🪪 The Real Estate Act, RECA and Licensing

1. According to the preamble of the Real Estate Act, what is the Real Estate Council of Alberta (RECA) intended to do?

1. Provide regulation that protects the public and supports the industry
2. Represent licensees in negotiations with government and lenders
3. Set commission rates and standard fees for all brokerages across Alberta
4. Operate the provincial land titles registry and its search service

The preamble of the Real Estate Act states that RECA 'is intended to provide that regulation to protect the public and support the real estate industry.' RECA is a regulator, not a trade association: associations such as the Alberta Real Estate Association are defined separately in s.1(1)(a). Setting commissions or running the land titles registry is not among the purposes the Act gives the Board (s.5) or the Industry Councils (s.7.2).

2. How is the RECA Board composed under section 6 of the Real Estate Act?

1. 9 members: 5 licensees elected by industry and 4 public members named by the Minister
2. 7 members: 4 licensees elected at large by all licensees and 3 named by the Minister
3. 5 members: 1 public member named by the Minister and 1 from each Industry Council
4. 7 members: 3 public members named by the Minister and 1 from each Industry Council

Section 6(1): the Board has 7 members. The Minister appoints 3 public members, who must not be licensees, and each of the 4 Industry Councils established under s.7.1 appoints one of its elected licensee members (3 + 4 = 7). Terms are up to 3 years, with a limit of 6 consecutive and 12 total years of service (s.6(2), (4)).

3. Who appoints the chair of the RECA Board?

1. The executive director, choosing the longest-serving member of the Board
2. The Board members, electing one of the Industry Council appointees by vote
3. The four Industry Council chairs, acting jointly at the first Board meeting
4. The Minister, choosing one of the public members appointed to the Board

Section 6(5): the Minister appoints one of the 3 public members as chair of the Board, for a term of up to 3 years; the chair facilitates meetings and acts as the Board's spokesperson. By contrast, each Industry Council elects its own chair for a 2-year term (s.7.1(6)). The executive director is appointed by the Board (s.8(1)) and plays no part in naming the chair.

4. Under the Real Estate Act, which body has the purpose of setting and enforcing standards of conduct for licensees and the business of licensees?

1. The RECA Board, under its purposes listed in section 5 of the Act
2. The registrar, under the investigation powers in section 38 of the Act
3. The Minister, under the review and policy powers in section 76 of the Act
4. An Industry Council, under its purposes listed in section 7.2 of the Act

Under s.7.2(1)(a), the purposes of an Industry Council are to set and enforce standards of conduct for licensees and the business of licensees, to protect consumers and promote the integrity of the industry; s.7.2(2) and s.12 let it make rules on licensing and conduct. The Board's purposes in s.5 are different: strategic direction and effective operation of RECA, protecting against fraud, providing services that facilitate licensees' business, and administering the Act. The registrar investigates (s.38) and the Minister reviews (s.76), but neither sets conduct standards.

5. Alexei is licensed to lease and manage suburban office buildings on behalf of their owners. Which Industry Council makes the rules and licensing requirements for his industry?

1. The residential property manager Industry Council, since he manages properties
2. The residential real estate broker Industry Council, as the largest council
3. The commercial real estate broker and commercial property manager Industry Council
4. No Industry Council, as commercial property managers answer to the Board

Section 7.1(1) establishes four Industry Councils: (a) residential real estate broker, (b) commercial real estate broker and commercial property manager, (c) residential property manager, and (d) mortgage broker. Leasing and managing office buildings is commercial property management, so it falls under the Industry Council in s.7.1(1)(b), not the residential property manager council. The Board does not license anyone; licences are issued by Industry Councils (s.17).

6. How is each RECA Industry Council composed?

1. 2 public members named by the Minister and 3 licensees elected by their industry
2. 3 public members named by the Minister and 2 licensees named by the RECA Board
3. 5 licensees elected by their industry, with a public chair named by the Minister
4. 2 Board members, 2 elected licensees and the registrar acting as a voting member

Section 7.1(2): each Industry Council has 2 public members appointed by the Minister, who must not be licensees, and 3 licensees from that industry elected by the licensees of that industry. The Council elects its own chair for a 2-year term (s.7.1(6)), and no one may serve more than 6 consecutive or 12 total years on a Council (s.7.1(5)). Licensee members elected on or after December 1, 2025 serve 3-year terms (Bylaws s.3.1(b)).

