RECA FUNDAMENTALS EXAM QUESTIONS AND VERIFIED ANSWERS| (2024/ 2025 UPDATE)
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Course
RECA FUNDAMENTALS
Institution
RECA FUNDAMENTALS
RECA FUNDAMENTALS EXAM QUESTIONS AND
VERIFIED ANSWERS| (2024/ 2025 UPDATE)
Principal of Balance - □□ value is created and sustained where there is equilibrium
Principal of Substitution - □□ a buyer will pay no more for a property than the cost of
acquiringa similar and equally desirabl...
RECA FUNDAMENTALS EXAM QUESTIONS AND
VERIFIED ANSWERS| (2024/ 2025 UPDATE)
Principal of Balance - ✔□✔□ value is created and sustained where there is equilibrium
Principal of Substitution - ✔□✔□ a buyer will pay no more for a property than the cost of
acquiring a similar and equally desirable property
Principal of Contribution - ✔□✔□ value of a property attribute relates to the value it adds
to the overall value of the property. basis by which adjustments are made to the sale
prices of comparable properties
Principal of Progression - ✔□✔□ properties in the same area are dissimilar, the property
with the lesser value will be enhanced in value its proximity to properties of greater value.
Principal of Regression - ✔□✔□ where properties in the same area are dissimilar, the
property with the greater value will be adversely affected in value by its proximity to
properties of lesser value
Principal of Anticipation - ✔□✔□ value is created for the buyer by the expectation of future
benefits, whether based on money or amenities
Principal of Change - ✔□✔□ economic, political, and social forces are constantly in play
and contribute to the dynamic nature of property values
Principal of Competition - ✔□✔□ excessive profits breed opportunities which then tend to
destroy those profits
Principal of Consistent Use - ✔□✔□ when improved land is in transition to another highest
and best use, one use cannot be allocated to the land and another allocated to the
building
Principal of External Factors - ✔□✔□ various factors beyond the property itself can impact
its value and these factors may include economic, political, social and physical issues
Principal of Increasing/decreasing return - ✔□✔□ capital improvements add value to a
property to a certain point
Principal of Surplus productivity - ✔□✔□ factors of production that generate net income,
which is then attributed to the land and tends to set the value
,Principal of Supply and Demand - ✔□✔□ market value is determined by the interaction of
market forces such as the quantity of available properties and the interest of buyers able
to purchase them
Principal of highest and best use - ✔□✔□ considers legal permissibility, physical
possibility, financial feasibility and maximum productivity
Administrative penalties - ✔□✔□- actions breached a section of rules and deemed
potentially serious
Advisory Notes - ✔□✔□ Technical breach of legislation
ex. forgetting brokerage name on marketing
Amendments to the Act - ✔□✔□- can be made by provincial legislature with
recommendations by the Minister of Service Alberta
Amendments to the rules - ✔□✔□ The rules contain the day to day activities council has
the authority to create and amend
Annual general meetings - ✔□✔□- must be held within 15-months of last one
Appraisal Process - ✔□✔□ 1. define problem
2. Complete preliminary inspection and appraisal plan
3. Collect and analyze data
4. Decide on Approach
5. Reconcile final property value estimate
6. Write appraisal report
Approaches to complaints agent agent - ✔□✔□- Advisory notes
technical breach
letter of reprimand
less serious, already received advisory note
Administrative penalty
potentially serious
, hearings
severe in nature
benefits of economic growth - ✔□✔□ depletion of natural resources
Benefits of RECAS trust assurance and practice review program - ✔□✔□- effective record
keeping and administrative procedures
• education and advice in relation to brokerage trust accounting
• identifies and resolves potential problems regarding brokerage trust accounting
requirements
Benefits of REIX - ✔□✔□- enhances the image of the profession
• has the potential to save on insurance costs
• The profession is active in managing the program and its risks
Benefits of Voluntary Broker Resolution Process - ✔□✔□- avoids time and intrusion
involved with RECA investigation
• identifies deficient brokerage practices that need improvement
• allows participation in the process to achieve acceptable resolution
• opportunity to mend relationship with consumer
Bundle of rights - ✔□✔□ right to possess, use, enjoy and sell the land
• lease/rent
• sell/give away
• enter/use/do nothing
Civil liability - ✔□✔□- private legal action between disputing parties
• involves and plaintiff and defendant appearing in court
• established by the courts at the conclusion of legal proceedings
Common Law - ✔□✔□ Laws put in place by the courts
Complaints and Disputes can - ✔□✔□- indicate need for improved policies/procedures
• are associated with learning opportunities
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