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ON Solicitor Exam study materials
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ON Solicitor Exam practice questions

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Question 1Civil Litigation

In an Ontario civil action, what is the usual limitation period for commencing a proceeding under the Limitations Act, 2002?

  1. Ten years from the date of the act or omission complained of
  2. Two years from the date the claim is discovered Correct answer.
  3. Six years from the date the claim is discovered
  4. One year from the date the cause of action arose

Explanation

The Limitations Act, 2002 establishes a basic two-year limitation period running from the date the claim is discovered, subject to the presumptive discovery rule in section 5. A fifteen-year ultimate limitation period also exists, but the basic rule is two years.

Question 2Civil Litigation

A plaintiff is issuing a statement of claim in Ontario. Within what period after issuance must the claim generally be served on the defendant?

  1. Six months from the date of issuance Correct answer.
  2. One year from the date of issuance
  3. Thirty days from the date of issuance
  4. Two years from the date of issuance

Explanation

Rule 14.08 of the Rules of Civil Procedure requires that an originating process be served within six months after it is issued, failing which it must be renewed before service. This is distinct from the limitation period for starting the action.

Question 3Civil Litigation

Which document in an Ontario action sets out the defendant's response to the plaintiff's allegations and any counterclaim?

  1. A notice of motion
  2. A statement of defence Correct answer.
  3. A demand for particulars
  4. A reply

Explanation

The statement of defence is the pleading in which the defendant admits or denies the allegations and pleads any affirmative defences. A counterclaim may be included in the same document as a defence to a counterclaim.

Question 4Civil Litigation

In Ontario, which court has jurisdiction over most civil claims where the amount claimed does not exceed $35,000?

  1. The Divisional Court
  2. The Small Claims Court Correct answer.
  3. The Court of Appeal for Ontario
  4. The Superior Court of Justice

Explanation

The Small Claims Court, a branch of the Superior Court of Justice, has monetary jurisdiction over claims up to $35,000. Claims above that threshold are generally brought in the Superior Court of Justice.

Question 5Civil Litigation

A party wishes to obtain documents and information from the opposing party before trial in an Ontario action. Which discovery mechanism is available as of right after the close of pleadings?

  1. Examination for discovery of a party Correct answer.
  2. A pre-trial conference
  3. Cross-examination on an affidavit
  4. A motion for summary judgment

Explanation

Rule 31 provides that a party may examine an adverse party for discovery once pleadings are closed, without leave. The examination explores the issues and the documents relevant to the action.

Question 6Civil Litigation

What is the effect of the doctrine of functus officio in Ontario civil litigation?

  1. A judge may revisit a final order at any time before the appeal period expires
  2. A court may amend any order on its own initiative without a motion
  3. A judge who has finally decided a matter generally cannot revisit it absent statutory authority Correct answer.
  4. A party may re-litigate a matter already decided by a different court

Explanation

Functus officio provides that once a judge has finally decided a matter, the judge's authority over it is exhausted and the order cannot be revisited except in limited circumstances such as correcting clerical errors or where the rules permit.

Question 7Civil Litigation

In Ontario, what is the standard of proof applied in a civil action?

  1. Proof sufficient to satisfy a reasonable suspicion
  2. Proof on a preponderance of the evidence beyond any doubt
  3. Proof beyond a reasonable doubt
  4. Proof on a balance of probabilities Correct answer.

Explanation

Civil proceedings are decided on a balance of probabilities, meaning the trier of fact must be satisfied that the event was more likely than not. The beyond-a-reasonable-doubt standard applies in criminal matters.

Question 8Civil Litigation

A defendant in an Ontario action believes the statement of claim discloses no reasonable cause of action. What procedural step is most appropriate?

  1. A motion for leave to appeal
  2. A motion to set aside a default judgment
  3. A motion to strike the pleading under Rule 21 Correct answer.
  4. A motion for a mistrial

Explanation

Rule 21 permits a party to move to strike out a pleading on the ground that it discloses no reasonable cause of action or defence. Such a motion is typically brought before discovery and tests the legal sufficiency of the pleading.

Question 9Civil Litigation

In an Ontario action, a plaintiff seeks summary judgment on the basis that the defendant has no genuine issue requiring a trial. Which test governs under Rule 20?