7. Which statement about RECA's executive director is correct under section 8 of the Real Estate Act?

1. Appointed by the Board and may remain a licensee while serving as chief administrator
2. Appointed by the Minister as chief administrative officer, reporting to the Minister
3. Elected by licensees as chief administrative officer, reporting to the Industry Councils
4. Appointed by the Board as chief administrative officer, reporting solely to the Board

Section 8: the Board appoints the executive director, who is RECA's chief administrative officer (s.8(1)) and reports to and is accountable solely to the Board (s.8(3)). A licensee is not eligible to be or remain executive director (s.8(2)). The Board reviews the executive director's performance every year (s.8(5)); the Bylaws allow the title CEO (s.6.1).

8. Which statement correctly describes the registrar's position at RECA?

1. Appointed by the executive director, reports to the Board, and may also serve as executive director when needed
2. Appointed by each Industry Council, reports to its chair, and may remain a licensee while acting as registrar
3. Appointed by the Board, reports to the executive director, and is accountable to the Board for registrar duties
4. Appointed by the Minister, reports to the Industry Councils, and is accountable to the Minister for registrar duties

Section 8.1: the Board appoints the registrar, who must not be the person appointed as executive director (s.8.1(1)) and cannot be a licensee (s.8.1(2)). The registrar reports to the executive director (s.8.1(3)) but is accountable to the Board for the duties and powers the Act gives the registrar (s.8.1(4)); the executive director reviews the registrar's performance each year (s.8.1(6)). The Bylaws also forbid the executive director and the registrar from delegating their duties to each other (s.6.6-6.7).

9. Under section 55 of the Real Estate Act, which information may the Board, an Industry Council or the registrar publish?

1. Just the names of licensees whose licences were cancelled for fraud
2. Licence refusals, cancellations or suspensions, and disciplinary actions
3. Complaints received about licensees, before any investigation begins
4. Licensees' home addresses and personal finances, to anyone who asks

Section 55(1): the Board, an Industry Council or the registrar may publish information about the refusal, cancellation or suspension of a licence; licensees' names, business contact information and licence category; a person's withdrawal of a licence; and prosecutions and disciplinary actions taken under the Act. These publications have qualified privilege. Notice may also be sent to regulators in other provinces or territories and to law enforcement (s.55(2)), and may include personal information related to the licensee's business (s.55(3)), not unrelated personal data.

10. A newly amended Industry Council rule is inconsistent with a Board bylaw on the same subject. What does the Real Estate Act provide?

1. The rule prevails because Industry Councils regulate licensee conduct
2. The bylaw prevails over the rule to the extent of the inconsistency
3. The more recent of the two instruments prevails over the earlier one
4. Both remain suspended until the Minister resolves the inconsistency

Section 12(4): in the event of an inconsistency between a rule made under s.12 and a bylaw made under the Act, the bylaw prevails to the extent of the inconsistency. The Act contains no 'later in time' principle for this situation, and nothing suspends either instrument pending a decision of the Minister.

11. In 2026, an Industry Council adopts an amendment to one of its rules at a properly constituted meeting. When can the amendment take effect?

1. Immediately, because Industry Council rules need no approval
2. Once it is filed with the Registrar of Regulations of Alberta
3. Only once the Minister has approved the amendment in writing
4. Thirty days after the Board publishes the amendment online

Under s.12(2), an Industry Council submits a proposed rule or rule change to the Board, which transmits it to the Minister; s.12.1(2) provides that a rule or amendment requiring the Minister's approval has no effect until it is approved in writing. The Regulations Act does not apply to rules (s.13), so filing with the Registrar of Regulations is irrelevant. The Real Estate (Ministerial) Regulation removes the approval requirement only after June 30, 2028 (s.25.3(2)).

12. Priya, a licensee, has just been elected to an Industry Council. She also sits on the board of directors of the Alberta Real Estate Association. What does section 9 of the Real Estate Act require?

1. She must resign her licence, since Council members cannot be licensees
2. She may keep both roles if she declares the association role in writing
3. She may keep both roles, since associations are not regulated by RECA
4. She must not serve on an association's governing body while on the Council

Section 9(1)(a): while a member of the Board or an Industry Council, a person who is a licensee must not act in an official capacity for an association, be on its governing body, be its employee or otherwise act for it other than as an ordinary member. The Alberta Real Estate Association is an 'association' under s.1(1)(a). Being a licensee does not disqualify her: 3 of the 5 members of each Industry Council are licensees elected by the licensees of their industry (s.7.1(2)). A written declaration does not lift the prohibition.

