Practice Exam Questions

Humber Real Estate - Course 2, Module 1, Explaining Services

Available to a Seller or Buyer

1. Under Ontario law, how is an 'agency relationship' defined?: 22. What is the comparable term to 'Third Party' under REBBA?:
The relationship between two parties in which one party (the Customer
agent) accepts responsibility for representing the other party 23. A brokerage representing only a seller would consider a
(the principal) in dealing with a third party. buyer as a _________ or a customer?: Third Party
2. While common law uses the terms 'Principal' and 'Third Party', 24. What does 'Fiduciary' refer to in relation to a
what terms does REBBA use instead?: Client & Customer Representation Agreement?: A relationship of trust with one
3. The underlying relationship of the brokerage, salesperson, or more parties.
seller and buyer is based on what?: The Common Law of 25. An agent (brokerage) as a __________ has the legal obligation
Agency to act in the principal's (seller's or buyer's) best interests.:
4. In relation to a contract, how is a third party defined?: Fiduciary
Someone who is not directly connected with a legal 26. In a 'Fiduciary' relationship, what are the agent's obligations
transaction but may be affected by it, OR supporting one of to the principal (aka Client )?: - Full disclosure (of all facts
the people involved, i.e. lawyer, home inspector, etc. known)
5. Under REBBA, what is the equivalent for the legislative term - Obedience (obey the lawful instructions of the principal)
for "agency"?: Representation - Confidentiality (all info that is confidential will not be
6. In a real estate transaction, who is the 'Agent'?: The disclosed)
brokerage - Competence (provide all services competently)
- Accounting (responsible handling of all documents and
7. In a real estate transaction, who is usually the 'Principal'?: A
funds related to the transaction)
seller or buyer
27. Define 'Authority' in legal terms: The legal power or right
8. Agency is also known as ...: Representation
given by a principal, and accepted by the agent, to act on the
9. A Listing (Seller Agency) Agreement / Buyer Agency principal's behalf in business transactions with a third party,
Agreement is also known as ...: Representation Agreement and is typically analyzed in terms of actual and implied
10. Agreement of Purchase and Sale is also know as ...: authorities.
Agreement (Conveyance of Interest in Real Estate) 28. What is an example of 'Actual Authority'?: A seller gives the
11. Dual Agency is also known as ...: Multiple Representation brokerage authority to offer their property for sale.
12. Present Offer is also known as ...: Convey Offer 29. What is an example of 'Implied Authority'?: The brokerage
13. Purchase / Sale by Registrant: Acquisition / Divestiture by will determine the best marketing methods to offer the
Registrant property for sale (not specified in detail in the contract but
14. Who are the 'Parties' to a real estate transaction?: The seller allows the agent to get the job done properly).
and buyer 30. Under REBBA, what is 'Single Agency' called?: Single
15. What type of relationship does a salesperson have with their Representation
brokerage from a legal perspective?: Employee / Employer 31. Define a 'Single Agency' relationship: There is one agent
relationship with authorization to trade on behalf of their (brokerage) representing one principal (seller or buyer) within a
respective brokerages. transaction with a third party.
16. Once an agency relationship is established between a 32. Define a 'Dual Agency' relationship: There is one agent
brokerage and a client, does the agreement apply to all (brokerage) representing two or more principals (sellers and/or
brokers & salespersons employed by the brokerage?: Yes. buyers) within the same transaction.
Everyone must protect the client's best interests. 33. What is 'Dual Agency' called under REBBA?: Multiple
17. Define 'Brokerage' according to REBBA: The agent who is Representation (a form of concurrent representation)
authorized to trade in real estate on behalf of others. 34. What is the legal term used when a brokerage represents
18. Principal is also known as ...: Client two clients (i.e. two competing buyers) at the same time?:
19. What is a 'Principal'?: Someone who authorizes an agent to act Concurrent Representation
on their behalf in an agency relationship, and provides 35. Under common law, how can you legally enter into
information and lawful instructions to the agent regarding the agreement?: Verbally or in writing
transaction. 36. What is required by REBBA to enter into an agreement?: A
20. When a brokerage represents a seller when listing a written agreement
property, who is the 'Principal'?: The seller
21. When a brokerage represents a buyer when showing
properties for sale, who is the 'Principal'?: The buyer
37. What is an 'Implied Agreement'?: An agreement created by 47. If a salesperson's registration under REBBA is terminated,
the words and actions of one party, which leads the other what happens to the agreement with a buyer who was
party to believe there is an agency relationship when no working with that salesperson?: Nothing! Remember - the
formal acknowledgement of the relationship exists. agreement is between the brokerage and the buyer. NOT the
38. What are the 3 recognized forms of 'Agreement'?: Written, salesperson. Another salesperson would just take over.
verbal & implied 48. After an agreement is terminated, there are continuing
39. Under common law (not REBBA), what are the 3 ways an responsibilities to the principal based on the __________
agreement can be formed?: - By ratification obligations owed under the relationship.: Fiduciary
- By estoppel 49. What fiduciary obligations are still owed to the principal
- By operation of law even after termination of an agency relationship?: -
40. Define an agency relationship by 'Ratification': When the Confidentiality of personal information
authority is granted retroactively (i.e. the agent has acted - Maintaining utmost loyalty
without authority OR in excess of the authority granted). The - Protecting the principal's best interests
principal then agrees to be bound by such unauthorized acts. 50. What document details the actual authorities granted by a
41. Define an agency relationship by 'Estoppel': When a buyer or seller?: A representation agreement
principal leads a third party to believe they are being 51. What is the 'Actual Authority'?: The specific activity the
represented by the agent, and that the agent has the authority brokerage is permitted to perform.
to act on behalf of the principal. (i.e. Principal acts like they 52. What is the 'Implied Authority'?: Allows the brokerage to
already have the relationship with a brokerage. Must be complete the task properly, efficiently & competently.
provable by words or actions that the brokerage has the
53. A seller grants express authority to a brokerage to offer
authority)
their property for sale. What are some examples of a
42. Define an agency relationship by 'Operation of Law': When seller's express authorities to a brokerage?: - Allowing
a duty created by circumstance is imposed on an agent to act buyers to fully inspect the property
on behalf of the principal, where previously no agency - Placing a 'For Sale' or 'Sold' sign on the property
relationship existed. This relationship is based on established - Giving the exclusive authority to make all advertising
legal principles rather than by a formal agreement. This is rare decisions to the brokerage
but happens in emergency situations.
54. A buyer grants express authority to the brokerage to seek
43. In what ways can an agency relationship be terminated by out suitable properties for the buyer to view. What are
agreement?: - Completion of performance (automatic once some examples of a buyer's express authorities to a
the obligations of the agreement are fulfilled) brokerage?: - To locate a suitable property
- Mutual agreement (a cancellation form is signed by both - The brokerage's entitlement to receive and retain a
parties) commission paid by the seller or the listing brokerage
- Expiry - Providing information as needed to third parties retained by
- Revocation (may be either lawful or unlawful. If brokerage the buyer to assist in the transaction
isn't at fault for failing to provide services, cancellation by
55. What are some examples of 'Implied Authority' consented
principal is unlawful and they could be liable for damages).
to by a seller?: - Delegation (Brokerage delegates activities to
44. In what ways can an agency relationship be terminated by salespersons to carry out the seller's instructions)
operation of law?: - Impossibility of performance (subject - Showings/Negotiations
matter of the agency ceases to exist (i.e. a fire destroys a - Deposit/Trust Account
house) - Notices (e.g. a notice received by a brokerage that a buyer
- Illegality (agency purpose or relationship is unlawful, i.e. has fulfilled a condition in an offer is deemed to be notice
fraud or brokerage is ceasing operations and won't be received by the seller)
registered any longer)
- Death, mental incapacity or bankruptcy
45. In real estate, when does termination of an agency
agreement happen after completion or performance?: The
sale is completed (NOT when an offer is accepted).
46. A seller or buyer representation agreement is required to
have both an ___________ date and an _____________ date.:
Effective & Expiration
56. What are some examples of 'Implied Authority' consented 63. Define 'Duty of Indemnification': The agent must act
to by a buyer?: - Delegation (Brokerage delegates activities to according to the lawful instructions of the principal, and in
salespersons to carry out the buyer's instructions) doing so, may not be held responsible for any liability, claim,
- Relevant Facts/Presentation (Brokerage obtains and presents loss, cost, damage or injury resulting from these acts. As a
relevant facts for consideration) general rule of agency, the principal must compensate an
- Negotiations (Brokerage arranges showings and assists in agent for loss or damage incurred in carrying out lawful acts.
negotiations) 64. A buyer completes the purchase of a property, but shortly
- Notices (e.g. a notice received by a brokerage that an offer after taking possession discovers there is a latent defect to
has been accepted is deemed to be notice received by the the land or improvements. Is the brokerage liable?: No. The
buyer) brokerage should be indemnified as the buyer was required to
57. What are the consequences if an agent acts outside of the make their own enquiries to confirm the condition of the
scope of the authority granted?: The agent could be liable to property. This is an example of 'Duty of Indemnification'.
the principal for any injuries or for breach of contract.
58. Does a brokerage or a salesperson have the authority to Note: If the agent acts unlawfully or negligently, or is in
sign a contract on behalf of a principal?: No, unless precise breach of duty, the principal has no duty to indemnify the
and clear authority is granted. agent.
65. Define 'Duty of Remuneration': The obligation of the principal
Note: ... BUT even with approval, this can put a brokerage in a to pay the brokerage for the services agreed to and provided
position with legal ramifications, so a brokerage would first ask as part of the agency relationship between the parties.
for an extension to the offer so the seller can sign themselves 66. Define 'Duty regarding any other obligations agreed to': The
as this is much less risky. principal must perform any other obligations as agreed to by
59. Even though delegation of duties is an implied authority, both parties in the representation agreement.
what is a brokerage NOT allowed to do under agency law?:
Involve other brokerages in the marketing / selling process. Note: It's strongly recommended that any other obligations be
The agency obligation is particular to that original brokerage formally documented in the representation agreement rather
only. Delegation such as this would need to be documented in than agreed to verbally in order to avoid any
a listing agreement. misunderstandings)
60. True or false? Brokerages have an implied authority to 67. What does the phrase 'Duty of Care' refer to?: The standard
receive all or part of the purchase price.: False. They can of care and skill provided by a salesperson to a client or
only receive a deposit relating to the purchase, which is now customer.
considered monies held in trust for the seller. 68. What limited responsibilities are owed to a Customer under
'Duty of Care'?: - Provide information
Note: Upon completion of the transaction, the buyer receives a - Perform functions (if any)
credit towards the purchase price for the deposit amount. The - Limited disclosure and privacy oblitations
deposit monies themselves are usually applied later to the
commission owed by the seller to the brokerage. Note: Customers are not given advice as the act of providing
61. True or false? A brokerage cannot incur expenses on behalf advice can unintentionally alter a customer relationship to that
of the principal, or seek reimbursement without express of a client.
