ON Real Estate Sim 1 key terms

The provincial statute that sets the legal framework for trading in real estate, licensing registrants, and disciplining misconduct. It authorizes the regulator and its rules, and it overrides inconsistent industry practice.

A person licensed under the Real Estate Act to trade in real estate, deal in mortgages, or provide rental property management services. Registrants owe statutory duties to clients and the public, enforced through the regulator.

The governing body established under the Real Estate Act that administers licensing, sets rules and bylaws, and oversees conduct and discipline for registrants. It can suspend or cancel licences and impose penalties after a hearing.

A bank account where a brokerage deposits money held on behalf of clients, such as deposits on a purchase contract. Funds must be kept separate from brokerage operating money and disbursed only as authorized.

A situation where one brokerage represents both the buyer and the seller in the same transaction. Because interests conflict, it is permitted only with informed written consent of both parties and careful disclosure.

A legal relationship in which a brokerage acts on behalf of a client with the client's authority, creating duties of loyalty, confidentiality, disclosure, and obedience. It is formed by written service agreement, not by showing a property alone.

The highest standard of care owed to a client, including loyalty, good faith, full disclosure, confidentiality, and avoidance of personal advantage. It requires putting the client's interests ahead of the registrant's own.

A model in which the brokerage appoints a specific individual registrant to represent a client, so other registrants in the same brokerage may represent the opposing party without creating dual agency.

A hidden flaw in a property that is serious enough to affect a reasonable buyer's decision or the property's value, and that the buyer could not discover through ordinary inspection. Sellers must disclose it even without being asked.

The principle that a buyer takes property as found and must investigate its condition. It is softened by duties to disclose material latent defects and by any contractual representations and warranties.

The written contract in which a seller agrees to transfer real property and a buyer agrees to pay the price. It sets out parties, property, price, deposit, conditions, completion date, and representations.

A written proposal to buy property on stated terms that becomes binding once accepted and communicated to the offeror. It must be definite in its essential terms and is usually irrevocable until a stated deadline.

A response that changes the terms of an offer, which legally rejects the original offer and creates a new one from the other party. The original offer cannot later be accepted unless it is renewed.

A contract term making an obligation depend on an event occurring first, such as financing approval or a satisfactory home inspection. If the condition fails within the stated time, the contract may be terminated without breach.

Money paid by a buyer on signing a purchase contract to show good faith and bind the deal. It is held in trust and usually credited toward the purchase price, but may be forfeited if the buyer defaults.

A court order compelling a party to carry out its contractual promise rather than pay damages. Because each property is unique, courts may order a defaulting seller to complete the sale.

The most complete ownership interest in land, giving the holder the right to use, sell, lease, mortgage, or pass the property to heirs, subject only to government powers and private restrictions.

A form of co-ownership where two or more owners hold one undivided interest with right of survivorship. When one owner dies, that share passes automatically to the surviving owners, outside the will.

Co-ownership in which each owner holds a distinct, transferable share with no right of survivorship. On death, the share passes through the owner's estate, and owners may hold unequal percentages.

The legal evidence of a person's right to own or possess property. It may be held under a land titles system, where the register is generally conclusive, or under an older registry system.

Any registered claim, charge, lien, easement, or restriction that affects title and may limit how the owner can use or transfer the property. Buyers should review encumbrances before completing a purchase.

A registered right to use another person's land for a specific purpose, such as a utility line or shared driveway, without owning it. It runs with the land and binds later owners.

A registered promise that limits how land may be used, such as a ban on outbuildings or a minimum house size. It binds current and future owners and is enforced by affected neighbours or a benefiting party.

A policy protecting an owner or lender against certain title defects and fraud, such as forged documents or undisclosed liens. It supplements, but does not replace, a proper title search and survey.

A charge registered against land as security for a loan. The borrower keeps ownership but risks losing the property through foreclosure if payments are not made.

The loan amount divided by the property's appraised value or purchase price, expressed as a percentage. Higher ratios increase lender risk and typically require mortgage default insurance.

The schedule over which a mortgage debt is gradually repaid through blended principal and interest payments. A longer amortization lowers each payment but increases total interest paid.

A lender calculation comparing monthly housing costs, including principal, interest, taxes, and heating, to gross monthly income. It is used with total debt service ratio to judge affordability.

An opinion of value prepared by a registrant using recent sales, active listings, and adjusted differences between comparable properties. It supports pricing advice and is not a formal appraisal.

The most probable price a property should bring in a competitive, open market between a willing buyer and willing seller, both informed and acting without undue pressure, as of a stated date.

The use of a property that is legally permitted, physically possible, financially feasible, and produces the greatest value. It guides appraisers and investors in judging what to do with a site.

A ratio of a property's net operating income to its value or price, used to compare investment returns. A lower cap rate generally signals lower risk or stronger growth expectations.

A property's effective rental income minus operating expenses, before mortgage payments and income tax. It is the key figure in capitalization and in measuring an investment's performance.

A municipal law dividing land into zones and regulating permitted uses, building height, setbacks, density, and parking. It binds owners and buyers, and variances or amendments must be approved by the municipality.

A use that existed lawfully before a zoning bylaw changed but no longer complies with current rules. It may usually continue, though it often cannot be expanded or restarted after being abandoned.

A survey document showing a property's boundaries, buildings, and visible encroachments or easements relative to municipal requirements. Lenders and buyers use it to confirm that improvements comply.

A problem with a property that is not visible on reasonable inspection, such as hidden water damage or a defective foundation. Disclosure obligations increase with the seriousness of the defect.

A situation where a registrant's personal or financial interest, or a duty to another party, could improperly influence advice to a client. It must be disclosed and managed, often by written consent or withdrawal.

Agreement given by a client after receiving full, clear disclosure of the relevant facts and risks, including alternatives. It must be voluntary and is usually documented in writing.