding the liability of an occupier under the common law of torts? (1) An occupier of land owes a duty to an invitee to protect at all costs the invitee from any "unexpected" dangers or hazards on the land. (2) An occupier of land owes a minimal duty of care under the common law to trespassers and is required only to refrain from intentionally harming them. (3) The duty of care owed by an occupier of land at common law to licensees is somewhat greater than that owed to invitees. (4) A child is owed a lesser standard of care by an occupier than that owed to a licensee.

510. An option to purchase the mortgaged property given by the mortgagor to the mortgagee at the time the mortgage is negotiated is: (1) enforceable if the mortgagor has independent legal advice. (2) void. (3) enforceable in all cases. (4) none of the above.

511. All other things being equal, shortening the contractual term on a constant level payment mortgage always has the effect of: (1) increasing the size of the periodic payments required to fully amortize the loan. (2) increasing the size of the outstanding balance payment due at the end of the term. (3) Both of the above (4) None of the above

514. When can an appeal be made to the Supreme Court of British Columbia regarding a real property assessment value? (1) when a property owner receives his or her assessment notice (2) after receipt of the Property Assessment Appeal Board decision, and then only on a point of law (3) never (4) after receiving notification of the decision of the Property Assessment Review Panel.

516. Where a borrower believes that the amount of interest being charged is excessive, under which statute might relief be granted? (1) the Interest Act (2) the Business Practices and Consumer Protection Act (3) the Land Titles Act (4) all of the above

521. Which of the following is NOT an example of hardware? (1) monitors (2) shareware (3) printers (4) central processing unit

523. Which one of the following accurately describes the law with respect to security deposits on a commercial tenancy? (1) Security deposits must not exceed 50% of the monthly rental. (2) There is no limit on the amount of security deposit which may be charged. (3) Security deposits are not permitted. (4) Security deposits cannot exceed one month's rent.

526. Which one of the following statutes affects the real property taxation system in British Columbia? (1) Real Estate Services Act (2) School Act (3) Arbitration Act (4) Land Transfer Form Act

531. Which one of the following is not a depreciable asset? (1) a septic tank system (2) 50 acres of fallow land (3) carpeting (4) a concrete patio

532. Value in exchange is: (1) commonly referred to as value to the owner. (2) the sale price. (3) the owner's minimum price, called the floor price. (4) a range of mutual profit.

535. Either party to a contract of purchase and sale may assign that contract to another party: (1) as long as the words "or nominee" or "or assignee" are used to the contract. (2) as long as the assignment would not prejudice the interests of the other party to the contract. (3) only if the other party to the contract consents to the assignment. (4) in any or all of the above situations.

537. Using the cost method of appraisal, determine the market value of a property with a 37,000 square foot building if construction costs new are $62 per square foot, land value is estimated to be $1,200,000, and total depreciation on the building to date is estimated to be 8% ? (1) $2,294,000 (2) $3,310,480 (3) $3,494,000 (4) $3,214,480

539. There is a large Olympic size pool in the back yard of the home Margaret owns in Coquitlam. Each week in the summer a man from a pool maintenance company comes in and cleans the pool. Usually when he was cleaning the pool the back wash ran over and chlorinated water leaked down on the garden of the neighbour below, killing the flowers. Both Margaret and the man from the pool company were aware of what was happening. This would be considered: (1) a breach of the duty of care under the B.C. Occupiers Liability Act. (2) a private nuisance. (3) a patent defect. (4) occupiers liability.

643. Which of the following is NOT a commonly used financial statement? (1) a statement of profit and loss (2) an income statement (3) a balance sheet (4) a corporate statement of holdings

541. On March 7, Allan contracts, in writing, to sell his home to Bob for the price of $100,000. The sale is to complete on March 31. On March 8, the house is destroyed. Accordingly, there has been: (1) a mutual mistake. (2) a frustration of the contract. (3) a common mistake. (4) none of the above.

543. Conditions precedent are usually included in contracts of purchase and sale to protect the buyer. However, since conditions precedent can also be abused by buyers, a seller must be protected when a condition precedent is being included in a contract of purchase and sale. Which of the following additions to the contract of purchase and sale is NOT a valid method of protecting a seller's interests? (1) A specific time within which the condition must be removed can be included in the contract of purchase and sale. (2) A clause requiring a Property Disclosure Statement to be filled out can be included in the contract of purchase and sale. (3) A covenant can be inserted stating that the buyer will use his or her best efforts to satisfy the specific condition. (4) A time clause can be included which gives the seller the right to demand that the buyer remove the condition precedent within 72 hours.

546. Allison wants to put aside some money into a savings account to accumulate enough money to go on a trip to Australia. If she can afford to deposit $250 at the end of every month, and the savings account earns interest at j =4%, how much money will have accumulated in the savings account by the end of the 3rd 12 year? (1) $8,467.69 (2) $9,545.39 (3) $7,223.68 (4) $8,993.21

548. Which of the following clauses contained in a mortgage would constitute a clog on the equity of redemption and therefore be void? (1) collateral advantage clause (2) option to purchase clause (3) indemnity clause (4) acceleration clause

563. Which of the following accurately describes the provisions of the Strata Property Act with respect to the cancellation of management contracts entered into by the strata corporation for the management of the common property? (1) The contract can be cancelled upon payment of a sum of money. (2) Either party may give the other two months' notice without either party to the contract incurring any liability for breach of contract. (3) Management contracts are binding for their term, and may not be cancelled prior to their expiry date. (4) The Act prevents the strata corporation from entering into management contracts.

565. The REALTOR® Code of Ethics is enforced by the: (1) Canadian Real Estate Association. (2) local real estate boards. (3) British Columbia Real Estate Association. (4) Real Estate Council of British Columbia.

571. Hurston, the Head of Production at XYZ Preservatives Ltd. has been ordered by the company's President, in Toronto, to vent some gasses that have been stored in a pressure chamber at the Vancouver plant. Although the President knows that the gas is highly toxic, Hurston has been assured by the President that the gas is totally harmless and will quickly dissipate when released. Unfortunately, having escaped from the pressure chamber, the gas drifts in a dense cloud over Ralph's neighbouring apple orchard and destroys the apple crop. Which one of the following is TRUE? (1) Ralph will be successful in a claim against XYZ's President under the doctrine of trespass. (2) Ralph will probably succeed in a claim against XYZ based on negligence. (3) Ralph will be successful in his claim against XYZ based on the principles of nuisance. (4) Ralph would probably have a successful claim against XYZ based on the provisions of the Occupiers Liability Act.

574. When casual reference is made to the current mortgage lending rate, the common practice is to quote: (1) effective annual interest rates. (2) nominal interest rates. (3) equivalent interest rates. (4) interest rates per compounding period.

575. Charlotte offered to sell her property to Dennis for $180,000. Dennis wired, "Send lowest cash price - will give $165,000 cash". Charlotte replied, "Cannot reduce price". Dennis then accepted the original offer but Charlotte refused to sell claiming that there was no contract. Which of the following statements is TRUE? (1) Because Dennis' first wire was a counter-offer, and therefore a refusal of Charlotte's offer, there is no contract. (2) Charlotte's reply to Dennis' first wire was, in effect, a counter-offer on the same terms as her original offer. (3) Charlotte may successfully claim that her initial price of $180,000 was an "invitation to treat" and therefore she was entitled to refuse Dennis' offer to pay that amount. (4) Options (1) and (3) are both true.

586. Which one of the following is inconsistent with generally accepted accounting principles? (1) Expenses are recognized at the time they are incurred. (2) Assets are revalued upwards to account for the effect of inflation. (3) Fiscal year ends cannot be changed at will. (4) Revenues are recognized at the time they are earned.

587. The secondary mortgage market: (1) occurs when a borrower receives funds secured by a mortgage from a bank. (2) is the market in which existing mortgages are bought and sold as financial investments. (3) has been weakened by the introduction of mortgage-backed securities and Canada mortgage bonds. (4) is the market in which mortgage loans are initiated.

593. Given the following information, calculate the minimum annual income a buyer must have in order to qualify for a $42,500 loan. Interest rate: 11 3/4% per annum, compounded semi-annually Term: 5 years Amortization period: 25 years Payments: Monthly Maximum Gross Debt Service Ratio: 28% Property Taxes: $600 per annum (1) $20,728.89 (2) $20,620.29 (3) $16,939.56 (4) $19,161.78

607. Which one of the following is FALSE with respect to the estimate of vacancy rates in the appraisal of income producing properties? (1) Vacancy rates are expressed as a percentage of gross potential revenue. (2) Vacancy rates must be those existing at the time of the appraisal for the subject property. (3) Vacancy rates must be those estimated to exist in the future for similar properties in the market. (4) Vacancy rates must be deducted from gross potential revenue.

611. To qualify for a managing broker's licence in B.C., a person must meet which of the following requirements? (1) submit personal financial statements for each licensee they intend to hire. (2) be of good reputation. (3) three years' licensed experience in British Columbia. (4) all of the above requirements for a managing broker's licence.

612. Alan recently assisted Peter in the sale of Peter's house. What are the legal consequences of his doing so? (1) Unless he is licensed, Alan has breached the Real Estate Services Act. (2) If Alan is unlicensed, but performed the service without receiving or expecting any money or reward, he has done nothing wrong. (3) As long as Alan was not involved in the writing of the contract of purchase and sale, he may act for Peter and receive money for it. (4) If Alan is Peter's brother, Peter can pay him for the work and no breach has occurred.

618. In interpreting a listing contract, the courts will: (1) construe any ambiguous terms in favour of the party who wrote them. (2) ascertain the event upon which commission is payable. (3) determine whether the contract has been signed by all persons who have an ownership interest in the subject property. (4) do all of the above.

619. An agent will be personally liable to third parties: (1) whenever the agent contracts on behalf of a principal. (2) where the agent fails to disclose that he/she is an agent. (3) where the agent has no written authority. (4) in all of the above circumstances.

622. Valentina has agreed to sell her home to Petra for $140,000. Petra has saved up $15,000, which she paid to her brokerage as a deposit. The deposit will appear: (1) as a debit on Petra's statement and a credit on Valentina's statement. (2) as a credit on Petra's statement only. (3) as a credit on both parties' statements. (4) as a credit on Petra's statement and a debit on Valentina's statement.

631. Smiling Sue purchased a townhouse in March 1987 for $62,000. In March 1992, it was appraised at $140,000. In March 1995, Smiling Sue sold the townhouse for $122,000. What was the pre-tax yield on her investment expressed as an effective annual rate? (1) 10.1527765839% (2) 8.82934557901% (3) 9.90738584804% (4) 10.7176969167%

633. An estimate of gross potential rents is achieved by: (1) comparing all rents for similar space. (2) comparing rents for recently leased similar space. (3) projecting future rental increases. (4) totalling current rents in the subject building.

638. Your client, Bard, is a developer who owns land in an area zoned for single family residences. He wants to subdivide his 2.5 acre lot and build two 24 unit condominium projects on the land. Bard seeks your expert advice about how to overcome the land use bylaw obstacles that could prohibit the land development. You correctly advise Bard that: A. Bard will have to apply for a spot rezoning permit for this development site, according to the process outlined in the Local Government Act. B. By making an application for rezoning to the municipal council, a property owner may begin the rezoning process. C. A public hearing must be held by the municipal council prior to a change in the permitted land use or density under a zoning bylaw. D. The municipal council has the power, after a public hearing has been held, to alter an amended bylaw to further change the use or density of a zone without holding another public hearing, so long as it is in the public's best interests to make this further change. (1) Only A and D are true. (2) Only B and C are true. (3) Only B, C and D are true. (4) All of A, B, C and D are true.

647. A local mortgage broker arranged a mortgage in the amount of $210,000. The borrower has agreed to pay a brokerage fee in the amount of $7,200 which is to be added to the loan amount, giving a face value of $217,200 for the loan. The mortgage bears interest at a contract rate of 6.5% per annum, compounded semiannually. The mortgage has an amortization period and term of 20 years and calls for monthly payments. If the mortgage is to be sold to an investor for $225,000 immediately after the loan is initiated, the investor will earn the following nominal interest rate, with semi-annual compounding: (1) 7.06152973868% (2) 6.04705357815% (3) 7.13558632145% (4) 6.84278879588%

649. A property which is not employed in its highest and best use: (1) should be renovated. (2) possesses latent value. (3) should be rezoned. (4) should be appraised by the cost method.

652. The process used in underwriting income-producing properties is similar to that for residential borrower qualification except that in underwriting commercial properties: (1) a loan to value constraint is never used. (2) the income from the property is more important than the personal income of the borrower. (3) a gross debt service ratio is commonly employed. (4) a safety margin is not necessary.

658. Mr. & Mrs. Tom Jones and Ashraf Menzies have a signed contract of purchase and sale for a triplex owned by Alan Sinclair. Mr. & Mrs. Jones have agreed to pay $100,000 each and Ashraf has agreed to pay the balance of $50,000. They would like their ownership registered as a joint tenancy. Which one of the following statements is TRUE? (1) Tom, Mrs. Jones and Ashraf cannot register their ownership as a joint tenancy because they did not each contribute the same amount of cash. (2) If their interest is registered as a joint tenancy, Tom, Mrs. Jones and Ashraf will each own an undivided interest in the triplex. (3) Tom and Mrs. Jones would be allowed to register their interests as a joint tenancy because they are man and wife, but Ashraf would have to be a tenant-in-common with them. (4) Tom, Mrs. Jones and Ashraf cannot meet the four common law principles required to create a joint tenancy.

660. When referring to the assets portion of a balance sheet, the items are generally listed in order of liquidity. Which of the following correctly lists assets from most liquid to least liquid? (1) Accounts receivable, inventories, accounts payable, marketable securities (2) Marketable securities, accounts receivable, inventories, prepaid expenses (3) Cash, accounts receivable, land, marketable securities (4) Building, cash, prepaid expenses, inventories

667. Quan, a real estate licensee, completes a listing contract with Betsy Smith "to endeavour to effect a sale" of Smith's property for $250,000 payable in five equal annual installments. In return, Smith will pay Quan a flat fee of $10,000 if a suitable buyer is found. Quan feels the property is worth $190,000 market value. Green makes an offer to Smith through Quan of $250,000 cash, payable on completion day. Which of the following statements are TRUE? A. Quan may advise Smith that Green's offer exceeds Smith's stated price in the listing contract. B. Smith will be liable to Quan for $10,000 whether or not she accepts Green's offer because Quan has found an offeror who is ready, willing and able to purchase at Smith's stated price. C. Green can sue Smith for damages if she does not accept his offer of $250,000 cash because he has met or exceeded the terms specified in the listing contract. D. Smith will make a secret profit if she accepts Green's offer and this is illegal under the Real Estate Services Act. (1) All four statements above are false. (2) Statement A is true; the other three statements are false. (3) Statements B and C are true; statements A and D are false. (4) Statements A, B and D are true; statement C is false.

678. Steelgrave Developments is contemplating the construction of a large residential building. They have been guaranteed financing by their bank in the amount of $1,500,000. The terms of the financing are j2=9.75% with a 20 year amortization period, 5 year term, and monthly payments. Steelgrave believes that if market conditions are favourable, they will sell the building when it is completed, 2 years from now. How much principal will be paid off at the end of the two-year construction period? (1) $ 53,825.96 (2) $ 55,071.93 (3) $160,074.65 (4) $ 0.00

679. Consider the following data related to two recently sold properties, Property A and Property B. They are comparable to Property C, whose value is to be appraised. Comparables Subject Property A B C Sale Price 190,000 250,000 ? Gross Potential Income 36,000 47,000 54,000 Current Operating Expenses 25,000 32,000 36,000 Long Term Vacancy Rate 5% 5% 5% Using the limited data above, estimate a market value for Property C, rounded to the nearest $500. (1) $250,000 (2) $309,000 (3) $230,000 (4) $456,500

681. Blackacre, a revenue producing property, has been sold. The date of adjustment will be January 31, 1991, exactly 18 months after the contract of purchase and sale was signed and a deposit of $3,500 was paid directly to the seller. If interest on this deposit accrues for the benefit of the buyer, 6% per annum, compounded annually, what will be the amount shown on the seller's statement of adjustment? (1) $3,815.00 debit (2) $3,819.68 debit (3) $3,815.00 credit (4) $3,819.68 credit

684. An advantage of using a central, gas-fired, forced hot water heating system is: (1) its air filtration capabilities. (2) the production of a steady, consistent heat. (3) that money can be saved by leaving it off during an owner's winter absence. (4) that heat transmission is completely by radiation.

699. Where no time period is stipulated in an offer, the offer: (1) will lapse in 24 hours' time. (2) will lapse after a reasonable time. (3) will lapse in 2 hours' time. (4) will not lapse but rather, it must be revoked by the offeror.

700. Which one of the following BEST describes curable functional depreciation? (1) general wear and tear which is easily repaired (2) an outdated design which can be corrected easily (3) damage to the interior of a building which can be repaired economically (4) an outdated design which cannot be corrected easily

701. The total assessed value of all properties in the municipality of Smithtown, B.C. is $2,900,765,800. The municipality needs to raise $13,623,500 through its general tax on real properties to finance its anticipated expenditures this year. All classes of property will be taxed at the same rate. Other taxing authorities have set the following tax rates for taxes to be collected by the municipality of Smithtown: School 5.644 Hospital 0.3981 Regional District 0.0734 Able Smith, the grandson of the man after whom the town is named, purchased his first home in Smithtown last year; its assessed value is $97,645. Presuming that no taxes other than the above-mentioned taxes are collected, calculate Able's gross taxes payable on this property. (1) $ 805.06 (2) $1,055.74 (3) $ 458.59 (4) $1,435.74

702. Three years ago Larry bought a house at which time he arranged a mortgage for $240,000. The loan was written at a rate of 5.75% per annum compounded semi-annually, calling for monthly payments of $1,500.06 and an outstanding balance of $214,837.74 due at the end of the 5-year term. Larry has just received an offer from Mary to buy his house. Mary's offer consists of $50,000 cash and assumption of the existing financing for the remainder of the term. If current lending rates for 2-year term mortgages are 8% per annum, compounded semi-annually, what is the market value of Mary's offer? (1) $238,005.91 (2) $266,854.92 (3) $290,000.00 (4) $219,345.07

705. In which one of the following mortgage repayment schemes, do the monthly mortgage payments increase on a regular basis? (1) reverse annuity mortgage (2) graduated payment mortgage (3) straight line principal reduction mortgage (4) interest accruing mortgage

707. A private investor expects to receive $281.72 per month for a period of 17 years as a result of a mortgage loan he has just purchased for $21,000. Calculate the investor's expected yield (expressed as a nominal rate with semi-annual compounding) on his investment. (1) 14.9976796764% (2) 15.2333744136% (3) 14.7712806265% (4) 15.8135136537%

708. In order for a licensee to be liable for damages caused by a negligent misstatement, certain facts must be proved. These include that the licensee making the statement: A. did so in the course of business. B. did not qualify or disclaim the statement. C. knows, or should have known, that the advice was relied upon. D. knows that the statement was false, or speaks recklessly, without caring whether it is true or false. E. must have special expertise in the area on which the advice was given. F. must have a contractual relationship with the person to whom he or she is giving the advice. (1) B, C, D and E above are required. (2) A, B, C and E are required. (3) All of the above are required. (4) A, B, C, D and F are required.

711. Johnny Collins is trying to design his new home to be as energy efficient in heating as possible. On which side of the house should he place the largest windows? (1) north (2) south (3) east (4) west

712. In terms of appraisal, "recent" means: (1) up to three months ago. (2) that time period during which demand and supply conditions have remained relatively stable. (3) the time period that has expired since a number of properties comparable to the subject property were sold. (4) the time period that has expired since a number of properties similar to the subject property were listed for sale.

719. A visitor enters an apartment building to visit a tenant. As he enters the lobby, the skylight above collapses, injuring the visitor. Any lawsuit resulting from the above injury will be covered by: (1) fire insurance. (2) third party liability insurance. (3) plate glass insurance. (4) visitor's insurance.

729. The Local Government Act creates three different levels of local law. Which of the following is NOT one of these levels of local law? (1) local improvement district (2) local enterprise zone (3) regional district (4) municipality

730. Which of the following statements about the common law doctrine of notice is FALSE? (1) This doctrine holds a buyer to have notice of all reasonably discoverable interests affecting a property. (2) This doctrine is the basis of the B.C. Torrens system. (3) Subject to certain exceptions, the Land Title Act has abolished the doctrine of notice in British Columbia. (4) The doctrine of notice conflicts with the Torrens principle of conclusiveness of the register.

739. With which one of the following loans is the lender's initial capital and periodic income at the greatest risk? (1) interest only loans (2) interest accruing loans (3) straight line principal reduction loans (4) constant payment loans

740. Depreciation expense is: (1) another name for capital cost allowance. (2) an accounting concept which attempts to allocate the cost of an asset over the life of the asset. (3) usually calculated on land by the straight-line method. (4) None of the above

741. Where a case is brought before a judge of the British Columbia Supreme Court: (1) the judge may exercise only equitable jurisdiction in deciding the matter. (2) the judge may exercise both equitable and common law jurisdiction in deciding the matter. (3) where common law and equity conflict, the judge must apply the common law rule. (4) the judge may not do any of the above.

748. A complaint against the amount of a real property assessment might proceed through hearings by the four different bodies listed below: A. Property Assessment Appeal Board B. Property Assessment Review Panels C. Court of Appeal D. Supreme Court of British Columbia The order of these hearings would be: (1) A, B, D, C (2) B, A, D, C (3) A, C, B, D (4) B, A, C, D

750. If an offeror who has stated that the offer is open for 24 hours, decides to terminate the offer, the offeror: (1) must not terminate the offer until the 24 hours has expired. (2) must communicate any revocation of the offer to the offeree. (3) must give reasonable notice to the offeree before revoking the offer. (4) must give at least 72 hours' notice to the offeree before revoking the offer.

760. Guerilla marketing: (1) refers to any method of lead generation by telephone, fax, or mail. (2) is considered unconventional and relies on ingenuity and surprise. (3) is banned by the National Do Not Call List (DNCL). (4) is any form of non-personal selling, such as gift items.

763. Which of the following examples would NOT entitle a landlord to terminate a residential tenancy under the B.C. Residential Tenancy Act? (1) Amit, a tenant, has a girlfriend who stays in the apartment with him four or five days a week. They are constantly fighting and screaming late at night which wakes the other tenants. (2) Jean Paul, a landlord, wants to give notice to Velma, a tenant, so that Jean Paul's nephew who is moving to Vancouver can live there. (3) Vittorio, a tenant, has been late in paying his rent for eight months in a row. (4) Mikhail and Raisa entered a tenancy agreement on May 1 and Raisa moved in on May 15. On June 10 Raisa still had not paid to Mikhail the agreed-upon security deposit.

769. Howard slipped on a patch of ice and broke his ankle when walking up Laura's driveway to deliver a package. As a result, Howard suffered loss of wages until he recovered. One or more of the following statements may be TRUE. A. Howard is a trespasser and therefore Laura does not owe him a duty of care under the Occupier's Liability Act. B. If Laura has taken reasonable precautions such as applying sand or salt regularly to prevent ice building up on the driveway, she will not be liable to Howard under the Occupiers Liability Act. C. If Laura is only a tenant under a month-to-month lease of the premises, she will not be liable to Howard. D. Laura will be liable to Howard for all his damages even if she was not negligent. Which of the above statements are TRUE. (1) Only B and C are true. (2) Only B is true. (3) Only A, B and D are true. (4) Only D is true.

790. If you hear a conversation on a construction site about "rise" and "run", what part of the building is being discussed? (1) windows (2) stairs (3) framing (4) roof

791. An appraiser is looking for comparables to use in valuing a single family residence. Which of the following sales could provide good evidence of market value to the appraiser? (1) An identical house in the same neighbourhood as the subject property is listed at $210,000 but has not yet sold. (2) A similar house in the neighbourhood sold last month, after having been listed for two months. (3) A similar house in a similar neighbourhood was purchased by a developer who was assembling land to build a neighbourhood plaza. (4) Three weeks ago the owner of the house next to the subject property was notified that she had been transferred to Winnipeg and was to start this week. She has now sold her home and left for Winnipeg.

793. Which of the following statements is TRUE? (1) An appeal from all courts of original jurisdiction in B.C., including small claims court, is to the B.C. Court of Appeal. (2) An appeal from the B.C. Supreme Court is to the B.C. Court of Appeal. (3) A person who loses in the B.C. Court of Appeal has an absolute right to be heard in the Supreme Court of Canada. (4) An appeal from small claims court is heard by three, five or seven judges.

796. Patty and Henry sign a residential tenancy agreement specified to last for one year commencing on January 1, 2005 and ending December 31, 2005 but not specifically requiring the tenant to vacate the rental unit at the end of the tenancy. Assuming neither party has given notice to end the tenancy agreement, which of the following statements about Patty and Henry's agreement is true under the B.C. Residential Tenancy Act? (1) On December 31, the term of the tenancy will automatically renew for another one year term. (2) On December 31, unless the agreement provides otherwise, the term will automatically renew as a month to month tenancy. (3) On December 31, the tenancy will automatically terminate. (4) On December 31, the tenancy will automatically renew for one month and then terminate unless the parties give notice to continue.

806. The duty to repair commercial premises: A. is generally a landlord's obligation unless the lease specifies otherwise. B. is not imposed by the common law on a tenant except for an implied covenant to treat the leased premises in a tenant-like manner and to deliver up the premises as he or she found them, "wear and tear excepted". C. should be dealt with in writing in a lease to avoid disputes between lessee and lessor. D. is enforceable by a court only if the lease is in writing and registered in the Land Title Office as required by the Land Title Act. Which of the above statements is FALSE? (1) Only B and C are false. (2) Only A and D are false. (3) None of the above are false. (4) Only C is false.

814. When determining the rights of a landlord of residential premises, one must look to many sources including: A. the lease between landlord and tenant. B. the Commercial Tenancy Act. C. the common law. D. the Rent Distress Act. Which of the above statements are TRUE? (1) A, B, C and D are true. (2) Only A and C are true. (3) Only A, C and D are true. (4) None of the statements are true.

819. Karl has agreed to buy Whiteacre from Anya for $448,000. He has deposited $25,000 with the notary public who will complete the conveyance. The brokerage's commission is 5% on the first $100,000 and 1.5% on the balance of the purchase price. Property taxes are not yet due. The taxes last year were $1,324 and the notary public has told Karl to expect a 10% increase in that amount for the current year. The completion and adjustment dates are February 18th. There are two mortgages on Anya's title. Karl is assuming Anya's first mortgage in the amount of $123,544. Karl has arranged a second mortgage through the Banque Nationale de Paris, in the amount of $98,000. The balance of the purchase price and the property transfer tax will be paid in cash out of proceeds from the sale of Karl's other property. Anya will pay out her existing second mortgage of $23,000 from the proceeds of this transaction. The notary's fees are $700 for the conveyance, $250 for preparation of Karl's new mortgage and $75 for discharging Anya's second mortgage. It is NOT a leap year. The cash proceeds of sale which will be received by the Anya on the completion date is: (1) $265,969.47. (2) $290,969.47. (3) $289,469.47. (4) $292,469.47.