authority?: True. Typically, an agreement with a principal will 69. What responsibilities are owed to a Client under 'Duty of
identify the commission or remuneration paid to the brokerage, Care'?: Involves everything done for that client, including
which includes any expenses incurred. If the principal requests providing advice.
extra services (i.e. alternate forms of advertising), the agent
70. What are 2 examples of disclosures that must be made to a
can seek additional reimbursement, only if agreed to by the
customer?: - Any material facts known or that ought to be
principal.
known by the salesperson
62. What duties does the principal owe to the agent?: - Duty of - Any direct or indirect interest held by the salesperson or
indemnification brokerage related to a trade
- Duty of remuneration
- Duty regarding any other obligations agreed to
71. What are some ways of ensuring duty of care as a 80. What is the minimum content to be included in any written
salesperson?: - Seek advice (be aware of your limitations and representation or customer service agreement?: - The start
recommend third party experts) & expiry date
- Accuracy in documentation (contracts are properly worded, - Commission obligations
etc.) - Description of the services options available
- Be informed (stay up-to-date on relevant issues impacting - Services to be provided by the brokerage under the
property ownership, zoning, taxation, etc.) agreement
- Make inquiries (don't rely on info from others; do your due 81. How quickly must a signed copy of the agreement of
diligence to confirm accuracy of the info) purchase and sale be provided to the client or customer?:
72. What are the general obligations a brokerage and At the earliest possible opportunity (i.e. the next day)
salesperson owe to a client?: - Exercise Care & Skill 82. Single representation is to single agency, as multiple
- Ensure Honesty representation is to __________ ___________: Dual agency
- Perform Mandate
83. What are the two categories of representation?: Single &
- Obey Instructions (when lawful)
multiple
- Act In Person
84. If a brokerage represents two or more principals
- Negotiate Favourable Terms
(seller/buyer) within the same transaction, this is known as
- Maintain Confidentiality
what?: Multiple Representation
- Disclose Information
85. What are the basic obligations under a seller single
73. What are the general obligations a brokerage and
representation?: - Market the property and promote the
salesperson owe to a customer?: - Exercise Care & Skill
seller's best interests
- Ensure Honesty
- Advise the buyer that the brokerage is the representative of
74. List the 'Fiduciary Obligations' owed to clients.: - Not Misuse
the seller
Confidential Information
- Act as the seller's representative
- Not Make Secret Profit
- Obey lawful instructions
- Maintain Utmost Loyalty
- Fulfill fiduciary obligations
- Disclose Conflicts
- Exercise reasonable care and skill
- Avoid Conflicts of Interest
- Negotiate favourable terms
75. Fiduciary Obligations are based on what 3 fundamental - Disclose material facts to buyers
premises?: - Loyalty (client's best interests always take priority) - Timely present offers and counter offers
- Best interests - Discover and disclose all relevant and material facts to
- Trust and confidence (client relies on advice given) seller
76. What obligations are owed to Clients and Customers under - Keep seller fully informed
REBBA?: - Disclosure - Obtain expert advice
- Agency Relationships / Forms - Comply with regulatory requirements
- To Deliver Agreements, Offers & Statements (ASAP) 86. What are the basic obligations under a buyer single
- To Account (keeping proper records re: money, etc. and representation?: - Locate property and promote the buyer's
safeguard deposit by placing in a trust account) best interests
- Remuneration Provisions (allowable commission structures as - Advice seller that the brokerage is the representative of the
we learned in Course 1) buyer
- Not To Induce, Breach or Make Certain Promises - Obey lawful instructions
77. What is a real estate trust ledger used for?: Maintaining a - Fulfill fiduciary obligations
written record of all monies received and held in trust, and - Exercise reasonable care and skill
every transaction relating to that money (i.e. disbursement of - Seek out available properties
the funds & interest earned). - Discover and disclosed all relevant and material facts
78. Can you verbally promise a client something?: No. It must be - Obtain expert advice
in writing, signed by the person making the guarantee and - Timely presentation of offers and counter offers
delivered to the party to whom the guarantee is made. - Keep buyer informed
- Disclose competing offers
79. How soon must a copy of the 'agreement for the purpose of
- Negotiate favourable terms
trading in real estate' be given to the client or customer
- Comply with regulatory requirements
after signing?: Immediately. The next day, even, is prohibited.
87. What happens if written consent is not provided by all 95. What is a customer service agreement with a buyer used
parties for multiple representation?: The brokerage is for?: - Confirm that no commission is paid for any customer
required to release one of the clients from their agreement so service provided by the brokerage (unless otherwise agreed to)
they can seek representation elsewhere. - Confirms the brokerage is not the representative of the buyer
88. What information cannot be disclosed (unless instructed in 96. What is the minimum required information that must be
writing to do so by the client ) during multiple given to a seller or buyer before an agreement can be
representation?: - The amount the seller might accept (i.e. an signed?: - Service alternatives
amount other than the listing price) - Services being provided
- The amount the buyer might pay (i.e. other than the amount - Multiple representation
being offered for the property) - Representation and obligations
- The motivation behind the seller's listing of the property or - Representation and customer service
the buyer's purchase of the property - Service limitations
- The personal info of the seller or buyer - Obtaining written acknowledgement
- Any info related to previous negotiations of the property (i.e. 97. What are the benefits of defining and documenting services
the terms of an offer received by the seller may not be as soon as possible?: - To avoid situations where an implied
disclosed to the buyer) agreement is unintentionally created based on the words and
89. What are the 2 chronological steps undertaken during actions of a salesperson
multiple representation?: - Disclosure before a representation - To reduce the risks inherent in a seller or buyer
agreement misunderstanding the services to be provided
- Disclosure before an offer 98. What steps are required by a salesperson to ensure due
90. What must be explained to the client about multiple diligence when representing a seller?: - Confirming the
representation before an offer is made?: - The fact that the seller has made all necessary disclosures, as required by law
brokerage proposes to represent more than one client in - Discovering all relevant information and material facts
respect of the same trade regarding the transaction
- The differences between the obligations the brokerage would - Making appropriate disclosures to other parties, as required
have if it represented only one client in respect of the trade, - Demonstrating competence, skill and judgement when
including any differences relating to the disclosure of providing opinions, advice or information
information or the services that the brokerage would provide - Referring a seller to third-party professionals when the
91. If a seller is working with ABC Realty, and a buyer is working advice or opinion is beyond the education or experience of a
with ABC Realty as a customer, is this an example of single salesperson
or multiple representation?: Single. A customer (vs. a client) 99. When do due diligence obligations begin with a seller?:
is being provided services by the brokerage, not Before any relationship has been established.
representation. 100. What are some property features that should be noted
92. When dealing with a property that is for sale by owner, during a visual walkthrough?: - Lot (size, shape, landscaping
(FSBO), a seller's brokerage will sign a customer service and quality of any improvements such as a fence or deck)
agreement with the seller. What is this agreement used - Structure (age, condition and overall appeal)
for?: - Confirm the brokerage is not the representative of the - Features and benefits (upgrades, renovations and unique
seller aspects which would be highlighted in the listings)
- Provide the brokerage with the authority to obtain additional - Concerns (defects, safety hazards and repairs needed to
information about the property enhance the property's marketability)
- Detail the commission to be paid by the seller 101. Who selects the listing price of a property?: The seller.
- Obtain authorization to apply the deposit to reduce the
102. What type of selling costs should a salesperson make a
commission payable
seller aware of?: - Moving fees
93. During a private sale of a property, when is a customer - Legal fees
service agreement typically signed by a brokerage and the - Commission to brokerage (including applicable HST)
seller?: Before showing the property to a buyer.
103. Define the 'Irrevocable Time Period': A time and date
94. What are two reasons a customer service agreement might included in an offer which identifies the length of time the
be signed with a buyer?: - The seller is represented by the party has to accept an offer.
brokerage already
104. Who will dictate the manner in which an offer is
- A buyer selects to receive services only rather than being
presented?: Seller
represented as a client
105. How long can an 'Irrevocable Time Period' be?: Anywhere 114. What does The Code dictate about communication with a
from several hours to several days. client of another brokerage?: That communication must only
106. What are the 4 potential outcomes in a negotiation happen through the salesperson from the other brokerage,
scenario?: - Win-Win never the client directly.
- Win-Lose (Note: Exception is if the listing brokerage has given written
- Lose-Lose permission for a salesperson to communicate directly with
- No Outcome their client.)
107. When does 'Sub-Agency' occur?: This happens when the 115. If your brokerage is representing a client, but they are
seller is a client of the listing brokerage and a co-operating working with another salesperson, can you contact them
brokerage has a buyer who is a customer. directly?: You should only communicate through their
salesperson, even if they are with the same brokerage as you.
108. What is 'Sub-Agency'?: Extending the ability to represent the
(Note: This isn't part of The Code but it's generally accepted
principal to another brokerage. The other brokerage would
practice.)
then be deemed a sub-agent, and they now owe Fiduciary
Duties to the principal. 116. If a person approaches you directly and indicates they are
unhappy with their brokerage, can you encourage them to
109. What are 3 reasons a seller might choose to be a Customer
cancel their agreement and sign with you instead?: No.
instead of a Client?: - Seller has previous experience in
The Code strictly prohibits you from encouraging a client of
selling property
another salesperson or brokerage to break an existing contract.
- Would like to sell privately (FSBO), but would like to let
people know it's available 117. Can a salesperson encourage a buyer to break an existing
- Cost savings associated with reduced services agreement of purchase and sale if it means that buyer
might buy their own listing instead?: No. This is forbidden by
110. What costs should a salesperson inform a buyer about when
The Code.
purchasing their new home?: - Legal fees
- Land transfer tax
- Closing costs
111. When is it particularly important to verify all the information
provided by a seller about a property?: When the property is
for sale by owner, because there is no brokerage working with
the seller who would have confirmed these details first.
112. What services can a salesperson offer when a buyer is at
the offer stage?: - Preparing offers and advising on
conditions, clauses and other terms
- Attending the offer presentation whenever possible to
promote the buyer's best interests (vs. sending the offer to the
listing salesperson via email)
- Negotiating the offer on behalf of the buyer
113. What limitations are the when a buyer is a customer?: - No
obligation by the salesperson to research of verify property
defects
- Can't provide advice, including what price to offer or what
terms to include in an offer
- No obligating to act in the best interests of the buyer (but
required to treat the buyer fairly, honestly and with integrity)
- No obligation to keep the buyer's info confidential (a
salesperson MUST tell their seller client everything they know
about the buyer customer ... BUT the buyer must be told this in
advance before any info is shared)
Humber Real Estate - Course 2, Module 2, Documenting
Relationships with Sellers and Buyers

