Ontario Real Estate Exam Practice Flashcards

Comprehensive vocabulary flashcards covering Modules 1 through 5 of the Ontario real estate education program, focusing on RECO, TRESA, registration, ownership, and professional conduct.

RECO

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

TRESA

Trust in Real Estate Services Act, 2002; the legislation regulating real estate trading in Ontario.

General Regulations (TRESA)

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

Code of Ethics Regulations

Standards for professional conduct requiring honesty, integrity, good faith, courtesy, and competence.

Trading

Activities including buying, selling, leasing, listing, showing, advertising, and negotiating real estate.

Registrant

Anyone registered with RECO, which includes brokerages, brokers, and salespeople.

Brokerage

A corporation, partnership, or sole proprietorship registered under TRESA authorized to trade for compensation.

Broker

An individual registered under TRESA focused on management, supervision of salespeople, and brokerage operations.

Salesperson

An individual registered under TRESA after completing the education program and employed by a brokerage.

Landlord

A person who owns a property that is leased to another individual.

Tenant

A person who occupies a property owned by another.

Lessee

The legal term used within documents to refer to a tenant.

Broker of Record

The individual with ultimate responsibility for the brokerage, ensuring TRESA compliance and supervising registrants.

Branch Manager

A broker or salesperson appointed to manage a branch office with more than one salesperson.

Agreements (Parties)

Real estate contracts are always made between the client and the brokerage, not the individual registrant.

Pre-registration Step 1

Completing education, getting registered by a brokerage, and applying to RECO within $12\,\text{months}$.

Suitability Assessment

A RECO review determining if an applicant is fit for registration based on past conduct and financial responsibility.

Registration Disclosures

Requirement for applicants to disclose bankruptcy, unpaid judgements, or previous licensing refusals.

Criminal Record Check

A Level 2 criminal record and judicial matters check required for RECO registration.

RECO Professional Liability Insurance

Insurance providing consumer deposit protection, errors and omissions coverage, and commission protection.

Registration Renewal cycle

Registration must be renewed every $2\,\text{years}$ with RECO.

Renewal Reminder Period

RECO sends a renewal reminder $60\,\text{days}$ before the registration expires.

Crucial Salesperson Skills

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

Seller’s Market

A market where there are more buyers than properties, causing homes to sell quickly.

Buyer’s Market

A market with more properties than buyers, causing prices to fall and longer transaction times.

Residential Resales

Common starting point for salespeople involving emotional decisions and irregular hours.

New Home Sales

Working for builders to explain models, features, and arrange builder agreements and financing.

Condominium Knowledge

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

Rural Properties

Listings involving specialized systems like wells and septic tanks.

Recreational Properties

Real estate involving zoning, waterfront access, and specific tax considerations.

Agricultural Properties

Land requiring knowledge of land-use laws, zoning, and redevelopment potential.

Commercial Properties

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

Condition Failure

The failure of terms in an offer that may end the deal and prevent commission payment.

Income Basis

Real estate income is strictly commission-based and not guaranteed until the transaction closes.

Seasonality in Sales

The fluctuation of market activity, such as winters typically being slower for residential sales.

Financial Planning (Savings)

Advice for realtors to save at least $6\,\text{months}$ of personal and business expenses.

Taxes and Money Management

Budgeting for HST and income tax because brokerages do not deduct CPP or EI.

Commission Split

The sharing of remuneration between the brokerage and the salesperson.

Graduated Split

A remuneration model where the commission share changes based on performance or volume.

Desk Fee Model

A model where the salesperson pays a fixed monthly fee to the brokerage regardless of income.

One Brokerage Transaction

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

Two Brokerage Transaction

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

Multiple Representation

When a registrant represents both the buyer and seller's side in a single trade.

Client

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

Prospective Client

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

Self-Represented Party (SRP)

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

Services and Opinions

Professional advice and opinions that can only be provided to clients of the brokerage.