13. After reviewing the conduct of an Industry Council, which action may the Minister take by order under section 76 of the Real Estate Act?

1. Award damages to consumers who were harmed by its decisions
2. Dismiss its members and appoint an official administrator
3. Convert it into a committee that reports to the registrar
4. Cancel the licences held by its elected licensee members

Section 76 lets the Minister review the conduct of the Council, the Board or an Industry Council (s.76(1)) and then, by order, direct any appropriate action, appoint a comptroller, or dismiss all or any of the members (s.76(5)). If the Minister dismisses an Industry Council, the Minister may also appoint an official administrator, for terms of up to one year, and direct that a new Industry Council be put in place (s.76(7), (10); s.76.2(5)). Cancelling licences is a Hearing Panel order (s.43(1)(a)), and s.76 gives no power to award damages.

14. Acting in good faith, the chair of an Industry Council made a temporary order suspending Marco's licence pending the outcome of conduct proceedings. The Hearing Panel later found no conduct deserving of sanction, and Marco wants to sue the chair for his lost income. What does section 78 of the Real Estate Act provide?

1. The chair is liable, but the Assurance Fund must reimburse the damages
2. An action may proceed once the licensee obtains the Minister's consent
3. No action for damages may be brought against the chair for that order
4. The chair is immune only if the hearing ends with a finding of misconduct

Section 78 protects the Minister, an official administrator, RECA, the Board, the Industry Councils and their members, officers and employees from actions for damages for things done in good faith in carrying out their duties under the Act; the outcome of the later hearing does not change that. The chair's temporary order is made under s.53(1), and Marco's remedy at the time was to apply to the Court of King's Bench for a stay of that order pending the proceedings (s.53(2)). The Assurance Fund pays certain judgments and claims against licensees (s.57(3)), not damages against Council members.

15. Which of these powers must an Industry Council exercise itself, rather than delegate by resolution under section 15 of the Real Estate Act?

1. Its power to extend the time limits set by its own rules
2. Its power to make rules for licensees in its industry
3. Its power to direct a licensee by written notice
4. Its power to issue licences to qualified applicants

Section 15(2): an Industry Council may delegate by resolution any of its powers to an officer or employee of RECA or another person, except (a) its power to make rules, (b) its power to make appointments to the Board, and (c) any power under Part 3 (conduct proceedings). Directions under s.10, time extensions under s.79(2) and the issuing of licences (done in practice by the registrar, Rules 24-25) are not excluded. The Bylaws require all, or a majority plus one, of the Council's members to approve a delegation (s.5.5).

16. A licensee who sits on the RECA Board lets her licence lapse by not renewing it. What is the effect on her Board seat?

1. She may finish her term because she was properly appointed
2. She is deemed to have resigned from the Board immediately
3. She stays on the Board until the Minister removes her by order
4. She becomes a public member for the rest of her current term

Section 9(11): if a member's licence is withdrawn, expires or otherwise becomes invalid for any reason, the member is deemed to have immediately resigned from the Board or Industry Council. A licence that is not renewed is deemed terminated (Rules 10(1)(b), 25). Under Bylaw 2.4, the appointing Industry Council then has 30 days from notice of the vacancy to appoint a replacement for the rest of the term. Nothing converts a former licensee member into a public member: public members are appointed by the Minister (s.6(1)(a)).

17. Under section 1(2) of the Real Estate Act, which activity does not constitute an 'offering, advertisement, listing or showing' of real estate?

1. Publishing a list of properties for disposition or acquisition
2. Showing a property to a buyer on behalf of the property's seller
3. Running a newspaper advertisement for a client's home for sale
4. Holding an open house for a seller in exchange for a flat fee

Section 1(2): none of the following constitute an offering, advertisement, listing or showing of real estate for the purposes of s.1(1)(x)(iii): (a) the provision of information, forms and signs, (b) the creation of a web page to market properties, and (c) the publication of a list of properties for disposition or acquisition. Showing a home for a seller, running a newspaper advertisement for a client's home and holding an open house are showings, advertisements or offerings of real estate for sale under s.1(1)(x)(iii), so they are trades; done for another person for consideration, they require a licence (s.1(1)(v), s.17).

18. Dana holds no RECA licence. She phones homeowners offering to obtain listing agreements for a local brokerage, which pays her a fee for each signed listing. Is she trading in real estate?