829. Which of the following pieces of information is NOT required to be included in a transaction record sheet? (1) the nature of the real estate transaction (2) the financial institution involved in the transaction (3) the true consideration paid (4) the amount of commission paid

830. When a judge in the B.C. Supreme Court exercises equitable jurisdiction: (1) he or she may refuse to apply any law which is unfair. (2) he or she may grant such remedies as specific performance or an injunction. (3) he or she may refer to a code to ascertain the law on a particular matter. (4) he or she may do all of the above.

848. Devco Builders Ltd., a licensed real estate sales and development company, advertised in a newspaper that its deluxe condominiums come with a 10 year manufacturer's guarantee for all electrical and heating appliances included with each unit. In fact, the advertisement contained an error; there was only a 2 year guarantee available from the appliance manufacturer. One or more of the following statements may be TRUE. A. These facts disclose a potential breach of the federal Competition Act. B. Devco Builders has potentially breached the Real Estate Services Act which prohibits the circulation of false information concerning a real estate transaction. C. If Devco is the owner of the condominium development it is offering for sale, the Real Estate Services Act requires Devco to disclose its interest in the property to potential buyers. D. Devco has not breached any statute law; this was only an innocent mistake for which Devco is not liable. Which of the above statements are TRUE? (1) A and B are true. (2) A, B and C are true. (3) B and C are true. (4) Only D is true.

849. Robert is dying of a terminal illness. He therefore arranges for his wife Elaine to have a life estate with respect to his ancestral home with the fee simple to go to his daughter Whitney once Elaine dies. Whitney's interest is that of a: (1) reversioner (2) remainderman (3) rectification (4) none of the above

851. Joe and Sue Mortgagor wish to purchase a house. Joe's annual gross income is $35,000 and Sue's annual gross income is $30,000. The house they wish to purchase has a price of $210,000. Ripley Finance Company has told the Mortgagors that they can supply uninsured mortgage funds for the house at j = 7.5%, with an 2 amortization of 25 years and monthly payments. They have determined that the house has a lending value of $208,000, and annual property taxes are $1,900. Ripley uses a policy of requiring a 30% gross debt service ratio and will lend to a maximum of 80% loan-to-value. In the calculation of gross income, Ripley includes 100% of the principal wage-earner's income, and 75% of the secondary wage earner's income. Calculate the maximum loan the Mortgagors can expect (rounded to the nearest dollar). (1) $174,856 (2) $166,400 (3) $208,000 (4) $150,006

854. Two neighbours, Ms. Finch and Mr. Falcon, each sold their homes last week. Ms. Finch sold her house for $150,000, while Mr. Falcon's house only sold for $132,000. Mr. Falcon can't understand why his house sold for less since both homes are identical in all respects. Which of the following could account for the difference in selling price? (1) Ms. Finch had already purchased another home and needed to sell this home immediately. (2) Mr. Falcon had already purchased another home and needed to sell this home immediately. (3) Mr. Falcon supplied a vendor take-back mortgage of 13% while the current market rate was 16%. (4) All of the above factors could account for the difference in selling price.

856. Which of the following statements concerning the common law doctrine of the void deed is FALSE? A. A rightful owner of land whose title deed was "transferred" by a void deed could recover his title if he began his court action within the 20 year limitation period and he proved to a court that he was, in fact, the rightful owner. B. A current fee simple "owner" under a void deed had no remedy other than to seek compensation from the government and the forger from whom he bought the land, if he lost his land title to its rightful owner. C. A deed given in exchange for illegal consideration is not a void deed. D. There was no certainty of title for a buyer of land until the 20 year limitation period for lawsuits to recover a land title transferred by a void deed had expired. (1) A, B, C and D (2) Only B and C (3) Only B, C and D (4) None of the above are false.

859. The federal Competition Act prohibits false or misleading advertising and creates an offence punishable by imprisonment or a fine. Which of the following statements is NOT true concerning this offence? (1) This offence involves a representation, which could include oral or written representations. (2) All false advertisements made to the public will constitute an offence under the provisions of the Competition Act, even if an inexperienced person would not be misled by the representation. (3) Both the general impression of the representation as well as its literal meaning are relevant in determining whether a breach of the Act has taken place. (4) The person making the representation can escape liability if he or she can show that they honestly believed the statement to be true and took reasonable steps to ensure its truth.

865. Social networking is: (1) a serious and destructive form of computer crime. (2) an activity that focuses on building online communities for those who have common interests. (3) a blog that focuses on the real estate community. (4) the fastest ISP on the market today.

867. Which one of the following is FALSE? An agent's authority to act on behalf of his principal may arise: (1) expressly. (2) contingently. (3) by implication. (4) by ratification.

877. Which of the following is FALSE with respect to the law of contract? (1) Subject to some exceptions, only the parties to a contract have a right to sue or be sued for breach of the contract. (2) The burden or liability under a contract may be assigned, provided that the requirements of the Law and Equity Act are met. (3) A contract which creates an interest in land is one of the exceptions to the doctrine of privity of contract. (4) A statutory assignment must be in writing, must be absolute and unconditional, and notice in writing of the assignment must be given to the original promisor.

879. David Jones is being sued by a neighbour for creating a nuisance and causing damage to the neighbour's property. He advises you that: A. he has taken the utmost care and exercised skill in carrying on the activity causing the nuisance. B. the damage caused is trifling. C. he has authority under a municipal business licence to carry on the activity. D. he is using his property reasonably. Which of the above will NOT be a valid defence to the lawsuit? (1) A, B, C and D (2) A, C and D (3) B and D (4) Only B

882. In British Columbia there are three basic requirements for an easement. Which of the following is one of the requirements? (1) the easement is negative in effect (2) the easement has identifiable or defined boundaries (3) there must be a servient tenement adjoining a dominant tenement (4) the grantor must be in actual occupation of the servient tenement at the time he or she grants the easement

884. With a portable mortgage: (1) a purchaser takes over responsibility for the remaining contractual terms of an existing mortgage. (2) a borrower can save money when the existing mortgage has a lower interest rate than current market rates. (3) the vendor creates a vendor-supplied mortgage. (4) the portable funds fee (PFF) is always charged.

890. One or more of the following statements are TRUE: A. A sellers of real property is responsible for his or her property taxes up to the day before the adjustment date in a contract of purchase and sale. B. A buyer is usually responsible for legal fees relating to the conveyance and these appear as a debit on his or her statement of adjustments. C. A brokerage's real estate commission always appears on the buyer's statement of adjustments as a credit. D. Gross mortgage proceeds received by a buyer appear as a credit on the buyer's statement of adjustments. E. A tenant's security deposit appears as a credit on a seller's statement of adjustments. F. An existing mortgage assumed by a buyer is a debit on a seller's statement of adjustments. Which of the above statements are TRUE? (1) C and E are true. (2) A, B, D and F are true. (3) D, E and F are true. (4) C and F are true.

895. Ryan wants to purchase a house that is listed for $376,000. The bank's appraiser estimates that the lending value of the property is $370,000. Ryan's gross income is $75,000 per year. The bank applies a 80% loan-to-value ratio and a gross debt service ratio of 30%. Property taxes amount to $2,200 per year. Assume that the lender demands a 25-year amortization period and monthly payments at j2 = 8%. How much can Ryan borrow, rounded to the nearest dollar? (1) $296,000 (2) $221,651 (3) $172,953 (4) $224,387

906. With respect to the foundation of a residential building, damproofing is: (1) a material used to eliminate the penetration of frost in the concrete slab. (2) a material applied to foundation walls to seal minor capillary pores in the concrete. (3) a plastic vapour barrier placed under concrete footings. (4) a plastic pipe laid alongside the concrete foundation wall.

911. Which of the following statements concerning an open listing is FALSE? (1) Under an open listing a commission will only be paid to the agent who is the effective cause of the sale. (2) The Real Estate Services Act requires all listings to always be in writing. (3) Under an open listing the seller is free to dispose of the property independently without any liability to pay commission to an agent. (4) Under an open listing a seller is free to use the services of any number of brokerages.

913. Sara wants to purchase Bart's property. Sara would like to pay $50,000 in cash and take over the existing mortgage which has 233 monthly payments of $1,050 remaining on the mortgage. The interest rate on the original mortgage is j = 8%, but the current market rate is j = 5.5%. What is the market value of the 2 2 offer? (1) $244,650.00 (2) $200,903.78 (3) $180,322.00 (4) $150,154.54

918. Which of the following is NOT one of the obligations imposed on a strata corporation under the Strata Property Act? (1) the obligation to keep the common property in a state of good and serviceable repair (2) the obligation to maintain liability insurance of no less than $5,000,000 on the strata project (3) the obligation to establish a contingency reserve fund for unusual or extraordinary expenses (4) the obligation to establish a fund for payment of administrative expenses of the strata corporation

920. Which of the following are TRUE with respect to mortgage default insurance? A. the insurance company guarantees the borrower will be able to continue to make his mortgage payments without interruption. B. a lender may apply a higher loan to value ratio to an insured loan than an uninsured loan. C. the insurance premium paid on an insured mortgage cannot be added to the loan amount. D. mortgage default insurance is insurance for the lender. (1) A and C (2) B and D (3) A, B, and D (4) A and D

921. Which of the following properties would be most suitable for an appraisal by the comparative method? (1) A penitentiary located just outside the municipal boundary of a town inhabited by a population of 83,000. (2) A 2-bedroom unit in a 4 year old condominium. The building is a concrete hi-rise and is in an area where an abundance of similar units are marketed. (3) A 30 year old house designed by the famous architect, Earl Wright, to the owner's specifications. The house is situated in an exclusive area in West Vancouver. (4) A large office building in downtown Vancouver, owned by a forestry company which has been placed on the market because the first mortgage holder has commenced foreclosure action.

926. With fully amortized constant payment mortgages, when payments are rounded up to the next higher dollar, the numbers of payments necessary to repay the loan amount: (1) will always increase in addition to increasing the size of the final payment. (2) may decline in addition to reducing the size of the final payment. (3) may increase to the length of the term. (4) cannot be determined.

645. A borrower has arranged a loan of $196,000 at an interest rate of 6% per annum, compounded annually over an amortization period of 15 years. What is the monthly payment required? (1) $1,386.30 (2) $1,543.86 (3) $1,262.84 (4) $1,637.18

933. A prospective buyer signs an offer on a property for $250,000 and mentions to the listing licensee that she would be willing to pay as much as $270,000 for the property if necessary. The listing licensee presents the offer to the seller without mentioning that the buyer may be willing to increase the offer. The seller accepts the offer of $250,000. Since it is not a dual agency situation, this fact pattern is: (1) an example of the agent's ethical obligation to deal fairly with the buyer at all times. (2) a breach of the agent's legal and ethical duty of full disclosure to her principal. (3) acceptable conduct on the part of the agent. (4) an example of the agent's duty not to make a secret profit.

934. ABC Loan Co. ("ABC") has agreed to lend $2 million dollars to Devco Ltd. in exchange for a registered first mortgage against Devco's current residential construction project. The loan is to be paid out in four equal instalments over a five month period, but all payments are at the discretion of ABC under the "advances" clause in the mortgage. The first instalment has been paid and it is now time to pay out the second instalment. ABC has discovered that a builder's lien has been filed against Devco's property. You correctly advise ABC that: (1) it is obligated to pay out the second instalment to Devco; to refuse to do so would be a breach of the mortgage contract. (2) if the second instalment is advanced to Devco, the lien claimant will have priority over this and any other advances made under the mortgage after the date of registration of the lien. (3) the lien cannot take priority over ABC's mortgage because the lien was registered after the mortgage. (4) None of the above statements is correct.

939. A clerk in the land title office mistakenly registered a fee simple transfer on the wrong title, with the result that Lot 5, owned by Michael, was transferred to Scott. Scott discovered this error and, instead of correcting the error, he sold the property to another person who was unaware of the clerical error and of Scott's dishonest conduct. Michael discovered the error after the buyer had registered the transfer from Scott. He wants his land restored to him and the register corrected. You correctly advise Michael that: (1) because this situation was caused by a clerical error, the Registrar will correct the register and restore Michael's property to him. (2) the person who bought the property, bona fide and for value, from Scott is protected by the B.C. land title system; as a result, Michael cannot have his property restored to him. (3) Michael contributed to his own loss by neglecting to register a lien on his title to indicate to anyone searching title that he was the registered owner; as a result, he cannot recover damages in a lawsuit against Scott. (4) None of the above statements is correct.

940. According to the Strata Property Act, which of the following statements is TRUE? (1) A unanimous vote of 100% of the members of a strata corporation is usually required to approve an amendment to the bylaws of the corporation. (2) An estate in fee simple is created for each individual strata lot by the registration, and approval of the registrar of land titles, of a strata plan. (3) The condominium concept can be utilized only for residential projects. (4) Before a strata plan can be registered in the land title office, all of the strata lots must be presold.

941. Terrence needs to borrow $200,000 to buy a studio apartment, so he can move out of his East Vancouver basement suite. He saw an ad on the bus that said "Bad Credit, No Problem, We Loan to ANYONE!", so he gave them a call. The potential lender was very friendly and said they could advance a loan of $200,000 with monthly payments of $1,400 over a 1-year term. The lender also gave Terrence a disclosure statement with a lot of fine print he didn't understand which stated the face value of the loan is $224,000 and the outstanding balance at the end of 1-year loan term is $219,820.63. Calculate the cost of funds advanced (expressed as a j ) for this loan with a 1-year term. 1 (1) 5.83265526389% (2) 19.0195592295% (3) 12.5215789632% (4) 7.11552968533%

945. Fletcher owns Lot 1, a rock-strewn beachfront property to which he had added 1 tonne of white sand imported from Aruba. Ana, owner of Lot 2, is Fletcher's neighbour. Lot 2 has a tennis court located near the beach. On windy days, the fine white sand on Fletcher's property is carried by the wind onto Ana's property where it coats the clay surface of the tennis court, making it very slippery and hazardous for anyone playing there. Ana has discussed this problem with Fletcher on several occasions but he has not done anything to prevent the problem from continuing. Ana has been unable to use her tennis court for several months as a result of the sand accumulating on the property. One or more of the following statements is TRUE. A. This is an example of the tort of trespass. B. This is an example of the tort of private nuisance. C. Ana has no basis in law on which to sue Fletcher because the problem is caused by natural forces. D. Fletcher may successfully defend against a lawsuit brought by Ana, on the basis that the damage caused is unintentional. (1) Only C (2) Only B (3) Only A (4) Only D

963. Which of the following is NOT included in the concept of real property? (1) natural features, such as trees and streams (2) moveable objects such as furniture (3) land (4) manmade improvements, such as buildings

966. A mortgage with a face value of $288,000 and a contract rate of interest rate of 4.2% per annum, compounded monthly calls for monthly payments of $1,780. What is the outstanding balance immediately after the 40th monthly payment has been made? (1) $245,223.45 (2) $254,915.90 (3) $224,654.84 (4) $232,919.53

970. Arco Architects recently purchased $19,000 worth of new office furniture, but with their quantity discount the final cost was only $17,100. It is expected that the furniture can be sold at the end of its 10 year life for $1,500. What is the annual depreciation expense if Arco uses the straight-line method? (1) $1,750 (2) $1,560 (3) $1,710 (4) $1,900

235. Which one of the following factors is MOST likely to affect the value of residential real property in the short run? (1) shifts in age composition of the population (2) a change in mortgage interest rates (3) a shift in the balance of trade between countries (4) the supply and cost of raw materials and energy

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974. One or more of the following statements correctly describes the law with respect to security deposits in a commercial tenancy. A. The interest which accrues on a security deposit is always paid to the account of the landlord. B. The interest rate on a security deposit is restricted by the federal Interest Act. C. The amount of a security deposit may be freely negotiated between the two parties to a commercial lease. D. Security deposits must not exceed 150% of the monthly rent as a higher amount is unconscionable and therefore illegal. Which of the following statements is TRUE? (1) B and C (2) Only C (3) B, C and D (4) All of the above are true.

981. Real estate is affected by a wider and more serious range of externalities than any other commodity. What characteristic of real estate causes this? (1) the supply of urban land is not fixed (2) the immobility of real property (3) ownership of real property may be divided both physically and legally (4) the durability of real property

984. A mortgage loan, created five years ago, was originally in the amount of $25,500. The contract called for interest at the rate of 9% per annum, compounded semi-annually and constant monthly payments of $219.39. Calculate the outstanding balance due immediately after the 36th and the 60th monthly payments have been made. (1) $23,550.43; $23,480.78 (2) $24,201.56; $23,124.56 (3) $24,540.22; $23,744.14 (4) $24,201.56; $23,992.19

991. Ethan visited a used car lot, owned and operated by Clara. The lot contains a variety of used cars, in addition to a marked off area where Clara keeps a variety of car parts. There are large signs around the marked off area, warning customers not to enter the area without the presence of an employee. Ethan, while walking around the lot, noticed a set of vintage car wheels in the marked off area. Disregarding the signage, Ethan entered the area to get a closer look at the wheels. Unfortunately, Ethan stepped on a small engine part that was lying on the ground and slipped and broke his ankle. Which of the following statements is TRUE? (1) If Ethan had been trespassing on Clara's lot, Ethan would have been owed no duty of care whatsoever under the Occupiers Liability Act. (2) If Ethan was an infant, he would likely be owed a higher duty of care than an adult under the common law because of an infant's relative inability to appreciate the danger presented by marked off areas in a used car lot. (3) Clara could not be held liable to Ethan if she was merely leasing the lot; only the owner of the land can be sued under the Occupiers Liability Act. (4) If Clara had an employee supervise the lot, and Clara was away from the lot at the time of the injury, only the employee can be held liable under the Occupiers Liability Act.

993. Which of the following is NOT one of the four basic principles of the BC title registration system? (1) indefeasibility (2) the doctrine of the void deed (3) the registration requirement (4) the abolition of notice

994. Which of the following results from the immobility of land? (1) A large older home is divided into four separate suites, and each is sold as a unit. (2) A piece of land is zoned as parkland, thereby increasing the value of nearby homes. (3) There is no licensing requirement for appraisers. (4) The economic life of a building may be shorter than its physical life.

996. Which of the following statements about fixtures and chattels is FALSE? (1) When a chattel becomes attached, even slightly, to real property, it will "prima facie" be considered a fixture unless circumstances show that the property was intended to remain a chattel. (2) A vendor of real property has the right to detach and remove any fixture after entering the contract of purchase and sale, if he or she so desires. (3) When an owner of a house attaches a mirror to the wall, to better use the mirror, he or she will usually be entitled to remove the mirror when the house is sold and the vendor moves out. (4) Both (2) and (3) are false.

997. Which one of the following is NOT a reason why an investor would use borrowed funds instead of an all cash offer for a real estate investment. (1) to diversify investments and reduce overall risk (2) to get a regular and predictable return on capital (3) to invest the borrowed funds at a higher rate of interest than the borrowing rate (4) lack of adequate capital to make the desired investment

999. Mimi was house-sitting for her friends Tom and Lizzie while they were on a three month photo-safari in Africa. The front porch was damaged in a freak storm that caused a tree to fall and smash the bottom two steps. Mimi didn't have the money to hire a carpenter to repair the stairs, so she attached a large sign to the bottom of the steps reading, "DANGER KEEP OFF". Dave, an out of work handyman who could not read English, was walking from house to house in the neighbourhood looking for casual work. He entered Tom and Lizzie's property, and not understanding the sign started up the steps to the front door. Dave landed on the damaged step, and the weight of his body was more than the step could stand. He broke his leg in two places, and having no insurance, has run up $3,750 in medical bills. Dave now intends to begin a lawsuit. Which of the following statements is FALSE? (1) Under the Occupiers Liability Act, both Mimi and the absent owners qualify as "occupiers." (2) Dave will be unsuccessful in his lawsuit because he willingly accepted the risk of injury when he walked up the broken steps. (3) The duty of care owed by an occupier under the Occupiers Liability Act applies in relation to the condition of the premises, activities on the premises, or the conduct of third parties on the premises. (4) At common law, an occupier owed a higher standard of care to invitees than was owed to licensees or trespassers.

231. Given the following information, calculate the minimum annual income a buyer must have in order to qualify for a $150,000 loan. Interest rate: 4.75% per annum, compounded semi-annually Term: 5 years Amortization period: 25 years Payments: Monthly Maximum Gross Debt Service Ratio: 32% Property Taxes: $2,600 per annum (1) $31,919.63 (2) $40,044.63 (3) $23,794.63 (4) $36,987.63

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233. Which one of the following actions would constitute a trespass? (1) Mary arrives at Safeway just as the door is being locked for the day and convinces the clerk to allow her in for last minute shopping. (2) John is on a museum tour and wanders off through a door stating "No Admittance". (3) Sue sells cosmetics door to door and walks onto Joan's property to reach her front door. (4) All of the above would constitute trespass.

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242. In a particular real estate transaction, taxes for the current year, in the amount of $516, were paid by the seller on July 1st. The adjustment, possession and completion date is July 28th. Where would the tax adjustment appear on the statements of adjustments? (1) As a credit on the buyer's statement and a debit on the seller's statement. (2) As a credit on the seller's statement and a debit on the buyer's statement. (3) As a credit on both statements. (4) As a debit on both statements.

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246. Where a licensee who belongs to the local real estate board breaches the rules contained in the Canadian Real Estate Association's Code of Ethics and Standards of Business Practice: (1) an action based upon the breach may be brought by an interested party in the federal court. (2) the appropriate real estate board may discipline the licensee. (3) the Real Estate Council may discipline the licensee. (4) no action may be taken as adoption of the Code is voluntary.

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248. In the shopping behaviour model, which of the following is NOT a main classification? (1) Specialty goods (2) Superior goods (3) Shopping goods (4) Convenience goods

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250. Calculate the nominal rate of interest, compounded quarterly that is equivalent to 1.5% per quarterly compounding period. (1) 18% (2) 6% (3) 12% (4) 10%

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251. Any clause contained in a mortgage which clogs the equity of redemption is: (1) valid. (2) void. (3) illegal. (4) an unreasonable restraint of trade.

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253. In applying the cost method of appraisal to the valuation of a single family residence built in 1954, the value of improvements is determined by: (1) the actual construction costs, or if unavailable, historic construction cost data. (2) the current costs of constructing a modern equivalent of the subject property. (3) the current costs of constructing an exact replica of the property being appraised. (4) the construction costs for a builder of average efficiency measured in 1954 standards.

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255. Under which one of the following conditions is the comparative method of appraisal MOST applicable? (1) where the volume of sales transactions is very low (2) where buyers and sellers are well informed about current sales transactions (3) where the property has redevelopment potential (4) where the property is unique

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256. Where a licensee has complied strictly with the disclosure requirements of the Real Estate Services Act when purchasing property: (1) no conflict of interest and duty could exist. (2) the common law may still require further disclosure. (3) he or she may make a secret profit. (4) none of the above will be applicable.

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260. Where a registered owner discovers that his title has been transferred by forgery to another person, and registered in the forger's name, he should: (1) try to repurchase it from the forger who is now the registered owner. (2) file a caveat to prevent the forger from transferring the property to a bona fide purchaser. (3) register a judgment against the title to recover his title to the property. (4) remove the duplicate certificate of title from the land title office.

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269. Comparable ABC has a gross potential rent of $124,000, operating expenses of $44,000, and a sale price of $635,930. Comparable XYZ has a gross potential rent of $138,000, operating expenses of $50,000 and a sale price of $711,000. The long-term vacancy rate is 4%. Based on the above, the market yield is estimated to be: (1) between 8.47% and 8.62%. (2) between 11.6% and 11.8%. (3) between 0.116% and 0.118%. (4) between 19.4% and 19.5%.

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283. How much should an investor be willing to pay for a property that is expected to sell for $55,000 in three years if the investor desires a yield of j = 10%? 2 (1) $40,795.68 (2) $41,041.85 (3) $41,322.31 (4) $47,511.07

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287. Once a licensee has obtained a signed acceptance from Allan of an offer to sell real estate owned by Bob and Carol jointly, the Real Estate Services Act requires the delivery of a copy of the agreement to: (1) Allan and Bob. (2) Allan, Bob and Carol. (3) Bob. (4) Carol.

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288. When attempting to determine whether a particular relationship is that of landlord and tenant or licensor and licensee, it is best to: (1) look at the formal wording of the document. (2) look at the substance of the agreement between the parties. (3) consult the Residential Tenancy Act. (4) consult the Commercial Tenancies Act.

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290. Mortgage interest rates are sometimes described as being "sticky"; that is, changes in mortgage rates tend to lag behind changes in bond yields. One reason for this "stickiness" is: (1) the short-term nature of a mortgage loan contract. (2) the weak secondary mortgage market. (3) mortgages are a highly liquid investments. (4) all mortgage investments are identical.

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291. Hurston, an employee of XYZ Preservatives Ltd. is in the habit of venting a cloud of highly toxic gas into the air at dusk every evening. Once it escapes, the cloud usually drifts over Ralph's apple orchard. Hurston's actions are strictly against company policy but by venting the gas Hurston saves time. Hurston is aware that the gas is highly toxic. Ralph has discovered that the emissions have destroyed his apple crop. Which one of the following statements is TRUE? (1) XYZ will not be liable for Hurston's acts because Hurston was acting contrary to XYZ's rules. (2) Ralph may be successful in a claim against XYZ based on the principle of private nuisance. (3) While Ralph will probably succeed in a claim against XYZ based on negligence, he will not have any remedy against Hurston. (4) Ralph would probably have a successful claim against XYZ based on the provisions of the Occupiers Liability Act.

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298. Which one of the following does NOT form part of the definition of market value? (1) Value is a price that is reasonably expected to prevail. (2) Value is based on the personal opinion of the value to the owner. (3) Value is determined at a particular point in time. (4) The buyer and seller must be bargaining at arm's length.

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359. With respect to the valuation of real property, value to the owner is most often required to be estimated in the context of: (1) churches and heritage buildings. (2) investment analysis. (3) a stable, unchanged market. (4) mortgage lending practice.