Assistance to SRPs

Limited help provided to self-represented parties only if it is in the best interest of the actual client.

Implied Representation

A situation created when a registrant provides services or advice without a formal agreement.

Designated Representation

A model where only a specific registrant (broker or salesperson) represents the client.

Brokerage Representation

A model where the entire brokerage, including all its registrants, represents the client.

Agreement of Purchase and Sale (APS)

A legal contract between a buyer and seller that transfers an interest in real estate.

Real Estate (Definition)

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

Real Property (Definition)

The physical property plus the 'bundle of rights' to possess, use, enjoy, and sell it.

Personal Property

Movable items not permanently attached to the land, such as couches and tables.

Fixture

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

Chattel

Movable property not included in the APS unless specifically listed.

Title

The legal ownership of a property.

Chain of Title

A records history showing the sequence of previous ownership for a property.

Root of Title

The earliest record of ownership in a chain of title.

Title Search

An investigation by a lawyer to confirm a seller has marketable title without encumbrances.

Closing Date

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

Detached Home

A residential property that stands alone and does not share walls with others.

Semi-detached Home

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

Townhouse

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

Linked Dwelling

Properties attached below grade (foundation) or through garages that may appear detached.

Multi-Unit Residential

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

SCSAA

Safety and Consumer Statutes Administration Act; the act under which RECO administers TRESA.

Public Online Register

A RECO database maintaining records of current and former registrants for public transparency.

CREA

Canadian Real Estate Association; the national organization for REALTORS in Canada.

OREA

Ontario Real Estate Association; the provincial organization representing Ontario REALTORS.

Local Real Estate Boards

Regional organizations providing MLS access and regional market data.

REIC

Real Estate Institute of Canada; a non-profit for advanced real estate education.

CCIM

Certified Commercial Investment Member; provides education for commercial real estate.

SIOR

Society of Industrial and Office REALTORS; promotes standards in industrial real estate.

Estate (Property Law)

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

Fee Simple

The freehold estate giving the owner the greatest possible rights and indefinite ownership.

Leasehold Estate

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

Air Rights

The right to use the air space above the land for structures like bridges.

Surface Rights

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

Riparian Rights

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

Mineral Rights

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

Concurrent Ownership

When two or more people own a property together at the same time.

Joint Tenancy

Ownership where the interest of a deceased owner transfers to the surviving owner(s).

Tenancy in Common

Ownership where an individual's share passes to their estate upon death, not to the other owners.

Unity of Title (Joint Tenancy)

Requirement that all owners acquire the property through the same document at the same time.

Unity of Possession (Joint Tenancy)

The equal right for each owner to possess and use the entire property.

Unity of Interest (Joint Tenancy)

Requirement that each owner has an equal and undivided interest in the property.

Unity of Time (Joint Tenancy)

Requirement that owners acquire their interests at the same time and for the same duration.

Condominium Common Elements

Shared areas such as hallways, lobbies, and elevators owned by tenants in common.

Common Elements Condominium (CEC)

A condo with no individual units; it only contains shared areas like roads and parking lots.

POTL

Parcel of Tied Land; a property connected to a common elements condominium.

Equity Cooperative

A corporation owns the building, and buyers purchase shares giving them occupancy rights.

Non-profit Cooperative

A housing arrangement where members have a rental agreement rather than shares of ownership.

Fractional Ownership

Multiple people own a portion of a property as tenants in common with usage based on share size.

Life Lease (Occupancy)

Interest providing the right to occupy a unit for a lifetime through a lump sum payment.

Fee Ownership Interest (Time Share)

Ownership giving the right to use a unit for a specific time and can be gifted or sold.

Right to Use Interest (Time Share)

Provides use rights for a set period but no actual legal ownership of the property.

Fixed Time Share

Usage of a unit at the same week or time every year.

Floating Time Share

Usage rights for a set amount of time where dates and times vary each year.