Residential Tenancies
What this domain tests
This domain tests the rules that apply when a residential property is rented, sold subject to a tenancy, or purchased as an investment. Expect questions on tenancy agreements, rent rules, notice, eviction, and the effect of a sale on existing tenants.
Core rules and concepts
- Tenancy agreements must be in the form the statute requires, with required disclosures (e.g., rent, deposit, landlord identity).
- Rent increases are limited by statute or guideline in many jurisdictions, with notice periods and frequency limits.
- Security deposits are capped and must be returned with interest where required; they are not the same as a pet or key deposit.
- Notice and termination: notice periods differ for landlord's own use, renovation, and non-payment. Retaliation and bad-faith eviction are prohibited.
- Sale of a rented property: the tenancy generally continues on the same terms; the buyer takes subject to the lease unless a statute permits termination for purchaser's use with proper notice.
- Entry rules: the landlord must give written notice for entry except in emergencies.
- Disclosure to buyers: existing tenancies, rent amounts, and any disputes are material facts.
Worked example
A seller under a fixed-term lease sells the home. The buyer intends to move in and asks the salesperson whether the tenant must leave at closing.
Reasoning: the fixed-term lease generally survives the sale, and the buyer takes subject to it. The buyer cannot simply terminate at closing; they must follow the statutory process (often notice for purchaser's own use, with a prescribed form and notice period, and compensation where required). The salesperson should disclose the lease to the buyer and advise both parties to obtain advice on the statutory notice. The mark is lost by answering that a sale ends the tenancy.
Traps that cost marks
- Assuming a sale terminates a fixed-term tenancy.
- Ignoring rent-increase guidelines and notice periods.
- Treating a security deposit as unlimited or non-refundable.
- Overlooking required disclosures in the tenancy agreement.
- Missing that tenancy details are material facts for buyers.
Condominiums and Special Property Types
What this domain tests
This domain tests the distinct rules for condominiums and other special property types: status certificates, common elements, fees, reserve funds, and special ownership forms such as co-ops, timeshares, and rural or waterfront property.
Core rules and concepts
- Condominium ownership combines a unit (owned) with an interest in common elements (shared). The corporation governs under the condominium statute and its declaration, bylaws, and rules.
- Status certificate (or equivalent disclosure package) reveals fees, reserve fund status, special assessments, litigation, and rules. Buyers should make the offer conditional on review by a lawyer.
- Common expenses fund operations and the reserve fund; increases and special assessments affect affordability.
- Rules and restrictions may limit rentals, pets, short-term rentals, and alterations. Read the declaration and rules, not just the status certificate summary.
- Reserve fund studies indicate future funding adequacy; a weak reserve fund signals risk of special assessments.
- Special types: co-operatives (shares plus occupancy agreement, board approval), timeshares (fractional use), and rural/waterfront property (well, septic, shoreline, and access issues).
- Disclosure: known special assessments, litigation, and rental restrictions are material facts.
Worked example
A buyer loves a condo with low fees. The status certificate shows the reserve fund is underfunded and the corporation is party to a construction-defect lawsuit.
Reasoning: low fees may reflect underfunding, not efficiency. The underfunded reserve plus litigation raises the risk of a special assessment. The buyer should make the offer conditional on a lawyer's review of the status certificate and should price the risk. The salesperson must disclose what they know and must not describe the fees as "stable" without evidence. The mark is lost by treating low fees as unambiguously good.
Traps that cost marks
- Advising on a condo without a status certificate condition.
- Assuming low fees mean good management.
- Missing rental or pet restrictions in the declaration and rules.
- Treating a co-op like a condo - board approval and shares, not title to a unit.
- Ignoring well, septic, or shoreline issues on rural and waterfront property.