1000. Mr. Dunigan has agreed to sell his prime Vancouver home to his friend Mr. Flutie. Mr. Flutie's offer consists of $55,000 cash and financing the remainder by way of a vendor take-back mortgage. The vendor take-back mortgage would be written for $375,000 at 11.75% per annum, compounded semi-annually, an amortization period of 25 years, a term of 5 years and monthly payments. Market rates of interest for equivalent mortgages are currently 13% per annum, compounded semi-annually. What will be the market value of Flutie's offer? (1) $588,804.16 (2) $358,848.90 (3) $413,848.90 (4) $400,078.42

103. Which one of the following is NOT a course of action that the Real Estate Council can take following a disciplinary hearing. (1) Reprimand the licensee (2) Order the cancellation of the licensee's licence (3) Suspend the licensee from participation in the Multiple Listing Service®. (4) Order the licensee to enroll in and complete a course of studies or training prescribed by the Council

109. A borrower is arranging a mortgage with Nicety Finance Company. The loan amount is $175,000, the interest rate is 4.5% per annum, compounded semi-annually, the amortization period is 20 years and the contractual term is 2 years. If payments are made monthly and rounded up to the next higher $10, calculate the outstanding balance at the end of the loan term. (1) $144,157.84 (2) $157,323.50 (3) $163,479.73 (4) $151,232.96

113. A contract of purchase and sale is: (1) a contract to make a contract. (2) evidence of intent to be bound, but not enforceable. (3) a binding contract if properly drafted. (4) All of the above.

116. Which one of the following types of authority would NOT provide an agent with sufficient authority to create a binding contract between his principal and a third party? (1) implied authority (2) apparent authority (3) assumed authority (4) express authority

120. Mike Moneylender, an investor in mortgages, would prefer to earn which of the following yields? (1) j = 9% 2 (2) j = 9.2025% 1 (3) j = 8.9% 365 (4) Mike would be indifferent amongst the 3 yields quoted above

121. After a borrower has given a mortgage of real property, the borrower's remaining interest is described at law as: (1) a right of foreclosure. (2) a common law mortgage. (3) the equity of redemption. (4) None of the above.

126. What is an assessment notice? (1) A demand for payment of a specified amount of property taxes (2) A notice issued by the municipality stating the date on which the assessor will appraise your property (3) An extract from the assessment roll concerning a specific property (4) A notice of the cost to the property owner of a local improvement project

130. In the comparative approach of appraisal, one method of making final adjustments to price is to use a Rating Grid. In using a Rating Grid, it is MOST important that: (1) the final market value be determined by averaging the comparable sale prices (after adjustments). (2) the comparable properties have the same lot size as the subject property. (3) the subject property be the basis of comparison and all comparables be adjusted to it. (4) the comparable properties have the same cost of improvements as the subject property.

133. Vincent and Pamela signed a standard contract of purchase and sale for the sale of Vincent's property. Vincent agreed to give title free of encumbrances. Pamela is putting on a new mortgage. Costs are as follows: Legal fees for conveyance $400.00 Legal fees to discharge an existing mortgage on title $100.00 Which one of the following statements is correct with respect to the statement of adjustments? (1) For her share of the above fees, Pamela will have a debit of $500. (2) Vincent should be credited $100. (3) Pamela should be debited $400 and Vincent should be debited $100. (4) Pamela should be debited $400 and credited $100.

138. A private nuisance involves some use of a person's own property: (1) which endangers the safety or comfort of the public or some major section of the public. (2) which amounts to a trespass. (3) which interferes with the use and enjoyment of, or causes damage to the property of another. (4) which is not described in (1), (2) or (3) above.

141. One way that housing styles can be classified is by the structural method used in construction. Which one of the following terms does NOT describe a type of structural method? (1) log (2) concrete block (3) vaulted ceiling (4) post, beam and plank

144. Violet has agreed to sell her home to Parker for a price of $150,000. Parker has paid a deposit of $15,000 directly to his brokerage. There is a mortgage registered against title that has an outstanding balance of $71,000, which Parker will assume. Parker will also be receiving financing, by way of a second mortgage, for $34,000. Property taxes of $1,095 were not paid by Violet by the due date; therefore, a penalty of $105 has been assessed. The outstanding property taxes and penalty will be paid by the conveyancer from the sale proceeds. A real estate commission of 6% of the purchase price is payable. Conveyancing fees for this transaction are $600. The adjustment, completion and possession date is August 31st. It is NOT a leap year and property transfer tax is payable. What is the amount that Parker requires to complete this sale? (1) $30,969.00 (2) $31,869.00 (3) $32,469.00 (4) $103,469.00

315. Which of the following is a liability on a financial statement? (1) depreciation expense (2) accumulated depreciation (3) salaries payable (4) both (1) and (3)

149. Consider the following statements regarding the income method of appraisal. A. Net Operating Income is a measure of return on the equity portion of a property's value. B. Items specific to an owner or investor are omitted in the calculation of Net Operating Income. C. Net Operating Income does not consider depreciation, income tax or debt service. D. The income method of appraisal is only used for apartment buildings. Which of the above statements are TRUE? (1) All of the above statements are true. (2) Only statements A and C are true. (3) Only statements B and C are true. (4) Only statements A and D are true.

153. Larry and Theresa orally agree that Theresa will lease 10 acres of farmland owned by Larry for 5 years. As part of the agreement Larry agrees to build a barn which he does at a cost, to him, of $10,000. Which one of the following statements is true? (1) The lease agreement is not enforceable by Larry because it is neither in writing nor signed by Theresa as is required by section 59 of the Law and Equity Act. (2) Section 59 of the Law and Equity Act does not apply to lease agreements. (3) The lease agreement may be enforceable by Larry because he has altered his position by spending $10,000 on a new barn in reliance on the lease. (4) The lease agreement is void because it is not in writing.

155. There are many reasons why a property might sell for a price which is different from its current appraised value. Which of the following could be a reason? (1) The property is in a state of long-term disrepair. (2) The property is located beside a fertilizer plant. (3) The appraisal was done by the cost method. (4) All of the above

159. The practice of recognizing expenses as they are incurred, rather than when they are paid for, is a characteristic of: (1) the cost principle. (2) the recognition principle. (3) the matching principle. (4) the conservation principle.

163. Where would the commission appear on the statements of adjustments? (1) It would appear as a credit on the buyer's statement and as a debit on the seller's statement. (2) It would appear as a debit on the buyer's statement and as a credit on the seller's statement. (3) The commission only appears on the seller's statement. (4) The commission only appears on the buyer's statement.

169. The fact that a joint tenant's interest does not pass to a personal representative on death is referred to as: (1) an estate in inheritance. (2) a tenancy in common. (3) the right of survivorship. (4) a life estate.

170. David Jones is being sued for creating a nuisance. He makes the following arguments: A. The activity which is involved benefits the public. B. The damage he has created is trifling and of little consequence. C. He has not been negligent in carrying out the activity. D. The activity is authorized by statute and cannot be carried on without creating a nuisance. Which of the above is a valid defence to the lawsuit? (1) A, B, C and D (2) A and D (3) B and D (4) A and C

175. A building scheme is: (1) a special example of a group of easements attaching to two or more lots in a development. (2) used by developers to protect the buyer's rights to build according to their own tastes. (3) a set of restrictions on a development used to maintain uniformity. (4) a document filed with the disclosure statement on a conversion of an existing building to a condominium.

176. A "periodic" tenancy is: (1) a term lease. (2) a lease for a certain period of time. (3) a tenancy which automatically renews itself on the last day of the term for a further term of the same length until it is terminated by either party upon proper notice. (4) a tenancy which is created in a commercial context after the entering of the lease and prior to the entering of possession by the tenant.

177. Victor is selling his house to Paula with an adjustment date and a possession date of August 16th, and a completion date of August 14th. He is concerned about the fact that he just filled his oil tank. Which one of the following is TRUE? (1) The conveyancer will give Victor a debit on the statement of adjustments for the oil in the tank. (2) Victor will lose the cost of his oil. He should not have filled the tank. (3) Victor could arrange to have a reading done on the adjustment date and make an adjustment privately with Paula for the cost of the oil remaining in the tank on that date. (4) The cost of oil remaining in the tank must be calculated as at the completion date and Paula must reimburse Victor for that amount.

185. Which one of the following is NOT a rationale for government regulation of land use? (1) protection of property values (2) public health and safety (3) limiting the power of land developers

189. A seller is willing to sell his house, by way of a take-back mortgage, for $90,000. The seller demands 24 monthly payments, and payment of the outstanding balance in the amount of $75,000 with the 24th payment. The seller wishes to earn an effective rate of 15% on his money. What is the monthly payment required? (1) $1,664.80 (2) $7,048.03 (3) $1,599.23 (4) $ 720.60

197. How much should an investor be willing to pay for a property that is expected to sell for $60,000 in three years if he desires a yield of not less than j2 = 14%? (1) $40,498.29 (2) $36,648.83 (3) $39,980.53 (4) $48,977.87

199. John makes the following offer to Mary. "I will pay you $500 to put a new rose bed in my garden". If Mary accepts, what is the result? (1) There is no contract because there is no consideration. (2) The promise to pay is past consideration and therefore no contract exists. (3) An enforceable contract has been formed if an intention to create a legal relationship exists. (4) There is no contract because the contract is not in writing.

200. After the contractual right to redeem has passed on a mortgage: (1) the borrower must give up the mortgaged property. (2) the lender is the owner of the mortgaged property. (3) an equitable right to redeem still exists. (4) the borrower owes a higher rate of interest on the arrears than on the principal if the borrower redeems.

201. When a contract is executed under seal, the seal: (1) constitutes a written acceptance. (2) takes the place of the signature of the offeror and offeree. (3) stands in the place of consideration. (4) represents intention.

208. An offer of $235,000 is accepted, comprised of a cash down payment of $55,000 and a vendor-supplied loan of $180,000 at 4% per annum, compounded semi-annually. The loan has an amortization period of 25 years, a term of 5 years, and calls for monthly payments rounded up to the next higher dollar. Market rates of interest for equivalent mortgages are currently 9% per annum, compounded semi-annually. The market value of the offer is: (1) $146,960.00 (2) $235,000.00 (3) $201,690.44 (4) $192,158.00

209. The interest that is acquired by a buyer of a strata lot is: (1) a fee simple interest only. (2) a joint tenancy with all of the other strata lot owners. (3) a fee simple interest in the strata lot and a fee simple interest, as a tenant in common with the other strata lot owners, in the common property. (4) a share in the strata corporation in proportion to the unit entitlement.

210. The Health Act: (1) establishes public health departments under federal jurisdiction that are responsible for maintaining the public health. (2) is a statute through which the provincial government administers public garbage disposal in urban areas. (3) provides that a local public health department may determine whether or not a subdivision of lands, not served by a municipal sewer system, can be adequately served by a septic tank system. (4) All of the above statements are true.

216. Which of the following statements about the principle of indefeasibility is TRUE? (1) Legal mortgages, but not equitable mortgages, are guaranteed by the principle of indefeasibility in British Columbia. (2) The principle of indefeasibility provides that where a buyer deals with a registered chargeholder the buyer will acquire good title. (3) In British Columbia there are a number of exceptions to the principle of indefeasibility. (4) The principle of indefeasibility is consistent with the common law doctrine of the void deed.

217. Kent rented his Kerrisdale house to Lisa for a fixed term of three years commencing July 1, 2001 and terminating on June 30, 2004 for an annual rent of $12,000 payable in equal monthly installments on the first day of each month. On April 12, 2003 Lisa abandoned the premises without giving notice to Kent, and without paying the rent for April. The B.C. Residential Tenancy Act requires Kent to: (1) hire a bailiff to distrain Lisa's goods left on the premises to compensate Kent for the rent in arrears. (2) limit his claim against Lisa for arrears of rent to the amount of the security deposit provided by her. (3) attempt to re-rent the premises and mitigate his damages. (4) sue Lisa for the rent due for the remaining term of the lease without any obligation for Kent to account to Lisa for the security deposit and accrued interest.

304. Which of the following statements respecting condominiums is TRUE? (1) Each strata lot is entitled to one vote which is given a proportionate decision making value by the strata council in accordance with the unit entitlement of the particular lot. (2) A strata corporation for a residential condominium complex which passes a bylaw severely restricting the number of lots which may be leased may restrict any renewals of existing leases until the total number of leased lots in the complex complies with the bylaw. (3) A bylaw which is passed by a strata corporation cannot be enforced against a strata lot owner unless or until it has been filed in the appropriate land title office. (4) The owners of the strata lots which are on the top floor of a residential condominium complex also own the airspace above their individual lots; however, the Strata Property Act restricts the use of the airspace to only those uses which are approved by a special resolution of the strata corporation.

305. With respect to bylaws in a strata development, which of the following statements is TRUE? (1) Bylaws are passed by special resolution of the strata council. (2) Bylaws may limit an owner's right to lease a strata lot if it is a commercial condominium complex. (3) Bylaws provide for the control and management of the strata lots and common property. (4) All of the above statements are true.

310. In British Columbia there are three basic requirements for an easement. Which one of the following is NOT a requirement? (1) There must be a dominant and servient tenement. (2) The easement must accommodate the dominant tenement. (3) The dominant and servient tenements must be owned by different parties. (4) The easement must be capable of forming the subject matter of a grant.

312. Corey has offered $431,000 for a house, providing he is able to obtain acceptable financing. The house lists for $442,000, but the lender has determined the lending value is $440,000. The lender requires a loan-tovalue ratio of 80% and a gross debt service ratio of 32%. Property taxes are $2,750 per year and Corey's annual gross income is $75,000. If the interest rate is 6% per annum, compounded semi-annually, the amortization period is 20 years, and payments are made monthly, what is the maximum amount this lender will advance, rounded to the nearest $10? (1) $352,000 (2) $230,530 (3) $248,650 (4) $320,640

324. Why is the sub-market for single-family residences considered to be more perfect than other real estate submarkets? (1) Buyers and sellers do not necessarily attempt to achieve the greatest profit. (2) Each property is unique. (3) There is a more abundant flow of market information relating to current prices. (4) There are a small number of buyers and sellers relative to the total number of properties.

333. A real estate appraiser would NOT value: (1) an existing rental agreement of a warehouse. (2) the right to use airspace at the top of a highrise office building. (3) the legal interest in cattle on agricultural land. (4) a fee simple interest in a two-bedroom apartment.

334. An agency contract that specifies that the real estate brokerage shall be the sole agent for the owner with respect to the sale of property, is called: (1) an open listing. (2) a general listing. (3) an exclusive listing. (4) a restricted listing.

336. In using the cost method of appraisal, the MAJOR difficulty is experienced in calculating: (1) curable physical depreciation. (2) curable functional depreciation. (3) incurable physical depreciation. (4) replacement cost of the building as new.

339. "Reproduction cost" is best defined as: (1) the current construction cost of a building which would provide the same utility as the subject property. (2) the current cost of moving the building to a site where the building would represent the highest and best use of that site. (3) the current cost of constructing an exact replica of the subject property. (4) the original cost of construction, adjusted for inflation.

341. Which one of the following real properties must be assessed at market value for purposes of real property taxation? (1) a small house, surrounded by warehouse properties, owned continuously by one owner since January, 1946 (2) Shell Oil pipelines (3) residences owned by elected government officials (4) land in the agricultural land reserve which is also classified as farmland under the Assessment Act

343. Given the following information, calculate the cash proceeds of sale to the seller on completion: Price: $195,000 Deposit paid to brokerage: $ 15,000 Financing: 1st mortgage of $71,000 to be assumed 2nd mortgage of $34,000 has been arranged by the buyer. Taxes: The taxes in the amount of $1,500 are not due before the completion. Commission: 6% of sale price Conveyancing Fees: $600 Adjustment, Completion and Possession Dates: June 30th Note: It is not a leap year. (1) $ 96,560.27 (2) $ 111,539.73 (3) $ 111,560.27 (4) $ 110,960.27

351. Which of the following is NOT generally required to create an enforceable contract of purchase and sale? (1) the names of the buyer and the seller (2) a description of the property being sold (3) the completed statements of adjustment (4) the price to be paid in the sale

360. The amount of shopping effort required by a consumer often depends on the type of goods he or she is looking to buy. Which of the following correctly lists goods from the least amount of effort required to the most amount of effort required? (1) Convenience goods, shopping goods, specialty goods, unsought goods. (2) Shopping goods, convenience goods, unsought goods, specialty goods. (3) Unsought goods, convenience goods, shopping goods, specialty goods. (4) Convenience goods, unsought goods, specialty goods, shopping goods.

363. When completing a listing contract, a licensee should: (1) rely on all of the information provided by the seller. (2) only rely on the seller's information if the seller says he/she has checked it. (3) independently check information with the appropriate authority where possible. (4) use the seller's information, but advise all buyers that it is unreliable.

367. The Personal Information Protection Act (PIPA) regulates the information that is collected and used by all licensees. Which of the following are PIPA privacy principles? A. Provide recourse B. Obtain consent C. Identify the proposal D. Limit use, disclosure and retention (1) A and C only (2) B, C, and D only (3) A, B, and D only (4) All of the above

372. Charlie Brown and his sister, Sally, moved in next door to the house owned by Lucy VanPelt. Every afternoon, Lucy's friend and tenant, Schroeder, a concert pianist, would practise on the VanPelt grand piano. Unfortunately, Sally, who worked the night shift, was a very light sleeper, and was unable to sleep during Schroeder's rehearsals. At Sally's request, Charlie explained to his new neighbour that the piano playing caused the Brown house to vibrate, and Sally could not sleep. Lucy just replied, "Too bad," and slammed the door on Charlie's face. Which of the following statements is TRUE? (1) Lucy could successfully defend an action in private nuisance brought by the Browns for the piano vibrations by pleading volenti non fit injuriae, that is, that the Browns moved to the nuisance. (2) Sally's condition of being a light sleeper would be a relevant factor in measuring the reasonableness of the noise, and Lucy will have to consider Sally's condition in assessing her own conduct. (3) In order to be successful in a private nuisance suit, Charlie and Sally must prove that they have either suffered some interference with the use and enjoyment of, or physical damage to, their property. (4) If Charlie and Sally brought an action, only Lucy, as the landlord and occupier of the land would be liable for the nuisance.

373. Which of the following is the main reason that interest accruing loans are normally written for short terms? (1) For long-terms, borrowers generally prefer to make periodic payments. (2) Total payments decline over the term of an interest accruing loan, so the sooner the loan is refinanced, the higher the potential return to the lender. (3) The lender's return and original investment are at risk for the entire term of an interest accruing loan. (4) The outstanding balance of an interest accruing loan declines over the term of the loan, so it is prudent for the lender to keep the term short.

375. Where a condition precedent is inserted in a contract of purchase and sale, a licensee might also include a "time clause". Which of the following definitions accurately describes such a clause? (1) The clause requires the removal of the condition precedent within a reasonable time. (2) The clause states specifically the date by which the condition precedent must be removed. (3) The clause permits the seller to require the removal of the condition precedent within a specified time, if a better offer is received. (4) None of the above three statements accurately describes a "time clause".

376. Carolyn has recently received an interest only loan for $80,000 to operate a food cart in downtown Vancouver. The loan has an interest rate of 9% per annum, compounded quarterly, and requires interest only payments every quarter. Calculate the quarterly interest only payments that Carolyn makes if the duration of the loan is 18 months? (1) $1,200 (2) $3,600 (3) $1,800 (4) $7,200

381. A tenancy which automatically renews itself on the last day of the term for a further term of the same duration until terminated by either party with proper notice is called a: (1) tenancy at will. (2) tenancy at sufferance. (3) periodic tenancy. (4) term certain tenancy.

382. A borrower has proposals from four lenders to advance funds of $122,000 as a mortgage loan. Payments on each loan will be made annually. A B C D Face Value 125,500 125,000 124,000 123,000 Amortization Period 8 yrs 5 yrs 7 yrs 6 yrs Rate: j = 6.6% 6.5% 6.75% 7% 2 Based on effective annual interest rates on funds actually advanced, which alternative should the borrower choose? (1) A (2) B (3) C (4) D

393. Alexander Management Company Limited has just arranged a $1,450,000 mortgage loan to finance their purchase of a small retail shopping complex. The interest rate is 12.75% per annum compounded semiannually; the amortization period is 20 years and the term of the loan is 10 years. Payments are to be made quarterly and rounded up to the next higher dollar. Which one of the following statements is FALSE with regard to this contract? (1) The quarterly payment will be $49,701. (2) The outstanding balance at the end of the term will be less than $1,123,500. (3) Under the terms of the Canada Interest Act, the total outstanding balance on this loan can be prepaid at any time after five years from the initiation date of the mortgage. (4) The lender has no right to demand payment of the total outstanding balance at any time prior to the end of the contractual term provided the borrower meets all contractual obligations.

401. Who owns the common property of a strata corporation? (1) The owner-developer of a strata project, as a trustee for the individual strata lot owners. (2) The strata corporation. (3) Each individual strata lot owner owns a share of the common property of a strata corporation in the proportions set out in the Schedule of Unit Entitlement. (4) None of the above.

407. Given a nominal rate of interest of 5%, the greater the frequency of compounding: (1) the lower the effective annual rate. (2) the higher the rate per compounding period. (3) the higher the yield to the lender. (4) the lower the payments to the borrower

410. ABC Inc. paid $155,000 for an asset on which the Income Tax Act allows capital cost allowance (CCA). The asset was purchased five years ago, and will be disposed at the end of this year. How much CCA will be claimed by ABC Inc. at the end of this year? (1) $7,750 (2) $5,997 (3) $0 (4) Not enough information is given

418. Where an agent, with express authority, enters into a contract with a third party on behalf of his principal and the third party knows he/she is an agent, who will the law recognize as parties to that contract? (1) the agent and the third party (2) the agent, the principal and the third party (3) the principal and the third party (4) none of the above combinations

420. Which one of the following is NOT a remedy available for a private nuisance? (1) abatement (2) damages (3) specific performance (4) injunction

433. Under the B.C. land title system, a mortgage is registered as a charge against the property of which the mortgagor is: (1) the first registered charge holder. (2) the last registered charge holder. (3) the registered owner. (4) not registered.

437. The Real Estate Council is NOT responsible for which one of the following: (1) holding hearings to investigate the conduct of licensees (2) making bylaws that establish the information required on a licence application (3) enforcing the provisions of the Code of Ethics (4) providing for an educational programme for licensees

442. Retained earnings on a company's financial statements is best defined as the: (1) company's profit for current year. (2) company's profit for the current year which was retained for future investment. (3) accumulated total of the company's profits (less losses) less dividends since incorporation. (4) accumulated profits since incorporation used for investing in fixed assets.

447. Josie Purchaser arranged a mortgage loan for $175,500 at 9.25% per annum, compounded semi-annually, with a 25-year amortization period and monthly payments. What is her interest cost for the first month? (1) $1,482.01 (2) $1,183.30 (3) $1,327.46 (4) $154.55

453. Frank sends a telegram to Joe saying, "I will sell you 200 dozen widgets for $1,200." Before Joe receives the telegram, he sends a telex to Frank offering to buy "200 dozen widgets for $1,200." Given this information, which of the following statements is true? (1) Frank and Joe have formed a binding and enforceable contract. (2) Because the requirement of writing contained in section 59 of the Law and Equity Act has not been complied with, a contract has not been formed. (3) There has not been a valid offer and acceptance and therefore a contract has not been formed. (4) Both (2) and (3) are true.

465. Where a seller sells a unit of subdivided land in British Columbia and the subdivision is a development property: (1) the Real Estate Development Marketing Act has no jurisdiction. (2) the Real Estate Council's Policy Statements regarding the form and content of disclosure statements will apply. (3) the buyer has the right to rescind the purchase agreement at any time by providing appropriate notice, if the seller has not provided a disclosure statement to the buyer. (4) None of the above are correct.

467. Using the cost method of appraisal, what will be the market value of a property with a 50,000 square foot building if construction costs new are $50 per square foot, land value is $750,000, and total depreciation on the structure to date is estimated to be 10%? (1) $3,250,000 (2) $2,500,000 (3) $3,000,000 (4) $2,250,000

472. Sally contracted to purchase sewing machines wholesale at $100.00 each, with a delivery date of November 30. The wholesaler did not deliver the machines until December 31. Sally had a buyer on November 30 willing to pay $250 each for the machines but by December 31 the value had dropped to only $75.00 each. Which is Sally's best remedy against the wholesaler? (1) quantum meruit (2) specific performance (3) damages (4) injunction

475. Where a buyer makes an offer to purchase land, and does NOT pay a deposit: (1) acceptance by the seller will not form a contract. (2) the licensee should personally pay $1.00 of his or her own money into the brokerage's trust account. (3) a contract will be formed on acceptance without existence of a deposit. (4) none of the above statements is true.

483. The Code of Ethics and Standards of Business Practice is: (1) the maximum standard adopted by real estate boards to govern REALTORS®' conduct. (2) a collection of rules governing real estate licensees which are enforceable by the Courts. (3) a set of professional rules of conduct which must be adopted as the minimum standard by real estate boards. (4) a restatement of the rules found in the Real Estate Services Act.

484. Marissa Campbell owns a forty-five year old apartment building on a street in Vancouver. All six suites are rented out at below market rents and the current leases are not up for renewal for another two years. The apartment building is situated in a block in which all of the other apartment buildings have been torn down and replaced with office buildings. In addition, the apartment is situated on land zoned for commercial purposes. Which of the following statements is true about the state of Marissa's investment? A. Marissa's apartment is "ripe for re-development". B. The tenants' rents will now increase. C. Marissa's apartment possesses latent value. D. Marissa's apartment is currently at highest and best use. (1) Only A is true. (2) C and D are true. (3) A and C are true. (4) A and B are true.

485. Which of the following statements comparing cooperatives and condominiums is TRUE? (1) Both condominiums and cooperatives are created by filing a plan in the land title office. (2) Buyers of both condominiums and cooperatives acquire a fee simple interest in the real property on which the purchased unit is situated. (3) Buyers of condominiums will generally find it easier to finance their purchase than will buyers of cooperatives. (4) Both owners of condominiums and owners of cooperatives are equally free to sell their units to whomever they wish.

487. An investor plans to pay $200,000 for a vacant lot which he feels will sell at the end of three years for $280,985.60. What effective annual interest rate will the investor earn? (Ignore real property taxes) (1) 40.4928% (2) 13.4976% (3) 12% (4) 11.3865515215%

490. Which one of the following is the BEST method of accounting for cyclical repairs in the appraisal of an income producing property? (1) Increase the capitalization rate. (2) Deduct the amount of the repair in the year it is expected to be incurred. (3) Apportion the amount of the repair to an annual allowance. (4) Reduce the eventual sales price of the property to reflect depreciation.

495. A nominal interest rate of 8% per annum, compounded semi-annually is NOT equivalent to: (1) an effective annual rate of 8.16%. (2) 1.980329027186% per quarter. (3) 4.85006200803% per annum, compounded monthly. (4) 7.84498557561% per annum, compounded daily.