1. What 4 things must be specified on both representation and 8. What types of listings are there?: - Exclusive with one
customer service agreements?: - The effective date and brokerage
expiry date of the agreement (can only be one expiry date) - Placed on a listing service inviting co-operation from other
- The method for calculating commission or other brokerages
remuneration payable to the brokerage (in the case of a seller, - Open listing
the amount payable) 9. Define an 'Exclusive Listing': The seller gives the sole right to
- How the commission or other remuneration will be paid market and sell their property to one brokerage. The brokerage
- The services that the brokerage will provide under the is authorized by the seller to sell their property during the
agreement time specified in the agreement and on the terms agreed to.
2. If the term of a representation or customer service Note: Only the brokerage with whom a seller has signed an
agreement is more than 6 months, what must be exclusive agreement is authorized to show the property to
prominently displayed on the first page, and requires an potential buyers, and the property wouldn't be advertised on a
initial by the seller/buyer?: The expiry date listing service.
3. If two sellers sign one representation agreement, is it 10. Why would a seller choose an 'Exclusive Listing' with a
acceptable to present them with one copy of the signed brokerage?: Because the seller has given specific instructions
document, if they sign in person at the same time?: No. regarding the showing of the property that the brokerage must
Each seller must receive their own individual copy of the follow. For example, pre-qualifying potential buyers for high-
signed listing agreement. end properties, ensuring privacy and tighter control over who
4. Under REBBA, when might specific conditions allow is shown the property (i.e. no nosy neighbours wanted).
remuneration to be paid without a written agreement?: - A 11. What is a potential major issue when a seller considers an
salesperson has conveyed a written offer that is accepted by 'Exclusive Listing'?: By restricting the authority to sell the
the seller property to the listing brokerage, buyers working with other
- A salesperson shows a property to the buyer, who brokerages may not know of the property's availability and
subsequently purchases the property miss the opportunity to view and purchase the property.
- The salesperson introduces the seller and the buyer, for the 12. Define a listing via 'Listing Service': The most common form
purpose of discussing the acquisition or disposition of an of listing; the property is placed on a listing service (i.e. MLS)
interest in real estate and the authority to list is granted to only one brokerage,
5. In what situations would the salesperson need to disclose however, the seller permits the listing brokerage to co-operate
the nature of the relationship to both the buyer and seller?: with other brokerages in the sale of the property.
- The brokerage is representing both the seller and the buyer in 13. What is a 'Co-Listing' (aka 'Shared Listing')?: A seller signs a
the same transaction (i.e. both the seller and the buyer are representation agreement with two or more brokerages at the
clients) same time. There's only one listing, but two or more brokerages
- The brokerage is representing the seller as a client and is share the responsibilities and the commission. Note: This
providing services to the buyer as a customer in the same doesn't happen very often but can happen when multiple
transaction owners of the same property want their own representation
- The brokerage is representing the buyer as a client and is (i.e. during separation or divorce)
providing services to the seller as a customer in the same
14. Define an 'Open Listing': Also known as For Sale By Owner
transaction
(FSBO), is when a seller does not list their property with any
6. If a home is locked up properly after an open house, and brokerage, however the seller is willing to allow any
then is broken into, is the brokerage liable for the brokerage to show the property to a buyer. This is often
damages?: No. The seller agrees in their representation identified by a sign on the property stating 'Brokers Protected',
agreement to indemnify the brokerage in case of damage, meaning the seller will co-operate with any brokerage and will
theft, vandalism or fire that may occur during the marketing compensate the brokerage who first acquires a buyer ready,
process, providing the brokerage is not behaving negligently in willing and able to meet the terms of the listing or secures the
carrying out its duties. acceptance by the seller of a satisfactory offer.
7. If a buyer agrees the brokerage should received a 15. What type of agreement is usually used during an 'Open
commission of 2.5% of the sale price of any property Listing' if a brokerage brings a buyer?: An agreement to pay
purchased during the term of their agreement, and the commission (rather than a representation agreement). The
seller is providing 1.5% commission, how much commission seller is not a client and the brokerage does not owe the seller
will the buyer's brokerage make?: 2.5% as agreed to in the any fiduciary obligations.
buyer representation agreement. (Seller pays 1.5% and buyer
pays the additional 1%)
16. What type of properties often use 'Open Listings'?: Office, 24. True or false? In multiple representation, notices must be
retail or industrial properties. given directly to the seller or buyer in a transaction before
17. What documents can be used by a salesperson to confirm they can be deemed as received.: True. Unlike during Single
details given by a seller on the seller representation Representation, a brokerage can't receive a notice for a seller
agreement?: The deed, assessment notice or a municipal tax or buyer because they represent both parties during multiple
bill. representation.
18. What is a 'Holdover Provision'?: A provision stating the 25. Is a seller obligated to refer any inquiries about their
brokerage is entitled to commission if a buyer is introduced to, property to their listing brokerage?: Yes. If the seller accepts
or shown, the property during the listing period and purchases an offer during the listings period or holdover period without
the property during an identified time period following the notifying the brokerage, the seller is obligated to pay the
expiration of the listing. Also known as the 'Holdover Period'. commission as stated in the agreement, within 5 days of the
brokerage's request.
19. What happens if a listing expires, but during the 'Holdover
Period' the seller re-lists with another brokerage, and then 26. What is a 'Finder's Fee'?: Any direct or indirect financial benefit
a buyer who previously saw the property (before it first received from another person arising from services provided
expired) then buys it? How is commission handled between to the client (also called a referral fee). These must be
the first and second brokerage?: The original listing disclosed in writing.
brokerage's commission owed is reduced by the amount of 27. Is marketing an implied authority or an actual authority?:
commission paid under the new agreement. If the commission Actual authority
in the new listing is equal to or greater than the commission 28. What does the 'Warranty' section of an agreement cover?:
stated in the original listing, then no commission is payable. That the seller has exclusive authority and power to offer the
property for sale. The seller must inform the listing brokerage
Example: Brokerage A was originally owed 5% and Brokerage about third-party interests or claims concerning the property
B is now owed 4.5%, so after the sale is completed, Brokerage that may affect the sale. This includes any rights of first refusal,
A received 0.5% and Brokerage B received their full 4.5%. options, easements, mortgages or encumbrances.
29. A buyer views a property during an open house held by the
Note: If the commission agreed upon by Brokerage B was
salesperson but does not submit an offer. When the listing
equal to or more than the amount promised to Brokerage A
expires, the seller does not list the property for sale with
originally, no commission would be owed to Brokerage A.
another brokerage. Seven weeks after the expiry of the
20. The listing agreement identifies that unless otherwise listing, the seller sells the property privately to the buyer
informed, the co-operating brokerage is representing the who viewed it during the open house held by the
interests of the buyer. This is known as what?: Assumed salesperson, but the sale is not closed until after the
buyer agency holdover period has expired.
21. What does The Code of Ethics require when explaining
Multiple Representation to a client?: - The fact that the Is commission owed to the original brokerage in this case?:
brokerage could enter into multiple representation but that his Yes. Even though the transaction closed after the holdover
could only be done is all of the clients represented by the period, the AGREEMENT was made during the holdover
brokerage for that trade consent in writing. Consent is not period. The seller would owe 5% commission to the brokerage.
required to be given. 30. True or false? If anything is added to a seller representation
agreement that conflicts with the pre-set wording, the pre-
- The nature of the services that the brokerage could provide set wording takes precedence as it forms part of the
to each client when working under multiple representation contract between the brokerage and the seller.: False. The
22. What is the brokerage's obligation under Multiple 'Conflict or Discrepancy' clause permits any added provisions
Representation?: To remain impartial and to treat all parties to take precedence over the pre-set wording. A seller
equally and fairly. representative agreement can contain added provisions to suit
23. Define 'Notices' in reference to a transaction: Documents the particular requirements of a seller or brokerage.
given and received by the seller.
31. True or false? A seller representation agreement is faxed to 39. What are the primary differences between a buyer
a seller who signs it and faxes it back to the brokerage. The representation agreement vs. a seller representation
faxed copy is sufficient to place the listing on the local real agreement?: - General description of Property type
estate board's listing system, but the seller's original - Geographic location
signature must be obtained on the seller representation - Indemnification
agreement before an offer is presented.: False. The - Consumer Reports
'Electronic Communication' clause provides for any agreement
to be transmitted electronically and that the signatures will be Also, unlike the seller agreement, the buyer representation
deemed original. There is no further need to have the seller agreement is an authority both for the purchase of property
sign the seller representation agreement. and the leasing of property.
32. True or false? If a seller and a salesperson sign the seller 40. Does the warranty section of the buyer's representation
representation agreement with electronic signatures, both agreement apply if the same client purchases a different
parties are agreeing to the use of electronic signatures with type of building (i.e. residential vs. commercial) in the same
respect to the agreement.: False. Both parties are agreeing to geographical area, but from a different brokerage?: No.
the use of electronic signatures with respect to the agreement Only the same type of building (i.e. residential) falls under the
by signing that way. warranty that the client isn't represented by any other