  1. Whether the plaintiff's case is uncontested
  2. Whether the defendant has failed to file a statement of defence
  3. Whether there is a genuine issue requiring a trial based on the record Correct answer.
  4. Whether the amount claimed is below the Small Claims Court limit

Explanation

Rule 20, as interpreted in Hryniuk v. Mauldin, requires the court to determine whether there is a genuine issue requiring a trial, using the expanded powers to weigh evidence and draw inferences where appropriate. The test focuses on the record before the court.

Question 10Civil Litigation

A defendant in Ontario fails to deliver a statement of defence within the prescribed time. What may the plaintiff do?

  1. Move for a mistrial
  2. Move to strike the claim
  3. Move to dismiss the action for delay
  4. Move for default judgment under Rule 19 Correct answer.

Explanation

Where a defendant fails to defend, the plaintiff may note the defendant in default and seek default judgment under Rule 19. The judgment may be obtained on motion or, in some cases, on the filing of appropriate material.

Question 11Civil Litigation

In Ontario, a party seeks to compel production of a document that the opposing party claims is privileged. What is the proper approach?

  1. The party may proceed directly to trial and raise the issue there
  2. The party may bring a motion for production and the court will determine the privilege claim Correct answer.
  3. The party must file a motion to strike the claim
  4. The party may demand that the opposing party waive privilege

Explanation

Where privilege is asserted over a document, the party seeking production may bring a motion and the court will inspect the document and rule on the claim of privilege. Privilege is not self-determining by the party asserting it.

Question 12Civil Litigation

An Ontario plaintiff wishes to add a new party to an existing action. What is generally required?

  1. The consent of the existing defendant only
  2. Leave of the court on a motion, unless the party is added before the close of pleadings Correct answer.
  3. The approval of the registrar
  4. A new statement of claim issued in a separate action

Explanation

Adding a party after the close of pleadings generally requires leave of the court under Rule 5.04, which considers factors such as delay and prejudice. Before the close of pleadings, amendments may be made without leave in some circumstances.

Question 13Civil Litigation

In an Ontario civil action, what is the purpose of a pre-trial conference under Rule 50?

  1. To hear the trial on the merits
  2. To determine the admissibility of all evidence
  3. To conduct examinations for discovery
  4. To settle the action or narrow the issues before trial Correct answer.

Explanation

A pre-trial conference is intended to promote settlement, narrow the issues, and address procedural matters before trial. The judge may make orders and give directions to facilitate the trial.

Question 14Civil Litigation

A defendant in Ontario wishes to appeal a final order of the Superior Court of Justice. To which court is the appeal generally taken?

  1. The Federal Court of Appeal
  2. The Small Claims Court
  3. The Court of Appeal for Ontario Correct answer.
  4. The Divisional Court

Explanation

Appeals from final orders of a judge of the Superior Court of Justice are generally taken to the Court of Appeal for Ontario. The Divisional Court hears certain statutory appeals and appeals from specified interlocutory orders.

Question 15Civil Litigation

In Ontario, when may a party bring a motion for particulars of a pleading?

  1. Where the pleading is so vague that the party cannot reasonably plead a response Correct answer.
  2. Only at the pre-trial conference
  3. Only after the close of discovery
  4. Only with the consent of the opposing party

Explanation

Particulars may be demanded where a pleading lacks sufficient detail to allow the opposing party to know the case to meet and to plead. The court may order particulars where necessary to enable a fair response.

Question 16Civil Litigation

A plaintiff in Ontario has not moved the action forward for several years. What is the defendant's most appropriate remedy?

  1. A motion to dismiss the action for delay under Rule 24 Correct answer.
  2. A motion for default judgment
  3. A motion for summary judgment
  4. A motion to strike the statement of defence

Explanation

Rule 24 permits a defendant to move to dismiss an action for delay where the plaintiff has failed to set the action down for trial or otherwise advance it within the prescribed time. The court considers prejudice and the interests of justice.

Question 17Civil Litigation

In Ontario, which of the following best describes the doctrine of issue estoppel?

  1. A party may re-litigate an issue already decided in a prior proceeding if new evidence is available
  2. A party may avoid a prior decision by commencing a new action in a different court
  3. A party is barred from re-litigating an issue that was finally decided in a prior proceeding between the same parties Correct answer.
  4. A party may relitigate an issue decided in a criminal proceeding in any civil proceeding

Explanation

Issue estoppel prevents a party from re-litigating an issue that was conclusively determined in a prior proceeding involving the same parties or their privies. It promotes finality and prevents abuse of process.

