RECO and TRESA Real Estate Exam Prep

A comprehensive set of 290 flashcards covering Modules 1 through 5 of the Ontario real estate curriculum, focusing on RECO, TRESA, ownership types, land description, and professional conduct.

What does the acronym RECO stand for?

Real Estate Council of Ontario

What is the relationship between TRESA and RECO?

TRESA is the legislation set by the government, and RECO is the body that administers and enforces it.

What is the full title of the legislation known as TRESA?

Trust in Real Estate Services Act, 2002

What is the primary purpose of TRESA?

To regulate real estate trading in Ontario to protect consumers and ensure integrity in transactions.

Which two sets of regulations contain most of the day-to-day rules for registrants?

General Regulations and Code of Ethics Regulations

What do the General Regulations under TRESA cover?

Technical and procedural rules for daily activities, including registration, advertising, agreements, and disclosures.

What specific standards does the Code of Ethics set for registrants?

Professional conduct standards requiring honesty, integrity, good faith, courtesy, and competent service.

What behaviors are expressly prohibited by the Code of Ethics?

Misrepresentation, fraud, coercion, intimidation, harassment, and unethical conduct.

What is one of the administrative insurance programs RECO handles?

Consumer deposit protection

How does RECO handle complaints against registrants?

It handles investigations and takes disciplinary actions on brokers, brokerages, and salespeople.

In the context of Ontario real estate, what does 'trading' include?

Buying, selling, leasing, listing, showing, advertising, and negotiating.

Who is considered a 'registrant' under RECO?

Anyone registered with RECO, including brokerages, brokers, and salespeople.

What is a 'Brokerage' under TRESA?

A corporation, partnership, or sole proprietorship registered under TRESA authorized to trade real estate on behalf of others for compensation.

Can a salesperson trade real estate independently of a brokerage?

No, they can only trade if employed by a brokerage and registered with RECO.

Who is responsible for ensuring all registrants within a firm comply with TRESA?

The brokerage

What is the primary focus of a 'Broker' compared to a salesperson?

Brokerage operations, management, and supervision of salespeople and the brokerage itself.

When is an individual officially registered as a 'Salesperson'?

After completing the salesperson program and being registered under TRESA while employed by a brokerage.

What is a 'Landlord'?

A person who owns a property which they lease to another individual.

What is a 'Tenant'?

A person who occupies a property owned by another.

Which legal term is typically used for a 'Tenant' in legal documents?

Lessee

What is the role of the 'Broker of Record'?

To ensure TRESA compliance for the entire brokerage and to supervise and educate brokers and salespeople.

Who holds ultimate responsibility for a brokerage's actions?

The Broker of Record

When is a 'Branch Manager' required for a branch office?

When a branch has more than one salesperson.

With whom is a real estate representation agreement technically made?

Between the client and the brokerage, not the individual salesperson.

How many steps are required to become an official salesperson in Ontario?

4 steps

What is the time limit to apply to RECO after completing pre-registration courses?

Within 12 months.

What must an applicant purchase after passing the suitability assessment?

Mandatory professional liability insurance

What level of criminal record check is required for registration?

Level 2 criminal record and judicial matters check.

What financial history must a registration applicant disclose?

Bankruptcy or unpaid judgements.

Does a criminal record automatically prevent registration?

No, each application is assessed individually.

What are the three components of RECO professional liability insurance?

Deposit protection, errors and omissions coverage, and commission protection.

How often must real estate registration be renewed?

Every 2 years.

How many days in advance does RECO send a renewal reminder?

60 days.

What is necessary for a registrant to complete during each renewal cycle?

Continuing education

What are four crucial skills for a salesperson?

People skills, organization and planning, confidence, and persistence.

What characterizes a 'Sellers Market'?

There are more buyers than properties, so homes sell more quickly.

What happens in a 'Buyers Market'?

There is more inventory than buyers, prices may fall, and buyers take more time with more conditions.

What is a common starting point for many salespersons involving 'emotional decisions'?

Residential resales

What additional tasks are involved in 'New Home Sales'?

Working for builders, explaining models, qualifying buyers, and completing builder agreements.

What specific knowledge is required for selling Condominiums?

Knowledge of condo rules, fees, amenities, financial health, and owner vs. tenant occupancy.

What systems must a salesperson understand when dealing with rural properties?

Wells and septic systems.

What are key considerations for 'Recreational Properties'?

Zoning, waterfront access, and tax considerations.

What must be considered regarding agricultural properties?

Zoning, land-use laws, and redevelopment potential.

What are the categories included in 'Commercial Properties'?

Office, retail, industrial, and investment properties.

How do commercial sales timelines typically compare to residential?

Commercial sales often have longer research timelines and transaction periods.

What is 'Commercial Leasing' knowledge based on?

Tenancy law and strong people skills.

When is a salesperson paid their commission?

Only after the transaction closes and the brokerage receives the funds.

What does commission usually consist of?

A percentage of the sales price shared with the brokerage.

Why might a residential sale in winter be slower?