33. When asking an individual to sign a representation brokerage within the stated geographical area.
agreement, remind them that they are signing under seal. 41. What does the provision for indemnification in a buyer's
What does this mean?: That the contract will become binding representation agreement cover?: The buyer's
once signed. acknowledgement that the brokerage and its representatives
34. Is spousal consent required when a buyer is buying a are not responsible for any defects found in the properties the
property?: No, only when selling a matrimonial home. buyer views. They also acknowledge that they have been
advised to make their own enquiries about the property as the
35. Where is initialling required on an agreement?: On any page
information provided by the seller or the listing brokerage may
where a signature is not obtained, and in the following places:
not have been verified.
- When the duration of the agreement exceeds 6 months
- To acknowledge the warranty statement indicating they are 42. If a buyer asks you about a physical condition of a property,
not a party to another listing agreement what should you do?: Refer them to a professional.
- Whether they agree to another brokerage contacting them 43. What does a 'Consumer Report' consist of?: The buyer's
after the listing expires or is cancelled personal and credit information.
36. Is a signature required by the client to acknowledge receipt 44. What is the purpose of a 'Consumer Report'?: To ensure
of their copy of the representation agreement?: Yes. They compliance with the requirements set out in the Consumer
must be given a copy immediately upon signing and a Reporting Act, which regulates consumer reporting agencies
signature is required for receipt. who furnish consumer reports.
37. Does a spouse who is not on-title have to initial each clause 45. In what types of situations might a 'Consumer Report' be
and sign the acknowledgement section of the form?: No. requested?: The extension of credit such as obtaining a
Only the spouse who is on title signs and initials as the seller mortgage, and entering into or renewing a tenancy agreement.
for the property. The non-titled spouse will sign under spousal 46. What are 2 common schedules you might see attached to a
consent, which indicates their approval to list the property for buyer's representation agreement?: - A list of properties that
sale. may be excluded from the buyer representation agreement (i.e.
Note: Policy regarding spousal consent signatures can differ the buyer may have viewed a property for private sale or a
brokerage to brokerage. new home construction site by a builder)
38. "Listing brokerage commission" is also known as what on the - A pre-approval letter from a mortgage provider to assist in
seller representation agreement?: Total commission (then it's the brokerage assessing the buyer's qualification
further split to co-operating brokerage from there). 47. What happens if the seller is offering the co-operating
brokerage a lower percentage than agreed to in the
buyer's representation agreement?: The buyer agrees to pay
any deficiency between the agreed amount the brokerage is
entitled to and the amount paid by the seller or the listing
brokerage. The brokerage will inform the buyer of any such
deficiency at the earliest practical opportunity and prior to
submitting an offer.
48. What are the primary differences between a seller 56. What are the 4 types of changes available when altering a
customer service agreement and a seller representation Seller Representation Agreement?: - Amendment
agreement?: - Non-exclusivity disclaimer (a seller can have a - Suspension
customer service agreement with any number of brokerages at - Cancellation
the same time, but DOES still have to warrant they aren't under - Assignment (the transfer of rights in a contract to another
contract with another brokerage at the time of signing) party)
- Buyer details (for example, the buyer is identified because 57. What are the 2 most common amendments to a Seller
the brokerage brought the buyer to the FSBO seller) Representation Agreement?: - Change in listing price
- Term of the agreement - Change to the expiry date of the agreement (new terms must
- No listing price identified be agreed upon before expiry occurs, otherwise a new
49. What statement under the warranty section of a seller agreement would have to be written)
customer service agreement may not exist in a seller 58. Why would a Suspension of a Seller Representation
representation agreement?: The seller warrants that they Agreement be required?: - When the marketing activities for
have the sole and exclusive right to execute the agreement. a property need to be stopped for a specific period of time
50. Under REBBA, how can multiple representation be avoided (i.e. illness in the family, a major life event like a wedding or
when one brokerage is working with a buyer and seller?: funeral, or to repair damages)
One person signs as a client, one person signs as a customer. 59. Once a Suspension of a Seller Representation Agreement is
completed, what steps need to be taken?: Alteration to the
If both want full services, you would enter into multiple listing about the suspension and notice must be given to all
representation instead. brokerages and salespersons.
51. What are the differences between Buyer Representation 60. When documenting a Suspension to a Seller Representation
Agreements vs. Buyer Customer Service Agreements?: - Agreement, what details need to be included?: - Effective
Commission date of suspension
- Representation and Customer Service - Expiry date of suspension
- Signature Areas - When the marketing activities for the property will resume
52. What kind of schedules might you see attached to a Buyer 61. Who can give consent for a Suspension of a Seller
Customer Service Agreement?: - The terms where the buyer Representation Agreement?: A broker of record or a
agrees to pay a commission for the brokerage manager of the brokerage.
- To identify the services the brokerage is agreeing to provide
62. Does a Suspension of a Seller Representation Agreement
under the agreement
affect the holdover period?: No. It remains the same.
53. In a Buyer Customer Service Agreement, what does the
63. What happens if a seller or buyer and their brokerage both
'Representation and Customer Service' section of the
want to terminate their agreement?: Both parties must sign
agreement explain?: That the brokerage will not be
the Cancellation change, and a broker of record or a manager
representing the buyer and may be representing the seller.
must sign for the brokerage.
54. Under The Code and a Buyer Customer Service Agreement,
64. If an agreement is cancelled, what happens if the seller
is a brokerage obligated to show all relevant properties to
sells their home during the remaining portion of the listing
a customer no matter how much commission is offered?: No.
period OR the holdover period, what happens?: Commission
Unlike a client relationship, the brokerage is not under
is owed to the brokerage, unless there are other terms agreed
obligation to do this because the buyer customer is not
to between the parties.
obligated to compensate the brokerage. If they really want to
Note: The same is owed of a Buyer who cancels their Buyer
see everything, a customer should be advised to sign a buyer
Representation Agreement.
representation agreement instead and instead become a client.
65. What happens when a brokerage prepares an Assignment
55. Can a brokerage disclose a buyer customer's information to
of a Seller Representation Agreement?: It releases the
a client seller?: Yes. With a customer there is no
original listing brokerage from all the obligations of the
confidentiality required. With a client, full disclosure of all
agreement and assigns all rights and obligations to the other
information is required.
brokerage.
66. What is a common situation in which Assignment of a Seller
Representation Agreement might be used?: When a
salesperson transfers to another brokerage and is permitted to
transfer the listing agreement with them to the new brokerage.
67. Who from the brokerage can authorize an Amendment to a 75. What are some common types of documents acquired by a
Seller or Buyer Representation Agreement?: The salesperson?: - Surveys or other information related to the
salesperson. listing
68. Is a spousal signature of an untitled spouse required to - Identification verification of the seller or the buyer as
amend, suspend, assign or cancel an agreement?: Yes. required by FINTRAC
- Disclosures from sellers about any issues with their property,
69. In what ways can a Buyer Representation Agreement be
repairs conducted on the property, etc.
changed?: Amendment
Cancellation 76. A brokerage leases a portion of a warehouse for storage,
Assignment which is located close to the main office because their
current location does not have sufficient space. Is this
Note: Suspension is NOT usually available to buyers, only appropriate?: No. Unless the brokerage obtains the Registrar's
sellers. The buyer would simply state that they are not permission to do so, it cannot store its records and documents
available to look at potential properties and, as the at a place that is not its main office.
salesperson, you would respect that. 77. Inducements are also known as ....: Promises
70. What are some common Amendments that are added to Note: These must be fully agreed to in writing and should be
Buyer Representation Agreements?: - Including additional cleared with the brokerage before making the promise.
services that the brokerage might provide to the buyer 78. Under REBBA, can a salesperson promise to offer certain
- Revising the property-type or geographic location services for free such as staging or property inspection,
- Revising the terms of any commission obligations of the without a written contract?: Yes. These promises do not
buyer required a signed contract.
- Revising the expiry date of the agreement (buyer's initials 79. List the mistakes a salesperson should avoid while
required if new expiry date is more than 6 months after the documenting relationships.: - Documentation errors
commencement date) - Incorrect words, statements and predictions
- Making corrections to information recorded in the agreement - Misrepresentation
71. If a buyer wants to suspend their Buyer Representation - Lack of due diligence
Agreement, how can this be handled?: Since suspension isn't - Breach of duties, obligations and disclosure requirements
an option for Buyer Representation Agreements, the agreement 80. What are the leading practices in documenting
should be cancelled and the cancellation change needs to be relationships?: - Reviewing agreements
signed by both the client and the broker of record or manager - Research and analysis
of the brokerage. - Clarity and honesty
72. What are some common situations in which a Buyer or Seller - Timely advice
Customer Service Agreement may be amended?: Changes
pertaining to:
- The services that the brokerage will provide to the seller
- Changes to the terms of commission
- Changes to the expiry date of the agreement (same 6+ month
initial applies)
- Corrections to information recorded in the agreement
73. How long is a brokerage obligated to retain all documents
and records created during the course of a trade?: For at
least 6 years.
Note: If a trade was contentious and may result in legal action,
these files should be kept indefinitely.
74. What are a salesperson's responsibilities regarding
documentation?: To submit all documents created or
obtained to the brokerage in a timely manner for appropriate
record keeping.
Humber Real Estate - Course 2, Module 3, Understanding
Residential Property Types, Ownership and Planning

