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What is Dower Act?

Raman Gakhal of Alberta Real Estate School explains in detail about the Dower Act in Real Estate and covers the dower act requirements, application, process as well as difference between Dower Consent and Dower Release.

Dower Act is something that all Realtors® are and should be aware of. It is one of the most important topics for all categories of Real Estate Exams. It is also an important topic for buyers to be aware of when it comes to purchasing a property. It deals with matrimonial homes. So basically, if you are married or about to be married, and if you are buying a property, dower act comes into action. This is a very general phenomenon that almost every individual deal within their lifetime.

You can also switch over to the video version below if you prefer watching over reading –

What is Dower Act?

We can define Dower Act as –

Dower Act protects the rights of the untitled spouse in a matrimonial home.

It means if there is one person on the title and that person is married, the rights of the other spouse that is not on the title will be protected with dower act. The title spouse i.e., the person who is listed on the Certificate of Title of the property will not be able to dispose off the property. In other words, they will not be able to sell, mortgage, or lease the property without the consent of the untitled spouse.

What does Dower Act offer?

In a situation where two people are married and only one person is on the title, they will not be able to sell the property without the consent of the second person who is not on the title. This act provides residential safety and security to the untitled spouse, so that they don’t get kicked out of the matrimonial house that they are living in by their common law or legally married partner. However, it is important to note that dower act only safeguards the rights of the spouse and not their children.

How can Dower Act protect you if your titled spouse dies?

You might be wondering, what will happen if the titled spouse dies? if the person who is on the title dies, it then creates a life estate for the untitled spouse in the property. This means that the untitled spouse will be able to use the property. They can then have the full control of the property. It is their right as they were directly related with their partner.

Dower Act offers concrete rights to the spouse that even if the titled spouse has a will, and he has nominated a different beneficiary in the will as the owner of the property after his death, dower can still overpower the will and come into effect, if the untitled spouse is still alive. Once the untitled spouse dies, the estate will then pass to whoever the fee simple owner of the property is. Basically, only then the beneficiary in the will (other than the untitled spouse) will be able to take charge of the property.

Requirements for Dower Act Application

In order to take the benefits of dower act, you need to have the following conditions fulfilled. Only then, dower can be applied –

  1. There should be only 1 spouse in the certificate of title of the property. The spouse should be untitled for the dower act to be applied.
  2. The titled spouse and untitled spouse should be legally married.
  3. Either of the spouses should have lived in the property after getting married. This is a very important point as for the dower act to apply, it should be made sure that the property is used as a living/residential space by at least one of the spouses. Only then dower act can protect the rights of living for the untitled spouse.
  4. It only applies to Residential Properties. The purpose of dower act is to protect the basic rights of retaining the personal residence of a married partner. Thus, it can be applied for residential properties only, and not for business/commercial properties.

Dower Consent and Dower Release

Dower Consent and Dower Release are documents required during the Dower Rights legislation in the Alberta Law. The Dower Act creates Dower rights.

The Dower Act Process

  1. See if all the requirements are met.
  2. Get the Dower Consent or the Dower Release signed by the untitled spouse
  3. If the spouse chooses to sign the dower consent form, the next step would be to add the real estate agent’s consent to the file to keep all the records.
  4. Finalize the deal and transfer the certificate of title on the name of the Untitled Spouse.

Key Takeaways from the Blog

Sample Exam Questions

Example 1 – Definition Question

Which of the following statements best describe the term Dower Act?

A. It protects the rights of the title spouse in the matrimonial home when there’s a soul owner on the certificate of title

B. It protects the rights of the untitled spouse in the matrimonial home when the property is held in joint tenancy option

C. It protects the rights of the untitled spouse in the matrimonial home when there is a sole owner on the certificate of title or

D. It protects the rights of the untitled spouse in the matrimonial home when property is held as tenants in common

Correct Answer: C

Rationale: Here, only Statement C states all the points that define the term Dower Act – untitled spouse, matrimonial home, sole owner on the certificate of title. Thus, the correct answer will be Statement C.