Question 18Civil Litigation

A party in Ontario seeks to rely on a document at trial that was not produced during discovery. What is the likely consequence?

  1. The document may be admitted only if the opposing party consents
  2. The document is automatically excluded with no discretion
  3. The court may refuse to admit the document or make a costs order Correct answer.
  4. The document is automatically admissible without restriction

Explanation

Rule 30.08 gives the court discretion to refuse to admit an undisclosed document or to make other orders, including costs. The purpose is to enforce the discovery obligation and prevent surprise at trial.

Question 19Civil Litigation

In an Ontario action, a party seeks to examine a non-party for discovery. What is required?

  1. A subpoena issued by the registrar
  2. The non-party's consent only
  3. Leave of the court, which may be granted where the non-party may have information relevant to the issues Correct answer.
  4. The consent of all parties

Explanation

Rule 31.10 permits examination of a non-party only with leave of the court, which considers whether the person may have information relevant to the issues and whether the examination is necessary.

Question 20Civil Litigation

What is the effect of a without prejudice offer to settle under Rule 49 in Ontario?

  1. It binds the parties once made
  2. It is generally not disclosed to the trial judge until after judgment on the merits Correct answer.
  3. It is automatically disclosed to the trial judge before judgment
  4. It terminates the action

Explanation

Rule 49 offers are generally not disclosed to the trial judge until the merits have been decided, at which point the offer may affect costs. The without prejudice nature encourages settlement.

Question 21Civil Litigation

A defendant in Ontario believes the plaintiff's claim is statute-barred. What is the most appropriate procedural response?

  1. A motion for default judgment
  2. A motion to strike the claim under Rule 21 or a motion for summary judgment, depending on the record Correct answer.
  3. A motion to examine the plaintiff for discovery
  4. A motion for a mistrial

Explanation

A limitations defence may be raised by a motion to strike where it is apparent on the face of the pleading, or by summary judgment where the evidentiary record supports it. The choice depends on whether the facts are established on the record.

Question 22Civil Litigation

In Ontario, what is the general rule regarding costs in a civil action?

  1. Costs are automatically awarded on a full indemnity basis to the successful party
  2. Costs are fixed by the registrar without regard to the outcome
  3. Costs generally follow the event, subject to the court's discretion Correct answer.
  4. Each party bears its own costs regardless of outcome

Explanation

Section 131 of the Courts of Justice Act and Rule 57 provide that costs are in the discretion of the court, and the general principle is that costs follow the event. The court may depart from this principle in appropriate cases.

Question 23Civil Litigation

A party in Ontario seeks to introduce expert evidence at trial. What is generally required under Rule 53.03?

  1. The expert must be a party to the action
  2. The party must serve an expert's report and comply with the acknowledgment of duty requirements Correct answer.
  3. The expert must be approved by the court before testifying
  4. The expert must be certified by a professional body

Explanation

Rule 53.03 requires that a party intending to call an expert serve the expert's report in advance and that the expert acknowledge the duty to provide fair, objective, and non-partisan assistance to the court. These requirements promote reliability and fairness.

Question 24Civil Litigation

In Ontario, when may a court set aside a default judgment?

  1. Only where the defendant demonstrates a meritorious defence and a reasonable explanation for the default Correct answer.
  2. Only where the judgment was obtained by fraud
  3. Only where the plaintiff consents
  4. Only within thirty days of the judgment

Explanation

The court may set aside a default judgment where the defendant provides a reasonable explanation for the default and shows a meritorious defence or an arguable case. The overarching consideration is whether setting aside the judgment serves the interests of justice.

Question 25Civil Litigation

A plaintiff in Ontario obtains a judgment but the defendant refuses to pay. Which enforcement mechanism is available?

  1. A motion to strike the statement of defence
  2. A motion for a mistrial
  3. A motion for leave to appeal
  4. A garnishment of the defendant's bank account Correct answer.

Explanation

A judgment creditor may enforce a judgment by garnishment, seizure and sale, or examination in aid of execution. Garnishment directs a third party, such as a bank, to pay money owed to the debtor to the creditor.

Question 26Civil Litigation

In an Ontario civil action, a plaintiff wants to start the action against a defendant who resides outside Ontario but committed a tort within the province. Which jurisdictional basis most directly supports service outside Ontario without leave under Rule 17.02?