1. Define a 'Dwelling Unit' A self-contained housing unit 11. Define A limitation placed on the use of
with one or more habitable 'Restrictive property and is registered on title for
rooms containing at minimum a Covenant' that property. It's a contract between 2
kitchen, bathroom facilities and land owners, where 1 owner (the
an exit from the building. "covenantee") acquires the right to
restrain the other owner (the
2. What is the difference - A duplex is under single
"covenantor") from putting the land to
between a semi- ownership (under 1 title) ... the
specific uses.
detached structure and a dwelling units can then be lived
vertically divided duplex? in or rented out 12. Unless Tenancy in common
- The 2 dwelling units in a semi- documented
detached structure are each explicitly, what is
owned separately (under 2 titles) the default form
of concurrent
3. Define 'An Estate In Land' The interest or rights associated
ownership?
with real property.
13. What are the 2 - Tenancy in common
4. Holding a fee simple - Freehold ownership
types of - Joint tenancy (one person dies,
interest in a property can - Freehold estate
concurrent property gets passed to other joint
also be referred to as
ownership? tenant)
what?
14. What are the 4 - Possession
5. What rights are included The rights (aka Bundle of Rights)
unities that must - Interest
under fee simple include the right to:
be present to - Time
ownership? - Sell
constitute joint - Title
- Lease
tenancy?
- Use
- Do nothing 15. Define 'Joint It a married person passes away while
- Give away Tenancy: Spousal owning an interest in a matrimonial home
- Enter the property Interest' as a join tenant with an individual who is
not their surviving spouse, the joint
*Use the acronym SLUDGE to tenancy is immediately severed and
remember these rights reverts to tenancy in common. This
provision allows for the deceased's
6. What happens if a An implied easement exists
interest in assets of the property to revert
property fronts onto a under the Road Access Act
to their legal spouse.
public road and the permitting the owner to cross
property as a result over someone else's property to 16. If a joint tenant Severance
cannot be directly achieve access. wishes to destroy
accessed? the right of
survivorship
7. What are the 4 categories - The right to take property
before their
of government limitations (expropriation)
death without the
over land ownership - The right to regulate
consent of the
rights? - The right to levy taxes
other joint
8. Zoning bylaws, building The right to regulate (aka Police tenant(s), what is
codes, traffic and sanitary Power) this called?
regulations are based on
17. What happens This act turns joint tenancy into tenants in
what government right?
when a joint common with the other tenant or tenants.
9. What are 'Private Restrictions placed on a tenancy is Even afterwards, if there are 2 or more
Limitations'? property by a landowner rather severed? other tenants remaining, they still remain
than a government body. joint tenants with each other, but are
10. What are 2 common - Restrictive Covenants tenants in common with the person who
types of private - Easements holds the severed interest.
limitations?
18. What are 2 of A joint tenant granting their interest to a 25. What is a This type of corporation has no units, but
the most third party, or all parties involved deciding Common has common elements like roads, a golf
common to sever their joint tenancy and instead Elements course, or a ski hill. Owners enjoy the
methods of hold their interests as tenants in common Condominium? common elements and jointly fund their
severance? (i.e. during a marriage separation, the joint maintenance and repair.
tenancy termination can be mutually
agreed upon as part of the separation You own your house and the land on
agreement). which it sits, and
all owners within the community share
19. What is an Splitting the land by means of an
ownership of the roads and community
example of application to a court.
centre. Your part-interest in the
joint tenancy
corporation is attached to the parcel of
termination by
land you own, not your house.
partition?
26. Is a condo's No. They are elected by condominium
20. In what Married couples (especially when there is a
board of owners who are members of the
situations difference in the equity being brought into
directors condominium corporation. As some
would you the purchase), friends or business partners
elected by the residents may not be owners (i.e. renters),
often see
residents? they are not eligible to vote for the
tenants in
board.
common?
27. Who is in charge The board of directors
21. In which form Tenants in common
of setting a
of concurrent
condo's fees?
ownership can
the tenants 28. What is the The owner's partial interest in the CEC is
hold separate difference in attached to the land their home sits upon,
interests in a ownership rather than the home itself. This land is
property? between a considered a parcel of tied land (POTL).
Common In a standard condominium, the owner's
22. In which form Joint tenancy
Elements interest in the condominium corporation
of concurrent
Condominium lies in the unit.
ownership do
and a Standard
the tenants
Condominium?
share an equal
interest in and 29. Describe an Property is owned by a corporation
title to the 'Equity Co- made up of shareholders - also referred
property? operative' to as members. Ownership involves the
purchase of share capital in the property
23. What are the Rules are easier to change than bylaws
that entitles the owner to use and occupy
primary because bylaws are not effective unless the
a specific unit under an arrangement
differences majority of unit owners vote in their favour.
defined in an occupancy agreement.
between a
condominium 30. In what ways is - Managed by a board of directors
board's 'Rules' an Equity Co- - Members pay monthly fees
and 'Bylaws'? operative similar
to a
24. A copy of a Bylaws
condominium?
condominium's
________ must be
registered in
the land
registry office.
31. Does the 'Co- No, since they are member-owned 38. Define Co- A fractional interest held by 2 or more
operatives and controlled corporations. Ownership people who are registered on title as owners
Corporations Act' of a property. The percentage owned by
regulate the day-to- each person does not need to be equally
day business of an divided.
equity co-operative or
39. Describe a Owners may receive an occupancy
its bylaws?
'Multi-Unit agreement in addition to the deed. The
32. What is a key A co-op's monthly housing charges Co- agreement gives them the right to occupy a
difference between an also include a share of the Ownership specific unit within the structure, since the
equity co-operative's property tax that is charged for the Building' deed only documents the fractional interests
and a condominium's entire property. Since each member held in the building. The tenants in common
monthly housing contributes toward the larger bill owners have exclusive right to occupy and
charge / monthly rather than having to pay individual use a specific unit. They are issued a share
fees? property taxes, they are indirectly certificate in the co-ownership corporation,
liable if others fail to pay their reflecting their proportionate interest. In this
property tax. way, they are very similar to equity co-
operatives, though they differ in concurrent
33. How does an equity They require that their boards give
ownership types.
co-op's board of approval to buyers, sellers or the
directors offset the leasing of all member units. 40. What are the A) Fee simple interest in a unit
risk of non-payment 3 ownership B) Property is owned by a corporation
toward common types of the C) Tenant in common ownership with 1 or
liabilities (such as following more persons
blanket mortgages kinds of
that may require properties?
payment by any new A)
owners)? Condominium
B) Equity Co-
34. Are equity co-ops Old, and are often have larger
Operative
typically new or old units than those offered in a new
C) Co-
buildings? standard condo, and they may be
ownership
more economical also.
41. Which type of Co-ownership
35. The sale of a unit in an - A share certificate
property
equity co-op will - Occupancy agreement
does NOT
provide the buyer with - Rules / regulations
have a board
what documents? - Bylaws
of directors?
- The amount of the mortgage
Condominium,
registered against the entire
Equity Co-
property owned by the co-
operative or
operative corporation (as a
Co-
mortgage cannot be placed upon
ownership?
an individual unit)
42. What is a 'Life Properties in which the buyer purchases the
36. What is the biggest The form of ownership. An equity
Lease right to occupy a given dwelling unit within
difference between an co-op is defined by share capital,
Complex'? a community for the duration of their
equity co-op and a which is not applicable to a condo
lifetime. Buyers of this type of lease are
condominium? purchase.
referred to as occupants rather than owners.
37. Why would an equity Because it already includes the
43. Who are - Non-profit or charitable housing providers
co-op's monthly property tax.
some typical - Seniors' organizations
maintenance fee be
sponsors of - Church or faith groups
higher than a condo's?
Life Lease - Service clubs
Complexes? - Ethnic associations
44. What is the financial A lump sum up front followed by 55. At what level of Municipal
structure of monthly fees. These fees take care of government are
purchasing a Life a range of expenses including snow most Planning
Lease? removal, landscaping, garbage Act initiatives
disposal, repairs, building insurance carried out at?
and possibly meals.
56. What are the Severance and subdivision approvals and
45. In a Life Lease Setting aside funds for roofs, most direct ways zoning bylaws
Complex, what is the exteriors, buildings, roads, sidewalks, the Planning Act
purpose of the sewers, heating, electrical or will impact you
reserve fund? plumbing systems, elevator, laundry, as a
recreational, parking facilities, etc. salesperson?
46. How is an amount Based on the lot size, location and 57. What is the To describe local policies that outline
paid for a land lease view. purpose of the how land in a given community should
typically calculated? official plans be used.
developed by
47. What is the range of 20 to 99 years
municipalities?
term of land leases?
58. What is the job To grant variances from the provisions of
48. Land lease homes The Residential Tenancies Act
of the zoning bylaws, to grant consents and to
(i.e. homes without (doesn't apply if the site is used by
Committee of control the continuance of non-
wheels that are not travellers or people on vacation).
Adjustment? conforming uses that would alter current
seasonally occupied)
land use regulations.
are regulated by
what Act? 59. What are the 3 Upper Tier (region, country or district)
different types Responsible for: Preparation, adoption
49. In a land lease, what To maintain any grounds, buildings
of municipalities and revision of the official plan, and the
is the monthly fee or equipment intended for common
and what are process of dividing and developing land.
required for? use.
their
50. What is the The land lease tenant owns their responsibilities? Lower Tier (municipality)
difference in residence and has the right to sell or Responsible for: Preparation, adoption
ownership between a lease the dwelling. and revision of the office plan and the
life lease community adoption of zoning bylaws, interim
and a land lease control bylaws and other bylaws.
tenant?
51. Why is financing for Because the person will not Single Tier (district, region, township, city
land lease difficult to technically own any land to pledge or municipality)
obtain? as security. Responsible for: Assumption of all
municipal responsibilities where a
52. What is the 'Planning A provincial legislation that sets out
municipality does not form part of an
Act'? rules for land-use planning and
upper tier municipality.
recognizes the authority of
municipalities and planning boards in 60. Describe the Its council will often coordinate planning
Ontario to make planning decisions. relationship between the respective lower tier
between upper municipalities, as well as address matters
53. Who administers the The Ministry of Municipal Affairs and
and lower tier for which it may be directly responsible,
Planning Act and Housing
municipalities. including roads and water/sewer
provides advice and
systems.
information on land-
use planning to
municipalities?
54. What does 'LPAT' The Local Planning Appeal Tribunal
stand for?
61. What are 3 - Restrictions relating to the placement 67. What are the steps in 1. Consult and Determine
common ways of signs, notices or advertising on getting approval of a Authority
municipal property 'Plan for Subdivision'? 2. Prepare a Draft Plan
initiatives impact - Establishing provisions regarding 3. Complete Application /
on real estate flood control that affect properties in Appeal to LPAT if applicable
activities? flood-prone areas 4. Approval Authority (Provide
- Requiring property owners to meet Notices & Hold Public Meetings)
various standards in the control of 5. Decision and Notice of
noise, vibration, odour, dust and Decision (Draft Plan Approval)
outdoor illumination (e.g. operation of 6. Appeal Decision (if
commercial enterprises and noise applicable)
bylaws relating to residential uses) 7. Final Approval and
Registration
62. What does the The size, message content and location
sign bylaw in most of signs on property. As a general rule, 68. After submitting a 'Plan 180 days
municipalities no signs can be placed on public lands for Subdivision', how long
regulate? without permission from the is the time period
government body. Municipal bylaws between the steps
differentiate between permanent signs 'Prepare a Draft Plan' and
(which require permits) and temporary 'Decision and Notice of
signs (which do not require permits). Decision (Draft Plan
Approval)'?
63. Who should a The Ministry of Transportation (MTO)
salesperson 69. What is 'Intensification'? An alternative to land severance
contact if they and subdivision. This solution to
have a question increasing housing demands
about if a permit is involves expanding the use of
required for a existing land, buildings and
sign? municipal services rather than
increasing housing through
64. What are the 1. Consult and Determine Authority
urban sprawl.
steps in Consent 2. Complete Application
for Severance? 3. Application Review 70. What is an 'Official Plan'? A document that is designed to
4. Decision Issued provide a framework for future
5. Appeal Process (if applicable) / decisions on how land in a
Decision of Local Planning Tribunal community should be used.
6. Issuing of Certificate
71. Who approves the The Ministry of Municipal Affairs
65. How long is the 90 days 'Official Plan'? and Housing
timeframe during
72. How often is the 'Official Every 5 years
Consent for
Plan' reviewed?
Severance
between the steps 73. True or false? Many True
'Complete lower tier municipalities
Application' and will have their official
'Decision Issued'? plan approved by the
upper tier municipality?
66. How long is the 20 days
timeframe during
Consent for
Severance
between the steps
'Application
Review' and
'Consultation with
Other Agencies'?
74. True or false? When considering an False. They must 79. In a apartment building, one Residential Restrictions
official plan, the local council or hold at least one dwelling is occupied by two
planning board must hold at least one public meeting siblings, whereas another unit is
public meeting. There is no meeting for for the 5 year occupied by two unrelated
requirement for the five year review or revision also. friends. This provision of 'The
update to the official plan. Planning Act' disallows for a
bylaw to treat these cases
75. True or false? An official plan will True.
differently based on the
identify not only the type and location
occupants' relation to one
of future development but also the
another, or lack thereof.
services that will be needed for
development to take place. 80. A sign is placed on a vacant lot, Holding Provision, which
which indicates that it is to be stipulates that signage
76. What is the purpose of zoning bylaws? To implement
used for a future purpose. What with an "H" symbol can
the general
is the name of this provision of be placed on a piece of
policies for
'The Planning Act'? land held (reserved) for a
future land use,
future specific use.
according to the
However, the symbol can
municipality's
be removed if a bylaw
official plan.
amendment nullifies the
77. What issues do zoning bylaws typically - The use to intended future use.
address? which the land
81. What does the 'Interim Control Allows the right to pass a
may be put (e.g.
Provision' of 'The Planning Act' bylaw, which temporarily
residential)
do? restricts some land uses
- Where
in a specific area for the
buildings and
duration of no more than
other structures
one year. During this
can be placed
time, the municipality
on the land
studies and reviews its
- The type of
land use policies related
building
to the area.
permitted,
building height 82. True or false? Individual types False.
and how that of residential structures (such as While types of residential
building may be single-family dwellings and structures may share the
used multi-unit residential structures) same zoning class (i.e. R
- Lot sizes, typically have a unique zoning for Residential), structures
dimensions and symbol? are further subdivided
setbacks into zoning symbols to
(minimum account for minimum
clearance) from clearances unique to
the street or each structural type.
property line
83. True or false? Section 6 of a False.
- Parking
zoning bylaw typically contains Section 6 of a zoning
requirements
content related to commercial bylaw typically contains
78. What are the general zoning - Residential zones. content related to
classifications? - Commercial residential zones, which
- Industrial can be consulted in the
- Institutional listing and selling
- Open space process.
- Agricultural
84. True or false? Building True. 88. What does Offers programs to aid in management of
zones are divided into For example, a single-family 'The Ontario provincially held properties including
zone classes. All zone residential building is zoned R1. Heritage buildings, natural heritage sites, registered
classes are associated Trust' do? archaeological sites and the support of
with a class zone heritage conservation easement properties.
letter followed by a
89. What Council will refer the objection to the
number, designating
happens if a Conservation Review Board to conduct a
the type of structure.
property is hearing and make recommendations on
85. What types of Residential structures but also submitted as whether the property should be designated.
properties can be commercial, industrial or public a heritage Council is not bound to follow these
protected under the buildings, cemeteries or churches. site, but recommendations but rather ensure they are
Heritage Act? there is an considered in their final decision.
Buildings are not required for objection?
designation, which means that
90. What type - A heritage designation bylaw will require
vacant lots, cultural landscapes or
of things that the owner preserve any specific heritage
landscape features, marine heritage
should a attributes that form part of the property's
and archaeological sites, ruins or
buyer be description and support the approval of its
properties only considered to be
aware of designation. They may also be required to
areas of archaeological potential
when repair any damages to the attribute by using
may also qualify as heritage
considering original materials (especially if these have
properties.
buying a been noted as heritage attributes) and
86. What is the purpose of To define processes that protect heritage workmanship.
'The Ontario Heritage our past, even as municipalities property? - These requirements can result in added
Act'? plan for strong and vibrant futures. costs and increased insurance premiums to
any owner of the property because the
Heritage designation publicly designation runs with the land.
recognizes, promotes and
91. What if an They must submit an application for a permit
preserves places of cultural history,
owner wants for the proposed work and obtain written
provides protection from
to make consent from their municipal council before
demolition and ensures that any
alterations making any changes.
alterations respect the property's
that could
heritage value.
affect the Note: General maintenance work, such as
87. What steps are 1. Identification of the property by a heritage repainting trim, repairs/replacement to an
involved in the municipal heritage committee, attributes of asphalt roof or any alterations or repairs that
Heritage Property should one be established for the their are not part of the designation bylaw, do not
Designation Process? municipality. The committee property? usually require heritage approvals.
ensures all relevant information is
considered when assessing a
potential property. This requires
research & a site analysis.