Example 2 – Scenario Question

John is a real estate professional with Prime Brokerage helping Sam and Melissa sell their home. On pulling the title for the property, John sees that Melissa is the sole owner of the property as she had purchased the place prior to their marriage. Which of the following statements apply in this situation?

A. Dower Act does not apply as Melissa had purchased the property prior to their marriage.

B. Dower Act does not apply as Sam and Melissa plan to use the property as a rental.

C. Melissa needs to sign a Dower Release and register it on the title of the property.

D. Sam will need to sign a Dower Consent, so Melissa can sell the property.

Correct Answer: D

Rationale: In this case, it doesn’t matter if the property was brought into the marriage or not. If one person had the property prior to the marriage and the person gets married and because either or both the spouses have lived in the property, Dower Act would apply. And thus, the untitled spouse would have to give consent in order for the property to be sold. Here, the untitled spouse would be Sam because Melissa owned the property prior to marriage. But because they’re living in this property right now, dower act will apply. Thus, the correct answer in this case would be Statement D. We would get Sam to sign the Dower Consent.

So, this is Dower Act for you. Learn the concept and all the related terms for Dower Act, when to apply the dower act and how the dower act process takes place. The sample questions should give you an idea about how to take on the topic in the real estate exams. We cover similar topics to make you understand the concept of the topic with relevant examples and practice questions to make your preparations robust.

Want to know What are the 5 Cs of Credit? Hop on!

Join Alberta Real Estate School for expert help with understanding the concepts of Real Estate and getting uncommon and detailed tutoring sessions personalized as per your needs. Get our personalized Notes designed to get you through the Real Estate Exams in the first attempt! Visit our list of Real Estate Tutoring Sessions for details.

If you have any doubts for Exam Preparation of any of the real estate courses or topics, reach out to us directly at 587.936.7779.

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Understanding Real Estate Exam Questions

Raman Gakhal of Alberta Real Estate School is helping us understand the breakdown for Real Estate Questions asked by RECA in the Alberta Real Estate Exams.

The Real Estate Exam in Alberta is a very tricky exam. There are a lot of topics to understand. Thus, the Alberta Real Estate Exam Format is also designed to match the format of the content. Alberta Real Estate Exams are multiple-choice and thus, the questions asked in the exam are divided in to:

[I] Definition Questions

Definition Questions go with their name. They do exactly what they say i.e., Terms or Definitions. So, they can either give you a term to define and they will ask you for the definition of that term or they can give you a definition and they will ask you what term that describes. For example, things like real property, real estate, land, GDP, etc.

[II] Scenario Questions

One of the most difficult types of questions to expect in the Alberta Real Estate Exam would be Situational or Scenario Questions. Scenario questions basically ask you who, what, when, where or why of any situation. So, they will give you a scenario and based on that, you will have to answer the given question.

Let’s try to understand some Sample Real Estate Questions with Solutions –

Examples of Real Estate Exam Questions in Alberta

Example 1

Which of the following statements best describes the concept of Scalable Enforcement under RECA’s professional conduct review program?

  1. RECA will consult the courts and other governing bodies to impose disciplinary sanctions
  2. Disciplinary Sanctions will be first carried out by the brokers and then referred to RECA if the same infraction occurs
  3. Industry Professionals will receive sanctions that can and will escalate upon future occurrences of the same activity
  4. Failing to comply with brokerage policies and procedures will result in monetary fines that increase with each breach

Correct Answer: 3

Rationale: So, in this case, it is a Scenario Question. The reason of the statement being true is RECA will put an easier Sanction initially, but if the other party does not improve their behavior and keep repeating the same mistakes again and again, the Sanctions will be higher. So they will escalate upon future occurrences of the same activity.

Example 2

Which of the following statements is an example of an inappropriate inducement?

