ON Residential Transactions Exam flashcards
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32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Trust in Real Estate Services Act
- Ontario statute (TRESA, 2002) that governs brokerage registration, representation, and trading in real estate, replacing most of the former Real Estate Brokers Act.
- Duty of confidentiality
- A registrant must not disclose a client's confidential information without consent; the duty survives termination but does not cover material facts about the property.
- Multiple representation
- When one brokerage represents two or more clients in the same trade; it requires written disclosure and informed consent from all clients and imposes impartiality.
- Designated representative
- A registrant within a brokerage assigned to represent a client; the brokerage holds the representation, but the designated representative owes the client duties.
- Self-represented party guide
- A prescribed information guide that must be given to a self-represented party before a brokerage provides services, with a record of the disclosure kept.
- Buyer representation agreement
- A written agreement between a buyer and brokerage stating the term, area or property type, services, and compensation, and possibly a holdover clause.
- Holdover clause
- A clause entitling the brokerage to commission if the buyer purchases a property introduced during the term after the agreement ends; it must be stated and reasonable.
- Listing agreement essentials
- A written listing agreement must state the term, listing price, commission, and services, and must be signed by the seller to be enforceable.
- Misleading advertising
- Advertising that is false or deceptive, omits the brokerage name, or misstates price or features breaches the Code of Ethics and is prohibited.
- Material fact disclosure
- Known latent defects and environmental issues must be disclosed to buyers; a registrant cannot withhold them at the seller's request.
- Comparative market analysis
- An estimate of value from recent comparable sales, active listings, and expired listings, adjusted for differences in size, condition, location, and features.
- Absorption rate
- The number of sales in a period divided by active listings at the end of that period; a low rate indicates a buyer's market.
- Months of inventory
- Active listings divided by average monthly sales; roughly six months is often treated as a balanced market.
- Condition precedent
- A contract term that must be satisfied before the agreement becomes binding, such as a financing or inspection condition in an APS.
- Deposit in trust
- A deposit is part of the purchase price and is generally held in trust; it is forfeited to the seller if the buyer fails to complete without lawful excuse.
- Time is of the essence
- A contract term meaning deadlines, including the closing date, are strict; a party who fails to close on time is in breach unless the contract provides otherwise.
- Mortgage stress test
- Most buyers must qualify at the greater of the contract rate plus two percentage points or the Bank of Canada benchmark rate.
- Loan-to-value ratio
- The mortgage amount divided by the property value; a higher LTV generally requires mortgage default insurance.
- Gross debt service ratio
- Housing costs divided by gross annual income; the total debt service ratio adds all other debt payments to the calculation.
- Title insurance
- Coverage protecting the buyer and lender against certain title defects, including fraud, survey errors, and undisclosed encumbrances.
- Joint tenancy
- A form of co-ownership that includes the right of survivorship; tenants in common instead hold distinct shares without survivorship.
- Latent defect
- A defect not discoverable by a reasonable inspection; the seller must disclose known latent defects, while patent defects need not be disclosed.
- Radon guideline
- A radioactive gas that can accumulate in homes; Health Canada recommends mitigation when levels exceed 200 Bq/m3.
- Underground oil tank
- A buried heating oil tank that must be removed and the surrounding soil tested; a leaking tank can create significant remediation liability.
- Trust account rules
- Client money must be held in a designated trust account at a Canadian financial institution, deposited within five business days, and reconciled monthly.
- Closing adjustments
- Prorated items such as prepaid property taxes, utilities, and rent that are allocated between buyer and seller as of the closing date.
- Residential Tenancies Act
- Ontario statute governing most residential tenancies, rent increases, and eviction; it does not apply where landlord and tenant share a kitchen or bathroom.
- Last month's rent deposit
- A security deposit equal to one month's rent that a landlord may require; it must be applied to the last month's rent and earns interest.
- Status certificate
- A condominium disclosure provided within 10 days of a written request; the buyer has a 10-day cooling-off period after receiving it.
- Reserve fund study
- A condominium corporation's study of expected repair and replacement costs, updated every three years, that determines reserve fund funding.
- Co-operative ownership
- A buyer purchases shares in a corporation and a right to occupy a unit; the board must approve the buyer and financing differs from a condo mortgage.
- Conflict of interest disclosure
- A registrant with a personal interest in a transaction must disclose it in writing and obtain consent before acting for the client.