RECO and TRESA Real Estate Exam Prep Flashcards

A comprehensive set of 250 flashcards covering Real Estate Council of Ontario (RECO) regulations, the Trust in Real Estate Services Act (TRESA), professional conduct, land ownership types, surveying methods, and land registration systems.

RECO

The Real Estate Council of Ontario, which administers and enforces TRESA.

TRESA

The Trust in Real Estate Services Act, 2002; the legislation that regulates real estate trading in Ontario to protect consumers.

General Regulations (TRESA)

Sets out technical and procedural rules for daily real estate activities including registration, advertising, and disclosures.

Code of Ethics Regulations

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

Trading

Includes buying, selling, leasing, listing, showing, advertising, and negotiating in real estate.

Registrant

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

Brokerage

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

Broker

An individual registered under TRESA who focuses on brokerage operations, management, and supervision of salespersons and the brokerage.

Salesperson

An individual registered under TRESA after completing the salesperson program who must be employed under a brokerage to trade.

Landlord

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

Tenant

The person who occupies a property owned by another.

Lessee

The term typically used for a tenant within legal documents.

Broker of Record

Maintains ultimate responsibility for the brokerage, ensuring TRESA compliance and supervising all registrants.

Branch Manager

A broker or salesperson appointed to manage a branch office when it has more than one salesperson.

Representation Agreement

A contract made between a client and the brokerage (not the individual salesperson) regarding real estate services.

Registration Suitability

An assessment by RECO of an applicant's criminal history, past disciplinary actions, honesty, and financial responsibility.

Mandatory Professional Liability Insurance

Required insurance for registrants that provides deposit protection, errors and omissions coverage, and commission protection.

RECO Renewal Cycle

Registration must be renewed every $2\text{ years}$ with continuing education requirements.

People Skills

A crucial salesperson skill used to build relationships and manage transactions.

Organization and Planning

Essential skills for manages time and the unique aspects of every real estate transaction.

Persistence

A skill involving the confidence to continue working through challenges in a sales environment.

Sellers Market

A market condition with more buyers than properties, leading to quicker sales and potentially higher prices.

Buyers Market

A market condition with more properties than buyers, where prices may fall and buyers use more conditions.

Residential Resale

Trading of existing homes, often involving emotional decisions and irregular working hours.

New Home Sales

Involves working for builders, explaining models, and arranging financing for new constructions.

Condominium Knowledge

Requires understanding of condo rules, fees, amenities, financial health, and occupancy types.

Rural Properties

Properties that often require specific knowledge regarding wells and septic systems.

Recreational Properties

Properties involving considerations for zoning, waterfront access, and specific tax rules.

Agricultural Properties

Involves land use laws, redevelopment potential, and zoning for farming.

Commercial Properties

Includes office, retail, industrial, and investment properties requiring extensive research and longer timelines.

Commercial Leasing

A specialty requiring knowledge of tenancy law and strong negotiation skills.

Residential Sales Hours

Characterized by irregular hours and the need for quick responses to clients at any time.

Commercial Sales Hours

Typically conducted during regular business hours with more emphasis on planning and research.

Qualifying Buyers

The process of ensuring a buyer's needs and financial capabilities align with a property.

Accepted Offer

A written offer signed by all parties that becomes a legally binding contract.

Failed Conditions

Situations where terms of an offer are not met, which may end a deal and result in no commission.

Commission

Remuneration typically based on a percentage of the sales price, paid only after a transaction closes.

Income Fluctuation

Variation in a realtor's earnings based on market activity, seasonality, and completed transactions.

HST (Harmonized Sales Tax)

Tax for which real estate professionals must budget, as it is not deducted by the brokerage from commissions.

Desk Fee Model

A remuneration model where a salesperson pays a fixed monthly fee regardless of their income level.

One Brokerage Transaction

A trade where the total commission is split between the seller and buyer sides within a single brokerage.

Two Brokerage Transaction

A trade where the seller's brokerage receives the total commission and pays a share to the buyer's brokerage.

Multiple Representation

A situation where a registrant or brokerage represents both the buyer and the seller in the same trade.

Client

A party who has a representation agreement with a brokerage and receives professional services and advice.

Prospective Client

An individual seeking services who has not yet entered into a representation agreement.