496. Which one of the following is NOT a required characteristic of an offer? (1) It must be made in clear and unambiguous terms. (2) It must demonstrate a serious intention to be bound. (3) It must be made in writing in order to be enforceable against the offeror. (4) The terms stated must be clear enough that both offeror and offeree clearly understand the extent of their obligations.

497. Which of the following statements about the law in British Columbia governing occupiers liability are TRUE? A. The language of the Occupiers Liability Act expressly preserves the common law distinction between licensees and invitees. B. Under the statute there can be more than one occupier of land at the same time. C. The occupier's liability does not extend to risks willingly assumed by a visitor as his or her own risks. D. The language of the Occupiers Liability Act would probably allow for the imposition of a lesser standard of care to be owed to a trespasser than to a person with permission to be on the premises. (1) A, B and D are true. (2) A and D are true. (3) B, C and D are true. (4) A, B, C and D are true.

499. Which is NOT an example of a type of zone one might encounter in a zoning bylaw? (1) a commercial zone (2) an industrial zone (3) a school zone (4) an agricultural zone

513. Charlie enters into a fixed term tenancy agreement with Lucy for the rental of a suite during the school year. The agreement is for eight months beginning on September 1, 2004. The agreement does not provide that Charlie must vacate the rental unit when the term expires. In April, Charlie finds a summer job and decides to remain in the suite after the original lease expires. He pays Lucy one month's rent on May 1, 2005, which she accepts. No new agreement is entered into. Two days later, Lucy learns that her brother, Linus, has been transferred back to Vancouver and is expected to arrive at the end of the month with his new wife, Sally. Linus has indicated that he wishes to live in the suite now occupied by his old friend Charlie. Which of the following statements is TRUE? (1) Under the termination provisions of the Residential Tenancy Act, Lucy can give Charlie notice of the end of the tenancy agreement since she intends, in good faith, for her brother to occupy the premises. (2) Lucy just has to wait until the end of May, and can evict Charlie at any time after that, since the original fixed term lease has expired and there is no new tenancy agreement. (3) If Linus decides to purchase the premises, and Lucy provides Charlie with at least two months' notice and pays an amount equivalent to one months' rent, he must move in within a reasonable time after the effective date of the notice and stay for at least 6 months or else a court may order that Charlie be paid an amount equivalent to two months' rent. (4) Regardless of whether Linus chooses to purchase or rent, Lucy can give at least two months' notice, and the end of tenancy would not be effective until July 31, 2005 at the earliest.

515. If an offer is made by mail and the acceptance is mailed, when is the acceptance effective? (1) when it is received by the offeree (2) when it is received by the offeror (3) when it is posted (4) from the date and time of the postmark on the envelope

518. Which one of the following lists accurately describes the correct criteria, as agreed upon by negotiation experts, for a successful negotiation? (1) Efficiency, a zero-sum game, minimal wasted resources, preservation of the relationship. (2) Efficiency, satisfaction of both parties, distributive results, minimal wasted resources. (3) Efficiency, satisfaction of both parties, minimal wasted resources, preservation of the relationship. (4) Efficiency, a zero-sum game, satisfaction of both parties, preservation of the relationship.

520. Garfield, a trading services representative, was the listing and selling representative with respect to the sale of Madison's house to Tyler. After the sale completed, Tyler discovered that the main and lower floors of the house sloped. Garfield, Madison and Tyler had not noticed this before, although the defect was discoverable using ordinary diligence. Based on the above, which of the following statements is TRUE? (1) Garfield had a duty to inspect the premises for soundness and structural defects before advertising it for sale. (2) The sloping floor is a patent defect which should have been brought to Tyler's attention. (3) Neither Garfield nor Madison are liable to Tyler for failing to bring the defect to Tyler's attention. (4) Both (1) and (2) are true statements.

524. The expenses incurred by the Real Estate Council are covered by: (1) the Superintendent of Real Estate. (2) the provincial government's ministry responsible for the enforcement of the Real Estate Services Act. (3) assessments on all licensees. (4) real estate boards.

525. Where a principal adopts a contract that the agent entered into without any authority: (1) the third party is not obligated to honour the contract. (2) the agent cannot be given authority after the fact. (3) the agent is given authority retroactively to enter into that contract. (4) the principal can sue the agent for breach of warranty of authority.

528. Which of the following statements about the trial process in British Columbia are TRUE? A. Our common law system is based on an adversarial process in which each of the two opposing parties presents its point of view to an impartial trier of fact whose decision is binding on both parties. B. A plaintiff commences an action by filing a notice of civil claim in the court registry; once served with the notice of civil claim, the defendant can answer by denying some or all of the claims set out in the plaintiff's notice of civil claim by filing a response to civil claim. C. One of the major reasons why most claims are settled out of court is that the discovery process allows the parties to see more plainly the strengths and weaknesses of their positions. D. The plaintiff and defendant alternate in calling their witnesses. (1) All of the above are true. (2) Only A and B are true. (3) Only A, B, and C are true. (4) Only B, C, and D are true.

533. Which of the following is NOT a characteristic of a fee simple estate? (1) it is held subject to the Crown's land use regulations (2) it may be expropriated by the Crown (3) it is a leasehold interest (4) it is held subject to other individuals' common law rights

534. Under the Assessment Act the Property Assessment Review Panels may hear complaints when a property has been assessed at too high or too low an amount. Under the Act, where the complainant is someone other than the owner: (1) the appellant has to notify the owner. (2) the appellant may orally present a notice of complaint to the assessor. (3) the assessor must deliver notice of the hearing to the owner. (4) the assessor has to prove that the property is fairly taxed.

545. An appraiser has located a comparable where the sale price was $220,000, comprised of $105,000 cash and a $115,000 vendor take-back mortgage written at 3.5% per annum, compounded semi-annually, with monthly payments sufficient to fully amortize the loan over 20 years. Assuming that the market rate for similar financing is 5% per annum, compounded semi-annually, what should the appraiser regard as the sale price of the house? (Round answer to the nearest $100). (1) $101,300 (2) $220,000 (3) $206,300 (4) $192,000

547. Norm Abrahm has offered $231,000 for a house, providing he is able to obtain acceptable financing. The house lists for $242,000, but the lender has appraised the house at $238,000. The lender requires a loan-tovalue ratio of 80% and a gross debt service ratio of 28%. Property taxes are $1,750 per year and Mr. Abrahm's annual gross income is $85,000. If the interest rate is 12% per annum, compounded annually, the amortization period is 15 years, and payments are made monthly, what is the maximum amount this lender will advance, rounded to the nearest $10? (1) $143,250 (2) $178,500 (3) $158,270 (4) $190,400

549. The most effective remedy available to a landlord when a tenant does not pay the rent in a commercial tenancy is: (1) an injunction. (2) a garnishing order. (3) distress. (4) a demand letter.

554. A comparable has been identified to value a subject property. The 2,400 square foot subject property has 4 bedrooms, 4 bathrooms, an alarm system, and does not have a vendor-supplied mortgage. The 2,400 square foot comparable has a sale price of $225,500, 3 bedrooms, 3 bathrooms, an alarm system, and no vendorsupplied mortgage. If the market value of a bedroom is $4,000, the market value of a bathroom is $5,700, the market value of an alarm system is $4,500, and above a 1,900 sq. ft. benchmark, each 100 sq. ft. is worth $6,000, this comparable will have to be adjusted for bedrooms and bathrooms by: (1) -$4,000 and -$5,700 respectively. (2) +$6,400 and +$5,700 respectively. (3) +$4,000 and +$5,700 respectively. (4) +5,700 and +$4,000 respectively.

555. In order for a person to make a successful claim against the Assurance Fund in B.C., he or she must prove three of the following. Indicate the EXCEPTION. (1) He or she has lost an interest or estate in land. (2) He or she cannot recover that interest or estate by court action. (3) The person who deprived the injured party of his or her interest or estate in land has resold the interest to a bona fide purchaser for valuable consideration. (4) If the Land Title Act had not been passed, he or she would have recovered the interest in land by a court action.

557. A seller refuses to acknowledge the waiver of a condition precedent from a contract of purchase and sale. Assuming that the condition was made exclusively for the benefit of the buyer and the waiver was made prior to the expiry of the condition precedent, the agreement is: (1) one which is not binding on either party. (2) voidable at the option of the seller. (3) binding. (4) voidable at the option of the buyer.

558. When, with respect to commercial tenancies, there is said to be an implied covenant of quiet enjoyment, it means: (1) that the landlord will refrain and will cause others to refrain from entering into competition with the tenant's business. (2) that the tenant will conduct his affairs in such a manner as not to violate local noise bylaws and that, if he/she does, he/she will be liable for any fines or penalties levied. (3) that the landlord provides assurance to the tenant against the consequence of a defective title involving the landlord or those lawfully claiming under him/her. (4) that the landlord will ensure that all tenants conduct their affairs in such a manner as not to violate local noise bylaws.

561. An agent owes a duty to the principal not to make a secret profit. This means that an agent must keep the principal fully informed about: (1) all of the agent's personal business dealings. (2) the agent's annual tax return. (3) all of the actual benefits and prospective benefits accruing to the agent in a transaction. (4) only the actual profits received by the agent.

564. A Board of Variance must hear and determine appeals in a number of important areas. Which one of the following is NOT an activity of a Board of Variance? (1) to review a decision of a building inspector with regard to damage to a nonconforming use (2) to hear an appeal where the enforcement of a zoning bylaw will cause undue hardship (3) to amend a zoning bylaw (4) to establish a time limit within which construction of a minor variance must be completed.

568. Burt and Ernie owned, as joint tenants, a revenue producing property which was leased to Oscar. Ernie died leaving a Will which gave his interest in the property to Grover. Grover is now demanding one-half of the rent paid by Oscar. Burt refuses this request. Analyze the following statements. A. The property was held in joint tenancy and therefore Burt, the survivor, owns the entire estate after Ernie's death. B. Ernie severed the joint tenancy by bequeathing his interest in the property to Grover. Therefore, Grover is entitled to a one-half interest in the property. C. Burt and Grover now own the revenue producing property as tenants in common. D. Burt and Grover now own the revenue producing property as joint tenants. E. Grover cannot have any interest in the property because there was no interest in the property that could be disposed of by way of Ernie's Will. Which of the above statements are TRUE? (1) Only B and D are true. (2) Only B and C are true. (3) Only A and E are true. (4) Only A is true.

570. Which one of the following is FALSE with respect to the proprietorship form of business? (1) A proprietorship is terminated upon the death of the owner. (2) A proprietor must pay tax on his/her business income at personal tax rates. (3) The proprietor is liable for all debts of his business to the extent of his/her capital investment in the business only. (4) There is no legal separation of the assets of the business and the other assets of its owner.

577. A property is located in an area where most of the houses are connected to the sewer. The fact that the property in question is only connected to a septic tank creates a situation known as: (1) a patent defect. (2) caveat emptor. (3) a latent defect. (4) the Hedley Byrne principle.

624. On January 1 Abdul placed an advertisement on CQXR radio station offering squash lessons for $30 per hour. Lois heard the ad and phoned Abdul on January 3 and said "I want to take squash lessons but I'm a student, do you give a lower rate to students?" Abdul said that he only had one rate of $30 per hour. Lois said she would phone back. On January 5 Lois phoned Abdul and said she accepted Abdul's offer. Which of the following statements concerning Abdul and Lois is true? (1) The January 1 advertisement was an offer which Lois accepted on January 5. (2) The January 1 advertisement was an offer and Lois' telephone call on January 3 was a counteroffer. (3) Lois' January 3 call was a request for information and Abdul's response on January 3 was an offer. (4) Lois' January 3 call was a counter-offer and Abdul's response on January 3 was a second counteroffer.

579. Which of the following situations does NOT involve the breach of a duty owed by a licensee to a client? (1) Leigh, a trading services representative, discloses a client's bargaining position to that client's competitor. Leigh thought it would be okay to do so because the transaction took place five years before. (2) Bob receives six similar offers to purchase the house of his client, the Simpsons. He decides not to waste the Simpsons' time, so he only presents them with the four best offers. (3) Susan represents Navco Developments in its purchase of houses in Vancouver. Susan also represents Abco Inc. — a competitor of Navco — in Abco's acquisition of properties in the Cariboo. (4) Ward is a real estate licensee in Prince Rupert who deals solely with residential properties. One of his present clients expresses an interest in purchasing a warehouse and office complex for a business to be opened in Vancouver. Ward offers to fly down to Vancouver, at the expense of the client, in order to locate and negotiate the purchase. The client accepts.

590. The appraisal of condominium units using the market comparison method has some distinct differences from the appraisal of other types of real property. Which one of the following factors might be applicable to condominiums ONLY? (1) location and neighbourhood (2) quality of construction (3) common area charges (4) interest rate on the mortgage

596. The risk to a mortgagee can be reduced by: (1) increasing the amortization period. (2) reducing the monthly payments. (3) reducing the loan-to-value ratio. (4) reducing the debt coverage ratio.

599. Jennifer Joseph has lived alone in an apartment since the death of her husband ten years ago. She has just turned 60 years of age, retired from her job as a bus driver, and wants to begin gardening as a hobby to fill in her retirement years. She has found a small house which is selling at a price she can afford because it is the only residential property in an area of commercial development. The present owners, who are anxious to sell, have lived in the house for about twenty years and have developed a magnificent garden which appeals very much to Mrs. Joseph; however, she is worried about having enough retirement income to meet the mortgage payments and the property tax payments if she uses all of her savings as a down payment. Which one of the following statements is true? (1) Mrs. Joseph should apply for a reverse annuity mortgage (R.A.M.) because a R.A.M. will require lower mortgage payments than a conventional mortgage. (2) After Mrs. Joseph's purchase, the property will continue to have an assessed value for real property tax purposes which is based on its value as a residential property. (3) Mrs. Joseph may make application to defer payment of the net property tax for as many years as she owns and resides in the house. (4) If Mrs. Joseph becomes an owner-occupier, the home-owner grants will allow reduction of her taxes to no more than $350.00.

602. A constant payment mortgage is written for $48,951.77 and specifies payments of $520.00 per month for 15 years. The interest rate on this mortgage is: (1) 12% per annum, compounded semi-annually. (2) 8% per annum, compounded semi-annually. (3) 10% per annum, compounded semi-annually. (4) 11% per annum, compounded semi-annually.

603. A comparable has been identified to value a subject property. The 2,400 square foot subject property has 4 bedrooms, 3 bathrooms, an alarm system, and does not have a vendor-supplied mortgage. The 2,500 square foot comparable has a sale price of $225,800, 3 bedrooms, 3 bathrooms, an alarm system, and no vendorsupplied mortgage. If the market value of a bedroom is $3,200, the market value of a bathroom is $2,700, the market value of an alarm system is $4,500, and above an 1,800 sq. ft. benchmark, each 100 sq. ft. is worth $6,000, it can be concluded that the adjusted sale price of this comparable is: (1) $228,600 (2) $216,600 (3) $223,000 (4) $235,000

605. If the cost of developing houses is greater than their market value, what will occur in the short run? (1) costs will decrease (2) market value will increase (3) development will stop (4) the style of new housing will be changed to reflect the increased costs

613. Which one of the following statements is FALSE? (1) Where a husband and wife own property in joint tenancy and one of them dies, the other becomes the owner of the whole interest. (2) Where a joint tenant transfers his interest to a third party, the third party becomes a tenant in common with the original joint tenant. (3) Where a husband and wife own property as tenants in common and one of them dies, the other becomes the owner of the whole interest. (4) A joint tenancy becomes a tenancy in common upon severance.

614. In British Columbia under the Torrens System of land registration, if property is registered in favour of a trustee, this is shown by: (1) registering a caveat against the title. (2) registering a lis pendens against the title. (3) a notation of trust on the title. (4) none of the above procedures.

615. Mark, an experienced real estate licensee, showed a home in Lion's Bay to John who was a first home buyer. John asked Mark whether the house had termites. It was located in forested area and John told Mark that he was afraid that this location might have termite infestation problems. Mark told him that there were no termite infestation problems in the house. After the sale was completed, John discovered that the house had a serious termite problem which would cost a considerable amount to repair. On what grounds might Mark be liable to John in a lawsuit? (1) occupier's liability (2) private nuisance (3) negligent misrepresentation (4) vicarious liability

616. One or more of the following statements correctly describes the law with respect to security deposits in a commercial tenancy. A. The interest which accrues on a security deposit is always paid to the account of the landlord. B. Return of the deposit is not a personal obligation of the landlord. C. The amount of a security deposit may be freely negotiated between the two parties to a commercial lease. D. Someone who purchases the property from the landlord is obligated to repay the security deposit to the tenant. Which of the above statements is/are TRUE? (1) All of the above are true. (2) Only B and C are true. (3) Only C is true. (4) Only B, C and D are true.

620. Victoria has agreed to sell her home to Penny for $140,000. Property taxes of $2,300 have been assessed and were paid in full by Victoria on July 15th. There is an outstanding late payment penalty of $85 which Victoria has not yet paid. The adjustment and possession date is December 28th. It is NOT a leap year. Penny's share of the property taxes will appear on her own statement of adjustments as: (1) a credit of $25.21. (2) a credit of $18.90. (3) a debit of $25.21. (4) a debit of $18.90.

642. Where a licensee is personally involved in a real estate sale, which of the following is NOT a part of the disclosure requirements under the Real Estate Services Act? (1) The licensee must disclose that he or she, or an associated company or partnership, is purchasing the property on their own behalf. (2) The licensee must disclose that he or she, or an associated company or partnership, is selling their own property. (3) The licensee must disclose any other properties currently under consideration by the licensee. (4) The licensee must make the required disclosure in writing, in the required form, prior to entering into any agreement.

648. What is the amortization period of a $125,000 loan that has a term of 7 years, an interest rate of 6.5% per annum, compounded semi-annually, and monthly payments of $926. (1) 300 months (2) 240 months (3) 239.803291458 months (4) impossible to determine from the information provided

657. Where a principal adopts a contract which his agent entered into without any authority: (1) the third party is not obligated to honour the contract if he does not wish to. (2) the principal can sue the agent for breach of warranty of authority. (3) the agent is given authority retroactively to enter into that contract. (4) all of the above.

659. A friend of yours is cleaning out her real estate office and is throwing away the hard copies of all her transaction-related documents. When you ask her why, she explains that she has electronic copies of all of these documents and therefore, they are just taking up space. Which of the following statements regarding data backup and legal considerations should your friend be aware of? (1) Keeping only electronic copies of transaction-related documents is advisable and hard copies are not necessary in the real estate industry. (2) There is no need to keep hard copies because of the use of digital signatures. (3) She should retain her hard copies in case there is a question as to the authenticity or origin of the electronic documents and email communications. (4) None of the above.

662. In which one of the following situations may the landlord choose to give the tenant one month's notice of the end of the tenancy agreement? (1) Charles is renting a one-bedroom apartment in the West End of Vancouver on a month-to-month basis. He has been diligent in paying his rent on the due date each month but the landlord has recently discovered that Charles' friend, Christine, has moved into the apartment with him. (2) Jordan's warehouse is long overdue for a major renovation which cannot be completed with the present tenant in occupation. Aladdin, the tenant, has four months left on his term certain tenancy and does not wish to move. (3) On September 1st, Kirsten moved into a small house owned by Jackson without paying the security deposit of $300 requested by the rental agent and according to the terms of the tenancy agreement. On September 30th she tenders $600 for the October rent but refuses to pay the additional $300 for the security deposit. (4) MacGregor's son is moving to Vancouver and wants to live in an apartment which MacGregor owns and has rented out to Mrs. Julian for the last twenty years.

663. With respect to an insured mortgage loan, which of the following statements is FALSE? (1) In Canadian mortgage loan insurance, the lender pays the insurer a single premium, the cost of which is generally passed on to the borrower. (2) Borrowers can add the mortgage loan insurance premium to the mortgage amount. (3) Canada Mortgage and Housing Corporation (CMHC) is the only institution in Canada that provides mortgage loan insurance. (4) Federally regulated financial institutions require mortgage insurance in order to make loans with loan-to-value ratios higher than 80%.

664. Ownership of land in British Columbia includes not only the surface of the land, but also: (1) the column of airspace above it insofar as the owner can see. (2) the gold and silver below the land to a depth of ten feet. (3) any enhancements to the land whether contractually stated or not. (4) petroleum down to the centre of the earth.

670. An appraiser is using the market approach for his appraisal of a single family house. By proper adjustment the appraiser can use sales prices of all the following properties for comparison purposes, EXCEPT: (1) houses in different neighbourhoods. (2) houses with different square footage. (3) houses recently sold between related parties. (4) houses sold over six months ago.

674. Which of the following is NOT characteristic of a mortgage as an investment? (1) Smaller investors face a mortgage payment reinvestment problem. (2) Mortgages require a high initial outlay of capital. (3) Mortgages require a low degree of administrative work. (4) Mortgages are"unique", which makes them difficult to trade.

688. Robert asks Whitney to act as his agent at the auction of the effects of a deceased rock star. Robert was an enthusiastic fan of the deceased and tells Whitney that no matter what, he must become the owner of the deceased's vintage Rolls Royce which is painted in a most attractive "paisley motif". Whitney is also told that under no circumstances is she to come away from the auction without buying this automobile for Robert. At the auction, the rock star's "paisley" Rolls Royce is offered with a second "pin-striped" version of the vehicle . The two vehicles are offered as a package and accordingly, Whitney as the successful bidder purchases both vehicles for Robert. If asked to discuss Whitney's scope of authority, you would correctly answer that during the course of the fact pattern, Whitney was provided with: (1) express authority. (2) implied authority. (3) both express and implied authority. (4) neither express nor implied authority.

690. An investor plans to pay $200,000 for a vacant lot which he feels will sell at the end of three years for $320,000. What effective annual interest rate will the investor earn? (Ignore real property taxes) (1) 8.48035476425% (2) 10.1699102864% (3) 16.9607095285% (4) 12.6043147142%

696. A seller agreed to sell her home for $155,000. The buyer paid a $5,000 deposit to his brokerage. The buyer will assume the existing mortgage on title, which has an outstanding balance of $71,000. Furthermore, the buyer will be granting a second mortgage to his father for $34,000. Taxes are unpaid and overdue in the amount of $1,095, with a further penalty owing of $105. Real estate commission is 6% of the sale price. Legal fees for the transaction are $600. The adjustment, completion and possession date is August 31st. It is NOT a leap year and property transfer tax is payable in this transaction. What are the cash proceeds due to the seller? (1) $69,169.00 (2) $69,538.00 (3) $73,869.00 (4) $74,169.00

709. In order to facilitate the exchange of possible resources in a negotiation, it is important: (1) to make repeated concessions in order to get the other negotiator to follow. (2) to deliberate issue by issue. (3) to make concessions when necessary. (4) not to disclose your true interests to the other side.

716. Which of the following statements regarding generally accepted accounting principles is FALSE? (1) Revenues are recognized at the time they are earned. (2) Fiscal year ends cannot be changed at will. (3) Assets are recorded at fair market value when they are acquired. (4) Expenses are recognized at the time they are incurred.

717. Joe, a store keeper, asked Harry, a courier, to deliver some groceries for him, which Harry did. What is the result? (1) Joe does not have to pay Harry anything because Harry's actions are past consideration. (2) Harry could bring an action under the Real Estate Services Act to force Joe to pay for the services. (3) Harry could recover a reasonable amount from Joe for his services under the principle of quantum meruit. (4) Harry could bring an action under section 54 of the Law and Equity Act to force Joe to pay for the services.

721. Which of the following statements concerning a corporation's capacity to contract is TRUE? (1) Under the Business Corporations Act, a contract entered into by a company before that company exists CANNOT be ratified after the company is formed. (2) There can never be a limitation on the legal capacity of a corporation to enter a contract because a corporation can contract just as an individual person can. (3) Any person may ascertain the legal capacity of a corporation to contract by reviewing its incorporation documents maintained at its official records office. (4) None of the above are true.

722. Sally, a listing licensee, agreed with an aggressive purchaser that Sally would give part of her commission to the buyer in the event that the buyer's offer for Whiteacre was accepted by Jacob, the seller. This arrangement will result in a quick sale of Whiteacre for the price stipulated in the listing contract, which is what Jacob desperately needs. Which of the following statements is/are FALSE? A. It is the duty of the listing licensee to get the best price for the seller. B. Disclosure to Jacob by Sally is not required because the commission is Sally's to do with as she pleases and she is not making a secret profit. C. Sally should have told the buyer to offer a lower price which she could recommend to Jacob, rather than reduce her commission. D. Assuming that all the terms in the listing contract are met by Sally, she will be entitled to commission when this deal closes. (1) Only C is false. (2) Only statements B and C are false. (3) Only statements B, C and D are false. (4) None of the above statements is false.

724. Akiko Yamada vacated the property she had just sold taking all her household furniture including the following items: A. a small Persian carpet from the front hall which had been chosen especially to complement the colours in the marble on the floor B. an antique, stained glass window which was hung on two large hooks in front of the living room window C. wall-to-wall carpeting from the den which had been attached to a tack strip which, in turn, was attached to the hardwood floor D. a porch swing which was bolted to the ceiling and floor, but which was specifically excluded from the purchase price in the contract of purchase and sale What are the consequences of Akiko's actions? (1) She must replace all of the above four items. (2) She must replace items B and C because they were attached to the house. (3) She is only required to replace item C. (4) She must replace items A and C because they both had to do with floor coverings.

725. An acquaintance of yours has approached you and wants to know why the bank which may finance his purchase of a house requires an appraisal. He claims that since an appraisal is not required for an investment in stocks, an appraisal should not be required for an investment in real property. Which one of the following statements provides the BEST reasoning for your support of the bank's requirement? (1) The high turnover of real estate relative to stocks means that only an expert can keep up with changing values. (2) The local nature of the real estate market implies that the flow of information will be unlimited and easy to assemble. (3) It is difficult to find real properties that are very much alike. (4) All of the above statements are true.

726. Which of the following is the most common type of construction today for high-rise apartment buildings? (1) wood stud frame (2) steel studs and concrete topping (3) concrete framing (4) masonry walls and wood floors

727. Under the Strata Property Act, strata corporations are obligated to do certain things. Which of the following is NOT a duty the strata corporation is obliged to carry out? (1) The maintenance of property insurance on the common property. (2) The creation of an operating fund for common expenses. (3) The performance of work ordered by a competent public authority in respect of a strata lot. (4) The establishment of a contingency reserve fund.