  1. The claim concerns a tort committed in Ontario. Correct answer.
  2. The defendant has never visited Ontario.
  3. The plaintiff resides in Ontario.
  4. The defendant owns real property outside Ontario.

Explanation

Rule 17.02 lists circumstances in which a document may be served outside Ontario without leave, and one listed connection is a tort committed in Ontario. The claim must be connected to Ontario through a recognized real and substantial link or a listed Rule 17.02 ground. Residence of the plaintiff alone or ownership of foreign property does not establish that connection.

Question 27Civil Litigation

An Ontario plaintiff serves a statement of claim on a defendant in Toronto. Within what period must the statement of defence generally be delivered under the Rules of Civil Procedure?

  1. Within 10 days after service of the statement of claim
  2. Within 60 days after service of the statement of claim
  3. Within 30 days after service of the statement of claim Correct answer.
  4. Within 20 days after service of the statement of claim

Explanation

Under Rule 18.01, a defendant must deliver a statement of defence within 20 days after service of the statement of claim if served in Ontario, and within 30 days if served elsewhere in Canada or the United States, and 60 days if served outside those places. Because the defendant here was served in Ontario, the 20-day period applies.

Question 28Civil Litigation

In an Ontario action, the plaintiff wishes to examine the defendant's employee who has knowledge of the events but who is not a party. What must the plaintiff generally obtain before conducting that examination?

  1. The consent of the defendant's lawyer
  2. A notice of examination served on the employee
  3. A subpoena issued by the registrar
  4. A court order granted on motion with notice to the employee Correct answer.

Explanation

Rule 34.03 permits examination of a non-party only with a court order, which may be sought on motion with notice to the person to be examined. A non-party is not subject to examination as of right the way a party is. Consent of the opposing lawyer or a bare notice does not substitute for the required order.

Question 29Civil Litigation

A defendant in an Ontario action delivers a statement of defence that pleads a counterclaim against the plaintiff. How is the plaintiff generally required to respond to the counterclaim?

  1. By ignoring it because a counterclaim is not a pleading
  2. By moving to strike the counterclaim within 10 days
  3. By serving a notice of intent to defend
  4. By delivering a reply to the counterclaim within the prescribed time Correct answer.

Explanation

A counterclaim is a pleading that stands as a claim by the defendant against the plaintiff, and the plaintiff responds by delivering a reply within the time prescribed by the rules. The reply serves the function of a statement of defence to the counterclaim. A motion to strike or a notice of intent to defend is not the ordinary response.

Question 30Civil Litigation

In an Ontario civil action, a party wants to rely at trial on a surveillance video that was not listed in its affidavit of documents. What is the most likely consequence under the rules of documentary discovery?

  1. The video is admissible only if the opposing party consents.
  2. The video may be excluded unless the court grants relief from the production obligation. Correct answer.
  3. The video is automatically admissible because surveillance evidence is exempt from production.
  4. The video must be produced but cannot be used to impeach a witness.

Explanation

A party must disclose and produce relevant documents in its possession, control, or power, and a document not produced may not be used at trial absent leave or relief from the court. The trial judge retains discretion to permit late production on terms, including costs or an adjournment. Surveillance evidence is not categorically exempt from production.

Question 31Civil Litigation

An Ontario plaintiff obtains a default judgment against a defendant who never delivered a defence. The defendant later learns of the judgment and wishes to have it set aside. What must the defendant generally demonstrate on the motion?

  1. That the defendant has a meritorious defence and a reasonable explanation for the default Correct answer.
  2. That the judgment amount exceeds $35,000
  3. That the plaintiff's claim was frivolous and vexatious
  4. That the plaintiff failed to serve the statement of claim

Explanation

On a motion to set aside a default judgment, the court considers whether the defendant has a defence with merit and whether there is a reasonable explanation for the default. The overarching question is whether setting aside the judgment serves the interests of justice. A bare assertion of a defence or a complaint about the amount is insufficient.

Question 32Civil Litigation

In an Ontario action, the plaintiff serves a notice to admit facts on the defendant. What is the effect if the defendant fails to respond within the prescribed time?

  1. The notice is a nullity and must be re-served.
  2. The facts are deemed admitted and may be used against the defendant at trial. Correct answer.
  3. The trial is adjourned until the response is delivered.
  4. The defendant is automatically noted in default.