Self-Represented Party

An individual who chooses not to use a brokerage and receives no services, advice, or representation.

Implied Representation

A risk created by providing services, opinions, or advice to an individual without a formal agreement.

Designated Representation

A model where only a specific registrant (broker or salesperson) represents the client, while others in the brokerage remain impartial.

Brokerage Representation

A model where the entire brokerage is considered to be representing the buyer or the seller.

Agreement of Purchase and Sale (APS)

The legal contract between a buyer and seller for the transfer of an interest in real estate.

Real Estate

The physical property, including land, buildings, and permanent improvements.

Real Property

The physical property plus the 'bundle of rights' associated with ownership (possess, use, enjoy, sell).

Personal Property

Movable items not permanently attached to the land, such as furniture or televisions.

Fixture

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

Chattel

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

Title

The legal ownership of a property.

Chain of Title

The historical record of previous ownership of a property.

Root of Title

The earliest ownership record found in a title search.

Title Search

A process completed by a buyer's lawyer to confirm a seller has a marketable title without unresolved encumbrances.

Deed

A document used to transfer ownership of land under the Registry Act.

Transfer/Deed of Land

The modern document used to record the transfer of ownership in the land titles system.

Closing Date

The specific date when ownership of a property officially transfers from the buyer to the seller.

Detached Home

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

Semi-detached Home

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

Townhouse

A residential unit that shares walls with three or more other units.

Linked Dwelling

Homes attached below grade or through garages that may appear detached from the surface.

Multi-unit Residential

A building containing more than one dwelling unit, such as a duplex.

SCSAA

Safety and Consumer Statutes Administration Act, under which RECO administers and enforces TRESA.

Administrative Agreement

The agreement governing the relationship between the Ontario government and RECO.

Public Register

An online database maintained by RECO listing current and former registrants.

CREA

The Canadian Real Estate Association, a national organization that owns the REALTOR® and MLS® trademarks.

OREA

The Ontario Real Estate Association, which represents Ontario REALTORS® and provides standard forms.

Local Real Estate Boards

Regional organizations that provide MLS® access and market data reports to members.

REIC

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

CCIM

Certified Commercial Investment Member, an organization for commercial and investment real estate professionals.

SIOR

Society of Industrial and Office REALTORS®, promoting high standards in commercial real estate.

Estate (in Land)

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

Fee Simple

Also known as freehold; provides the owner with the greatest rights and fewest limitations for an indefinite duration.

Leasehold Estate

The right to use and occupied property for a specific period of time without owning it.

Air Rights

The legal right to use the empty space above a parcel of land.

Surface Rights

The right to use the exterior surface of the land, excluding minerals below.

Riparian Rights

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

Mineral Rights

The right to remove resources like oil, gas, or minerals from beneath the land.

Concurrent Ownership

A situation where two or more people own a property simultaneously.

Joint Tenancy

A form of ownership where the 'right of survivorship' applies, transferring a deceased owner's share to the survivors.

Unity of Title

A requirement of joint tenancy where all owners must acquire the property through the same document.

Unity of Time

A requirement of joint tenancy where all owners must acquire the property at the same time.

Unity of Possession

A requirement of joint tenancy where each owner has equal rights to possess and use the entire property.

Unity of Interest

A requirement of joint tenancy where each owner has an equal and undivided interest in the property.

Tenancy in Common

A form of co-ownership where an owner's share passes to their estate rather than the other owners upon death.

Condominium Ownership

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

Common Elements

Shared areas in a condominium, such as hallways, elevators, and lobbies.

Common Elements Condominium (CEC)

A condo corporation with no individual units, consisting only of shared areas like roads or parks.

POTL

Parcel of Tied Land; the land to which an interest in a common elements condominium is attached.

Equity Cooperative

A corporation-owned property where buyers purchase shares to gain the right to occupy a specific unit.

Share Certificate

The document proving ownership in an equity cooperative.

Occupancy Agreement

A contract between a cooperative member and the corporation outlining the member's right to live in a unit.

Non-profit Cooperative

A co-op where members have rental arrangements rather than share ownership.

Fractional Ownership

A model where multiple people own a property as tenants in common, with usage time based on the fraction size purchased.

Life Lease

An arrangement where a person pays a lump sum for the right to occupy a unit for their lifetime without owning the property.