  1. A brokerage agrees to pay the buyer’s moving costs to close a transaction
  2. A brokerage ad states that it will pay the appraisal fee for all the first time home buyers
  3. A real estate professional agrees to pay the first mortgage payment to get new business
  4. A real estate professional pays for the seller’s window repair to make the sale

Correct Answer: 4

Rationale: So, in this case, they are asking us which of the following is an Inappropriate Inducement. It is a Definition Question. So, you have to understand the Definition of Inducement and apply the understanding of the concept to answer the question. Now, if you have learnt the concept thoroughly, you will know that paying the cost of window repair of a seller is not a Real Estate Agent’s liability. Thus, the answer is 4.

Example 3

Which of the following applies to the payment of Referral Fees?

  1. Real Estate brokerages may be paid Referral Fees by Mortgage Brokerages
  2. Real Estate Professionals may pay referral fees to mortgage brokerage professionals
  3. Real Estate Professionals may pay referral fees to unlicensed individuals if the broker approves
  4. Real Estate Professionals may be paid referral fees by mortgage brokerages

Correct Answer: A

Rationale: This is again a Definition Question. According to the concept of Referral Fees, Real Estate Agents are allowed to pay Referral Fees. However, they have to be paid through the Brokerage and not directly. So, the process goes as – We send Referral Fess to Mortgage Brokerage and then the Brokerage sends the fees to the Mortgage Brokers.

Example 4

Which of the following Disclosures are required by a brokerage when one of its real estate professionals wants to purchase a property that the brokerage has listed for sale?

  1. Disclose to the client the name of the real estate professional
  2. Disclose to the client the existence of a conflict of interest
  3. Disclose to the client the opportunity to seek independent advice
  4. All of the above

Correct Answer: 4

Rationale: If a real estate professional wanted to buy a property that is listed by another agent in the same brokerage, it means that the brokerage is representing the seller. So, in this case, we would have to do some disclosures and we would have to disclose the name of the real estate professional who is involved. We would have to say that there is a conflict of interest and the client will have the opportunity or we have to provide them the opportunity to seek independent advice on how to proceed. Thus, our correct answer here is D – All of the above.

Example 5

The rules require an individual trading in real estate to hold an authorization with RECA unless they are exempt. Which of the following is not exempt?

  1. A person acting directly by statute or court order to dispose of real estate
  2. A bank, credit union, loan corporation, trust corporation or insurance company administering real estate
  3. A full time assistant that holds open houses for a real estate professional
  4. A member in good standing of the Law Society of Alberta when in the practice of law

Correct Answer: C

Rationale: The person who is acting based on a court order and they are auctioning of the property or it’s some sort of a foreclosure and they’re dealing with the property, that person does not require a license anything under the court order does not require a license because they’re only working with one particular property that the court is dealing with. So, they don’t require a license.

Generally, when there’s a foreclosure or anything like that, they will hire a real estate professional to represent and that’s why we don’t have to worry about it. So anything under the court is completely exempt. Also any kind of bank, credit union, loan corporation, all these types of companies are allowed to provide mortgages. Normally, you would require a license from RECA or authorization from RECA in order to get mortgages. However, in this case, these companies fall under their own regulation.

So for example, if it’s an insurance company like Manulife, they give out mortgages but they would fall under the Insurance Act and therefore, they don’t have to go through RECA under the Real Estate Act, Same way, a bank or a credit union they have their own banking regulation or credit union regulations that they fall under and therefore they are exempt from RECA authorization because they already have a similar regulation that they fall under.

Here, Option D states a lawyer. Basically, we will work with lawyers in closing the transactions and lawyers do not fall under RECA’s jurisdiction. Again, because they are under the Law Society of Alberta. They have their own rules that apply to them. In case of Option C, it refers to a full-time assistant that holds open houses for a real estate professional. Now, the problem here is a full-time assistant is not allowed to do open houses. So, this is act in person when we have contract with somebody. We are the ones who are supposed to act on behalf of that person. We are the one with authorization. If a person is working as a full-time assistant that means they’re unlicensed and they’re not allowed to do open houses for us. They’re not allowed to represent a client, sign a contract or do any of those things. So, all those activities require a license. Thus, a full-time assistant would not be able to do this transaction, they would need a license. So they’re not exempt.