2. Providing a notice to the owner

and placing a notice in the local
newspaper.

3. Passing and registering a

heritage designation bylaw. The
designation is registered on the title
of the property.
92. What type of - Many municipalities have their own 96. Anyone, including the 30
financial support financial incentive programs property owner, can
is available to - The Heritage Property Tax Relief object to the intention
owners of program to designate a listed
heritage - Grant and loan programs from property on the
properties to provincial & federal levels of government heritage register within
help them with to assist with individual projects how many days?
ongoing
97. Can a property owner Yes. While a property owner is
maintenance and Note: Some financial assistance programs
recommend their own able to identify their own
conservation of will require that a heritage easement be
property for individual property if they so choose, the
their properties? registered on title defining the owner's
property heritage municipality usually identifies
responsibilities to maintain their property
designation? most of the potential designated
in exchange for this financial support.
heritage properties. Any
93. The owner of a - Identify how the building or structure individual or group may do so.
heritage could contribute to the future use of the
property can property, such as proposed development
only demolish - Identify alternative uses for the building
the property by or the property
obtaining written - Potentially selling the heritage property
consent from the to the municipality or a buyer who will
council. What are conserve it
some - Expropriate the property
alternatives to
demolition that
might be
suggested?
94. What is required The bylaw does not require the owner to
by the replicate any lost heritage attributes. The
designation replacement building can be of a
bylaw if a different design and constructed using
building on a different materials.
heritage
property is
completely or
partially
destroyed?
95. True or false? A True.
property that is Municipalities may add listed (or non-
not designated designated) properties to their register
can appear on along with those that are individually
the municipal designated or those that are part of a
heritage register. designated Heritage Conservation
district through designation bylaws
passed by the municipality. These non-
designated properties have some
protection from demolition because they
have been included on the register, but
they have not gone througha n official
designation process.
Humber Real Estate - Course 2, Module 4, Factors Impacting
Residential Real Estate Negotiations

1. What is the difference between a 'Patent Defect' and a 'Latent Defect'?: A 'Patent Defect' is observable by the untrained eye.

A 'Latent Defect' is not readily observable to the untrained eye during the reasonable inspection of a property.
2. What is the most severe type of latent defect?: A material latent defect because it poses a serious risk that can render the home
unsafe, unhealthy or otherwise uninhabitable to live it.
3. What are some sources of demographical information that a salesperson may access?: - Real estate boards
- Subscription-based databases (e.g. Geowarehouse) and Canadan Mortgage and Housing Corporation (CMHC)
4. What are some examples of common material facts for a seller?: - Credit report of the buyer
- Zoning designation (e.g. bylaws, land use or fence height requirements)
- Proximity to schools or other public activities / amenities
- Dwelling measurements
- Recent neighbourhood property sales
- New developments
- Structural conditions and results (e.g. age, maintenance issues like roof leaks, foundation damage, mechanical or electrical
deficiencies, basement water seepage, mould or insect infestations)
- Outdated materials that can be personally or environmentally hazardous (e.g. asbestos, know-and-tube wiring, lead or Kitec
plumbing or underground storage tanks)
- Building and/or dwelling measurements or lot size (e.g. discrepancies in measurements cited in listings or specific measurements of a
balcony)
- Previous use of a property (e.g. former illicit activity such as a grow-op, meth lab or murder)
- Government limitations (e.g. HST, property taxes or any expropriation plans)
- Private limitations (e.g. easements or restrictive covenants)
- Alterations (e.g. renovations completed without permits or inspections or demolitions)
- Existence of nearby businesses or facilities that may impact quality of life (e.g. nearby development or industrial facility, airport or
railway line)
5. What are some ways you can do your due diligence to protect a seller's best interests?: - Inspecting the property and asking the
seller questions that would reveal defects and material facts that should be disclosed
- Documenting information shared with and by the seller with back-up copies stored in a second location
- Protecting the seller's personal information and motivations for selling unless you have written consent to share specific information
- Verifying that the information included in the listing or any advertising/promotional materials is accurate
- Excluding any detail about a home that you cannot verify from the listing or adding a qualifying statement or disclaimer
- Ensuring that you fully explain the content of all documents that you ask the seller to sign, and making sure that they have received
copies in a timely fashion
6. Is seller disclosure required for a patent defect?: No, because it's readily visible upon reasonable inspection.

Note: A good way to to remember this term ... think "It's PATENTLY clear that there is a hole in this wall!"
7. What does 'Caveat Emptor' mean?: Buyer beware
8. What type of defect are the following examples of?

- A missing railing
- Visible cracks in a foundation wall
- Evidence of mould
- Water stains on the ceiling
- Shingles missing from the roof
- A broken window pane: Patent Defects
9. What type of defect are the following examples of?

- Hidden water damage behind a shower or bathtub surround

- Fence encroachment onto a neighbouring property
- Vermiculite insulation
- Minor seasonal flooding in the basement: Latent Defects
10. Is a seller obligated to disclose a latent defect or a material latent defect during the sale of their home?: Yes
11. What is the most severe type of defect?: Material latent defect
12. What type of defect are the following examples of?

- High indoor concentration of radon gas which has reached hazardous levels
- A crack found in the basement behind the drywall that can affect the structural integrity of the house
- Mould infestation that would result in the building being condemned
- A property that has been identified as a grow house that requires remediation: Material Latent
13. What's it called when you re-assess the buyer's wants and needs during the home search processing?: Requalification
14. What does 'Proptech' mean?: Property technology
15. What does Section 8 of The Code of Ethics require?: That you advise a client or customer to obtain services from other better
qualified professionals and under no circumstances discourage clients or customers from seeking such services.
16. What market is the 'best-offer-first' strategy associated with?: A strong seller's market where demand for housing is high. Going in
with the best offer may be the only opportunity to catch the seller's attention amidst competing offers. But you must prepare the buyer
as their best may not be good enough.
17. What is a tactic that may be used in a Buyer's Market?: Buyers may state "this is my only offer."

Remember, the individual having the least motivation has the most negotiating power.
18. What type of market is the most rare and short lived?: A balanced market
19. What are some common factors affecting market conditions?: - Demographic changes
- Employment conditions
- Interest rates and mortgage availability
- Building activity
20. As more couples marry and acquire financing, the new couples will often want to establish an independent household in their
own dwelling. This is known as what?: The Family Formation Rate
21. A high family formation rate may predict what kind of market?: A seller's market (in the short term, in a strong economy).
22. What happens if the demand remains constant or increases during a seller's market?: The marketplace subsequently will need to
make more housing units available for the market to equalize.
23. Stable employment rates across the labour force can sometimes predict what type of market?: A balanced market.
24. Do economic downturns typically indicate a weakened or strengthened real estate market?: Weakened
25. What does substantial building activity normally indicate in relation to the real estate market?: A strong real estate market.
However, overbuilding can increase supply resulting in reduced real estate values.

Note: Unless the increase in supply is coupled with a corresponding increase in customer demand, real estate prices can experience a
downward trend and create a buyer's market.

Conversely, a sudden increase in demand can indicate an upward trend in real estate prices given the time it takes to build additional
inventory.
26. What are some recommended ways to advise a seller during a Seller's Market?: - Seek a large deposit as a sign of the buyer's
commitment
- Hold out for an unconditional offer and/or counter offer for terms in their favour
- Negotiate for a higher selling price, particularly when multiple offers are received. The strategy to delay offer presentations to attract
multiple offers may be commonplace in some areas but carries its own risks. If this strategy is discussed, you will want to make sure
that the seller understands the pros and cons of delaying offers.
27. What are some recommended ways to advise a buyer during a Seller's Market?: - Offering the highest price within the buyer's
means and/or accompanying their offer by a larger deposit than expected in current market conditions, preferably in the form of a
bank draft or certified cheque on offer presentation so they are taken more seriously by sellers
- Weighing the benefits and risks of submitting an offer without conditions
28. What are some recommended ways to advise a seller during a Buyer's Market?: - Keep their home in good condition so that the
property's potential is apparent
- Make the property available for as many viewings as possible
- Expect to receive conditional offers, and be aware of the risks of making counter offers when there is a surplus of properties on the
market
- Expect that they may receive offers at a lower price point than desired with less interest in negotiations
29. What are some recommended ways to advise a buyer during a Buyer's Market?: - Make informed choices that focus on their
priorities and consider making offers on properties that satisfy most (if not all) their wants and needs
- Take their time in viewing properties and putting together an offer
- Submit a conditional offer to protect their best interests by including conditions (e.g. inspection or repairs to be done)
- Make an offer that allows room for negotiation rather than one that is based on their maximum budget
- Consider adding a clause making the purchase conditional upon the sale of their property, as applicable
30. What are some recommended ways to advise both sellers and buyers during a Balanced Market?: - Be prepared to make
conditional and/or counter offers since these are commonplace in a balanced market; neither party is at a distinct advantage or
disadvantage
- Be prepared to negotiate the selling price and terms (e.g. closing dates and other matters important to both parties)
31. What are some typical conditions and clauses that can be added to an offer to protect and promote the interests of seller and
buyer clients?: - The buyer arranging financing
- Having a home inspection done
- Arranging insurance
- The seller making certain guarantees regarding the condition of the property, chattels and fixtures or major improvements (e.g.
swimming pools or garages)
- The seller agreeing to repair damages (e.g. fixing a crack in a wall and repainting it)
32. In a situation with competing offers, what pieces of information do you need to provide to potential buyers when you are
working for a seller?: - The number of competing offers
- If a competing offer has been made by a buyer representative within their brokerage
- If a competing offer has been made by the listing salesperson
- If 2 buyer representatives from the same co-operating brokerage have submitted offers (as this may be a multiple representation
situation for the co-operating brokerage and consent needed)
33. In a situation with competing offers, what pieces of information do you NOT need to provide to potential buyers when you are
working for a seller?: - The amounts of competing offers or any terms included
34. How long do you and your brokerage need to keep a record of all offers on file?: 1 year
35. If a leakage in a basement was fully remediated, does it need to be disclosed to a potential buyer?: No. A salesperson should
verify the accuracy of a seller's representation before preparing the listing, and only if the leakage is still an ongoing problem, that is
when it should be disclosed.
36. If a salesperson sees evidence of past leakage in the basement and the seller explains it was repaired the prior year, should the
salesperson recommend that the seller get the problem inspected by a third-party professional before putting the home on the
market?: No. If the salesperson can verify the accuracy of a seller's representation by obtaining the documentation regarding the
repairs from the seller, a third-party professional inspection may not be necessary.
 Humber Real Estate - Course 2, Module 5, The Financial
Aspects of the Buying and Selling Process and the Role of
Third-Party Professionals

1. What are some examples of common expenses that a seller may incur in a typical real estate transaction?: - Home stager
- Lender (i.e. a cost associated with discharging a mortgage early)
- Surveyor
- Lawyer
- HST or capital gains tax
- Moving expenses
2. What tasks will a lawyer complete when working with a seller?: - Review the Agreement of Purchase and Sale
- Note any deadlines to ensure the transaction proceeds as scheduled
- Respond to any questions or concerns received from the buyer's lawyer
- Fulfill any other requirements of the transaction
- Ensure that prepaid expenses are returned to the seller by way of adjustments and that they have settled any outstanding property
tax or utility payments before closing
- Transfer the property title to the new owner
3. On what types of services is HST applicable on?: Lawyer fees, brokerage fees or commissions (if applicable), and moving costs.
4. When is capital gains tax applicable?: When there is a capital gain realized on the sale of a seller's rental or investment property, or
non-principal residence.
5. When would the capital gains tax be payable?: On the seller's next income tax return.
6. If a seller asks you for an estimate of the capital gains tax payable, can you provide this service to your client?: No. The seller
should be advised to contact their accountant for an estimate as this is beyond the expertise of a salesperson.
7. Define 'Adjustments' when referring to the sale of a property.: Costs that are allocated between the seller and buyer on closing. It
could be a debit or credit to either party depending on the situation.
8. What are the most commonly adjusted for expenses?: Unmetered utility costs and property tax.
9. What are some common expenses buyers will encounter?: - Property inspector
- Appraiser
- Surveyor
- Lawyer
- Land transfer tax and HST on various services
- Commission
- Moving expenses
- Expenses related to adjustments made on closing
10. What does an inspection report by a Property Inspector cover?: Information about the physical structure, including the roof, attic,
walls, floors, ceiling, windows, doors, insulation and all other visible components of the structure.
The mechanical systems are also inspected, including the condition of the heating system, central air conditioning, electrical, plumbing
and other systems.
11. Who normally pays for the appraisal cost of a house during a sale? Who requires an appraisal to be completed?: - The buyer pays
- The lender requires it
12. What can a surveyor's fee depend on?: The property's size, shape, terrain and accessibility.
13. The commission paid to the brokerage(s) is most commonly paid to the listing brokerage by the seller's lawyer (as per the terms
of the seller representation agreement ) and appear as an ___________ __________ on the Statement of Adjustments.: Adjustment item

Note: Sometimes the buyer may be obligated to pay commission to the brokerage that is representing them under the terms of a buyer
representation agreement. In those cases the buyer can pay the commission directly to their brokerage or instruct their lawyer to pay
the fee.
14. How long is a seller responsible for costs associated with the property?: The day before closing.
15. What are the criteria to quality for the First-time buyers refund / tax credit?: - Canadian citizen or permanent resident of Canada
- 18 years of age or older
- Must occupy the home as a principal residence within 9 months of registration
- Cannot have owned a home anywhere in the world (this is confirmed by signing an affidavit with a lawyer.)
- If the purchase has a spouse, the spouse cannot have owned an eligible home or had any ownership interest in an eligible home
anywhere in the world while he or she was the purchaser's spouse. (This is confirmed by signing an affidavit with a lawyer.) If they
have, then a refund would not be available to either spouse.
16. How much money can buyers of new homes claim for a first-time buyer refund?: Up to $4,000
17. According to the Vendors and Purchasers Act, who is responsible for the costs that are incurred on the day of closing?: The
buyer
18. Historically how were borrowed funds traditionally secured by the lender?: The lender took physical possession of the property.
The property reverted to the original owner on a specified date, assuming the loan was paid with interest. Otherwise, the property was
lost forever due to lack of payments on agreed dates.

