Ontario RE Essentials Exam flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Broker of record

A broker designated by a brokerage to oversee its real estate business and ensure compliance with Ontario registration and conduct rules. The brokerage must have one.

Trust account

A brokerage account used only for client deposits and other trust funds. Trust money cannot be mixed with the brokerage's operating money.

Commission flow

A salesperson's commission is paid to the brokerage, not directly to the salesperson. The brokerage then pays the salesperson according to their agreement.

Registrant categories

Ontario real estate registration categories include brokerage, broker, and salesperson. A brokerage is the business entity; brokers and salespersons are individuals registered to trade on its behalf.

Fiduciary duties

Duties owed to a client include loyalty, obedience, disclosure, confidentiality, reasonable care and skill, and accounting. They arise from the agency relationship and continue as required by law.

Conflict of interest

A situation where a registrant's personal or business interest could affect duties to a client. It must be disclosed in writing and managed according to TRESA and the Code of Ethics.

PIPEDA

Federal privacy law that applies to commercial activity, including real estate brokerages. It requires consent for collecting, using, or disclosing personal information and safeguards for that information.

FINTRAC

Canada's anti-money-laundering regulator. Real estate brokerages must identify clients, keep records, and report suspicious or large cash transactions as required.

Designated representation

A TRESA model where a brokerage designates one or more registrants to represent a client. Other registrants in the same brokerage may represent other parties with proper consent and confidentiality controls.

Multiple representation

When one brokerage represents more than one party in the same transaction. It requires written consent from all clients and must be fair and manageable.

Self-represented party

A party who receives limited services from a brokerage but is not a client. The registrant must disclose the absence of fiduciary duties and obtain required acknowledgments.

Buyer representation agreement

A written contract between a buyer and brokerage setting out services, term, commission, and holdover. It establishes the agency relationship and obligations.

Fee simple

The broadest ownership estate in Ontario land. It gives the owner rights to use, sell, mortgage, and pass the property to heirs, subject to government rules and encumbrances.

Joint tenancy

Co-ownership with right of survivorship. When one owner dies, that owner's share passes automatically to the surviving joint tenant or tenants, outside the deceased's will.

Zoning by-law

A municipal law that regulates permitted land uses, density, setbacks, height, and other development standards for properties within the municipality.

Status certificate

A condominium document package describing the corporation's finances, reserve fund, rules, and current legal issues. Buyers often make a purchase conditional on reviewing it.

Agreement of Purchase and Sale

A written contract for transferring an interest in real property. It sets out parties, property, price, deposit, conditions, closing date, inclusions, and adjustments.

Condition precedent

A contract term that must be satisfied before the transaction can close. If it is not waived or fulfilled, the agreement may end and the deposit is usually returned.

Counteroffer

A response to an offer that changes its terms. It rejects the original offer and creates a new offer that the other party may accept or reject.

Chattels and fixtures

Fixtures are items permanently attached to the property and normally included in a sale; chattels are movable items and are included only if the agreement lists them.

Stress test

A mortgage qualifying rule requiring borrowers to show they can afford payments at the greater of the contract rate plus two percentage points or 5.25%.

Gross debt service ratio

The percentage of gross monthly income needed for housing costs: mortgage principal and interest, property taxes, heating, and half of condo fees.

Land transfer tax

A provincial tax on the purchase price or value of Ontario real property, paid on registration. Toronto has an additional municipal land transfer tax.

Comparative market analysis

An estimate of value prepared by a registrant using comparable sales and listings, with adjustments for differences. It supports pricing and is not a formal appraisal.

Market value

The most probable price a property should bring in a competitive, arm's-length sale after reasonable exposure, with both parties acting knowledgeably and without undue pressure.

Months of inventory

Active listings divided by the average number of sales per month. Low months suggest a seller's market; high months suggest a buyer's market.

CASL consent

Canada's anti-spam law requires consent for commercial electronic messages. Real estate marketing emails and texts need consent, sender identification, and an unsubscribe mechanism.

Misleading advertising

Advertising that creates a false impression, even if literally true, can breach Ontario real estate rules. Claims about services, results, or properties must be accurate and substantiated.

REALTOR trademark

A trademark owned by CREA and used only by members of a local real estate board. Non-members cannot use it to describe themselves or their services.

Seller's direction

Written instructions from a seller about how offers will be presented or disclosed. The listing brokerage must follow lawful directions and communicate the process accurately.

Mirror image rule

A common-law contract rule that acceptance must match the offer exactly. Any change in terms is a counteroffer, not an acceptance.

Requisition date

The date by which the buyer must raise title objections. After this date, the buyer may be deemed to accept title subject to the agreement's terms.