Example 6

Which of the following groups of statements are correct regarding the Real Estate Act Rules? Choose the correct statements.

  1. The Rules may only be amended by the Provincial Legislature
  2. RECA posts the most current version of the rules on its website
  3. The Rules refer to the Standards of Practice for industry professionals
  4. When contemplating amendments to the Rules, RECA consults with industry professionals and stakeholders

Options:

A. Statements I, II and III

B. Statements II, III and IV

C. Statements I, III and IV

D. All Statements are correct

Correct Answer: B

Rationale: Here, the statements 2, 3 & 4 are correct as RECA is allowed to amend the rules and bylaws. They don’t have to go through the provincial legislature. Only we have to go through the provincial legislature. If there are any sort of amendments required to the Real Estate Act, only provincial legislature can amend it. However, the rules and bylaws can be amended by RECA. Thus, the 1st Statement is not correct. But the other Statements state that RECA will post most current version of the rules on their website. Rules are the standards of practice that we have to follow in our day-to-day. So, they apply to all Real Estate Industry Professionals and then any time when RECA wants to do changes, they will consult industry professionals i.e., us. They will get feedback from all the professionals who would be in that industry plus the stakeholders and change the rules. Therefore, Option B is correct.

These are some great examples of Real Estate Exam Questions that you can expect in the Alberta Real Estate Exams. The examples clearly show the level of complexity these questions can create. Thus, you should understand and learn the concepts whole-heartedly to crack the actual meaning of the questions. Once you breakdown the question in smaller parts, you start to understand the answer they are looking for and you can then answer it without any confusion.

Want to tackle Definition Questions in the Real Estate Exams more confidently? Get all the Important Real Estate Terminology right with Alberta Real Estate School.

Join Alberta Real Estate School for expert help with understanding the concepts of Real Estate and getting uncommon and detailed tutoring sessions personalized as per your needs. Get our personalized Notes designed to get you through the Real Estate Exams in the first attempt! Visit our list of Real Estate Tutoring Sessions for details.

If you have any doubts for Exam Preparation of any of the real estate courses or topics, reach out to us directly at 587.936.7779.

Happy Studying!

We hope you found this information useful. You can also listen to this blog on the Podcast Channel below. Stick to us for our latest updates.

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How to Calculate Net Present Value (NPV)?

Raman Gakhal of Alberta Real Estate School is explaining the calculation of Net Present Value which can be used in Commercial Real Estate Exams in Alberta.

Net Present Value (NPV) is a topic of Commercial Real Estate Course. It helps us to find out the Present Value of an Investment or a Property. It is a very important concept that you can expect to see in your Real Estate Exams. Calculation Net Present Value is a critical topic.

This strategy is useful for Commercial Projects and Properties to determine the Net Present Value of any particular Commercial Property, thereby calculating the Future Value of the Property in Present times. It is thus, one of the most important topics of Commercial Real Estate.

What is Net Present Value?

Net present value (NPV) is a method used to determine the current value of all future cash flows generated by a project,

This is a way to determine which projects are likely to turn the greatest profit.

Net Present Value Illustration Image

So, for example, if someone were to buy a Commercial Building, then in that case, we would have a yearly Cash Flow (CF). Thus, we can say we would have the Net Operating Income that would come in from the Commercial Property. We have to consider the income that we are making from the business that is running in the said commercial building for the current year as well as over the years and calculate the worth of that Income / Profit on this Present day.

The reason we have to do this is because we have to see if the project (of buying the Commercial Building) is bound to make profits or not. We can use the calculation of finding Net Present Value of various projects to see if we are going to make profits in future and will be able to give us the highest Rate of Return.