Over the years, the intent underlying a mortgage changed. The borrower came to retain possession of the land but pledges it to the
lender as security.
19. Why are mortgages referred to in terms of their priority of registration?: Because if, for example, a property has two mortgages
registered on title, distinguishing these mortgages is required as the priority of registration can impact the ability of the lend to recover
the debt owed should a default occur.
20. What are the 2 types of mortgages?: Legal and Equitable
21. Describe a 'Legal Mortgage': Also commonly referred to today as a 'First Mortgage', it historically transferred the owner's interest in
the land to the lender until the loan was repaid. It was termed the legal mortgage as transferring title could only occur once.
22. With a 'Legal' or 'First' Mortgage, what happens in the event of default?: The lender can take action against the borrower. This could
include either foreclosure, where the borrower forfeits any equity that they may have in the property, or it could include forcing the
sale of the property under power of sale.

In the event of a sale or some disposition of the property, the first mortgage is first in priority to be paid. Any mortgage registered
after this would be paid based on the funds remaining after a full payment to the legal or first mortgage.
23. Describe an 'Equitable Mortgage': Commonly known as a second mortgage, third mortgage, etc. This is sometimes used when a
borrower requires additional funding but does not want to disturb the existing legal (first) mortgage, or the mortgagee does not want
added risk by increasing the first mortgage but is agreeable to another secondary lender assuming that risk.

The secondary lender is content with this added risk if they feel that they property and borrower's ability to pay are acceptable. This
subsequent mortgage often requires a higher interest rate to offset the increased risk of the mortgage being in second place if a
default occurs.
24. Define 'Amortization': The gradual retirement of a debt by means of periodic partial payments of principal and interest.
25. In relation to mortgages, define 'Term': The length of time the borrower is committed to the lender. The mortgage will have a
specified interest rate, payment schedule and privileges associated with it for the term.

When the term has ended and there is an outstanding amount of money still owed to the lender, a borrower will renew the mortgage.
This could be with the same lender or a different lender, and the interest rate, payment schedule and privileges associated with the
loan may differ from what was previously agreed to.
26. Describe a 'Fully Amortized Mortgage': A mortgage loan with specified scheduled payments, which include principal and interest that
a borrower will pay over a designated period of time until the maturity date when the loan is paid in full.

This is a mortgage where the amortization and the term of the mortgage are the SAME.
27. How long is a typical amortization period?: From 5-30 years, and commonly residential mortgages range between 15-25 years.
28. A longer amortization results in a lower ________ ________ ; however, the amount of interest paid over the amortization increases.:
Mortgage payment
29. Explain what a 'Partially Amortized Mortgage' is.: A mortgage where the borrower makes payments of principal and interest, but
these instalment payments are not sufficient to pay back the total principal amount at the end of the term. Therefore, a final payment
on the mortgage at its maturity date would be required to pay off the debt in full. This is known as a 'Balloon Payment'.

Instead of paying the full amount by way of the balloon payment, the borrower may renew the mortgage for another period of time
(called a term) until the total debt has been paid. A mortgage may be amortized over 30 years yet broken down into smaller terms
that are renewed.
30. What factors can affect the term of a mortgage?: - The anticipated direction of interest rates
Note: For example, if interest rates appear to be falling, a borrower may have a short term to the mortgage, such as 6 months. If
interest rates are stable or increasing, a borrower may choose a longer term, such as 5 years, to be assured of the lower or stable
interest rate.
31. What is a 'Loan-to-Value' ratio?: A term used to express the ratio of a loan to the value of a property.
32. How is a loan-to-value ratio calculated?: The amount of the mortgage is divided by the value of the property to provide a ratio,
which would be expressed as a percentage. The higher the percentage, the more risk the lender has because the loan amount is high in
relation to the amount of equity the borrower has in the property.
33. Most lenders use a ____________ loan-to-value ratio as a way to reduce their risk associated with a loan.: Conservative
34. What happens if a loan-to-value ratio meets or slightly exceeds a predetermined comfort level for the lender?: Additional
security or collateral is usually sought from the borrower.
35. What is a 'Fixed Rate' mortgage?: A mortgage in which the rate of interest does not change throughout the term of the loan. The
amount of principal and interest paid each month in a blended payment may vary, but the total payment remains the same. The
standard blended mortgage is called a 'fixed mortgage' because a blended principal and interest payment is fixed throughout the
term.
36. What is a 'Variable Rate' mortgage?: A mortgage in which the interest rate is adjusted periodically to reflect market conditions. This
kind of mortgage fluctuates with the applicable bank prime rate. Corresponding adjustments are made to payments or amortization.
37. How often are payment adjustments made on 'Variable Rate' mortgages?: Quarterly, half yearly or yearly.
38. What are the 4 basic mortgage payment arrangements?: - Interest only
- Interest accruing
- Interest plus specified principal
- Blended (amortized)
39. Describe an 'Interest Only' mortgage.: The borrower does not repay any principal, but remits interest payments at regular, specified
intervals. The principal amount is due at the end of the mortgage term. Interest only mortgages are sometimes used in short-term
private or interim financing to avoid complex interest calculations.
40. Describe an 'Interest Accruing' mortgage.: The lender receives no payment of interest or principal during the mortgage term. Interest
accruing mortgages are rarely found in today's marketplace and, if used at all, would undoubtedly be for a very short time period.
41. Describe an 'Interest Plus Specified Principal' mortgage.: This plan, sometimes referred to as a straight principal reduction plan,
requires the borrower to repay a fixed principal amount at specified times during the term. At regular intervals, the borrower is also
asked to pay interest on the outstanding balance. This type of payment arrangement is uncommon and would probably come from a
private lender as an equitable mortgage.
42. Describe a 'Blended (Amortized)' mortgage.: This plan is the most common type of payment arrangement for residential mortgages.
It provides for equal payments made at regular specified intervals during the mortgage term. Each payment is a blend of principal
and interest based on the amortization schedule for the mortgage. Blended mortgages can either be fixed or variable. The fixed
mortgage has a set interest rate for the blended mortgage during the term of the mortgage. The variable rate mortgage has an interest
rate that varies based on the lender's prime rate or some other identified index.
43. Covenants are also known as what?: Promises
44. List the 'First Implied Covenants' in relation to a mortgage.: - The mortgagor will make payments (incl. interest) & pay taxes (this is
also called a "personal covenant")

- The mortgagor has the legal right to give the mortgage (the borrower has the legal authority to give the property as security for the
loan)

- The mortgagor has no other encumbrances other than those registered on the specific property (lender wants assurance there is no
other debt associated with the property)

- The mortgagee, when mortgagor is in default, has the right to take possession, collect rents from tenants & sell the land. If the lender
sells the land to pay the outstanding balance of the loan, this is called "power of sale"

- The mortgagee in possession by default shall be granted quiet possession. If the lender takes possession of the property, there can
be no interference from any other party which would include the borrower.

- Upon default, total monies owing shall become due and payable. If the borrower does not make the scheduled payments, they are in
default. If that occurs, the lender informs the borrower that they will be required to pay the whole mortgage balance rather than just
the outstanding payments.
45. Define the 'Second Implied Covenant' in relation to a mortgage.: The mortgagor covenants that the land is held in fee simple,
which means they have the most rights and the fewest limitations to ownership, and the land is owned with good title.
46. Define the 'Third Implied Covenant' in relation to a mortgage.: The mortgagor covenants that the lease, in the case of a leasehold
property, is valid and up-to-date, and that the reimbursement to the mortgagee will be made by the mortgagor for non-payment or
non-performance of other covenants under the lease.
47. Under The Mortgages Act, what are a mortgagee's (lender's) rights?: 1. The right to assign the mortgage.
The mortgage, as an interest in land, can be sold, transferred, or assigned without the consent of the mortgagor. The borrower must be
notified of the assignment. The terms remain the same, and the mortgagor (borrower) will now make payments to the new mortgagee
(lender).

2. The right to be paid.

Mortgagee has the right to be paid the principal sum that is loaned, and the interest based on arrangements spelled out in the
mortgage document. Failure to pay, to fulfill covenants (promises) or to observe provisions of the mortgage will give rise to several
remedies that can be exercised by the mortgage including power of sale and foreclosure. If all covenants are fulfilled and the full
amount of the mortgage has been paid by the mortgagor, a discharge is provided to the mortgagee.
48. Under The Mortgages Act, what are a mortgagor's rights (borrower's)?: 1. The right to quiet possession.
The mortgagor has the right to quiet uninterrupted possession and no interferences by the mortgagee when not in default. They have
the right to use the property and are not responsible to the mortgagee for ordinary wear and tear on the structures but must exercise
reasonable care and maintain the property.

2. The right to redeem the property free of the mortgage. The mortgagor retains the right to sell or mortgage their interest, and to deal
with it in the same manner as any interest in property. This is right is EXTREMELY IMPORTANT. Any provision inserted in the mortgage
document that attempts to prevent the mortgagor from exercising this right will be struck down as invalid.

3. The right to discharge the mortgage.

When the loan is fully paid, the mortgagor obtains a discharge signed by the mortgagee. The discharge fee is normally paid by the
mortgagor. If a discharge cannot be obtained, the provincial statute relating to mortgages typically provides for the mortgagor to
make application through the courts to obtain a court order based on supporting evidence.
49. What privileges do mortgagors have?: - Pre-payment (unless a pre-payment option has been added to the mortgage document, pre-
payment is not allowed)

- Renewal (Some mortgages have a built-in renewal privilege however this is an exception. Most Canadian mortgages do not
specifically spell out the opportunity to renew and therefore this opportunity doesn't exist)

- Transfer (Depends on the wording of the document. 3 approaches exist: 1. Mortgagor may be able to transfer but may remain liable
through their personal covenant, unless they are removed from the mortgage document.) ... 2. The mortgagee may insert sale and
approval clauses requiring approval of any person who will be assuming the mortgage at the point of property sale. ... 3. The
mortgagee may insist on non-transferability.