728. Deborah is a trading services licensee. After providing her best estimate with respect to the value of Susan's property, Deborah lists the property at $600,000. Jennifer, who has learned that Susan's property is situated in the middle of an area to be redeveloped, immediately comes to Deborah with a full-price, subject-free, offer. In response to Deborah's surprise at the instantaneous results, Jennifer acknowledges that a redevelopment of the area is intended. Deborah does not advise Susan of the redevelopment as it might throw a "spanner" in the works and, in any event, she feels that a redevelopment might cause the value of Susan's property to decrease rather than rise. Susan accepts Jennifer's offer and is delighted that the property sold so quickly. Analyze the following statements. A. Deborah has breached her duty to Susan by not advising Susan of the proposed redevelopment. B. Susan does not have any claim against Deborah because she received the full listing price for her property. C. The proposed redevelopment might have affected Susan's decision to sell her property and therefore, should have been brought to Susan's attention. D. If Deborah had advised Susan of the redevelopment she would have breached the duty that she owed to Jennifer. E. As long as Deborah honestly believed that the offer was fair, she has satisfied her duty to Susan. F. Deborah could have suggested that Susan consider cancelling the $600,000 listing and re-listing at a higher price. Which of the statements are TRUE? (1) A, C, D and F (2) B, C, D and E (3) A, C and F (4) B, C, D, E and F

885. Which British Columbia Act regulates the way private sector organizations collect, use, keep secure, and disclose personal information? (1) Private Information and Disclosure Act (2) Private Sector Protection Act (3) Personal Information Protection Act (4) Privacy Collection Act

735. Which one of the following statements is FALSE? (1) The principle on which the comparative method of appraisal rests is that the price paid for a commodity will be equal to the cost of acquiring a substitute in the same circumstances. (2) In the comparative method of appraisal, "recent" refers to the period immediately preceding the appraisal date during which values have remained stable. (3) If a comparable which has vendor financing at below market rates is used in the comparative method of appraisal, the value of the below-market financing will be added to the sale price of the comparable to determine the adjusted sale price. (4) If the adjusted sale prices of five comparables are $100,000, $90,000, $95,000, $100,000 and $100,000, the appraiser could estimate the market value of the subject property to be $100,000.

737. Current assets on the financial statements of a business include: (1) owner's initial investment. (2) rents payable. (3) marketable securities. (4) all of the above.

738. Software such as word processing, picture editing, and organizational tools are generally sold to users for a price. However, some software is distributed free of charge and encourages users to pay in order to have additional functions or access to future updates. This type of software is known as: (1) openware. (2) free-source software. (3) shareware. (4) copyware.

755. As an appraiser working for a large investment firm, you have been asked to determine the value of a small commercial building which produces a net operating income of $48,700 per annum. If the market capitalization rate for similar investments is j = 20%, the market value of the property is: 1 (1) $243,573.21 (2) $240,000.00 (3) $243,500.00 (4) impossible to calculate with information given.

756. (i) is a conveyance of land as a security for a loan and carries with it the (ii) equitable right to redeem the security on payment of the debt, even after default. (1) (i) A mortgage; (ii) mortgagee's (2) (i) An agreement for sale; (ii) buyer's (3) (i) A mortgage; (ii) mortgagor's (4) (i) A deposit of the duplicate certificate of title; (ii) borrower's

757. Fred Jones wants to determine the market value of his property. Unfortunately, he lives in a sparsely inhabited region where there are no recently-sold, similar properties. However, he does know that the replacement cost (new) of his 1,350 square foot house is $38.50 a square foot. The site value estimated using the comparative method of appraisal is $37,500. Mr. Jones has not taken adequate care of his house and it has depreciated in value. There has been $12,200 of curable physical depreciation. In addition, the bathroom and kitchen fixtures are outdated; their replacement cost is $6,300. Based on the above information, what is the market value of Mr. Jones' property? (1) $51,975 (2) $89,475 (3) $70,975 (4) $77,275

778. Larry owns a large gift shop. For the past eight years Marie, a jeweller, has leased an area in the back room for use as a workshop. Larry and Marie have an oral agreement that Marie will only use the workshop area during weekday mornings when the gift shop is not busy, so as not to disturb customers with the noise of her work. Marie pays $350 each month to Larry for this right. Larry has sold the shop to Theo for use as a restaurant, but he is uncertain what to do about his long-term tenant. You correctly advise Larry that: (1) The Commercial Tenancy Act requires that "reasonable notice" of a least six months be given to Marie of Larry's intention to terminate the tenancy. (2) In order for Marie to enforce this agreement against Theo, it must be in writing and registered in the Land Title Office. (3) The agreement between Larry and Marie is not enforceable against Theo because it is only a licence. (4) The agreement is not enforceable against Larry because it does not meet the requirements of the Real Estate Services Act.

779. Kenneth, a licensed managing broker, has been sued by a buyer who relied on the advice of a representative employed by Kenneth. Evidence in the case indicated that Kenneth's representative was grossly incompetent and that Kenneth had failed to carry out his supervisory responsibilities as the managing broker. The Real Estate Council is instituting a formal disciplinary hearing to investigate the situation and both Kenneth and the representative have received the notice of hearing. Kenneth does not think that the Council can discipline him and is angry that he is being held responsible for his representative's conduct. One or more of the following statements may be FALSE. A. The Real Estate Council has the authority to subject Kenneth to a disciplinary hearing for the actions of his representative, under the powers granted to the Council by the Real Estate Services Act. B. The representative cannot be disciplined jointly with Kenneth; only Kenneth will bear responsibility for a breach of the Real Estate Services Act by his employee. C. One of the disciplinary options available to the Council in this case is to suspend Kenneth's licence. D. The Real Estate Council has no authority to discipline Kenneth in this situation; only his real estate board may do this. Which of the above statements are FALSE? (1) A, B and C are false. (2) B, C and D are false. (3) B and D are false. (4) Only D is false.

784. A constant payment mortgage is written for $48,951.77 and specifies payments of $520.00 per month for 15 years. The interest rate on this mortgage is: (1) j = 11.5% 2 (2) j = 10.1637220669% 4 (3) j = 9.79781791304% 12 (4) all of the above

785. Which of the following is NOT a characteristic of a corporation? (1) A corporation can be sued. (2) The shareholders of a corporation cannot be held responsible for more than their agreed share purchase. (3) The shares of a corporation must be held by more than one party. (4) A corporation is a taxable entity.

788. A mortgage for $350,000 is written at 6% per annum, compounded monthly, not in advance. The mortgage calls for monthly payments, a five-year term, and a 25-year amortization. The mortgage contract permits the borrower to prepay the full amount of the loan at any time subject to the payment of a penalty, which is the greater of a three months' interest penalty or the interest rate differential. Payments are rounded up to the next higher dollar. At the time of prepayment, the current comparable interest rate is 4% per annum, compounded monthly. If the borrower wishes to prepay this loan at the end of the first year (with the 12th payment), calculate the amount of the payout penalty. (1) $5,624.87 (2) $5,156.37 (3) $27,500.66 (4) $34,621.75

889. Fancy Finance Corporation has agreed to advance $370,000 to a real estate developer by way of an interest accruing loan. If Fancy Finance Corporation wants to earn an effective annual rate of 6% on the funds advanced, what is the amount they should receive from the developer in 30 days? (1) $370,250.42 (2) $372,933.33 (3) $371,776.26 (4) Cannot be determined from the information given.

800. Property signs are primarily used to make a prospective buyer aware that a property is for sale, or has been sold, and to encourage the individual to call the firm for more details. Which of the following are general guidelines for good property signs? A. Name and logo of the company should be dominant. B. Signs should not look crowded. C. Messages should be kept simple. D. Signs should avoid stating who the property was sold by. (1) C only. (2) B and D only. (3) A, B, and C only. (4) All of the above.

804. Which of the following statements about the fee simple estate are TRUE? A. The term "fee" means that the rights exercisable by the holder of a fee simple estate have been acquired by a payment of money. B. Where the owner of a fee simple estate dies without a will, the property will "escheat" to the Crown. C. Where the owner of a fee simple estate creates a life estate in that property in favour of some person, the fee simple estate will cease to exist. D. A fee simple estate is an estate which is held for a limited period of time. (1) B and C are true. (2) B and D are true. (3) None of the above are true. (4) A is true.

805. Which of the following statements concerning the equitable jurisdiction of the court are TRUE? A. The rules of equity developed as a remedy for the rigidity of the common law in England. B. Where the rules of equity and common law conflict, the court will apply the common law rule. C. Equitable remedies are available to parties in a court action as of right, regardless of their conduct. D. Specific performance, injunctions and legal damages are three types of equitable remedies. (1) A, B and D are true. (2) B and C are true. (3) Only A is true. (4) All of the above are true.

810. Which one of the following is NOT a primary motivation for investment in real estate? (1) diversification of an investment portfolio (2) acquisition of a portfolio, the income from which will benefit the investor in retirement years (3) a need for short term funds to finance the acquisition of chattels (4) a desire for accommodation for residential or economic activities

811. The significant characteristics of improved land are: A. its immobility. B. the durability of its improvements. C. the indivisibility of ownership. D. the divisibility of services it provides. Which of the following statements is TRUE? (1) Only A, B and D are true. (2) Only A and C are true. (3) Only A and B are true. (4) Only A, B and C are true.

820. Kenny has agreed to buy Pinkacre from Alia for $448,000. He has deposited $25,000 with the notary public who will complete the conveyance. The brokerage's commission is 5% on the first $100,000 and 1.5% on the balance of the purchase price. Property taxes are not yet due. The taxes last year were $1,324 and the notary public has told Kenny to expect a 10% increase in that amount for the current year. The completion and adjustment dates are February 18th. There are two mortgages on Alia's title. Kenny is assuming Alia's first mortgage in the amount of $123,544. Kenny has arranged a second mortgage through the Big Bank Inc., in the amount of $98,000. The balance of the purchase price and the property transfer tax will be paid in cash out of proceeds from the sale of Kenny's other property. Alia will pay out her existing second mortgage of $23,000 from the proceeds of this transaction. The notary's fees are $700 for the conveyance, $250 for preparation of Kenny's new mortgage and $75 for discharging Alia's second mortgage. It is NOT a leap year. The balance due to complete on Kenny's statement of adjustments is: (1) $210,630.87. (2) $202,214.47. (3) $209,174.47. (4) $208,982.94.

823. Dave has recently been hired at a new job, and is starting to make investments with his excess income. Dave's first investment is to place $5,000 in a term deposit where it will accrue interest at a rate of 6.5% per annum, compounded annually. The term of the investment is 18 months. How much money will Dave receive from the investment at the end of the 18 month term? (1) $5,487.50 (2) $5,473.55 (3) $5,495.34 (4) $5,503.52

826. Which of the following is NOT an exception to the principle of indefeasibility under the B.C. Torrens system of land registration? (1) a lien for unpaid provincial taxes (2) a public right-of-way in favour of B.C. Hydro and Power Authority (3) a registered fee simple acquired bona fide for value without knowledge of an earlier fraudulent dealing in the fee simple title. (4) a right of expropriation under a B.C. statute

838. Which one of the following factors would make a property owner eligible to apply for deferral of real property taxes? (1) The property owner is a member of parliament. (2) The property owner is a divorcee. (3) The property owner is a widower. (4) The property owner is a war veteran.

839. Which of the following is NOT one of the three essentials for the formation of a binding contract? (1) consideration (2) acceptance (3) deposit (4) offer

843. Which of the following statements regarding capital cost allowance (CCA) is FALSE? (1) Only one-half of the maximum allowable CCA may be claimed on an asset in the year the asset is purchased. (2) No CCA may be claimed in the year of the asset's disposal. (3) The maximum CCA in a given year is equal to the depreciation expense multiplied by the CCA percentage. (4) The CCA percentage rate is determined by the Canada Revenue Agency.

846. One or more of the following statements are TRUE. A. A real estate licensee may safely ignore the requirement of writing established by section 59 (3)(a) of the Law and Equity Act so long as the buyer and the seller agree on the terms of sale. B. A contract respecting land or a disposition of land which does not satisfy the requirement of writing contained in section 59 of the Law and Equity Act is void. C. A court may order restitution or compensation when it decides that a contract cannot be enforced because of the requirements of section 59 of the Law and Equity Act. D. The court has the power to enforce an oral contract respecting a disposition of land if necessary, to avoid an inequitable or unfair result where the party relying on the contract has substantially altered his position. Which of the above statements are TRUE? (1) B and C are true. (2) A, B and D are true. (3) C and D are true. (4) B, C and D are true.

850. On May 3, Mary offered to buy Harvey's house. The offer was stated to be open for acceptance by mail or telephone until 2:00 p.m. on May 4. Which one of the following statements is TRUE? (1) If Harvey mails his acceptance, Mary must receive it before 2:00 p.m. on May 4 for there to be a valid contract. (2) Mary cannot revoke her offer prior to 2:00 p.m. on May 4. (3) If Harvey makes any changes to Mary's offer prior to accepting it, Mary's original offer is terminated. (4) If Harvey decides to accept the offer before 2:00 p.m. on May 4, but does not communicate this acceptance to Mary, there is still a valid contract.

852. The selling price of a property is $350,000. The purchaser has applied to a lender for mortgage funds and been told that the maximum loan he can obtain is $268,000. The lender's appraiser feels that a long-term conservative estimate of the property's value is $335,000. What is the loan-to-value ratio on this loan? (1) 77% (2) 75% (3) 80% (4) 70%

853. Which of the following statements concerning government regulations of privately owned land is true? (1) The provincial government and the federal government together have legislative authority over most privately owned land in Canada. (2) The provincial governments have delegated their authority over privately owned land to local governments, and at present they retain no authority for regulating uses of privately owned land within the provinces. (3) Local governments derive their powers to regulate privately owned land use from the provincial government and may only exercise the specific powers delegated to them. (4) In British Columbia all local governments derive their authority to control privately owned land use from the Local Government Act.

855. An assignment of a commercial lease cannot be made by a tenant to a third party: (1) even if there is a clause in the lease allowing the tenant to do so. (2) if the landlord has not given his/her consent during the course of dealings prior to execution. (3) if the tenant is specifically prevented from doing so by a clause in the lease. (4) if the lease permits subletting of the premises.

861. A contract between the seller of real estate and the buyer whereby the vendor agrees to sell his/her interest in that land to the buyer for a specified price payable in installments and, upon payment of the price in full, to transfer title to the buyer is called: (1) an equitable mortgage. (2) an agreement of purchase and sale. (3) an agreement for sale. (4) a disguised form of mortgage.

864. A $195,000 mortgage loan has an interest rate of 7.5% per annum, compounded monthly. At the end of its 5-year amortization and term, the borrower will owe $178,877.95 on the loan. What is the amount of each monthly payment, rounded to the next higher cent? (1) $1,423.09 (2) $1,598.34 (3) $1,441.04 (4) $1,567.87

866. A strata corporation is permitted by the Strata Property Act to take certain actions. A strata corporation may: A. control, manage and administer the common property, common facilities or other assets of the corporation for the benefit of all owners. B. prohibit strata lot owners from selling their lots to non-residents of British Columbia. C. register a lien for unpaid strata fees. D. remove a strata lot owner's right to use recreational facilities on common property. Which of the above statements represent actions which may be taken by a strata corporation? (1) Only B (2) Only A, B and C (3) Only A, C and D (4) All of the above are permitted.

872. Different heating systems have different advantages and disadvantages. Which of the following are advantages of a wood-fired space heater? A. reduced overall heating expense B. steady consistent heat C. provides both radiant and convection heat (1) A only (2) A and B (3) A and C (4) B and C

876. Which of the following could a defendant use as a defence to a claim in negligence against him? (1) The defendant did not intend to cause injury or damage to the plaintiff. (2) The defendant breached the standard of care owed to the plaintiff. (3) The damage suffered by the plaintiff was not reasonably foreseeable by a person in the defendant's position. (4) The act of the defendant was authorized by statute.

880. A life tenancy has been granted to Avon "without liability for waste". For which of the following actions would Avon incur liability to the remainderman? (1) failure to repair or maintain buildings and improvements on the land (2) erecting a chain link fence across the centre of the property (3) destruction and removal of all the buildings from the land out of spite to the remainderman (4) Avon would not be liable in any of the above situations

883. When an Order Absolute of Foreclosure is obtained by a petitioner who is in the position of second mortgagee: A. that mortgagee can no longer exercise its right to sue the borrower on his or her personal covenant. B. the order forecloses the registered owner's interest in the mortgaged land and permits the petitioner to transfer title into his or her own name. C. all other charges, liens, encumbrances and interests registered on the borrower's title are foreclosed or "wiped" off the title. D. the petitioner may sell the property after taking title to it and does not have to account to the borrower for any profit which might be realized in excess of the mortgage debt. Which of the above statements is/are TRUE? (1) Only A and B are true. (2) Only A, C, and D are true. (3) Only A, B, and D are true. (4) All of the above statements are TRUE.

938. What is the nominal rate of interest, compounded semi-annually that is equivalent to 11.5% per annum, compounded monthly? (1) 5.8895333892% (2) 12.1259328138% (3) 11.7790667784% (4) 11.2337829579%

893. The principle of "unlimited liability" implies that: (1) an owner of a business has a very large debt load which cannot be serviced. (2) one should never become a general partner. (3) an owner may lose more money than his/her initial investment. (4) there is no difference between being a sole proprietor of a small business and a shareholder of a large corporation.

898. Which of the following statements concerning the Business Practices and Consumer Protection Act (BPCPA) is FALSE? (1) Mortgage lenders and brokers must disclose the Annual Percentage Rate (APR) to the borrower. (2) The Annual Percentage Rate (APR) represents the borrower's contactual interest rate plus any noninterest finance charges. (3) A disclosure statement must be given to a borrower six days prior to the borrower incurring an obligation under a credit agreement, unless the time period is waived by the borrower. (4) In order to provide borrowers with some help in determining the actual cost of borrowing, most provincial governments in Canada have legislated that certain disclosure requirements must be met for specific types of mortgages.

899. The Real Estate Services Act achieves its primary purpose in a number of ways, including: A. setting out sales procedures which must be followed by all licensees in order to keep their licenses. B. establishing a body called the Real Estate Council of British Columbia which administers the details under the Act. C. requiring that all representatives and brokerages be licensed. D. providing for subdivision regulation by requiring all developers to supply a disclosure statement. Which of the above statements are TRUE? (1) Only A and C are true. (2) Only A, B and D are true. (3) Only A, B and C are true. (4) Only B and C are true.

900. Which of the following items would appear on the vendor's statement of adjustments as debits? (1) assumption of mortgage, purchaser's share of taxes paid and discharge of second mortgage. (2) real estate commission, cash proceeds of sale and sale price. (3) legal fees for discharge of second mortgage, sales commission and assumption of first mortgage. (4) assumption of mortgage, purchaser's share of taxes paid and cash proceeds of sale.

902. Which of the following is NOT an element of the tort of negligent misrepresentation? (1) a statement of fact or opinion given negligently (2) reasonable reliance on the statement by the person to whom it is given (3) a contractual relationship between the parties (4) no clear qualification by the speaker that he or she disclaims any liability for the accuracy of the statement

905. Which of the following statements is NOT true? (1) In a conflict between common law principles and equitable principles, equitable principles will prevail. (2) In a conflict between common law principles and statute law, statute law will prevail. (3) In a conflict between statute law and equitable principles, equitable principles will prevail. (4) In a conflict between equitable principles and statute law, statute law will prevail.

907. The Competition Act prohibits false or misleading advertising. Which of the following statements concerning this offence is FALSE? (1) A person or company can be guilty under the Competition Act even though every part of their advertisement is literally true, when the general overall impression is misleading. (2) For a misrepresentation to offend against the Competition Act it must be false or misleading in a material respect. (3) The standard applicable in determining whether a statement is misleading or not is whether a knowledgeable person would be misled. (4) Where an accused can show that he or she had taken all reasonable care to determine the truth of the statement and that he or she honestly believed it to be true, the accused will avoid liability.

914. Which of the following is NOT an example of a situation in which a landlord can end a residential tenancy agreement for cause? (1) The number of persons permanently occupying a suite is unreasonable. (2) A tenant fails to give the necessary security deposit within 30 days of the date required by the tenancy agreement. (3) The premises must be vacated to allow for renovations which cannot be performed while the premises are occupied. (4) The premises must be vacated to comply with an order made by the local authority regarding zoning.

916. Which of the following properties would be fully exempt from property taxation? (1) Martland, B.C. has recently built a new City Hall building. The former city hall is still owned by the municipality, but is now rented out and operates as a profitable art gallery. (2) A church is located on a one acre parcel of land in Prince George, B.C. The church has built a multi-family dwelling on a portion of the site to provide additional revenue. (3) A university which permits community groups to use its playing fields during the summer. (4) All owner-occupiers who earn less than $12,000 a year in gross income.

922. Which one of the following statements is FALSE? (1) Subprime lenders account for risk by charging increased interest rates and incorporating higher administration and processing fees compared to prime lenders. (2) One of the problems in the US subprime market arose because the subprime boom introduced lending practices that made it easier to obtain loans. (3) The market share of Canadian subprime mortgages is much larger than in the US. (4) The Canadian subprime market is subject to less risk than its American counterpart because all high ratio Canadian mortgages must be secured with mortgage insurance.

925. A building scheme is a special example of a group of restrictive covenants attaching to two or more lots within a particular development plan. Which of the following statements concerning building schemes is FALSE? (1) The original purchasers must receive their fee simple title from the same seller. (2) The seller must have intended the restrictions to bind each lot. (3) Buyers must negotiate any exemptions from the application of the building scheme individually prior to purchase. (4) The restrictions must apply equally to all the individual lots and be consistent with a general scheme of development.

951. A comparable has been identified to value a subject property. The 2,500 square foot subject property has 5 bedrooms, 4 bathrooms, an alarm system, and does not have a vendor-supplied mortgage. The 2,600 square foot comparable has a sale price of $226,500, 4 bedrooms, 3 bathrooms, no alarm system, and no vendorsupplied mortgage. If the market value of a bedroom is $4,000, the market value of a bathroom is $5,700, the market value of an alarm system is $4,500, and above an 1,800 sq. ft. benchmark, each 100 sq. ft. is worth $6,000, this comparable will have to be adjusted for bathrooms and an alarm system by: (1) -$5,700 and -$4,500 respectively. (2) +$4,000 and +$6,000 respectively. (3) +$5,700 and +$4,500 respectively. (4) $0 and +$4,500 respectively.

952. A limitation or restriction placed upon the use of one person's land for the benefit of another is called: (1) remuneration. (2) a zoning bylaw. (3) a restrictive covenant. (4) an order absolute of foreclosure.

957. Which of the following statements regarding a personal website used by trading services licensees is/are FALSE? A. The more pages your site has, the better it is. B. Demographic information is a good resource to have on your site. C. You should never update your site more than once a month. D. A profile with a list of your services and testimonials from past clients is acceptable content for your site. (1) Only statement C is false. (2) Statements B and D are false. (3) Statements A and C are false. (4) All of the above statements are false.

961. Which of the following statements regarding the effect of registration of a mortgage in a B.C. land title office is TRUE? (1) The registration of a mortgage in the land title office is conclusive evidence that the mortgagee is entitled to an interest in the land described in the mortgage document. (2) A mortgage which is not registered in the land title office is unenforceable against the parties to the mortgage. (3) Registration of a mortgage raises only a rebuttable presumption that the mortgage is valid; a registered mortgage is not "guaranteed" under the B.C. land registration system. (4) None of the above statements is true.

971. A landlord has rented an apartment to a tenant under a one year tenancy agreement. Three days ago, at the beginning of the third month of the term, the tenant failed to pay rent as due. What action can the landlord take? (1) The landlord may immediately enter the leased premises and seize the tenant's furniture of sufficient value to equal the amount of rent owing. (2) The landlord is prohibited by law from terminating this fixed term lease; it must continue until its expiry date. The landlord's only remedy is to take the matter to arbitration. (3) The landlord may now give the tenant 10 days written notice of the end of the tenancy agreement, and the tenant may avoid termination by paying the overdue rent within 5 days of receiving the notice. (4) The agreement is now void because of the tenant's breach of one its fundamental covenants, i.e., the requirement to pay rent.

972. Which of the following statements about easements are TRUE? A. The person enjoying the benefit is the dominant tenement. B. The granting of an easement by one landowner to another conveys ownership of the easement area to the dominant tenement owner. C. Where a right or privilege over land benefits a long established trade on a dominant tenement, this has been held by the court in some cases to be sufficient to create an easement. D. A tenant who occupies land under a twenty year lease can grant an easement to a neighbouring property owner and the easement, if registered in the land title office, will run with the land even after the lease expires. (1) Only A and C are true. (2) Only A, B and D are true. (3) Only C is true. (4) Only A and D are true.

973. Joan was considering putting in an offer on a farm in Peachland, B.C. for $130,000, subject to arranging suitable financing. She approached Peachy Credit Union for pre-approval of a mortgage loan, and Peachy hired A & A Appraisers to determine the value of the farm for mortgage purposes. A & A appraised the property at $135,000 and Peachy Credit Union approved a mortgage loan of $101,250 to Joan, who then went ahead with the purchase. Eleven months later the bank was forced to foreclose on the property and upon obtaining another appraisal, found that the market value of the property was only $70,000. It is found that A & A was negligent in its appraisal report. What remedies, if any, are available to a) Joan, and b) Peachy Credit Union? (1) Peachy Credit Union can sue A & A for breach of contract, but Joan has no case against A & A. (2) Peachy Credit Union can sue Joan for their loss under her personal covenant but cannot sue A & A Appraisers. (3) Peachy Credit Union can sue A & A for breach of contract, and Joan can sue A & A under tort law. (4) No remedies are available to either Joan or Peachy Credit Union.

987. Which of the following statements is FALSE? (1) Trespass is an act done to another's land, while nuisance is an act done on one person's land which affects another's land. (2) The remedies for trespass are damages, injunction, and self-help, while the remedies for nuisance are damages, injunction, and abatement. (3) With both trespass and nuisance, the plaintiff must prove interference with the use and enjoyment of the plaintiff's land and physical damage to property. (4) Trespass usually occurs once or twice, whereas nuisance usually involves repeated or continuous occurrences.

297. Where a landlord refuses to allow a commercial tenant to take possession of the demised premises the tenant may: (1) get an order for specific performance. (2) maintain an action for breach of the covenant of quiet enjoyment. (3) sue the landlord for damages. (4) do none of the above.