Example of NPV Calculation

Refer the Video for seeing the Actual Calculation

Example

Tammy is a real estate professional representing a client who is interested in purchasing a commercial building. Tammy believes she can negotiate a purchase price of $1,600,000. The client wants to sell the property after 4 years for $2,000,000 and earn an annual return of 12%. Tammy projects the annual net operating income to be $300,000 for the first year, $315,000 for the second year, $325,000 for the third year, and $345,000 for the fourth year. What is the net present value for the investment?

A) $462,387.25
B) -$620,484.39
C) $1,574,763.55
D) $640,591.69

Solution

  1. CF (Cash Flow for Current Year) = 1,600,000
  2. CF1 (Cash Flow for First Year) = 300,000
  3. CF2 (Cash Flow for Second Year)  = 315,000
  4. CF3 (Cash Flow for Third Year) = 325,000
  5. CF4 (Cash Flow for Fourth Year) = 345,000 + 2,000,000  = 2,345,000
  6. 12 I/YR
  7. Compute NPV (Net Present Value) = $640,591.69

So, the Correct Answer is D = $640,591.69.

This is NPV for Commercial Real Estate. You can tackle other Calculation Topics in the Commercial Real Estate Exams with our help and understanding of the topic. We can offer you concrete examples with Calculation Solutions and the tactics you can use within your Real Estate Calculators.

Want to learn the concept of Time Value of Money within your Commercial Real Estate Course? Hop On!

Join Alberta Real Estate School for expert help with understanding the concepts of Real Estate and getting uncommon and detailed tutoring sessions personalized as per your needs. Get our personalized Notes designed to get you through the Real Estate Exam in the first attempt! Visit our list of Real Estate Tutoring Sessions for details.

If you have any doubts for Exam Preparation of any of the real estate courses or topics, reach out to us directly at 587.936.7779.

Happy Studying!

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Managing Stress During the Real Estate Exam

Raman Gakhal of Alberta Real Estate School is talking about managing exam stress while attempting the Alberta Real Estate Exams.

Do you get Stressed while Writing the Exam?? If yes, don’t worry. You are not alone! The most common advice that we have to offer to our Students as a Real Estate Education Institute is how to Manage Real Estate Exam Stress. But believe us, Real Estate Exam Stress is Real!

In the previous parts of the series, we saw some stress management techniques for your exam preparations as well as some tips for the exam day.

Now, the time comes when you are actually attempting your real estate exam. Managing exam stress while you are writing the exam is apparently the most important thing you can come across as it can make or break your result. After all, you have been preparing for this moment since all this time. We have thus, come up with the most effective stress management techniques to implement – while you are writing your real estate exams.

Let’s have a look –

To list a few, below are some of the most effective Exam Tips that we discussed.

1. Arrive Well Rested

An illustration of a woman getting up from bed happily and fresh.

Rather than counting the exam day as the final day to prepare for the exam writing, count it from a day prior to that. If you are writing your exam tomorrow, you need to make sure that you get a good night’s sleep a night before writing the exam. It’s very important that you go into the exam hall well rested. It will help you to focus thoroughly on the exam questions and help you recall your study materials faster. We suggest not to cram too much a night before the exam because that is not going to help. This is one of the most important points which will help you manage your exam time effectively.

2. Read All the Instructions Carefully

An illustration of a male figure trying to read information from a bunch of papers with a magnifying glass.

Any Exam can come with a Pre-set of Rules and Instructions that needs to be followed in order to give the exam legally. Note and follow the Pre-Exam Instructions carefully. It is mandatory to abide by the set guidelines so make sure they are followed accurately. Any unethical, lousy, or unprofessional behavior can result in serious penalties and fines.

3. Do NOT Rush!

An illustration image that shows a wall clock and a man with ties running inside the clock.

Rushing while writing is a good sign of anxiety. Rushing in attempting the exam can make you overlook important points that you might know. This might lead you to select wrong answers, especially if it is a multiple-choice question. You have to think carefully before answering the question, read the question properly and may be more than twice to make sure to understand the questions. There may be some tricks to confuse you. So you need to make sure whatever answers you are selecting are the ones that you want to select.