Market seasonality affects residential sales volume.

What is the recommended financial buffer for a new real estate professional?

At least 6 months of personal and business expenses saved.

Which taxes are registrants responsible for budgeting themselves?

HST and income tax, as CPP and EI are not deducted by the brokerage.

What are common brokerage fee models?

Graduated splits, higher splits with expense contributions, and desk fee models.

In a 'Desk Fee Model', how is the salesperson charged?

They pay a fixed monthly desk fee regardless of their income.

What must happen first in a one-brokerage commission split?

The total commission is split between the seller and buyer sides.

According to TRESA, does 'trading' include preparing offers?

Yes.

What is 'Multiple Representation'?

When a salesperson or registrant represents both the buyer and the seller in the same transaction.

What is a 'Client' in a real estate context?

Someone who has a representation agreement with the brokerage and receives services and representation.

What is a 'Self-Represented Party'?

A party that chooses not to use a brokerage and receives no services, advice, or representation.

What is 'Implied Representation'?

A situation where services, opinions, or advice are provided without a formal agreement.

According to TRESA, how can representation agreements be formed?

Written, oral, or implied.

What is 'Designated Representation'?

A specific registrant (broker or salesperson) is designated to represent the client while the rest of the brokerage remains impartial.

What does APS stand for?

Agreement of Purchase and Sale

When does an offer become a 'legally binding contract'?

Once it is signed by all parties.

What is the difference between 'Real Estate' and 'Real Property'?

Real Estate is physical land and buildings; Real Property includes the physical property plus the 'bundle of rights'.

What is 'Personal Property'?

Movable items not permanently attached, such as couches or tables.

What is a 'Fixture'?

An item attached to the property that is included in the sale unless specifically excluded.

What is a 'Chattel'?

A movable item that is not included in the sale unless specified in the APS.

What is 'Title' in real estate?

Legal ownership of property.

What is the 'Chain of Title'?

The record of previous ownership of a property.

What is the 'Root of Title'?

The earliest ownership record of a property.

What is a 'Title Search' and who completes it?

A search to confirm the seller has a marketable title, completed by the buyer's lawyer.

What document is used to transfer ownership under the Registry Act?

A deed (Transfer/Deed of Land).

What characterizes a 'Detached Home'?

A home that stands alone and does not share walls with other properties.

What is a 'Semi-Detached' home?

A home that shares one wall but sits on its own lot.

What defines a 'Townhouse'?

A unit that shares walls with 3 or more units.

What is a 'Linked Dwelling'?

A property attached to another below grade or through the garages, often appearing detached above ground.

Under what act does RECO administer TRESA?

Safety and Consumer Statutes Administration Act (SCSAA)

Who provides oversight for the real estate industry in Ontario?

The Ontario Government

What is the purpose of RECO's public online register?

To allow the public to check the status of current and former registrants.

What does the acronym CREA stand for?

Canadian Real Estate Association

Which organization owns the REALTOR and MLS trademarks?

CREA

What is the provincial association for REALTORS in Ontario?

OREA (Ontario Real Estate Association)

What does OREA provide to its members?

Standard forms, clauses, industry news, and lobbying representation.

What do Local Real Estate Boards provide access to?

The MLS (Multiple Listing Service) and market data reports.

What is REIC?

Real Estate Institute of Canada, providing advanced education and designations.

What does CCIM stand for?

Certified Commercial Investment Member

Define an 'Estate' in real property.

An interest in real property that includes various rights connected to ownership or tenancy.

What is a 'Fee Simple' or 'Freehold Estate'?

An ownership interest that gives the owner the greatest rights and is of indefinite duration.

What is a 'Leasehold Estate'?

The right to use and occupy property for a specific period of time without ownership.

What are 'Riparian Rights'?

Rights given to waterfront property owners allowing access to and use of the water.

What are 'Mineral Rights'?

The right to remove minerals like oil and gas from beneath the land.

Define 'Concurrent Ownership'.

When two or more people own property together.

What is the key feature of 'Joint Tenancy' regarding death?

The Right of Survivorship: when one owner dies, their portion transfers directly to the remaining joint tenants.

Name the 'Four Unities' required for Joint Tenancy.

Title, Time, Possession, and Interest.

What happens to ownership in a 'Tenancy in Common' if an owner dies?

The interest passes to the deceased owner's estate, not the other owners.

What is 'Condominium Ownership'?

Fee simple ownership of a unit and tenancy in common ownership of common elements.

What is a 'Common Elements Condominium' (CEC)?

A condo with no individual units, only shared areas like roads or parks, tied to a parcel of tied land (POTL).

What is the ownership structure of a 'Co-operative'?

The property is owned by a corporation, and 'members' hold shares or rental agreements.

What document shows ownership in an 'Equity Co-operative'?

A share certificate and an occupancy agreement.

How does 'Fractional Ownership' differ from 'Co-ownership'?

Fractional ownership usage depends on the fraction size; Co-ownership shares are listed on the deed as tenants in common.