Explanation

Rule 51.02 provides that a party on whom a notice to admit facts is served must respond within the prescribed time, failing which the facts are deemed admitted. Deemed admissions may be used at trial and can narrow the issues. A notice to admit is not a step that produces default or a nullity.

Question 33Civil Litigation

An Ontario defendant believes that the plaintiff's action was commenced after the expiry of the applicable limitation period. What is the most appropriate procedural step to raise this defence?

  1. Plead the limitation defence in the statement of defence and, if appropriate, move for summary judgment Correct answer.
  2. Bring a motion to strike the claim as disclosing no reasonable cause of action
  3. Serve a notice of constitutional question
  4. Seek an order for particulars of the statement of claim

Explanation

A limitation defence is an affirmative defence that should be pleaded in the statement of defence and can be determined on a motion for summary judgment if the record permits. A motion to strike attacks the sufficiency of the pleading, not the factual expiry of a limitation period. Particulars and constitutional notices address different issues.

Question 34Civil Litigation

In an Ontario civil action, a party seeks to amend its statement of claim after the close of pleadings but before trial. What is the general approach of the court on a motion to amend?

  1. Amendments require leave of the Court of Appeal.
  2. Amendments are permitted if they can be made without prejudice to the opposing party and are necessary to determine the real issues. Correct answer.
  3. Amendments are never permitted after the close of pleadings.
  4. Amendments are permitted only with the consent of all parties.

Explanation

Rule 26.01 directs that the court shall grant leave to amend a pleading at any stage of an action on such terms as are just, unless the amendment would cause non-compensable prejudice. The policy favours determining the real issues in dispute. Consent is helpful but not required, and the Court of Appeal is not the motion court.

Question 35Civil Litigation

An Ontario plaintiff commences an action and later discovers that the defendant has disposed of assets in order to frustrate any judgment. What interlocutory remedy is most directly aimed at preserving those assets pending trial?

  1. A Mareva injunction restraining disposition of assets Correct answer.
  2. An order for examination of a judgment debtor
  3. A garnishment order
  4. A certificate of pending litigation

Explanation

A Mareva injunction restrains a defendant from dealing with assets where there is a real risk of dissipation and the plaintiff has a strong prima facie case. A certificate of pending litigation preserves a claim to land rather than personal assets. Garnishment and judgment debtor examinations are post-judgment enforcement tools.

Question 36Civil Litigation

In an Ontario action, the defendant wishes to rely on the evidence of an expert at trial. Under Rule 53.03, what must the party generally serve on the other parties?

  1. A notice of intention to call the expert without any report
  2. A transcript of the expert's discovery evidence
  3. The expert's report signed by the expert, setting out the opinion and the basis for it Correct answer.
  4. A summary of the expert's qualifications only

Explanation

Rule 53.03 requires that a party who intends to call an expert serve the expert's report, signed by the expert, which sets out the opinion and the facts and assumptions on which it is based. The report must also acknowledge the expert's duty to the court. A bare summary of qualifications or a notice without a report does not satisfy the rule.

Question 37Civil Litigation

An Ontario court has issued a final judgment in favour of the plaintiff. The defendant fails to pay voluntarily. Which enforcement mechanism allows the plaintiff to require a third party who owes money to the defendant to pay the plaintiff instead?

  1. A writ of seizure and sale
  2. A garnishment order Correct answer.
  3. A contempt motion
  4. An examination in aid of execution

Explanation

Garnishment under Rule 60.08 allows a judgment creditor to require a third party indebted to the judgment debtor to pay the creditor directly. A writ of seizure and sale directs the sheriff to seize and sell the debtor's property. Examinations in aid of execution gather information, and contempt addresses disobedience of a court order.

Question 38Civil Litigation

In an Ontario civil action, the plaintiff serves an offer to settle under Rule 49 on the defendant. The defendant does not accept, and the plaintiff ultimately obtains a judgment more favourable than the offer. What is the general consequence regarding costs?

  1. The defendant is entitled to costs because the offer was ignored.
  2. The plaintiff is presumptively entitled to partial indemnity costs to the date of the offer and substantial indemnity costs thereafter. Correct answer.
  3. The plaintiff is entitled only to disbursements.
  4. Costs are automatically doubled for both parties.