1. No; a trade begins when a buyer and seller sign a purchase contract
2. Yes, provided that she also holds deposit money for those homeowners
3. No; she does not show any property, so she is not trading in real estate
4. Yes; soliciting or obtaining listing agreements is part of trading

'Trade' in s.1(1)(x) is broad: besides purchases and sales, it includes listings (iii), (vi) the solicitation, negotiation or obtaining of a contract or arrangement for any of those activities, and (viii) any act in furtherance of them. Soliciting listings for a fee is therefore trading, and s.17 requires a licence. Showing property or holding deposits is not a precondition.

19. Which of the following is included in the Real Estate Act's definition of 'real estate'?

1. A holiday trailer used mainly for weekend camping at a recreational site
2. A motorhome kept on a farm and used mainly for recreational road trips
3. Household furniture and appliances sold separately from a residence
4. A mobile home on its own chassis, used as a residence on a residential site

Section 1(1)(u): real estate means real property, leasehold property, or a portable dwelling that is designed and used as a residence, is mounted on its own chassis and running gear, can be transported, and sits on a site used or intended for residential purposes. A holiday trailer or recreational vehicle used wholly or mainly for recreation is expressly excluded, and furniture is not real estate.

20. RECA licenses real estate brokers, property managers and mortgage brokers. What does the Real Estate Act require of a person who acts as a real estate appraiser in Alberta?

1. A real estate appraiser licence issued by one of RECA's Industry Councils
2. Registration with a real estate brokerage as an associate or associate broker
3. A licence from the Minister under the Real Estate (Ministerial) Regulation
4. Membership in good standing in one of the appraisal bodies named in the Act

The 'industry' RECA licenses is the real estate broker, property manager and mortgage broker industry (s.1(1)(n)). Appraisers are not licensed by an Industry Council: s.17.1 requires anyone acting as a real estate appraiser in Alberta to be a member in good standing of the Appraisal Institute of Canada, the Alberta Assessors' Association or the Canadian National Association of Real Estate Appraisers. A licensed real estate broker who estimates value for the purposes of a trade is not acting as an appraiser under the Act (s.2(4)(c)).

21. Under section 17 of the Real Estate Act, a person who trades in real estate as a real estate broker must hold which of the following?

1. A certificate of membership in a provincial real estate association
2. A designation from a national real estate institute or a university
3. A business licence issued by the municipality where the office is located
4. The appropriate licence issued by the Industry Council for that industry

Section 17: no person may trade in real estate as a real estate broker, deal as a mortgage broker, act as a property manager, or advertise or hold themselves out as one, unless they hold the appropriate licence issued by the Industry Council relating to that industry. Membership in an association (s.1(1)(a)), a municipal business licence or a private designation does not replace the licence.

22. Grace owns a 30% interest in a rental duplex with two friends. She negotiates its sale herself, without a licence and without charging anyone a fee. How does the Real Estate Act apply to her?

1. It applies, because a duplex sale counts as trading in commercial real estate
2. It applies, because she owns less than a majority interest in the duplex
3. It does not apply, because she holds a substantial interest of at least 25%
4. It does not apply, because every private sale is exempt from the licensing rules

Section 2(1)(c)(ii): the Act, as it relates to trading in real estate, does not apply to a person who disposes of real estate they own or in which they have a 'substantial interest'. Section 1(1)(w.2) defines a substantial interest as an ownership interest in real estate of not less than 25%; Grace's 30% meets that threshold, so no majority interest is needed. Not every private sale is exempt: a person who trades in real estate for others acts as a real estate broker and needs a licence (s.1(1)(v), s.17). The exemption does not depend on whether the property is residential or commercial.

23. Which person may sell real estate without a RECA licence because of an exemption in section 2(1) of the Real Estate Act?

1. A retired licensee selling a neighbour's home for a reduced flat fee
2. An executor selling estate land under the terms of the deceased's will
3. A property owner's adult child selling the parent's home for a fee
4. A relocation consultant selling an employee's home for a commission

Section 2(1)(a): the Act, as it relates to trading, does not apply to an executor or trustee selling under the terms of a will (nor to receivers, liquidators and others acting under a statute or court order). The other three people sell for another person for consideration, which makes them real estate brokers under s.1(1)(v) who need a licence under s.17; a former licence or a family relationship does not change that.

24. Omar is licensed under the Land Agents Licensing Act and negotiates surface leases for an energy company. What does the Real Estate Act provide about his land agent work?