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300. To qualify for a managing broker's licence a person must possess which one of the following qualifications? (1) three years' experience as a representative in British Columbia (2) be a Canadian citizen (3) be at least 19 years of age (4) none of the above are qualifications for a managing broker's licence

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990. Eugene and Lenore visited Green Maple Tree Farms. The property is owned and operated by Rodney. Trees kept for sale are placed in holes in the ground, with their roots encased in burlap. The holes are not filled in when a tree is removed, yet are located in a grid pattern which is apparent to any viewer. Signs are located at the beginning and end of every row of trees warning customers to watch for and avoid open holes. Eugene and Lenore walked among the rows of trees while selecting a tree for their purchase. An open hole (approximately 3 feet in diameter) was noticed by them, in response to which Lenore walked around the hole and Eugene attempted to step across the hole. Eugene fell into the hole and fractured his leg. Shortly after this event, Lenore tripped over a green garden hose lying unseen in the grass between the rows of trees, which was left by Rodney earlier in the day. Lenore broke her arm in her fall. Which of the following statements are TRUE? A. Rodney is likely liable to both Eugene and Lenore for their injuries suffered as a result of his breach of the duty of care owed to them under the Occupiers Liability Act. B. Eugene will probably not recover any damages in a lawsuit against Rodney because he breached his duty to take reasonable care for his own safety; he was the author of his own harm. C. Lenore acted reasonably in avoiding the danger presented by the hole. Her injury from tripping on the garden hose was a direct result of the occupier's negligence; therefore, she will probably succeed in a lawsuit against Rodney. D. Rodney can successfully defend against a lawsuit by both Eugene and Lenore, using the defence contained in the Occupiers Liability Act that an occupier has no duty of care to a person in respect of risks willingly accepted by that person as his or her own risks. (1) B and D only. (2) A, C and D only. (3) B and C only. (4) All of the above.

998. Lisa, a real estate licensee, accepts a listing at a much higher price than market conditions warrant. Back at the office, another licencee, Dave, suggests that since the seller's interests are best served by making a sale, Lisa should advertise the property at a more reasonable price than that specified by the Seller. Which of the following Articles or Interpretations of the Standards of Business Practice has Dave overlooked in suggesting this course of action to Lisa? (1) Article 12, Interpretation 12.2: A REALTOR® shall not provide an Opinion of Value if it is outside the REALTOR®'s field of expertise to do so unless this fact is disclosed in writing to the Client or assistance is obtained from another Person who has experience in this area. (2) Article 25: The business of a REALTOR® shall be conducted so as to avoid controversies with other REALTORS®. (3) Article 13: Interpretation 13.2: The advertised or offered price shall not be other than that which was agreed upon in writing with the Seller. (4) None of the above applies to the situation described.

234. Which one of the following is NOT an implied term of a mortgage? (1) The borrower is entitled to redeem the mortgage within a reasonable time. (2) The borrower is entitled to redeem the mortgage free from all conditions or terms of the mortgage contract. (3) The borrower is entitled to assign the mortgage. (4) The borrower is free from any unreasonable collateral advantage required by the lender.

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247. A comparable has been identified to value a subject property. The 2,000 square foot subject property has 4 bedrooms, 4 bathrooms, an air conditioner, and does not have a vendor-supplied mortgage. The 2,100 square foot comparable sold for $326,500 and has 4 bedrooms, 3 bathrooms, no air conditioner, and no vendorsupplied mortgage. If the market value of a bedroom is $3,200, the market value of a bathroom is $2,700, the market value of an air conditioner is $1,500, and above an 1,800 sq. ft. benchmark, each 100 sq. ft. is worth $5,000, this comparable will have to be adjusted for bathrooms and square footage by: (1) -$2,700 and +$5,000 respectively. (2) +$5,000 and -$2,700 respectively. (3) +$2,700 and -$5,000 respectively. (4) +$5,400 and +$2,700 respectively.

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259. Where two neighbouring landowners contract to prevent one of them from putting his land to a certain use, they are said to have created: (1) a licence. (2) a limiting caveat. (3) a restrictive covenant. (4) an easement.

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261. Which one of the following is the BEST reason for an investor to choose to use debt-financing rather than all cash in order to purchase an income-producing property? (1) The investor can deduct from taxable income the principal portion of debt repayments, thus lowering taxes payable. (2) A one-year term on the debt financing required is readily available. (3) The investor can obtain the debt financing at a lower interest rate than the expected yield on the project. (4) Property values are expected to decrease.

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273. Earl is the registered owner of Blackacre. Duke forges and registers a transfer of Blackacre to himself. Duke then borrows $50,000 from Royalty Trust Co. The loan is secured against Blackacre by way of a mortgage. Which of the following statements is TRUE? (1) Royalty is secure in relying on Duke's title. (2) Earl can recover Blackacre but the title to the property will remain encumbered by the Royalty Trust Co. mortgage. (3) Because of the forgery, Earl can recover Blackacre free of the Royalty Trust Co. mortgage. (4) Royalty Trust Co. may obtain its $50,000 back from the Assurance Fund.

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274. A borrower has arranged a loan of $32,000 at an interest rate of 7% per annum, compounded semi-annually with payments set at $1,400 per month. What is the period necessary to amortize the loan? (1) exactly 23.6030542566 years (2) exactly 24.5756945454 years (3) approximately 2 years (4) approximately 20 years

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289. The comparative method of appraisal is based on an analysis of recent sale prices for similar properties. Which of the following best defines the word "recent"? (1) a period of time during which at least four properties have sold in the subject property's neighbourhood (2) a period of time of no less than one week and no more than six months (3) a period of time during which supply and demand conditions have not changed (4) a period of time during which the prime interest rate has been stable

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293. Which of the following is a TRUE statement regarding a real estate licensee's duty to ascertain the facts respecting a client's real estate transaction? A. A licensee should be knowledgeable, among other things, about price levels in the real property market, general economic trends, and changes to zoning bylaws. B. A licensee will not be liable for a breach of his or her duty to ascertain the facts if the breach resulted from a client providing incorrect information. C. The duty placed on a licensee is "strict" — meaning that any fact overlooked by a licensee will result in a breach of the licensee's duty, even if the licensee acted in the manner of a reasonably prudent broker in similar circumstances. D. Online access to the land title registry has removed most excuses for a licensee's failure to perform a title search. (1) Only A, C and D are true. (2) Only A is true. (3) Only A and D are true. (4) Only A and B are true.

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.669. The consumer price index is a good method to adjust sales prices to the level of values prevailing as of the date of appraisal: (1) where the comparable sales are deemed to be not recent. (2) where there are inadequate numbers of comparable sales within a particular neighbourhood. (3) where the cost method of appraisal is deemed to be inappropriate. (4) under no circumstances.

101. Which of the following factors will affect the value of land? (1) Immobility (2) Diversification (3) Externalities (4) Both (1) and (3)

107. Which one of the following actions would constitute trespass to land? (1) the crossing of another person's property by mistake (2) the deliberate crossing of another person's property (3) the throwing of an item upon another person's property (4) all of the above

110. Which one of the following types of organization is a separate taxable entity? (1) a general partnership (2) a sole proprietorship (3) a limited partnership (4) a corporation

111. Most zoning bylaws include density restrictions. Which of the following is NOT a method of measuring density? (1) total floor area of the building in relation to the size of the lot (2) floor area ratio (3) number of dwelling units per hectare (4) prescribing the maximum lot area per dwelling

114. Which one of the following is NOT required in a contract of purchase and sale? (1) the names of the parties (2) a description of the property being sold (3) the purchase price (4) the rate of commission payable

115. If, under a principal's instructions, an agent makes certain representations concerning a property which are false to the knowledge of both the principal and the agent: (1) the principal is liable because he or she explicitly authorized the tort. (2) the agent cannot escape personal liability by arguing that he or she was authorized to commit the tort. (3) the agent will be personally liable for the tort. (4) All of the above will be applicable.

119. A mortgage for $200,000 is written at 6% per annum, compounded semi-annually. The mortgage calls for monthly payments rounded up to the next higher dollar, a 5-year term, and a 20-year amortization. The mortgage contract permits the borrower to prepay the full amount of the loan at any time subject to the payment of a three months' interest penalty. At the time of prepayment, the current comparable interest rate is 4% per annum, compounded semi-annually. If the borrower wishes to prepay this loan at the end of the first year (with the 12th payment), calculate the amount of the three months' interest penalty. (1) $969.01 (2) $15,504.15 (3) $5,687.99 (4) $2,883.28

123. An offer of $235,000 is accepted, comprised of a cash down payment of $85,000 subject to a vendorsupplied mortgage of $150,000 at 4% per annum, compounded semi-annually. The loan has an amortization period of 25 years, a term of 5 years, and calls for monthly payments rounded up to the next higher dollar. Market rates of interest for equivalent mortgages are currently 9% per annum, compounded semi-annually. The market value of the offer is: (1) $180,413.23 (2) $122,426.97 (3) $235,000.00 (4) $207,246.79

125. The Local Government Act permits a council to enact certain bylaws relevant to planning. Which of the following areas is NOT regulated by local government? (1) Land use zoning (2) Subdivision regulation (3) Building regulations (4) Highways

134. The marketing mix consists of: (1) product, place, price, and preference. (2) people, place, price, and position. (3) personal selling, publicity, price, and promotion. (4) product, place, price, and promotion.

136. A lender who is foreclosing may ask the court to appoint a receiver where the property being foreclosed is: (1) a large residential apartment building. (2) a single-family dwelling with a tenant occupying it. (3) a single-family dwelling abandoned by the borrower. (4) any one of the above.

137. The "subject of an appraisal" is: (1) the market value of the physical property. (2) a fee simple estate on a cash or cash-to-first-mortgage basis. (3) a subjective measure of value by an experienced appraiser. (4) the value of the legal rights of ownership vested in a particular piece of real estate.

145. Which of the following is NOT a power or duty of the Real Estate Council? (1) Levying fees on all licensees in order to meet the Council's expenses. (2) Holding disciplinary hearings. (3) Collecting premiums and assessments from licensees on behalf of the Real Estate Errors and Omissions Insurance Corporation. (4) Undertaking and carrying our real estate law reform to promote the interests of real estate professionals.

146. An investor has the opportunity to invest in one of four alternative mortgages, each with the same degree of risk. The only distinction between these investments is the rate of interest charged to the borrower. These rates are: Loan A: 13.25% per annum, compounded daily Loan B: 13.50% per annum, compounded quarterly Loan C: 13.75% per annum, compounded semi-annually Loan D: 14.25% per annum, compounded annually Assuming that the investor can purchase each mortgage for the same amount of money, which investment will he prefer? (1) Loan A (2) Loan B (3) Loan C (4) Loan D

148. What is the result of the doctrine of stare decisis? (1) Former decisions are used as a basis for later decisions. (2) The common law system has uniformity. (3) Decisions by the Supreme Court of Canada are accorded the most weight in our jurisprudence. (4) All of the above result from the doctrine of stare decisis.

759. An interest accruing mortgage loan requires that $500,000 be paid at the end of a five year term. If the rate of interest on the loan is j12 = 12%, calculate the amount of funds advanced. (1) $283,713.43 (2) $279,197.41 (3) $312,500.00 (4) $275,224.81

151. Usually, a licensee's commission will be paid: (1) when a ready, willing and able buyer is presented to the seller. (2) when a deposit has been paid by the buyer. (3) when the contract of purchase and sale is signed by both parties. (4) when the transaction has been completed and title is transferred.

158. A multiple listing agreement is a type of exclusive listing agreement in which: (1) the brokerage lists two or more properties for the same seller. (2) the seller lists the property with two or more brokerages. (3) the seller pays more than one commission. (4) the contract requires the listing to be distributed to all members of the real estate board.

160. By extending the amortization period of a loan: (1) the mortgage loan is paid off faster which reduces the amount of interest paid by the borrower. (2) the size of the required payment will be larger. (3) the loan contract period becomes longer and the loan will be classified as a fully amortized loan. (4) the repayment of principal is spread over a greater number of payments, making each payment smaller.

164. Which one of the following statements is FALSE? (1) The doctrine of precedent provides uniformity to the common law system. (2) The Supreme Court of Canada is not required to hear all appeals. (3) The Supreme Court of British Columbia may exercise both common law and equitable jurisdiction. (4) An appeal by a taxpayer to reduce a tax assessment would fall within the sphere of private law.

167. Which one of the following is NOT a remedy for breach of contract? (1) damages (2) specific performance (3) injunction (4) rectification

180. A brokerage must maintain at least one account in a bank, trust company or credit union designated as a trust account into which the brokerage must put, upon receipt, all monies received for or on behalf of a client. The Real Estate Services Act only permits the brokerage to withdraw money from such an account under certain circumstances. Which one of the following is NOT one of them? (1) money paid to or in accordance with the instructions of the principal to whose credit the money was deposited (2) money intended as remuneration for a licensee and that has been earned in accordance with the Rules (3) money paid into the trust account by mistake (4) money required for payment of a brokerage's business expenses.

183. A mortgage contract with a face value of $170,000 requires monthly payments of $1,117.12 over a 20-year period. However, the mortgage broker advances only $166,000 after deducting a commission of $2,500, legal fees of $1,000, and an appraisal fee of $500. Calculate the cost of funds advanced for the borrower, expressed as an effective annual rate (j ). 1 (1) 6.07815769142% (2) 5.23423644854% (3) 5.29164705413% (4) 5.36165087549%

184. After an order nisi of foreclosure is granted to a petitioner and the respondent borrower fails to pay the amount due as required by the order, the petitioner may apply for: (1) an order absolute of foreclosure. (2) a judicial sale. (3) an equitable charging order. (4) either (1) or (2).

187. Which one of the following statements is correct? (1) Contracts of purchase and sale can always be assigned. (2) Contracts of purchase and sale can never be assigned. (3) Contracts of purchase and sale can only be assigned with the permission of the seller. (4) Contracts of purchase and sale can be assigned as long as the rights of the other party are not prejudiced.

188. With respect to an insured mortgage loan, which one of the following statements is FALSE? (1) Default insurance is paid for by the borrower. (2) The borrower can add the premium to the mortgage amount. (3) If the borrower defaults, the insurance company will guarantee that the lender will recover all capital invested. (4) The lender has only the personal covenant of the borrower and the value of the property for security.

191. In applying the income method of appraisal, depreciation is excluded from operating expenses in the calculation of net operating income. Which one of the following statements is an explanation of the reason depreciation is excluded? (1) Depreciation measures a loss in value which occurs despite regular repairs and maintenance. (2) Depreciation affects only the building component of the property. (3) Depreciation expense is excluded from calculations for income tax purposes. (4) The life of a building is primarily determined by economic factors rather than physical condition.

196. A potential buyer is aware of the asking price for a particular house listed for sale. Which of the following statements is normally TRUE? (1) The probable sale price will be equal to or above the floor price. (2) The probable sale price will be equal to or above the seller's "value to owner". (3) The ceiling price will be equal to or below the asking price. (4) All of the above three statements are normally true.

203. Which financial institution is currently the largest single source of institutional mortgage funds in Canada? (1) Credit unions (2) Life insurance companies (3) Trust and loan companies (4) Chartered banks

204. The loan to value ratio is the ratio of: (1) the annual payments on the loan divided by the market value of the mortgage. (2) the actual amount of the mortgage (the amount paid to the borrower net of bonus or brokerage fees) divided by the actual value of the property. (3) the market value of the mortgage divided by the market value of the property. (4) the face value of the mortgage loan divided by the lending value of the property.

213. Which of the following statements is TRUE? (1) Using a technology called encrypting, protecting information on the internet is accomplished by scrambling it into an unreadable format called decrypting. (2) Using a technology called coding, protecting information on the internet is accomplished by scrambling it into an unreadable format known as PDF. (3) Using a technology called photography, protecting information on the internet is accomplished by scrambling it into an unreadable format called deciphering. (4) Using a technology called cryptography, protecting information on the internet is accomplished by scrambling it into an unreadable format called encrypting.

221. The final value shown on a proprietor's income statement is: (1) known as net income. (2) equal to taxable income plus capital cost allowance less depreciation expense. (3) the difference between revenue and expenses for one year of operation. (4) all of the above.

222. Which of the following statements regarding income statements is FALSE? (1) It is also known as a profit and loss statement. (2) It is a listing of the revenue and expenses of a business enterprise. (3) It may include depreciation, revenue, and cost of good sold. (4) It is always determined on an annual basis.

311. In British Columbia's real property taxation system, the actual value of a property is: (1) the value at which the property last sold. (2) the value shown on the assessment notice. (3) the assessor's estimate of market value. (4) both (2) and (3).

313. Calculate the semi-annual periodic rate of interest that is equivalent to 12% per annum, compounded semiannually. (1) 1% (2) 0.975879418% (3) 12% (4) 6%

317. Certain classes of properties receive a full or partial exemption from real property taxation. Which of the following would receive either full or partial exemption? (1) crown land (2) university property (3) cemeteries (4) all of the above

319. When Joan was viewing the apartment in a converted house which she was contemplating renting from Zack, she noticed that the steps and the handrail in the back staircase appeared to be in a state of disrepair. When Joan moved in after signing the lease, she discovered that she could not use the back stairs because the bottom three stairs were rotten and the handrail was not bolted down. Which of the following statements is TRUE? (1) Unless the lease provides that Zack will repair the premises, he has no responsibility to make any repairs. (2) Zack is only obligated to make any necessary repairs that are brought to his attention in writing at the time the parties enter the lease. (3) Joan is obligated to do the repairs if she wants them to be done, because she entered the lease aware of the condition of the premises. (4) Zack is obliged by law to maintain the premises in a state of repair that complies with safety standards, irrespective of the condition of the premises at the time the lease was entered.

320. Latent defects are facts which are unknown to the buyer and are so material to the enjoyment of the property that the buyer might not have entered into the contract had he or she known that they existed and: (1) the defects are commonly known to exist. (2) the defects are discoverable upon reasonable inspection of the property. (3) the defects are visible to the eye of the average person. (4) the defects are not discoverable upon reasonable inspection of the property.

322. A potential borrower has inquired as to how large a mortgage loan she can "afford" with monthly payments of $550. If mortgage interest rates are currently 14% per annum, compounded semi-annually, with an amortization period of 25 years, calculate the maximum loan allowable. (1) $45,260.94 (2) $47,214.35 (3) $45,690.13 (4) $46,853.31

323. Bill Black purchased a home two years ago, at which time he arranged for a mortgage in the amount of $350,000 amortized over 20 years with a 5-year term and monthly payments. The interest rate on the mortgage was 6% per annum, compounded semi-annually. calling for monthly payments of $2,493 and an outstanding balance of $296,762.89 due at the end of the 5-year term. Bill has just received an offer on his house from Mark. Mark's offer consists of $50,000 cash and assumption of the existing mortgage for the remainder of the term. If current market rates for 3-year term mortgages are 3.5% per annum, compounded semi-annually, what is the market value of Mark's offer? (1) $352,537.42 (2) $449,911.72 (3) $399,223.72 (4) $402,537.42

325. Which of the following is NOT a part of a standard zoning bylaw? (1) the official zoning map (2) restrictions as to land use (3) the schedules outlining the regulations applicable to each particular zoning district (4) a consolidation of all amendments to the bylaw adopted up until the time of consolidation

326. If an applicant for a mortgage loan has income of $1,000 per month and property taxes are estimated at $600 per year and the permitted gross debt service ratio is 30%, what can the applicant afford to pay for monthly principal and interest? (1) $285 (2) $240 (3) $300 (4) $250

330. Susan Jones has offered to purchase a house from a vendor who is willing to provide partial financing. Her offer is a $75,000 down payment plus a mortgage of $125,000 at 4% per annum, compounded semiannually. The loan is to be fully amortized with monthly payments over 20 years. What is the market value of this offer if the market rate for similar mortgage loans is 6.5% per annum, compounded semi-annually? (1) $ 113,009.30 (2) $ 188,009.30 (3) $ 101,994.94 (4) $ 176,999.94

695. A constant payment mortgage is written for $48,951.77 and specifies payments of $548.91 per month for 15 years. The interest rate on this mortgage is approximately: (1) 12% per annum, compounded semi-annually. (2) 8% per annum, compounded semi-annually. (3) 10% per annum, compounded semi-annually. (4) 11% per annum, compounded semi-annually.

335. Mary registers a document, given to her by John, in the Land Title Office. The document states that: "I, John, grant to Mary and her heirs, assigns, executors and administrators, a right of way for persons and vehicles along and upon the easterly 30 feet of the southerly 64 feet of Lot 1, Plan 910, in order to give access to Mary's property, Lot 2, Plan 910." The interest granted is: (1) a restrictive covenant. (2) a lease. (3) a licence. (4) an easement.

346. Which one of the following is the generally accepted accounting principle which holds that all accounting information should be reported on objectively determined and verifiable data? (1) Consistency principle (2) Verification principle (3) Materiality principle (4) Objectivity principle

349. The purpose of the Real Estate Development Marketing Act is to protect the public by requiring developers to: (1) meet any preliminary requirements or approvals applicable to the type of property being marketed. (2) assure the buyer's title upon purchase. (3) prepare and file a disclosure statement in the form required. (4) All of the above are purposes of the Real Estate Development Marketing Act.

352. Which of the following is an example of a void deed at common law? (1) a forged deed (2) a deed signed in circumstances where the party signing can plead non est factum (3) a deed given for illegal consideration (4) all of the above are examples of void deeds

353. In conducting an appraisal, a background analysis is undertaken covering a range of market factors. Which of the following is a reason for including a background analysis in an appraisal report? (1) to indicate the current status of the subject property in relation to trends in property values (2) to confirm that comparable properties have been selected from the same market as the subject property and are, hence, subject to the same market forces (3) to provide the client with an appreciation of the socio-economic determinants of supply and demand (4) All of the above are reasons for including a background analysis in an appraisal report.

361. Concentrated marketing: (1) is also known as niche marketing. (2) requires a firm or representative to select a relatively small target market, and then focus its entire effort on satisfying the needs of this target market. (3) is also known as single target marketing. (4) is all of the above.

377. Listed below is one of the most important powers given to municipal councils in regulating the subdivision of land. Identify it. (1) They may require that all lots within the proposed subdivision be capable of being served by cable television. (2) They may require that all residential units within the proposed subdivision be in excess of a certain construction value specified in the bylaw. (3) They may require that not more than one lot in the proposed subdivision be sold to any given buyer in order to discourage speculation in building lots. (4) They may require that highways of a prescribed standard be provided as well as street lighting and underground wiring.

388. In establishing the actual value of a residential property for tax assessment purposes the Assessor may consider: (1) the present use of the property. (2) the location of the property. (3) the rental value of the property. (4) a comprehensive list of factors including all of those mentioned above.

389. Where a buyer under a standard contract of purchase and sale refuses to perform, the seller will NOT have the following remedy: (1) specific performance. (2) damages for loss of bargain. (3) damages relating to the costs of preparing necessary documents. (4) the forfeiture of a deposit, representing fifty percent of the purchase price, as liquidated damages.

391. A term of the mortgage provides that the full outstanding balance will become due and payable in the event of default by the borrower in making any payment. This term is known as: (1) the repayment clause. (2) the personal covenant. (3) the omnibus clause. (4) the acceleration clause.

395. Which one of the following statements is FALSE? (1) In an entirely residential condominium complex, a bylaw must be amended by a 3/4 vote of the strata corporation. (2) If a rule conflicts with a bylaw, the bylaw prevails. (3) Subject to some exemptions, a bylaw may prohibit the rental of strata lots in the condominium complex. (4) Assuming the standard bylaws have not been amended, the strata council may pass rules with respect to the safety and cleanliness of individually owned strata lots.

398. Generally speaking, a contract cannot be enforced against an infant unless: (1) the contract is affirmed by the infant after he reaches 19 years of age. (2) the infant performs or partly performs the contract within a year after reaching his 19th birthday. (3) the infant does not repudiate the contract within a year after reaching his 19th birthday. (4) All of the above will make a contract with an infant enforceable.

400. Where a principal of an agent has acted in such a manner as to lead third parties to believe that his agent has authority to perform certain acts on his behalf, and the third party, when dealing with the agent, reasonably believes that the agent has the authority that he/she represents, the agent is said to have: (1) actual authority. (2) express authority. (3) legal authority. (4) apparent authority.

403. Where a licensee intends to purchase property, which of the following details must he or she disclose to the seller? (1) The fact that he or she holds a real estate licence. (2) Any details that have been arranged for the resale of the property. (3) The fact that he or she will be sharing in the commission on the sale. (4) All of the above information must be disclosed.

405. An investor has decided to establish a bank account in order to accumulate sufficient capital at the end of seven years to purchase a boat. If the account pays interest at 3% per annum, compounded annually and the investor makes deposits of $8,000 at the end of each year, how much capital will he have accumulated at the end of seven years? (1) $42,851.59 (2) $79,747.81 (3) $57,987.33 (4) $61,299.70

406. A contract between a seller and a buyer whereby the seller agrees to sell its interest in certain property to the buyer for a price payable by installments and then, to convey legal title to the buyer after payment of the purchase price in the manner agreed, is called: (1) a mortgage. (2) an agreement of purchase and sale. (3) an equity of redemption. (4) an agreement for sale.

415. An offer is released or expires when one or more of the following occurs: A. The offeror decides to revoke his or her oral offer and mails a written revocation to the offeree before acceptance. B. No time limit is specified in the offer but a reasonable time has passed without acceptance by the offeree. C. The offeror dies or becomes insane before the offeree accepts the offer. D. An offer is revoked by the offeror and the revocation communicated to the offeree before acceptance. Which of the following is correct? (1) All of the above statements are true. (2) Only A, B and C are true. (3) Only A and B are true. (4) Only B, C and D are true.

423. A comparable has been identified to value a subject property. The 2,500 square foot subject property has 4 bedrooms, 4 bathrooms, an alarm system, and does not have a vendor-supplied mortgage. The comparable has a sale price of $281,000, a -$3,200 adjustment for bedrooms, a +$2,700 adjustment for bathrooms, a -$12,000 adjustment for square footage, and a -$700 adjustment for a vendor-supplied mortgage. If the market value of a bedroom is $3,200, the market value of a bathroom is $2,700, the market value of an alarm system is $4,500, and above an 1,800 sq. ft. benchmark, each 100 sq. ft. is worth $6,000, it can be concluded that this comparable has: (1) 5 bedrooms, 2 bathrooms, and no alarm system. (2) 3 bedrooms, 3 bathrooms, and no alarm system. (3) 4 bedrooms, 3 bathrooms, and an alarm system. (4) 5 bedrooms, 3 bathrooms, and an alarm system.

425. Which one of the following is NOT a required provision in a lease: (1) the amount of rent and method of payment (2) the commencement and term of the lease (3) the signatures of the parties (4) the previous address of the lessee

426. A young executive has applied to her bank for a mortgage loan to enable her to purchase a house. Her income is $45,000 per year. The bank informs her they will apply a 30% gross debt service ratio when calculating her maximum loan, and that current mortgage rates are 6% per annum, compounded semiannually for 20-year amortization mortgages. Given that annual property taxes are $1,500 and mortgage payments are to be made monthly, what is the maximum mortgage loan the bank will grant? (1) $137,963.81 (2) $152,698.35 (3) $147,986.22 (4) $140,412.28

430. Current assets on the financial statements of a business include: (1) the owner's initial investment. (2) rents payable. (3) real property at its historic cost. (4) None of the above

441. Which one of the following is NOT a material commonly used for water supply piping? (1) plastic (2) galvanized steel (3) copper (4) aluminum

444. Velma has just accepted Patricia's written offer to purchase Velma's home, which contains the following clause: "This offer is subject to the buyer selling her home at (address) by December 31". Which one of the following statements is TRUE? (1) If Patricia cannot sell her home by December 31 there is no contract and Velma retains the deposit. (2) Patricia must complete even if she cannot sell her home. (3) Patricia may waive this requirement at any time before completion. (4) This requirement may be waived by Patricia on or before December 31.