Explanation

Rule 49.10 creates a costs consequence where a plaintiff makes an offer that is not accepted and the judgment is as favourable as or more favourable than the offer. The plaintiff is presumptively entitled to partial indemnity costs to the date of the offer and substantial indemnity costs thereafter. The court retains discretion, but the presumptive rule applies unless displaced.

Question 39Civil Litigation

An Ontario plaintiff has delivered a statement of claim and the defendant has delivered a statement of defence. The plaintiff now wants to obtain documents from a non-party who is not a party to the action. What is the general procedure under the rules?

  1. Bring a motion for an order for production from the non-party Correct answer.
  2. Serve a notice of examination on the non-party
  3. Issue a subpoena duces tecum without any court order
  4. Request the documents informally and rely on the non-party's cooperation

Explanation

A non-party is not subject to the documentary discovery obligations that apply between parties. A party seeking documents from a non-party generally must obtain a court order, often on a motion, or use a subpoena where the rules permit. Informal requests have no coercive effect.

Question 40Civil Litigation

In an Ontario action, the court orders a party to produce a document. The party fails to comply. What is the court's most likely response?

  1. Dismiss the action or strike the defence, and make a costs order Correct answer.
  2. Refer the matter to the Law Society of Ontario
  3. Automatically declare a mistrial
  4. Order the document to be sealed

Explanation

Where a party fails to comply with an order for production, the court may make a variety of orders, including dismissing the action or striking the defence, and may award costs. The sanction is designed to secure compliance and ensure a fair trial. Referral to the Law Society or a mistrial is not the ordinary response.

Question 41Real Estate Transactions

A vendor accepts an offer on a resale home. Under the standard Ontario Agreement of Purchase and Sale, which statement best describes the legal effect of the deposit once paid by the buyer?

  1. The deposit is held in trust and forms part of the purchase price on completion. Correct answer.
  2. The deposit is paid directly to the vendor and may be spent immediately as the vendor chooses.
  3. The deposit is separate from the purchase price and is returned to the buyer on closing.
  4. The deposit is refundable to the buyer at any time before the completion date.

Explanation

In Ontario, the deposit is typically held in trust by the listing brokerage or the vendor's solicitor and is credited toward the purchase price on completion. It is not the vendor's money to spend before closing, and it is not automatically refundable. Trust handling protects the buyer if the transaction fails.

Question 42Real Estate Transactions

A buyer submits an offer with a financing condition. Before the condition is waived, the buyer's lender declines the mortgage. What is the buyer's position under the standard Ontario Agreement of Purchase and Sale?

  1. The buyer must extend the closing date unilaterally and keep searching for a lender.
  2. The buyer must complete and rely on a vendor take-back mortgage.
  3. The buyer forfeits the deposit automatically for failing to obtain financing.
  4. The buyer may terminate and recover the deposit because the condition was not satisfied. Correct answer.

Explanation

A condition precedent such as financing must be satisfied or waived within the stated period. If the buyer cannot satisfy it and does not waive it, the agreement comes to an end and the deposit is returned. The buyer is not obliged to obtain alternative financing.

Question 43Real Estate Transactions

Which document, when registered on title, gives a purchaser priority over a subsequent registered instrument affecting the same land?

  1. A Land Transfer Tax affidavit filed with the ministry
  2. A registrable instrument such as a transfer or charge registered first in time Correct answer.
  3. An unregistered agreement of purchase and sale held in escrow
  4. A written offer to purchase that has been accepted but not registered

Explanation

Ontario's land titles system operates on a registry where priority generally follows registration order. A registrable instrument registered first gains priority over later registrations. Unregistered interests and tax affidavits do not confer that priority.

Question 44Real Estate Transactions

A first-time buyer purchases a resale home in Ontario. Which statement correctly describes the Ontario land transfer tax payable on closing?

  1. It is payable only by the vendor and is deducted from the sale proceeds.
  2. It is calculated on the purchase price using graduated marginal rates and, for eligible first-time buyers, may be reduced by a rebate. Correct answer.
  3. It is a flat fee of one percent of the purchase price for every buyer.
  4. It is payable annually with property taxes rather than at closing.

Explanation

Ontario land transfer tax uses graduated marginal rates applied to the purchase price and is generally paid at closing. Eligible first-time purchasers may claim a refundable rebate, and Toronto has an additional municipal tax. It is not a flat fee and is not paid annually.