4. Manage Exam Anxiety

An Illustration figure of a girl is shown in an anxious mood biting hers nails in anxiety.

Anxiety increases our stress levels and heart rate. It can make you jittery and can make you forget your preparations and learnings. It is advised to stay as calm as possible so that you can focus at your best during the exam. Some tips to remain stress-free are listening to mild melodies and soft music for 2 to 5 minutes, avoiding last minute revisions or helping a friend in solving some doubts to boost your confidence levels. These tactics work in most scenarios.

5. Stay Hydrated

An illustration image of a fit girl drinking water from a bottle.

Water is an important energy source for your brain. In fact, it can be more important than food on many grounds. We advice to carry a bottle of water to the exam hall as well. So that you have water at small intervals. This will get your brain the required amount of oxygen to function on regular levels. During the exam, you have to make sure you do everything that helps you keep your brain active, because that is one thing you need the most.

6. Manage Long Exam Durations

An illustration of a girl trying to work on a desk on her laptop and is stretching her hands and legs to get fresh.

Other than being stressful, exams can be tiring. You are using all your energy, focus and retention powers to give your best during an exam. This can be quite exhausting. Especially, if the exam lasts for more than an hour. Real Estate Exam typically last for 2 to 3 hours. Thus, managing your exam durations is important. You can stretching your legs, hands and neck, drink water and get freshen up by going to a washroom if time permits. This can really help you stay calm and focus more with a refreshed mind.

7. Apply the Process of Elimination

An illustration image of a green pencil and a series of checkmark boxes where some boxes are marked with red crosses 'x' and others with a green check.

This is very important for Exams that have a question format of Multiple-choice. Sometimes the questions asked and the options given are tricky, If possible, you can apply the Elimination Method to answer questions. It is simply looking for the options that you know are not true. Eventually, you will left with an option that is the answer. If you are still not sure, you can take a guess for an option that you feel correct. There are no negative markings for the wrong answers in the Real Estate Exam. So its in our best interest to attempt the question somehow rather than leaving it all together.

8. Skip Questions

an illustration of an image of video forwarding option in red.

This is another important tactic to save time and increase your efficiency while you are writing the exam. If you feel you don’t know the answer to a certain question, its best that you skip that question for now and attempt all other questions that you are confident about at first. Keeping difficult questions at the end of the exam helps save time, plus you don’t spend too much time thinking and worrying about the question that you are not sure.

9. Final Review

an illustration of an image with a word "review" and a magnifying glass.

Once you are done with all the questions, it is advised to take a quick scan to all the answers that you have selected to make sure there are no mistakes. Multiple-choice questions can be confusing and one might select a wrong option in haste or just by accident. It is therefore important that you take a final review at your solutions so that you are not losing any marks out of mere accident.

10. Put the Exam in Perspective

A colorful sticker with stars and flowers that reads "Keep Smiling".

Finally, exams are stressful and need a lot of preparations. Sometimes, you are not able to give your best at all times or have other unfortunate circumstances. Its not always in our hands to do what we intend for. And thus, once the exam is over, you should put the exam in perspective. Leave the stress and just wait for the results, you part is over. Always. keep smiling and try learning from your each of your experiences.

These are some of the Tips to keep in mind While you are Writing your Real Estate Exam. These tips will help you give your Exams Stress Free and make sure you Pass your Real Estate Exam in the very first attempt!

Still Stressed about your Real Estate Exam? We will tell you how to Prepare for your Alberta Real Estate Exam like a Pro!

Join Alberta Real Estate School for expert help with understanding the concepts of Real Estate and getting uncommon and detailed tutoring sessions personalized as per your needs. Get our personalized Notes designed to get you through the Real Estate Exam in the first attempt! Visit our list of Real Estate Tutoring Sessions for details.

If you have any doubts for Exam Preparation of any of the real estate courses or topics, reach out to us directly at 587.936.7779.

Happy Studying!

We hope you found this information useful. You can also listen to this blog on the Podcast Channel below. Stick to us for our latest updates.

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