446. Which of the following is an example of an equitable mortgage? (1) mortgage of the equity of redemption (2) agreement to execute a legal mortgage (3) mortgage by way of deposit of the duplicate certificate of title (4) all of the above

452. Which of the following is NOT an essential requirement of a lease? (1) the name of the parties (2) a description of the premises being leased (3) the rent (4) the addresses and occupations of the parties

459. With respect to commercial tenancies, the covenant of quiet enjoyment is: (1) an implied covenant that the landlord will refrain and will cause others to refrain from making noise such that it would interfere with the conduct of the tenant's business. (2) an assurance that the tenant will conduct his or her business in such a manner as to obey all noise bylaws. (3) an assurance that all unfurnished premises be fit for human habitation. (4) an assurance to the tenant against the consequences of a defective title involving the landlord or those lawfully claiming under the landlord.

460. Which of the following is a reason why an investor would use borrowed funds instead of an all cash offer for a real estate investment. (1) lack of adequate capital to make the desired investment (2) to release equity for home improvements (3) to reduce overall risk by using only part of the borrower's total funds for any one investment (4) all of the above

461. Scrambling credit card information into an unreadable format is best known as: (1) copyrighting. (2) meta tagging. (3) portable document filing. (4) encrypting.

462. A purchaser has just agreed to a below-market vendor-supplied mortgage with a developer. The mortgage will be for $384,000 at an interest rate of j =1.95%, with monthly payments over a 30-year amortization 2 and a 3-year term. The market interest rate for similar mortgages is j =3.5%. 2 If the developer sells the 3-year term loan immediately to a mortgage investor for $350,000, what is the mortgage investor's yield, expressed as an effective annual rate (j )? 1 (1) 5.25654479488% (2) 5.69553214852% (3) 4.95812925084% (4) 5.38505562212%

463. Which of the following actions will protect a seller from an insincere buyer when a condition precedent is inserted in a contract of purchase and sale? (1) state a time limit by which the condition precedent must be fulfilled (2) talk to the buyer to ascertain whether he intends to fulfill the condition precedent (3) insert a clause requiring the buyer to use his best efforts to remove the condition precedent (4) all of the above

469. In which one of the following situations is the residual method of appraisal the MOST suitable method to use? (1) where the market supply and demand forces are fairly constant (2) where there is a large volume of available market data and the subject property represents the highest and best use of the site (3) where the value to be measured is market value expressed as an income flow (4) where the subject property possesses development potential

470. A $170,000 mortgage loan, written at a nominal rate of 7% per annum, compounded semi-annually, has a two-year contractual term. Payments are made monthly and are based on a 20-year amortization period. Payments are rounded to the next higher dollar. What is the size of the required payments? (1) $1,297 (2) $1,298 (3) $1,370 (4) $1,308

471. The selling price of a property is $175,000. The buyer has applied to a lender for mortgage funds and been told that the maximum loan he can obtain is $122,500. The lender's appraiser feels that a long-term conservative estimate of the property's value is $153,125. Which one of the following statements is TRUE? (1) The lending value of this property is $122,500. (2) The lending value of this property is $175,000. (3) The loan-to-value ratio on this loan is 70%. (4) The loan-to-value ratio on this loan is 80%.

476. In addition to carrying out the functions of a trading services representative, a validly licensed representative is entitled to: (1) carry out trading services for an unlicensed real estate brokerage. (2) be the managing broker of their own proprietorship. (3) carry out trading services for close personal friends and business associates although not employed by a brokerage. (4) do none of the above.

478. A Court has power to re-open a mortgage transaction where, having regard to the risk and to all the circumstances, it is of the opinion that the cost of borrowing is excessive or harsh and unconscionable. In which one of the following statutes is this power contained? (1) Interest Act (2) Mortgage Brokers Act (3) Real Estate Services Act (4) Consumer Protection Act

486. Which of the following would be relevant in determining whether an individual was an employee or an agent? (1) the contract which exists between the alleged agent and the alleged principal (2) the degree of control the alleged principal has over the alleged agent (3) the method of remuneration of the alleged agent (4) all of the above

492. Which of the following statements regarding social networking is FALSE? (1) The popularity of a given social network can change quickly. (2) Never post anything personal or sensitive related to a client. (3) Be aware of which social networks are drawing the most people relevant to your industry. (4) Social networks should never be used for business promotion.

493. When the licensee receives a deposit in a typical real estate transaction the licensee holds it: (1) for the seller. (2) for the buyer. (3) as agent for both. (4) as a stakeholder.

498. A comparable has been identified to value a subject property. The 2,300 square foot comparable has 4 bedrooms, 3 bathrooms, a garage, a view, and sold for $250,000. The comparable has +$4,200 adjustment for bedrooms, a -$2,600 for bathrooms, a +$9,000 for a view, and a +$15,000 adjustment for square footage. The market value of a bedroom is $4,200, the market value of a bathroom is $2,600, the market value of a garage is $13,500, the market value of a view is $9,000, and above a 1,900 sq. ft. benchmark, each 100 sq. ft. is worth $5,000. The area of the subject property is approximately: (1) 2,300 square feet. (2) 2,000 square feet. (3) 2,200 square feet. (4) 2,600 square feet.

501. What is a "time clause" or "72 hour clause"? (1) It refers to the fact that the offer is only open for a stipulated time. (2) It refers to the period in which either the seller or buyer can change his or her mind. (3) It refers to the length of time that a condition subsequent is in force. (4) It refers to the length of time the other party has to remove a condition precedent once the clause is invoked.

504. A mortgage was written for $176,000 with an interest rate of j2=6.5%, an amortization period of 15 years and monthly payments. Calculate the outstanding balance owing at the end of five years. (1) $150,636.85 (2) $146,983.58 (3) $141,985.82 (4) $134,807.87

505. A "real estate service" under the Real Estate Services Act includes: (1) finding a party to acquire real estate. (2) collecting rents or security deposits for the use of real estate. (3) advising on the appropriate price for real estate. (4) all of the above.

506. A potential borrower with an annual income of $48,000 and property taxes of $2,000.04 per annum has been told by a mortgage lender that the largest loan available will be $177,667. What is the maximum gross debt service ratio allowed by the lender given that the loan has monthly payments and is to be written at 5% per annum, compounded semi-annually and amortized over 25 years? (1) 25% (2) 27.5% (3) 32% (4) 30%

507. Mr. Smith has contracted to sell his house to Mr. Jones for $200,000. Mr. Jones has paid a deposit of $15,000, the balance in cash. Conveyancing fees are $350, taxes were prepaid by the seller, totalling $800 net for the period of July 1 to December 31, and the commission is 5%. Completion, adjustment and possession dates are July 1. Property transfer tax will be due on completion. The balance due to complete is: (1) $187,753.29 (2) $187,850.00 (3) $188,950.00 (4) $188,150.00

512. If you consider that the value shown on your assessment notice is too high, you can make a formal complaint to the: (1) municipal court. (2) Court of Appeal. (3) assessment commissioner. (4) Property Assessment Review Panel.

522. The following statements concern the rights and preferences of the petitioner and respondents in a foreclosure. Which of these statements is FALSE? (1) If the value of the property is less than the amount of mortgage debt owed to the petitioner, the mortgagor would want the property to be foreclosed, while the petitioner would want the property to be sold in a judicial sale. (2) Where the value of the property exceeds the total amount of mortgages, the respondents would want a judicial sale, but the petitioner would prefer the property to be foreclosed. (3) Where the court orders a judicial sale, the petitioner may make an offer, and if the court approves the offer, the petitioner will become registered owner, and still be able to sue the mortgagor for any shortfall between the sale price and the mortgage debt. (4) Where the value of the property being foreclosed exceeds the total amount of the mortgages, both the petitioner and the respondents will desire a judicial sale of the property.

527. Martha, who has been George's landlord for the past three months, has seized George's furniture from his rented premises and threatens to sell the furniture in order to pay George's arrears of rent. Which one of the following statements is FALSE? (1) Martha has chosen an illegal remedy against George if the rented premises is George's personal residence. (2) Martha has chosen a remedy called "distress" or "distraint". (3) Martha has chosen the most effective remedy against George if the rented premises is a warehouse. (4) Martha has taken an action which can be described as a classic example of a private nuisance.

530. When preparing a market value appraisal of a single family residence, an appraiser may: (1) rely on the owner's information as to the type of water supply piping in the property provided that he notes in his appraisal report the source of his information and the fact that it has not been verified. (2) ignore above-average quality of construction if the buyers and sellers in the neighbourhood do not consider high quality materials important. (3) disregard the recent sale of a house with same floor plan which is within the same subdivision as the subject property. (4) do all of the above, depending on the circumstances.

538. Banana Inc. has recently released its latest mobile device, the Banana Phone. The marketing director has decided to strategically price the Banana Phone higher during the first few months, and gradually decrease it throughout the year. This pricing method is known as: (1) meet or beat competitor pricing. (2) tiered pricing. (3) penetration pricing. (4) skimming pricing.

542. Which of the following statements regarding mortgagees is FALSE? (1) A mortgagee may require the addition of a guarantor to provide a separate personal covenant as a third party in addition to the borrower's personal covenant to pay. (2) Where the property secured is a condominium, a mortgagee may require the borrower to grant to the mortgagee the right to vote at meetings of the strata corporation on various matters affecting the security of the mortgage. (3) Although a number of remedies are usually available to a mortgagee in the event of borrower default, the lender usually has complete discretion in deciding the most suitable remedy to use in the circumstances. (4) Once the mortgage terms have been agreed to by the mortgagor and the mortgagee, the mortgagee is bound to advance the total amount of the funds when requested by the borrower, regardless of the terms of the mortgage.

544. Which one of the following is TRUE where a comparable property is sold subject to a vendor supplied mortgage at an interest rate lower than the current market rate? (1) The comparable property may never be used as evidence of market value. (2) The comparable sale price must be adjusted upward. (3) The comparable sale price may only be used as evidence of market value. (4) The comparable sale price must be adjusted downward.

559. A private investor expects to receive $281.72 per month for a period of 17 years as a result of a mortgage loan she has just advanced. Calculate the investor's expected yield (expressed as a nominal rate with semiannual compounding) on her investment if the loan was in the amount of $23,250. (1) 13.3143323752% (2) 12.8984099285% (3) 13.6889270786% (4) 13.2500195344%

560. There are three essentials which must be established in law before the courts will find a restrictive covenant. Indicate the EXCEPTION: (1) It must be negative in nature. (2) The covenantee must retain property which will itself be protected. (3) The burden of the restriction must have been intended by the parties to bind the land. (4) The covenantor must also retain the restricted property as any subsequent buyer will not be a party to the original contract.

562. In appraising an income producing property using the income method, gross potential rents must be estimated. How are gross potential rents best determined? (1) based on long term vacancy rates in the area in which the subject property is located (2) based on published surveys of relevant real estate trends (3) based on the relationship between money actually received and units actually rented (4) based on actual current rents of similar properties

576. "A contract respecting land or a disposition of land is not enforceable unless there is, in writing signed by the party to be charged or by his agent, both an indication that it has been made and a reasonable indication of the subject matter..." The preceding is an extract from which statute? (1) Real Estate Services Act (2) Statute of Frauds (3) Land Title Act (4) Law and Equity Act

637. Jim O'Hara owns a small office building located on the fringes of downtown Vancouver, B.C. He has just leased the building to Citizens for an Everlasting Planet (CEP), a registered charitable organization. In this scenario: (1) Mr. O'Hara may apply for a property tax exemption. (2) Mr. O'Hara may apply for property tax relief. (3) CEP may apply for a property tax exemption. (4) None of the above.

578. On June 1, Jem offered to buy Boo's summer cottage for $230,000, and Boo accepted. Since the cottage was on a secluded island, neither party was aware that on May 30 the cottage was struck by lightning and completely destroyed by fire. Boo has no insurance and is seeking to enforce the contract. Which of the following statements is TRUE? (1) This is an example of mutual mistake and Jem can rescind the contract. (2) The doctrine of frustration applies here and both parties are relieved of their future obligations under the contract. (3) A court will set aside the contract based on "non est factum" (it is not my deed) or unilateral mistake since Jem did not know the nature of the document he was signing and could not have known the cottage was no longer standing. (4) This is an example of common mistake and the contract is void.

595. A mortgage broker initiates a mortgage in the amount of $100,000 at j = 15%, with an amortization period 2 of twenty years, a term of five years, and monthly payments. The broker deducts a brokerage fee of $2,500 in addition to appraisal and legal fees totalling $750. Calculate the cost of funds advanced to the borrower. (1) j = 16.4047270676% 1 (2) j = 16.361028983% 1 (3) j = 15.5120940566% 1 (4) j = 16.6638916287%

597. Jake Touche wants to purchase a house that is listed for $276,000. The bank's appraiser estimates that the lending value of the property is $275,000. Jake's gross annual income is approximately $50,000 per year. The bank applies a 80% loan-to-value ratio and a gross debt service ratio of 32%. Property taxes amount to $1,800 per year. Assume that the lender demands a 25-year amortization period and monthly payments at j = 5%. How much can Jake borrow? 2 (1) $220,000.00 (2) $195,599.51 (3) $216,359.78 (4) $203,461.12

610. Which of the following guidelines should you follow when using email to communicate with clients? (1) You should always use all CAPS to get your point across in an email message. (2) Writing an email is generally considered more conversational than traditional paper-based communication, therefore, sarcasm and humour should be used to spice up your email message. (3) People love reading email messages, therefore, email messages should be long and detailed. (4) Email messages should always start with a salutation and be sure to add your name in closing.

617. When converting an existing building to a strata development: (1) the existing tenants must be relocated by the developer. (2) the age and condition of the building is irrelevant. (3) the developer must pay the existing tenants' moving expenses. (4) none of the above statements is true.

625. In a limited partnership: (1) each limited partner is personally liable for all debts that the partnership incurs. (2) a limited partner can actively be engaged in managing the business without any consequences to his or her partnership status. (3) the income is taxed before it is distributed to the partners. (4) there must be one or more general partners.

628. A property is listed for $488,888, but the property's lending value is estimated to be $480,000. Jay and Joan purchase the home for $485,500 subject to mortgage of $360,000. What loan-to-value ratio was applied by the lender with whom Jay and Joan negotiated the mortgage? (Assume that the loan-to-value ratio was the binding constraint on the loan size.) (1) 67.5% (2) 70% (3) 72% (4) 75%

629. Three years ago Jim bought a house at which time he arranged a mortgage for $120,000. The loan was written at a rate of 6.75% per annum compounded semi-annually, calling for monthly payments of $822.06 and an outstanding balance of $108,904.49 due at the end of the 5-year term. Jim has just received an offer from Alice to buy his house. Alice's offer consists of $25,000 cash and assumption of the existing financing for the remainder of the term. If current lending rates for 2-year term mortgages are 8.75% per annum, compounded semi-annually, what is the market value of Alice's offer? (1) $97,335.06 (2) $109,829.02 (3) $122,335.06 (4) $134,829.02

639. There are several steps taken before a lawsuit actually is brought before a judge. Which of the following procedures DOES NOT take place before a trial begins? (1) Filing and serving a notice of civil claim (2) Filing and serving a response to civil claim (3) Conducting an examination for discovery (4) Obtaining a garnishing order

651. A 200 watt light bulb operating at 120 volts requires a current of: (1) 2.2 amps. (2) 200 amps. (3) 0.83 amps. (4) 1.67 amps.

653. A board of variance is a board established to: (1) ensure that actions by municipalities are not at variance with the Local Government Act. (2) settle boundary line disputes between private parties. (3) ensure that all non-conforming uses cease within six months after a change in a zoning bylaw. (4) permit a minor deviation from a zoning bylaw for an individual property owner.

654. Which of the following is a liability on a financial statement? (1) accumulated depreciation (2) inventory (3) rents receivable (4) none of the above

655. Jennie has rented her apartment on a month to month basis for two years without a rent increase. She receives a properly delivered rent increase notice on July 31 raising her rent from $750 per month to $1,075 per month effective November 1. She feels this increase is excessive and discusses it with her landlord, but her landlord remains convinced that $1,075 is a fair market value rent, even though the applicable Consumer Price Index (CPI) is 3%. Which of the following statements is TRUE? (1) The notice of rent increase is invalid because it is less than 6 months before it becomes effective. (2) This rent increase can not be valid or approved because it is greater than the CPI plus 2%. (3) This rent increase will be valid only if there has been a change of landlords. (4) This rent increase will be valid only if approved for special circumstances as set out in the Residential Tenancy Act Regulations.

656. Which of the following are determinants for the value of a property? A. listed (asking) price B. rights of ownership C. physical property (1) A only (2) C only (3) A and B (4) B and C

677. The owner of an interest in real property which is located in British Columbia always has: (1) a fee simple interest. (2) the right to use his property in any way he/she chooses. (3) at least a 99-year lease from the Crown. (4) common law rights as modified by legislation.

680. In which of the following situations will the agency authority continue to exist? A. Lorne lists his house for sale with Steve. The house burns down. B. Lorne enters into an exclusive listing agreement with his agent Mark. Lorne then sells the property himself without Mark's assistance. C. Lorne enters into a written listing contract for the sale of his house with Brad. Brad dies. D. Lorne tells his agent over the phone that he no longer has the authority to sell his house. (1) A only (2) B and C only (3) D only (4) None of the above

682. Which of the following statements is TRUE with respect to listing contracts? (1) While a listing contract is a contract between the brokerage and the seller, the buyer is bound to some of the terms contained in the contract. (2) It is not necessary that an exclusive listing contain a specified duration or commencement date. (3) The open listing provides better protection for the agent than the exclusive listing. (4) None of the above statements is true.

687. Which one of the following statements is TRUE? (1) Given that the net operating income remains constant, the market value of a property rises as the required yield rises. (2) The market value of an income producing property is best determined by averaging the sales prices of any three other income producing properties which have recently sold. (3) In the determination of an income producing property's market value, the terms "gross realized income" and "net operating income" are synonymous. (4) The capitalization rate applied to the net operating income of an investment property is related to the yield on comparable investment properties.

689. Which of the following correctly outlines the "objective/task" method of creating a promotional budget? (1) Define the competition, outline competitors' expenditures, and set tasks to maintain competitiveparity with competitors. (2) Conduct tasks in order to reach a sales objective that is specific, realistic, measurable, and within a predetermined timeline. (3) Create an objective, analyze costs and benefits, and determine the tasks to reach the objective. (4) Define the advertising objective as "SMART", outline the necessary tasks, and estimate the costs of performing the tasks.

691. The MLS® is an important program for a trading services licensee. Which of the following best describes the MLS®? (1) A site that allows the user to create written documents in MLS® format. (2) A site that is used to register domain names for real estate offices. (3) A software program that allows you to conduct an appraisal. (4) A site that pulls together information on real estate related topics with a focus on real estate listings.

692. The effective annual rate of interest for 10% per annum, compounded semi-annually, is: (1) greater than the effective annual rate for 9% per annum, compounded semi-annually. (2) more than the effective annual rate for 10% per annum, compounded annually. (3) less than the effective annual rate for 10% per annum, compounded monthly. (4) all of the above.

693. What rate of interest per compounding period would allow savers to "double their money" in 8 compounding periods? Assume that you invest $100 today so that it will grow to $200 in eight compounding periods. (1) 12.5% (2) 108.609279198% (3) 25% (4) 9.05077326653%

694. The interest which is acquired by a buyer of a strata lot is: (1) a share in the strata corporation in proportion to the unit entitlement. (2) a joint tenancy with all of the other strata lot owners. (3) a fee simple interest in the strata lot and a joint tenancy with respect to the common property. (4) None of the above

697. A seller agreed to sell her home for $155,000. The buyer paid a $5,000 deposit to his brokerage. The buyer will assume the existing mortgage on title, which has an outstanding balance of $71,000. Furthermore, the buyer will be granting a second mortgage to his father for $34,000. Taxes are unpaid and overdue in the amount of $1,095, with a further penalty owing of $105. Real estate commission is 6% of the sale price. Legal fees for the transaction are $600. The adjustment, completion and possession date is August 31st. It is NOT a leap year and property transfer tax is payable in this transaction. What is amount of the cash that the buyer will be required to provide on the completion date? (1) $52,519.00 (2) $45,969.00 (3) $47,516.00 (4) $47,519.00

698. Which of the following is/are private lenders? (1) Mortgage corporations (2) Vendors who carry a part of the purchase price by granting a mortgage loan on a property (3) Trust companies whose estate and trust funds are invested in mortgages (4) All of the above

713. A caveat is: (1) a warning issued out of the Prosecutor's Office. (2) formal notice that a court action has been commenced. (3) formal notice that a builder's lien has been filed against the property. (4) a notice placed on the land title register at the request of a person who claims an interest in the land.

714. Which one of the following is TRUE with respect to the estimate of vacancy rates in the appraisal of incomeproducing properties? (1) Vacancy rates are expressed as a percentage of gross realized income. (2) Vacancy rates are considered an operating expense. (3) Vacancy rates can be ignored if the subject property has never had any vacancies. (4) Vacancy rates must be those expected to exist in the future.

734. A comparable has been identified to value a subject property. The 2,500 square foot subject property has 4 bedrooms, 4 bathrooms, an alarm system, and does not have a vendor-supplied mortgage. The 2,700 square foot comparable has a sale price of $236,500, 4 bedrooms, 3 bathrooms, no alarm system, and no vendorsupplied mortgage. If the market value of a bedroom is $4,000, the market value of a bathroom is $5,700, the market value of an alarm system is $4,500, and above a 2,000 sq. ft. benchmark, each 100 sq. ft. is worth $6,000, this comparable will have to be adjusted for an alarm system and square footage by: (1) $0 and -$6,000 respectively. (2) -$4,500 and +$6,000 respectively. (3) $0 and +$12,000 respectively. (4) +$4,500 and -$12,000 respectively.

743. The notice requirement for termination of a commercial fixed term lease is: (1) 60 days. (2) 120 days. (3) dependent on the term of the lease, i.e. 1 month, 1 month's notice; 6 months, 6 months' notice, etc. (4) not required because the lease automatically expires at the end of the term.

744. What will be the purchase price of a mortgage which will provide the buyer with 48 payments of $650 plus an outstanding balance of $55,858.13 at the end of 48 months, if the buyer of the mortgage requires a yield of 15% per annum, compounded monthly? (1) $55,698.26 (2) $58,989.31 (3) $52,305.42 (4) $54,125.28

745. Before a transport permit will be issued with respect to a manufactured home, the registrar must be satisfied that: (1) all of the security interests registered against the home are validly registered. (2) the home will be moved using proper equipment. (3) the registered owner is a resident of Canada. (4) all taxes on the home have been paid.

746. A mortgage for $225,000 is written at 6.5% per annum, compounded semi-annually, not in advance. The mortgage calls for monthly payments, a five-year term, and a 20-year amortization. The mortgage contract permits the borrower to prepay the full amount of the loan at any time subject to the payment of a penalty, which is the greater of a three months' interest penalty or the interest rate differential. Payments are rounded up to the next higher dollar. At the time of prepayment, the current comparable interest rate is 3.5% per annum, compounded semi-annually. If the borrower wishes to prepay this loan at the end of the first year (with the 12th payment), calculate the amount of the payout penalty. (1) $3,515.66 (2) $14,062.64 (3) $5,687.99 (4) $26,148.25

749. Mr. Singh has offered $331,000 for a house, providing he is able to obtain acceptable financing. The house lists for $342,000, but the lender has set the lending value at $338,000. The lender requires a loan-to-value ratio of 80% and a gross debt service ratio of 30%. Property taxes are $2,800 per year and Mr. Singh's annual gross income is $80,000. If the interest rate is 5% per annum, compounded semi-annually, the amortization period is 20 years, and payments are made monthly, what is the maximum amount this lender will advance, rounded to the nearest $100? (1) $270,400 (2) $293,700 (3) $255,600 (4) $268,800

752. A $46,000 second mortgage with interest at the rate of 15% per annum, compounded monthly calls for monthly payments of $555.00. The loan is based on: (1) an interest only repayment scheme. (2) a fully amortized repayment scheme. (3) partially amortized repayment scheme. (4) It is impossible to determine with the information given.

754. The potential buyer of an apartment block has asked an appraiser to do an appraisal of the apartment block in order to determine its market value. The following information has been made available to the appraiser: estimated gross realized income is $44,200; estimated long term vacancy allowance is 4%; estimated annual operating expenses are $17,850. In addition to this information, the appraiser has found two similar properties with the following yields: Property A has an effective annual yield of 7.85%, and Property B has an effective annual yield of 8.15%. Given the above information, the final estimate of value for the subject property on the date of valuation is: (1) $335,669 (2) $307,275 (3) $323,313 (4) $329,375

765. Jane purchased a condominium on the understanding that pets were permitted by the bylaws of the strata corporation. Later, the corporation passed a bylaw prohibiting any owner from keeping any animal on his or her strata lot. When Karl subsequently purchased his lot, he was aware of this new bylaw. The strata council has ordered the removal of Jane's dog and Karl's cat from their lots. Which of the following statements is FALSE? (1) Karl must remove his cat; the bylaw is enforceable against him. (2) Jane will be grandfathered and will be able to keep her dog. (3) Pet restrictions are valid under the Strata Property Act. (4) The Schedule of Standard Bylaws allows an owner one dog or one cat, and therefore Karl and Jane can keep their pets.