Question 45Real Estate Transactions

A seller's brokerage advertises a property on MLS. A buyer who is not represented by a brokerage contacts the listing salesperson directly. What is the listing brokerage's obligation regarding representation?

  1. The listing brokerage must refer the buyer to another brokerage before showing the property.
  2. The listing brokerage automatically becomes a dual agent for both parties.
  3. The listing brokerage may give the buyer confidential pricing advice as a client.
  4. The listing brokerage must disclose that it represents the seller and cannot provide undivided loyalty to the buyer. Correct answer.

Explanation

When a brokerage represents the seller, it owes fiduciary duties to the seller only. It must disclose this to an unrepresented buyer and cannot give that buyer client-level loyalty or confidential advice. Dual agency requires informed written consent and is restricted.

Question 46Real Estate Transactions

A buyer and seller sign an Agreement of Purchase and Sale. The buyer later refuses to close without lawful excuse. What remedy is the vendor most likely entitled to pursue first?

  1. A court order requiring the buyer's lender to advance funds
  2. Termination and retention of the deposit, with a claim for any additional damages Correct answer.
  3. Specific performance compelling the buyer to purchase
  4. An automatic penalty equal to the full purchase price

Explanation

Where a purchaser repudiates, the vendor may treat the agreement as at an end and retain the deposit, subject to any claim for damages exceeding it. Specific performance is generally available to a purchaser, not commonly to a vendor. Courts do not compel lenders to fund.

Question 47Real Estate Transactions

A purchaser obtains a mortgage to fund a resale purchase. The lender requires title insurance. Which statement best describes the role of title insurance in this transaction?

  1. It insures against covered title defects and fraud, and the lender's policy protects the lender's interest. Correct answer.
  2. It replaces the need for a solicitor's title search entirely.
  3. It transfers ownership of the property to the lender until the mortgage is repaid.
  4. It guarantees that the property complies with all municipal zoning bylaws.

Explanation

Title insurance protects the insured owner and lender against specified title risks such as fraud, survey defects, and certain registration errors. It does not replace a proper title search and does not guarantee zoning compliance. Ownership is not transferred to the lender.

Question 48Real Estate Transactions

A vendor sells a home and the buyer discovers after closing that the basement leaks during heavy rain. The vendor had painted over water stains before listing. Which claim is most likely available to the buyer?

  1. No claim, because resale homes are sold entirely as-is in Ontario.
  2. A claim for trespass because water entered the property.
  3. A claim for fraudulent misrepresentation based on the vendor's deliberate concealment of a known defect. Correct answer.
  4. A claim for breach of the statutory warranty of habitability applicable to all resale homes.

Explanation

Resale homes are generally caveat emptor, but deliberate concealment of a latent defect known to the vendor can support a claim in fraudulent misrepresentation. There is no implied habitability warranty for resale homes. Trespass is not the applicable cause of action.

Question 49Real Estate Transactions

A purchaser's solicitor discovers that a prior owner's discharged mortgage was never properly deleted from title, and a second charge remains registered. What is the most appropriate step before closing?

  1. Ignore the charge because it is old
  2. Require the vendor to discharge the outstanding charge and provide a clear title search on closing Correct answer.
  3. Ask the lender to increase the mortgage amount to cover the charge
  4. Complete the purchase and rely on the buyer to fix title afterward

Explanation

The purchaser is entitled to receive title free of undisclosed encumbrances. Outstanding charges must be discharged and cleared before or at closing, evidenced by a current title search and discharge documents. Completing without clearing title leaves the buyer exposed.

Question 50Real Estate Transactions

A buyer signs an Agreement of Purchase and Sale conditional on a home inspection. The inspector identifies a cracked foundation. The buyer wants to walk away. What must the buyer do under the standard Ontario form?

  1. Ask the vendor to reduce the price unilaterally.
  2. Wait until closing and then refuse to complete.
  3. Deliver a notice of non-satisfaction or waiver within the condition period; otherwise the condition is deemed fulfilled. Correct answer.
  4. Simply fail to attend at the inspection and the agreement lapses.

Explanation

Conditions in the standard Ontario form must be addressed by written notice within the stated period. If the buyer neither waives nor gives notice of non-satisfaction, the condition is deemed satisfied and the agreement becomes firm. Silence does not terminate the deal.