Ontario Real Estate Practice Flashcards

Flashcards defining key terminology, legislation, and procedures from the Real Estate Council of Ontario (RECO) curriculum modules 1 through 7.

RECO

The Real Estate Council of Ontario; an organization that administers and enforces TRESA on behalf of the provincial government.

TRESA

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

Trading

Includes buying, selling, leasing, listing, showing, advertising, or 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 in real estate for compensation.

Broker of Record

An individual at a brokerage responsible for TRESA compliance, supervision, and education of all brokers and salespersons.

Step 1 of Registration

Complete the pre-registration education program and apply to RECO within $12\text{ months}$ of completion.

RECO Professional Liability Insurance

Mandatory insurance for registrants providing deposit protection, errors and omissions coverage, and commission protection.

Seller's Market

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

Buyer's Market

A market condition where there are more properties than buyers, typically leading to falling prices and more conditions in offers.

Remuneration

The agreed percentage or amount of a sale/rental paid as commission, typically shared between the brokerage and the salesperson.

Desk Fee Model

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

Multiple Representation

When a salesperson or registrant represents both the buyer's and seller's interests in the same trade.

Self-Represented Party

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

Agreement of Purchase and Sale (APS)

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

Real Property

The physical property (land/buildings) plus the "bundle of rights" such as the right to use, enjoy, and sell.

Chattel

Movable personal property that is not permanent and is not included in an APS unless specifically listed.

Fixture

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

Mirror Principle

A land titles principle stating that the register accurately reflects current ownership and interests.

Curtain Principle

A land titles principle stating that buyers can rely on the current register and do not need to investigate a property's past ownership history.

Insurance Principle

A land titles principle where compensation may be available if a registration error causes a loss.

PIN

Property Identification Number; a unique number assigned to each parcel in the Polaris system.

Estate

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

Fee Simple Estate

The highest form of ownership offering the greatest rights and fewest limitations, held indefinitely.

Joint Tenancy

Ownership by two or more people with the right of survivorship, requiring the unities of title, time, possession, and interest.

Tenancy in Common

Ownership by two or more people where an owner's portion passes to their own estate upon death rather than to the other owners.

Common Elements

Shared areas in a condominium such as hallways, lobbies, and elevators owned as tenants in common by unit owners.

POTL

Parcel of Tied Land; a piece of land connected to a common elements condominium (CEC).

Equity Co-operative

A housing model where buyers purchase shares in a corporation to obtain the right to occupy a specific unit.

Easement

A right allowing one landowner to use another's land for a specific purpose which "runs with the land" upon sale.

Dominant Tenement

The property that receives the benefit of an easement.

Servient Tenement

The property over which an easement runs.

Restrictive Covenant

A restriction on land use written into a deed and registered on title that binds future owners.

Adverse Possession

Occurs when someone occupies land without the owner's permission for $10\text{ years}$ in Ontario to gain ownership rights (applicable only under the old registry system).

Escheat

The return of property ownership to the government when an owner dies without a will or legal heirs.

Gunter's Chain

An old measurement system where one chain equals $66\text{ feet}$; used historically to divide concessions.

Metes and Bounds

A method of legal land description that provides precise boundaries using distances and compass directions starting from a commencement point.

Surveyors Real Property Report (SRPR)

A private survey showing legal boundaries and the exact location of all structures, easements, and encroachments.

Honesty

The core conduct requirement to be truthful in all professional dealings.

Integrity

The core conduct requirement to act consistently with ethical principles.

Good Faith

The core conduct requirement to act reasonably and avoid harming any party.

Latent Defect

A hidden defect known to the seller that makes a property dangerous or unfit for habitation and cannot be discovered through reasonable inspection.

Statute of Frauds

A law requiring real estate sales and leases to be in writing and signed to be enforceable.

Privity of Contract

The principle that only parties to a contract (the buyer and seller) can be bound by or enforce it.

Rescission

A court remedy where a contract is cancelled and both parties are returned to their original positions.

Matrimonial Home

Under the Family Law Act, the property where spouses live or lived at separation as their family residence.

Official Plan

A municipality's long-term plan ($10$ to $15\text{ years}$) for land use and community growth.

Minor Variance

A small exception to current zoning bylaws approved by the Committee of Adjustment.

Ontario Land Tribunal (OLT)

An independent tribunal created in $2021$ that hears appeals involving land use planning and municipal disputes.

FINTRAC

The Financial Transactions and Reports Analysis Centre of Canada; responsible for detecting and preventing money laundering.

STR

Suspicious Transaction Report; filed with FINTRAC when there are reasonable grounds to suspect money laundering or terrorist financing.

LCTR

Large Cash Transaction Report; mandatory when $10000$ or more in cash is received in a single or related series of transactions within $24\text{ hours}$.

Reserve Fund

A separate bank account in a condominium used for major repairs and replacements of common elements.

Status Certificate

A document providing essential financial and legal information about a condominium unit and the corporation; must be provided within $10\text{ days}$ of request.

RTA

Residential Tenancies Act, 2006; the law governing the relationship between residential landlords and tenants.

CASL

Canada’s Anti-Spam Law; regulates commercial electronic messages (CEMs) like marketing emails and texts.

Capital Gain

A profit where only $50\text{ percent}$ is taxed, typically applied to investment or secondary properties.

ESA Phase 1

A non-invasive review of a property including site visits and record checks to identify possible contamination risks.

Tarion

The organization that administers Ontario's new home warranty program and manages warranty claims.

OBC

Ontario Building Code; sets minimum standards for building safety, fire protection, and structural integrity.

Co Alarms

Carbon monoxide alarms; required near sleeping areas in homes with fuel-burning appliances, fireplaces, or attached garages.

TSSA

Technical Standards and Safety Authority; regulates the installation and removal of fuel storage tanks.