768. A fifty-year old house is arranged such that when the front door is opened fully it is possible for a person standing on the porch to look straight down a hallway into the main bathroom. This is an example of: (1) a design deficiency in today's market. (2) functional depreciation under the cost method of appraisal. (3) a patent defect. (4) All of the above

770. If investors are able to double their funds in 6 years, what would be the effective annual rate of interest earned on those funds? Assume that you invest $100 today so that it will grow to $200 in six years. (1) 33.3333333333% (2) 20.0936955176% (3) 16.6666666667% (4) 12.2462048309%

774. Alex Dupuis wants to purchase Joe Benardo's property. Alex would like to pay $35,000 in cash and take over the existing mortgage which has 233 monthly payments of $900 remaining on the mortgage loan. The interest rate on the original mortgage is j = 9%, but the current market rate is j = 6%. What is the market 2 2 value of the offer? (1) $100,000.00 (2) $123,690.70 (3) $145,223.67 (4) $159,410.89

777. Which of the following will NOT serve to discharge a contract? (1) an agreement between the parties (2) the concept of frustration (3) performance of the parties' mutual obligations (4) a patent defect

781. Under the combined provisions of the Local Government Act and the Assessment Act, the "owner" who is liable to pay the real property taxes includes: A. where a person is a registered owner of a life estate, the life tenant; B. where there is an agreement for sale and purchase of the real property, the registered holder of the last registered agreement for sale and purchase. Which of the following statements are TRUE? (1) Only A is included under the definition of "owner". (2) Only B is included under the definition of "owner". (3) Neither A nor B is included under the definition of "owner". (4) Both A and B are included under the definition of "owner".

782. Where a deposit is paid directly to a seller on account of the purchase price: (1) the amount of the deposit will appear only on the buyer's statement of adjustments. (2) the amount of the deposit will appear as a debit on the buyer's statement and a credit on the seller's statement. (3) the amount of the deposit will appear only on the seller's statement of adjustment. (4) none of the above statements are true.

795. A borrower has arranged a $159,000 mortgage at j =12% with a 20-year amortization, 5-year term and 12 monthly payments. If all payments are paid when due, how much principal was paid off during the 5-year term? (1) $289.11 (2) $13,541.84 (3) $145,873.23 (4) $13,126.77

799. Which of the following are examples of sales promotional activities? A. window displays B. trade-show displays C. point of purchase advertising D. gift items, eg. calendars, pens or memo pads (1) A and B (2) C and D (3) A, B and D (4) All of the above.

801. Which one of the following statements correctly describes the manner in which taxes are adjusted? (1) If the seller has already paid the current year's taxes, the seller must be debited with the taxes from the adjustment date to December 31st. (2) If the taxes are overdue and a penalty is owing, both the amount of the taxes and the penalty must be apportioned between the buyer and the seller. (3) If the taxes are not yet due, no adjustment is made until the tax statement invoice arrives. (4) None of the above

803. In using the comparative method of appraisal, the appraiser estimates the value from the evidence afforded by the sale price of similar properties which have recently been sold. Which of the following BEST describes what is meant by "similar"? (1) similar in replacement cost (2) similar in price bracket (3) similar with respect to the dominant architectural features (4) similar with respect to those factors which are likely to have a material influence on the behaviour of buyers and sellers

809. Which of the following statements about periodic tenancies are FALSE? A. Where a tenant "overholds" a fixed term commercial lease and the landlord continues to accept the rent a periodic tenancy is created. B. Where a periodic tenancy is created as a result of a tenant overholding a fixed term commercial lease, the resulting periodic tenancy will be on all the same terms as the fixed term lease except the rent will be increased by ten percent. C. Where a fixed-term residential tenancy expires it will automatically convert to a month to month periodic tenancy unless the parties have agreed in writing that it will not do so, at the time they entered into a fixed term tenancy agreement. D. Where a periodic tenancy is created at the end of a term-certain commercial lease of five years the new periodic tenancy will always be for a term of five years. (1) A and B are false. (2) B, C and D are false. (3) B and C are false. (4) B and D are false.

816. A local mortgage broker arranged a mortgage in the amount of $210,000. The borrower has agreed to pay a brokerage fee in the amount of $7,200 which is to be added to the loan amount, giving a face value of $217,200 for the loan. The mortgage bears interest at a contract rate of 11.5% per annum, compounded monthly. The mortgage has an amortization period and term of 20 years and calls for monthly payments rounded to the next higher cent. If the mortgage is to be sold to an investor for $220,500 immediately after the loan is initiated, the investor will earn the following nominal interest rate, with semi-annual compounding (j2): (1) 12.7130484631% (2) 0.938978904% (3) 11.2677468497% (4) 11.5355861939%

817. Which of the following items would appear on the buyer's statement of adjustments as debits? (1) purchase price, legal fees for assumption of mortgage and balance due to complete (2) deposit paid, buyer's share of taxes paid and cash proceeds of sale (3) assumption of first mortgage, deposit paid and balance due to complete (4) buyer's share of taxes paid, purchase price and legal fees for assumption of mortgage

818. Garth has agreed to buy Whiteacre from Elisa for $448,000. Property taxes are not yet due. The taxes last year were $1,324 and the notary public has told Garth to expect a 10% increase in that amount for the current year. The completion and adjustment dates are February 18th. It is NOT a leap year. The property tax amount to be paid by Elisa will appear on her statement of adjustments as a: (1) debit in the amount of $174.12 (2) credit in the amount of $1,264.87 (3) credit in the amount of $191.52 (4) debit in the amount of $191.53

825. Accurate Appraiser is valuing a townhouse using the direct comparison approach. A house recently sold for $175,000, comprised of $85,000 cash and a $90,000 vendor-supplied mortgage written at 5% per annum, compounded semi-annually, with monthly payments sufficient to amortize the loan over 25 years and with a term of 5 years. At the time that the house sold, the market rate for similar mortgages was 7% per annum, compounded semi-annually. What price should Accurate Appraiser use if this sale is to be used as a comparable? (1) $ 175,000.00 (2) $ 159,734.18 (3) $ 82,625.28 (4) $ 167,968.24

828. Which of the following statements is TRUE? (1) A term in a commercial lease which is contrary to the terms of the Commercial Tenancy Act is void and can only be enforced by the landlord if he has reasonable cause to do so. (2) The implied covenant of quiet enjoyment at common law means that the tenant has a right of privacy. (3) A tenant is usually responsible for reasonable wear and tear to the premises, unless otherwise stated in the lease. (4) The doctrine of "interesse termini" is a common law rule stating that no estate in land passes until the tenant enters into possession of the leased premises.

832. Which of the following are statutory remedies available to an owner of a strata lot who is dissatisfied with certain actions or omissions of the strata corporation? A. An owner may sue the strata corporation. B. A court may order the appointment of an administrator in extreme cases. C. An owner may withhold payment of his proportionate share of common expenses. D. An owner may file a lien against the strata corporation. (1) A, B, C and D (2) Only A and C (3) Only A, B and C (4) Only A and B

835. Which of the following are examples of equitable mortgages? A. a mortgage disguised as a transfer of land, where the "sale" price is below market value B. a mortgage which, for procedural reasons only, is unregistrable in the land title office C. an agreement to execute a mortgage in the future under which the borrower has already received the principal amount D. a mortgage registered second in priority to another mortgage (1) A, B and C (2) A and B (3) Only D (4) All of the above

836. The doctrine of privity of contract: (1) creates the right of a third party to sue on a contract. (2) only applies to contracts creating an interest in land. (3) does not apply to bare licences. (4) does not apply to contracts where an interest in land is created.

841. Which of the following is an interest in land that can be valued? (1) an easement or right-of-way (2) airspace above land (3) a tenancy agreement (4) all of the above

845. Larry is a real estate licensee. During negotiations for the sale of a property with a well water system, the buyer asked how reliable a water source the well was. Larry, relying only on information from the seller, told the buyer that the well was reliable and supplied sufficient water for normal domestic uses. After completion of the sale, the buyer discovered that the water available was completely inadequate for domestic purposes because of a serious water shortage problem known to occur every year in the area. Which of the following statements is TRUE? (1) Larry is not liable to the buyer in negligence because he exercised reasonable care and skill under the circumstances. (2) The seller does not owe a duty of disclosure of this defect (annual water shortage) to the buyer. (3) The seller is not liable to anyone for his misrepresentation because he is not a real estate professional. (4) None of the above are true.

860. Which of the following events will terminate a real estate agency relationship? (1) actions of an agent which exceed the terms of the agent's authority under the listing agreement. (2) a failure by the agent to present all offers to the principal. (3) an offer by the agent to purchase for herself the principal's property. (4) an act of the principal which is inconsistent with the continuation of the agent's authority.

869. Which of the following are examples of legal non-conforming uses? A. A basement suite in an area near a university which has been zoned for single family dwellings for over 20 years. The suite has been in existence for 15 years and the municipality is aware of it. B. A 25 year old corner grocery which is located in an area where the original zoning was changed from multi-family to single family two years ago. C. A long-established factory in an area which has just been rezoned from industrial to residential. D. A ski rental shop operating for 5 months of the year in an area which has just been rezoned to residential. (1) A and D are legal non-conforming uses. (2) A, B and C are legal non-conforming uses. (3) B and C are legal non-conforming uses. (4) C and D are legal non-conforming uses.

268. The effective annual rate of interest for 10% per annum, compounded semi-annually, is: (1) greater than the effective annual rate for 9% per annum, compounded semi-annually. (2) more than the effective annual rate for 10% per annum, compounded annually. (3) less than the effective annual rate for 10% per annum, compounded monthly. (4) all of the above.

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870. One or more of the following statements are false. A tenancy agreement as statutorily defined: A. usually entitles a landlord to exercise the right to distrain a tenant's goods for arrears of rent. B. requires a tenant to carry out all repairs and maintenance of the leased premises. C. must always be registered in the Land Title Office to secure a tenant's rights against subsequent owners of the leased premises. D. must meet certain statutory requirements under the Commercial Tenancy Act of British Columbia. Which of the above statements are FALSE? (1) Only B is false. (2) Only A and D are false. (3) None of the above statements are false. (4) All of the above statements are false.

871. Which of the following statements regarding manufactured home registration is FALSE? (1) Except as between the parties to the transfer, the transfer is not effective unless the home is registered. (2) A person must not import a manufactured home into British Columbia unless ownership of that home has been registered. (3) Upon completion of the initial registration of a manufactured home, the registrar will assign it a registration number and issue two decals bearing that number. (4) If an owner discovers that his or her manufactured home is not registered, he or she must register the home within 30 days of that discovery.

873. Which of the following is NOT a power or duty of the Real Estate Council? (1) Levying fees on all licensees in order to meet the Council's expenses. (2) Holding disciplinary hearings. (3) Collecting premiums and assessments from licensees on behalf of the Real Estate Errors and Omissions Insurance Corporation. (4) Undertaking and carrying out real estate law reform.

874. Which of the following statements regarding technology is TRUE? (1) Firewalls only require hardware to function. (2) An RSS feed is a credit card sized chip that is necessary for high speed internet access. (3) The least common type of network security is the use of passwords. (4) Freeware is copyrighted software given away for free by the author.

886. When a real estate licensee advertises for sale property owned by herself, the licensee: (1) is required by the Real Estate Services Act to disclose the name of her brokerage. (2) should identify another licensee as the listing brokerage or selling licensee. (3) should be personally identified as a licensee as required by the Real Estate Services Act. (4) is not required to reveal the situation in the advertisement as long as the name, address and phone number of the licensee's firm or place of business is not used.

891. An agency contract can be terminated in one or more of the following ways: A. by the death of one of the parties B. by the legal doctrine of frustration C. by a letter of termination by the principal D. by the insanity of the agent or the principal Which of the statements are TRUE? (1) A, B and D are true. (2) D, C and A are true. (3) A, B and C are true. (4) All of the above are true.

892. Which of the following statements is/are TRUE? A. The presence of a special buyer in a sales transaction will greatly extend the range of possible bids. B. Real property markets are local by nature, due to the immobility of real property. C. The neighbourhood an appraiser should consider when doing an appraisal may not be limited to the subdivision in which the property is located. D. In British Columbia, anyone may undertake appraisal work and charge a fee for the appraisal services. (1) Only statement C is true. (2) Only statements A and B are true. (3) Only statements A, B and D are true. (4) All of the above statements are true.

894. A commercial lease for a fixed term (1) automatically terminates upon expiration of the term specified in the lease. (2) may be for any specified length of time. (3) must contain a description of the commencement date and duration of its term. (4) All of the above statements are true.

897. There are several procedural steps involved in the trial process in British Columbia. Some of these procedures are called: A. conducting discovery proceedings. B. filing and serving a response to civil claim. C. filing and serving a notice of civil claim. D. enforcing a judgment. Which of the following is the correct chronological order of the above? (1) A, B, C, D (2) C, A, D, B (3) B, D, A, C (4) C, B, A, D

910. The cost method of appraisal is only used on rare occasions to determine market value of residential properties. Which one of the following would be MOST correct as reasoning for the infrequency of use? (1) Costs are historic and therefore have no relevance. (2) Replacement cost would be difficult to determine. (3) Only the cost of land can be accurately determined. (4) The assumption that cost equals value is not necessarily correct.

915. Richard owns a 2,400 square foot unit in a strata complex. There are 19 other units, the square footage of which totals 37,600 square feet. The common property has an area of 12,600 square feet. The total common expenses for the year amount to $48,000. What is Richard's monthly share of the common expenses? (1) $596.83 (2) $255.32 (3) $761.90 (4) $240.00

917. An acquaintance of yours is about to purchase an income-producing property and asks your opinion of the property value. You wisely recommend that she have an appraisal done, but she counters by saying: "since appraisers in B.C. are not required to be licensed, it must be a straight-forward process that could be done by anyone. Why should I pay someone for an appraisal?" Which of the following could you give as a reason for hiring a professional appraiser? (1) Income-producing properties have low turnover rates. (2) The heterogeneity of property means that knowledge concerning one property cannot necessarily be applied to another property. (3) Real property markets are local. (4) All of the above provide good reasons for hiring an appraiser.

929. A borrower wishes to make monthly payments of no more than 30% of his monthly income of $2,500 for a period of 200 months. If interest rates are currently 9% per annum, compounded semi-annually, what is the maximum amount that should be lent? (1) $90,582.19 (2) $89,371.22 (3) $77,561.75 (4) $78,374.01

930. Which of the following statements concerning listing agreements are TRUE? A. A listing agreement is a contract between the seller and the brokerage, the terms of which can be relied on by the buyer. B. For the brokerage to become entitled to commission, the offer to purchase presented by the brokerage must be substantially in accord with the terms of the listing. C. All owners listed on title must sign the listing contract. D. A listing brokerage will not be entitled to a commission if it does not have a listing agreement with the seller prior to listing the property for sale. (1) A and C only (2) A, B and D only (3) B and C only (4) C only

936. Equitable remedies are remedies which are within the court's discretion to award. Which of the following is NOT an equitable remedy? (1) specific performance (2) injunction (3) quantum meruit (4) damages

937. The residual method of appraisal is the most suitable method for use where the subject property: (1) is an apartment block in an area currently zoned for residential duplexes only. (2) is vacant land. (3) represents the highest and best use of the site and there is a large volume of market data available. (4) has latent value.

943. According to the Real Estate Services Act and regulations, which of the following statements is TRUE? (1) An individual may commence trading in real estate immediately after receiving proof of passing the real estate licensing exam. (2) All staff employed by a real estate brokerage must be registered with the Real Estate Council. (3) An individual may be registered independently as a real estate representative without being employed by a registered real estate brokerage. (4) A real estate representative is employed by his or her brokerage to trade in real estate in the brokerage's name, on behalf of the brokerage's clients.

944. Clive and Joyce signed an exclusive listing agreement with Lone Dove Realty Ltd. ("Dove") for the sale of their jointly owned land. The agreement stipulated a price of $450,000 "all cash". Graham, a trading services licensee employed by Dove, presented the sellers with an offer from a buyer for $450,000 "subject to seller accepting take-back mortgage of $30,000." The sellers refused this offer and the listing has now expired. Dove feels that it is entitled to a commission notwithstanding that the offer was rejected. Which of the following statements is TRUE? (1) As a prerequisite to its claim for commission, Dove must prove that it was duly licensed under the Real Estate Services Act at the time the alleged cause of action arose. (2) In the event that Dove was not licensed under the Real Estate Services Act, no commission can be recovered by Dove but the licensee, Graham, can recover commission as an independent licensee. (3) No commission is payable by the sellers because the event stipulated in the listing agreement which would give rise to commission has not occurred. (4) Both (1) and (3) are true.

953. In a mortgage transaction, the mortgagor is: (1) the borrower (2) the fee simple owner of the mortgaged property (3) the holder of an equitable right to redeem the mortgaged property (4) all of the above

967. When a real estate agency relationship is created: (1) the interests of the agent take priority over those of the principal. (2) the buyer of the property is always owed the agent's primary duty to act solely for his or her benefit. (3) the "agent" is an employee and works under the direct control and supervision of his or her principal. (4) None of the above are true.

968. For licensees who wish to use pictures in advertising, which of the following statements regarding photo editing is TRUE? (1) Changing the physical characteristics of the property with photo editing is acceptable. (2) Editing photos in any way in not acceptable. (3) Removing power lines with photo editing is acceptable. (4) Removing a parked car in the driveway with photo editing is acceptable.

975. Which of the following statements is TRUE? (1) A licensee can protect him or herself from all liability for misrepresentation by having the vendor complete and sign a disclosure statement at the time the property is listed. (2) A licensee will not be liable for the tort of fraudulent misrepresentation unless he or she has some expertise in the particular area. (3) A licensee will be vicariously liable to a buyer for incorrect information given by the licensee to the vendor who passed the information on to the buyer. (4) A licensee is not required to provide opinions to buyers on areas outside his or her expertise; rather, it is the buyer's responsibility to seek the opinion of a qualified expert.

976. Where a principal of an agent has acted in such a manner as to lead third parties to believe that the agent has authority to perform certain acts on behalf of the principal and a third party deals with the agent in the bona fide belief that the agent has that authority, the agent is said to have: (1) implied authority. (2) express authority. (3) legal authority. (4) apparent authority.

977. A mortgage broker has helped you set up a mortgage loan. The loan is for $250,000 at an interest rate of j = 4.5% and a 20-year amortization. The loan calls for monthly payments of $1,582 over a 3-year term 12 with $225,208.61 owing at the end of 3 years. If the lender pays the broker a fee of 2% of the funds advanced, what is the yield to the lender, expressed as an effective annual rate (j )? 1 (1) 4.38524784511% (2) 3.62875235813% (3) 4.74999999999% (4) 3.82528759127%

276. The risk involved in being a mortgagee (a lender of funds secured by a mortgage) is: (1) greater than the risk involved when investing in Canadian government bonds for a similar time period. (2) acceptable to many investors if the interest rate is high enough. (3) reduced through careful appraisal of the value of the property and the credit rating of the borrower. (4) all of the above.

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980. Andrew forged a mortgage and registered it against the fee simple title of Julia, without her knowledge. Andrew then went to the Handy Dandy finance company and sold the mortgage to them. Wendy, an employee of Handy Dandy, searched the title and ascertained that Andrew was the registered mortgagee, prior to buying the mortgage from Andrew. Subsequently, Julia learned of the mortgage when Handy Dandy sent notice to her instructing her to make her payments in future to Handy Dandy. Julia told Handy Dandy that she had never granted a mortgage to anyone, and that she had no intention of paying them anything. Andrew is now living happily in Bolivia. Which of the following statements is TRUE? (1) Handy Dandy's mortgage is protected under the Land Title Act, since they dealt with the registered holder of the mortgage, and relied on the register. (2) Julia will be obliged to repay the mortgage to Handy Dandy, but she will be entitled to recover that amount from the assurance fund. (3) Handy Dandy will not be able to recover the mortgage debt from Julia, but they will be able to recover the amount of the mortgage from the assurance fund. (4) Julia will be able to have Handy Dandy's mortgage removed from her title, and Handy Dandy will have no recourse, except against Andrew.

986. Under the Real Estate Services Act, where a licensee desires to buy real property or an interest in it for him or herself, or for a company of which the licensee is a shareholder, director, or officer, or for a partnership of which the licensee is a partner, which of the following must the licensee disclose in writing to the seller prior to the agreement? (1) that he or she is a licensee acquiring the real estate for him or herself, or for the corporation or partnership (2) the amount of remuneration the licensee expects to receive based on the transaction (3) the name of the person to whom the disclosure is made (4) A licensee is required to disclose all of the above.

995. A company pays $97,635 for an asset on which the Income Tax Act allows capital cost allowance at 5% per year. The asset is expected to have a useful life of 25 years and will have no salvage value at the end of this time. Calculate the depreciation expense for accounting purposes for the asset's third year if the accountant chooses to use straight-line depreciation. (1) $3,913.40 (2) $4,185.49 (3) $4,521.72 (4) $3,905.40

230. Your office manager has just asked you to give a sample sales presentation at the next office meeting. You have decided to use presentation software to create a slide presentation. Which of the following are general guidelines for slide presentations? A. Use "8 X 8" format as a guide; no more than 8 words per bullet point and no more than 8 bullet points per slide. B. Each slide should start with a salutation. C. There is no need to speak during the presentation since all of the information should be on the slides. D. Put as much information on each slide as possible. (1) Only A and C (2) Only C and D (3) Only A, B and C (4) None of the above.

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238. A zoning bylaw may do any of the following EXCEPT: (1) divide the whole or a portion of the area into zones. (2) regulate the use of land. (3) regulate the number of buildings on a lot. (4) A zoning bylaw may do all of the above.

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243. A property is sold for $175,000. Real estate commission is 5% on the first $100,000 and 2.5% on the balance of the sale price. The adjustment, possession and completion date is July 28th. Taxes for the current year, in the amount of $516, were paid by the seller on July 1st. The buyer has paid a $20,000 deposit to her brokerage. The legal fees for the conveyance amount to $384. No exemptions apply to this transaction, so property transfer tax is payable upon completion. It is NOT a leap year. The required balance due to complete from the buyer will be: (1) $157,221.95. (2) $157,739.95. (3) $155,605.95. (4) $157,355.95.

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249. If the sale price was $120,000, the commission is 5%, the current year's taxes have been paid and were $1,095.00, and the adjustment date is August 30th, how much will the seller receive on completion? (1) $114,723 (2) $114,369 (3) $126,726 (4) $114,372

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254. Consider a building for which a strata plan was filed in August of 2001. In the event that the building is destroyed and the strata corporation passes a resolution not to rebuild, how will the proceeds of any insurance policy be distributed? (1) equally between all owners (2) according to the unit entitlement of the individual strata lot owners (3) according to the value each strata lot bears to the total value of all lots (values determined at the inception of the project) (4) according to a conversion schedule based upon the most recent assessed values of the strata lots.

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257. Whose responsibility is it under the Assessment Act to establish Actual Value? (1) the local municipal council (2) the Superintendent of Real Estate (3) the Lieutenant-Governor in Council (4) the Assessor

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258. Which of the following is characteristic of a mortgage as an investment? (1) illiquid relative to government bonds (2) requires a high degree of administrative work (3) requires a high initial outlay of capital (4) all of the above are characteristic of a mortgage as an investment

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263. Bob and Margaret execute a contract under seal. Because of the seal: (1) there is no need for written acceptance. (2) neither party needs to sign the contract. (3) they do not need the intention to contract. (4) there is no need for consideration.

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266. S, a seller, offers to sell a property to A for $50,000. The offer is to remain open for acceptance until noon the next day. At 11:00 a.m. (the next day) B offers to purchase the same property and S accepts. At 11:30, A accepts the original offer. Which of the following statements is TRUE? (1) S has entered into a contract with both A and B. (2) S could have revoked the offer to A and avoided the problem. (3) B would probably be entitled to specific performance while A must settle for damages. (4) All of the above three statements are true.

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267. An interest only loan has an original loan amount of $15,000, carries an interest rate of 6.5% per annum, compounded semi-annually, and has monthly payments of $80.17. When will this loan be completely repaid? (1) 670 months (2) 696.44934 months (3) 300 months (4) impossible to determine from the information provided

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278. Lawson has rented his warehouse to Tyler who runs a moving and storage business. Which one of the following is NOT a remedy available to Lawson if Tyler fails to pay his rent? (1) Lawson can re-enter the premises and forfeit the rent payable for the balance of the rental period. (2) Lawson may seize the personal property of Tyler and sell it in order to pay the arrears of rent. (3) Lawson can sue Tyler for the rent as would any creditor. (4) Lawson can apply under the provisions of the Residential Tenancy Act for an arbitrator to be appointed.

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279. Among other factors, the maximum amount that the buyer of a residential property may borrow is affected by: (1) the buyer's income. (2) the lending value of the property. (3) the prevailing mortgage interest rate. (4) all of the above factors.

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280. A potential borrower has inquired as to how large a mortgage loan she can "afford" with monthly payments of $850. If mortgage interest rates are currently 4% per annum, compounded semi-annually, with an amortization period of 25 years, calculate the maximum loan allowable. (1) $140,268.58 (2) $145,628.43 (3) $153,657.94 (4) $161,590.75

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284. Which one of the following statements is FALSE regarding successful negotiations? (1) Honed negotiation skills are essential for handling all aspects of a client's real estate transactions. (2) Learned negotiation skills can be used in one's personal and professional life. (3) Reading about negotiation skills is not sufficient to master the skills, as practice is required as well. (4) Practice through trial and error is the best way to internalize learned negotiation skills.

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285. An investor wants to decide whether to buy a mortgage which calls for monthly payments of $390 for 20 years. If the investor can earn j 2 = 8% in other investments, at what price should the mortgage be purchased? (1) $48,921.57 (2) $46,626.12 (3) $45,232.84 (4) $47,081.12

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299. Who may claim a home-owner grant? (1) anybody whose name appears on the assessment roll (2) the tenant of a property, if he/she has a lease exceeding 3 years (3) the owner of a property, whether he/she lives there or not (4) the owner-occupier of a property

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37. A revocation of an offer is effective when: (1) a notice of revocation is mailed. (2) it is communicated to the offeree. (3) it is reduced to writing. (4) a notice of revocation is filed.

23. An appeal from the small claims court is to: (1) the British Columbia Supreme Court. (2) the Federal Court of Appeal. (3) the British Columbia Court of Appeal. (4) the Small Claims Court of Appeal.

32. Which of the following correctly complete the phrase: "A mortgage is ..." A. a contract B. evidence of a loan C. security for a loan D. required to be registered to be effective between the parties (1) Only A, B and D correctly complete the phrase. (2) Only A, B and C correctly complete the phrase. (3) Only A and C correctly complete the phrase. (4) All of the above correctly complete the phrase.

61. The Law and Equity Act contains a provision that is often referred to as "the requirement of writing". Which of the following accurately summarizes the "requirement of writing" contained in section 59 of the Law and Equity Act? (1) A contract respecting land must be in writing or it is void. (2) A contract respecting land can never be enforced against a party who has not signed it. (3) A contract for the sale of land must be contained in one written document. (4) None of the above three statements accurately summarizes the requirement of writing.

66. A owes B $1,000. B assigns the debt to C. For this to be a statutory assignment three requirements are necessary. Which one of the following is NOT one of them? (1) The assignment from B to C must be for the entire amount. (2) The assignment from B to C must be in writing. (3) The notification from C to A must be in writing. (4) The notification from A to B must be in writing.

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