1. He must also hold an associate licence because surface leases are trades
2. He must register with a brokerage, but he does not need to pass any exams
3. He may act once the registrar issues him a written exemption order first
4. He need not hold a real estate broker licence for his land agent activities

Section 2(2): a person licensed under the Land Agents Licensing Act is not required to be licensed as a real estate broker under the Real Estate Act with respect to their activities as a land agent. No associate licence, brokerage registration or registrar's order is needed for that work.

25. An apartment owner hires Bianca as an on-site manager for the building. Which set of tasks can she perform while staying exempt from the Real Estate Act's licensing requirements?

1. Take applications, approve tenants and set the rent for the owner
2. Show suites, collect rent and take tenant applications for the owner
3. Collect rent, hold security deposits and approve leases for the owner
4. Show suites, negotiate lease terms and sign leases for the owner

Real Estate Exemption Regulation s.2(1)(a): an on-site manager acting for a real estate broker or an owner of residential property is exempt from the Act (except Part 2, Division 2) when they maintain the property, collect rent, show it to prospective tenants or receive tenant applications, but not if they negotiate or approve leases or rental agreements, or hold rental or other money for the broker or owner. Negotiating or approving leases and holding money received for a lease are property management (Act s.1(1)(s.1)(i)-(ii)), which requires a licence (Act s.17).

26. A developer still owns every unit in a new condominium and hires a firm to provide condominium management services to the condominium corporation. How does the Real Estate Act apply to those services?

1. They are exempt, because all units are owned by the same entity
2. They need a licence, unless the firm is also the original builder
3. They are exempt, but just until the first unit sale is advertised
4. They need a licence, because the developer is not the corporation

Real Estate Exemption Regulation s.2(4): where all the condominium units of a condominium corporation are owned by the same person, group of persons or entity, the provision of condominium management services to that corporation is exempt from the Act. Once units are owned by different people the exemption no longer applies, and the firm needs a condominium manager brokerage licence and licensed individuals (Act s.17; Rules 9.3-9.4). Advertising a unit or being the builder does not change the test.

27. Where are the exemptions for on-site managers and certain condominium management services from the Real Estate Act set out?

1. In the Real Estate Exemption Regulation, made by the Lieutenant Governor in Council
2. In the RECA Bylaws, made by the Industry Councils and approved by the registrar
3. In the Real Estate Act Rules, made by the RECA Board after first consulting the Minister
4. In the Real Estate (Ministerial) Regulation, made by RECA's executive director

Section 84(1)(a) lets the Lieutenant Governor in Council make regulations exempting persons, classes of persons or transactions from any provision of the Act; the Real Estate Exemption Regulation (Alta Reg 111/1996) does so for on-site managers, certain non-profit organizations and some condominium services (s.2). Rules are made by Industry Councils (s.12) and can only exempt persons from the rules themselves (s.12(1)(aa)); bylaws are made by the Board (s.11); the Ministerial Regulation is made by the Minister (s.84(2)).

28. Under Rule 2 of the Real Estate Act Rules, what are the classes of real estate broker licences?

1. Brokerage, broker, associate broker and associate
2. Brokerage, broker of record, agent and trainee agent
3. Brokerage, managing broker, salesperson and assistant
4. Broker, associate, unlicensed assistant and trainee

Rule 2(1) sets four classes of real estate broker: (a) brokerage, (b) broker, (c) associate broker and (d) associate. Property managers have the same four classes (Rule 4.1(1)), while mortgage brokers have three: brokerage, broker and associate (Rule 3(1)). 'Salesperson', 'agent' and 'trainee' are not RECA licence classes, and unlicensed assistants hold no licence at all.

29. What distinguishes a real estate associate broker from a real estate broker under Rule 2 of the Real Estate Act Rules?

1. The associate broker supervises associates, while the broker handles brokerage trust funds
2. The associate broker holds associate qualifications and may operate a branch office alone
3. Both hold broker qualifications, but only the broker is approved to operate the brokerage
4. Both hold associate qualifications, but the broker has completed a longer practice course

Rule 2(3)-(4): a broker and an associate broker both hold the qualifications of a real estate broker and are licensed by the relevant Industry Council, but only the broker is registered with and approved to operate a real estate brokerage; the associate broker is approved to trade on its behalf. Every brokerage must employ or be associated with a licensed and registered broker (Rule 2(2)). The broker manages the registered business office, and any additional office is managed by the broker or the broker's authorized delegate (Rule 13(4)).

30. Sofia's real estate associate licence was issued on March 15, 2026. Unless it is terminated or cancelled earlier, when does it expire?

1. September 30, 2026, the next September 30 after issue
2. March 31, 2027, the end of the government fiscal year
3. March 15, 2027, one full year after the date of issue
4. December 31, 2026, the end of the current calendar year

Rule 25: a licence issued by the registrar expires on September 30 following its issuance, unless it is terminated or cancelled before then. It is not an anniversary-date licence. A licence that is not renewed before October 1 is deemed terminated (Rule 10(1)(b)), so Sofia must renew by September 30, 2026 to keep trading. RECA's own fiscal year also runs from October 1 to September 30 (Bylaws s.6.13).

31. Marc, a real estate associate, never submitted his renewal application, fees and levies for the new licensing year. What is the status of his licence once the renewal deadline has passed?

1. It stays valid during a 30-day grace period after the deadline
2. It is deemed terminated, and he has withdrawn from the industry
3. It continues while his brokerage keeps paying his E&O premium
4. It is suspended until a Hearing Panel decides whether to cancel it

Rule 6(3): an associate renews by submitting a completed application, with the fees, premiums or levies set by the Board, by September 30. Rule 10(1)(b): a licence is deemed terminated when the licensee fails to renew it before October 1 of each year, and under Rule 11(a) a person whose licence is deemed terminated has withdrawn from the industry. The Rules provide no grace period, no Hearing Panel step and no link to insurance payments. Trading after that date without a licence would breach s.17 of the Act.

32. Jin passed his pre-licensing exam and applied for a real estate associate licence. The licence has not yet been issued, and he is not registered with a brokerage. What may he do in the meantime?

1. Advertise as an associate if his ads say that his licence is pending
2. Show homes under his future broker's supervision until it is issued
3. Keep studying, but not trade or hold himself out as an associate yet
4. Take listings in his own name and move them to a brokerage later

Rule 6(4): an individual must not trade in real estate or in any way hold himself or herself out as a real estate broker, associate broker or associate until the relevant Industry Council has issued a licence and the individual is registered to a brokerage. Supervised showings, 'licence pending' ads and listings in his own name would all be trading or holding out without a licence (Act s.1(1)(x), s.17).

33. Leah, a real estate associate, resigns from her brokerage on June 1 and does not register with another brokerage. What happens to her licence under the Rules?

1. It is deemed terminated because she no longer maintains registration
2. It becomes an inactive licence held by RECA until she finds a broker
3. It is suspended until she proves she has joined another brokerage
4. It stays active until September 30, when it would normally expire

Rule 10(2): the licence of a real estate broker, associate broker or associate is deemed terminated if the licensee fails to maintain registration with a brokerage, and she has then withdrawn from the industry (Rule 11(a)). An associate licence is the licence required to trade only when registered to a brokerage (Rule 6(2)); it does not survive until the end of the licensing year on September 30, and the Rules provide no inactive status for an unregistered associate.

34. A Hearing Panel cancelled Victor's licence. Unless a panel or the court sets a different period, how long must he wait before he is eligible for a new licence?

1. 60 months from the date the appeal period ends
2. 24 months from the date of the hearing decision
3. 12 months from the date of the cancellation
4. 36 months from the date of the cancellation

Rule 14(3): a person whose licence was cancelled under the Act is not eligible for a new licence until 36 months have elapsed from the date of the cancellation, or a lesser or greater period set by a hearing panel, an appeal panel or the court. During a suspension or cancellation period the person is also ineligible in any other class (Rule 14(2)).

35. Ravi, the registered broker of a small brokerage, becomes subject to personal bankruptcy proceedings. Which statement is correct under the Real Estate Act Rules?

1. He must notify the Industry Council chair only, but his eligibility is not affected at all
2. He must notify the registrar at once, and a broker subject to bankruptcy is ineligible
3. He may keep operating the brokerage if an associate co-signs the trust cheques
4. Bankruptcy relieves him of the eligibility rules until he is discharged by the court

Rule 40(1)(e): a licensee must immediately notify the registrar in writing when they are the subject of any bankruptcy proceedings. Rule 14(1)(m): a person who is licensed as a broker and is subject to bankruptcy is not eligible to be licensed, and Rule 15 states that bankruptcy does not relieve a person from the requirements of Rule 14. If the registered broker can no longer perform a broker's duties, the registrar may suspend the brokerage licence (Rule 35(2)(c)) or continue it with a temporary or replacement broker (Rule 36(1)).