- Postponement (an existing mortgagee, if provided with enough security, may agree to postpone the priority of their mortgage in
favour of a prior mortgage being replaced or another mortgage being created.)

- Discharge penalty (If a mortgagor decides to terminate the mortgage before the end of the term, they could incur a discharge
penalty. The amount of the penalty would be stipulated in the mortgage document. The mortgagor may also be subject to any other
costs associated with early termination, such as legal fees. If a seller is planning to discharge their mortgage on closing, the
salesperson should recommend that they contact their lender to determine what the discharge penalty, if any, will be.)
50. In a mortgage document, what is an 'Acceleration Clause'?: A clause in which the full mortgage amount becomes due and payable
upon default.
51. What 6 courses of legal action exist as remedies for mortgage default?: - Foreclosure (mortgagee assumes ownership after
receiving an Order of Foreclosure from the Court)

- Judicial sale (sale of the mortgaged property by court action)

- Quit claim deed (a legal document wherein a person agrees to release any right that they may possess in a parcel of land. i.e. a
mortgagor's release of their equity of redemption ... if equity exists, the borrower may convince the lender to pay them in return for
signing the Quit Claim Deed)

- Payment (personal covenant - lender suing for payment based on the strength of the personal commitment to pay by the borrower)

- Possession (by mortgagee ... typically happens with some other action i.e. power of sale or foreclosure)

- Power of sale (the legal right of the mortgagee to force the sale of a property without judicial proceedings should default occur.
This is most frequently used.)
52. What happens to a tenant renting a basement apartment if a building owner defaults on their mortgage and the property is
foreclosed upon?: The mortgagor and any other occupants, including the renter in this case, may be removed from the property.
53. If a property owner goes into default on their mortgage and 'Power of Sale' occurs, what happens if the amount of the sold
property is more than the owner owed the mortgagee?: The surplus would be given to the mortgagor. This action only allows the
mortgagee to retrieve what they are entitled to, and no more.
54. List some various potential lenders in relation to mortgages.: - Chartered banks (most popular)
- Trust and loan companies
- Life insurance companies (residential and commercial mortgages)
- Pension funds (not common)
- Credit unions / caisses populaires (must conduct business only with members)
- Private sources (last resort ... rigid terms and high interest rates)
55. Banks can loan up to 80% of the value of a property, but any loan that has a higher loan-to-value ratio than that must have
__________ ___________.: Mortgage insurance
56. Which type of lender has a dominant position in residential mortgage lending, and usually has rigid requirements and are not
open to negotiations?: Banks
57. What's the difference between a bank vs trust and loan companies?: Trust companies are able to act as trustees - meaning that they
are able to manage a customer's individual wealth.

It's important to note that many trust and loan companies are actually owned by chartered banks.
58. What type of products do trust and loan companies offer?: - Trust companies offer mortgages and other banking services
- Loan companies usually offer non-residential consumer loans and secondary mortgage financing
59. What type of lender is more commonly used by high-risk borrowers?: Loan companies
60. What is a 'Caisses Populaires'?: A credit union conducting business primarily in the French language.
61. What type of services can a lender offer?: - Financing / Refinancing
- Purchase plus improvements
- Construction loans
- Lines of credit
62. What is an 'Equity Takeout'?: When a borrower renews their mortgage, and the property's value and corresponding equity has
increased. By increasing the outstanding principal.
63. What does 'Refinancing a Mortgage' mean?: Altering the original terms of the loan.
64. What type of mortgage is popular with first time home buyers, can cover additional closing costs and renovations?: Purchase plus
improvements.

Note: Often requires CMHC approval and mortgage default insurance (especially if the mortgage value is greater than 80%)
65. Define a 'Construction Loan': A short-term higher interest loan that is used to cover the cost of construction.

Given the higher risk for the lender as the home is being built and is not a finished product, this type of loan is typically a much higher
interest rate than a traditional mortgage.
66. As a salesperson, what are the 2 main circumstances under which you may encounter new construction loans?: 1. The builder is
financing the construction phase of a property, and the buyer will be arranging their own financing to close the transaction.

2. The buyer will be funding the construction phase of a property and then closing the transaction using the funds already advanced
during construction.
67. Describe a 'Line of Credit': A lending tool that is secured by a mortgage registered against the borrower's home. If the loan has been
approved in advance by the borrower, then no additional approvals are required by the lender. There are no requirements for his this
money can be spent.
68. What determines an line of credit's interest rate?: The type of security. (i.e. a first mortgage is usually the most secure and will have
the lowest interest rate)
69. What 2 segments make up the mortgage markets?: - Primary (prime and sub-prime borrowers)
- Secondary
70. Define a 'Primary Market': Consists of both prime and sub-prime markets.

- Prime markets are focused on borrowers who have A or A+ credit (in other words, high credit scores and no credit problems).
Furthermore, properties must meet acceptable standards concerning construction, finishes and location.

- Sub-prime markets involve lenders who entertain higher risk levels involving borrowers with B and C level credit (ranging from
marginal credit scores and delinquency problems to discharged bankruptcy and individuals with no credit ratings).

This market is most relevant to a borrower as its dynamics largely determine mortgage funding costs and availability. This market
relies on the free interplay of borrower and lender in the search for, and provision of, funds for property financing, new construction
and renovations.
71. Define a 'Secondary Market': Involves trading of existing mortgages. Primary market lenders sell mortgage portfolios to investment
companies or pension funds in this market. Mortgages are pooled and converted into securities that can be purchased in pre-set
dollar amounts (for example, $5,000 per unit).
72. Interest rates are largely determined by _________ and _________ forces.: Supply, Demand
73. When the demand for a mortgage loan increases and the supply remains constant, rates will _________.: Rise
74. An abundant supply of available mortgages generally means rates will ________.: Lower
75. What generally causes a slowdown in the mortgage market?: When other investment options prove more attractive. A
corresponding rise in mortgage rates is required to increase market appeal.
76. What factors impact the mortgage interest rates?: - Marketplace demand and supply forces
- Mortgage market versus other investment options in a capital market
- Risks associated with specific mortgages (property or borrower)
- Government monetary policies
77. How long do mortgage terms generally range between?: 1 to 5 years
78. How long do amortization periods range between?: 15 to 25 years
79. How do you calculate a weekly mortgage payment?: In a weekly mortgage payment, the mortgagor makes 52 payments per year.

Example: A $100,000 mortgage with a 25-year amortization at an interest rate of 6.5% will require a weekly mortgage payment of
$154.26 [1.542580 (weekly payment factor)x 100 (loan value in number of thousands) = 154.2580]
80. How often are payments made in the following payment structures?

Weekly
Bi-weekly
Semi-monthly
Monthly: Weekly - Every week (52 payments per year)
Bi-weekly - Every 2 weeks (26 payments per year)
Semi-monthly - 2 times per month (24 payments per year)
Monthly - Every month (12 payments per year)
81. What are the 2 main categories of mortgage loans available?: Conventional and High Ratio
82. What is a 'Conventional Mortgage'?: When a borrower has a down payment of at least 20% of the appraisal lending value or sale
price (whichever is less).
83. What is a 'High Ratio Mortgage'?: When a borrower has a down payment of less than 20% and this type requires mortgage default
insurance.
84. Name 3 mortgage default insurance providers that could be chosen by a lender.: - Canada Mortgage and Housing Corporation
(CMHC - Gov't insurer)
- Genworth Financial Canada (private insurer)
- Canada Guaranty (private insurer)
85. Describe Canada Mortgage and Housing Corporation (CMHC) and its mandate.: The government mortgage insurance provider. As
the housing agency for the Government of Canada, it has a mandate to encourage construction of new houses, the repair and
modernization of existing houses and the improvement of living conditions and housing throughout Canada.
86. What organization provides a range of publications and acts as a resource centre for both private and public organizations
related to the housing industry?: The Canada Mortgage and Housing Corporation (CMHC)

CMHC also advises the government on housing matters and designs, and also oversees various federal housing programs.
87. Explain how a mortgage default insurance premium is charged.: A one-time payment which is based on the amount of the borrowed
funds. It can either be paid to the insurance company when it is approved and placed, or it can be added to the principal amount of
the mortgage, which is then amortized over the life of the mortgage.

The premium will change, depending on the loan-to-value ratio for the mortgage. The higher the percentage of the property value that
is borrowed, the higher the percentage in insurance premiums that is charged.
88. How do you calculate a loan-to-value ratio?: Divide the loan amount by the value of the property, then multiple it by 100 to get a
percentage of the ratio between the value of the property and the amount of the mortgage.
89. The purchase price minus the down payment equals the __________ __________.: Mortgage amount
90. [Purchase Price - Down Payment = Mortgage Amount]

The mortgage default insurance premium is calculated by multiplying the mortgage amount times the __________ __________.: Premium
Percentage
91. What kind of fees will a buyer need to be aware of when arranging a mortgage?: - Mortgage broker fees
- Lawyer fees
- Appraisal fees
92. Who typically pays a mortgage broker's fee?: The lender
93. When paying a lawyer, often the fee for the _______ ___ ________ and registering the mortgage are combined.: Transfer of title
94. Who is most often the client of an appraiser?: The lender, who often pays their fee. Therefore the borrower may or may not receive a
copy of the final report.
95. What is the job of a Mortgage Specialist?: They possess extensive knowledge of the market and can help the borrower gauge the
level of mortgage repayments they can afford by evaluating their income, debt repayments and everyday expenses. They can further
guide the borrower through the various stages of the mortgage qualification process.
96. List the Mortgage Qualification Process Steps.: 1. Application
2. Appraisal & Credit Check
3. Commitment (a letter from the lender agreeing to make the loan subject to satisfactory title and other conditions specified in that
commitment)
97. Describe the mortgage Pre-Approval process.: Pre-approval is a process that lenders use to qualify borrowers. Based on their
calculations and the borrower's profile, which can include their down payment and employment status, the lender will pre-approve the
borrower for a specific amount of mortgage funds and will often commit to a specific interest rate for a period of time.

Although no standard pre-approval form exists, most consist of a confirmation document setting out the maximum amount that can be
borrowed, the interest rate to be charged (guaranteed for a fixed period), and the monthly payments. The confirmation is subject to an
appraisal of the property being mortgaged.

NOTE: Pre-qualification by a lender is based on the borrower providing information to the lender, but the lender has not verified this
information. Verification occurs during the pre-approval process.
98. What does a lender use Gross Debt Service (GDS) and Total Debt Service (TDS) ratios for?: To determine a borrower's affordability.
99. Describe the Gross Debt Service (GDS) ratio.: A comprehensive measure of a borrower's monthly housing expenses.

It represents the maximum percentage of a borrower's gross income to be allocated to the Principal, Interest and property Tax
payments (PIT) ... If Heating costs are included, then it's PITH.

A borrower's current monthly mortgage payment is the primary expense. Other expenses may include monthly property tax payments,
home insurance payments and utility bills.
100. Describe the TDS ratio.: Similar to the GDS ratio, however it includes ALL of a borrower's debt (including personal loans such as auto
or furniture loans and credit card debt) and is not just focused on housing.
101. How is the Gross Debt Service (GDS) Ratio calculated (excluding heating costs)?: The total monthly expenses are divided by total
monthly income.

GDS formula = annual mortgage payment + annual property taxes divided by the gross annual income.
102. How does a lender specifically calculate the GDS ratio for buyers of a condo?: The lender will include a portion of the monthly
maintenance fee in the calculation (they'll normally use 50% of the fee to ensure the borrower has the capability of paying both the
loan payment and the condo fee, but lender policies may vary.)

GDS for a Condo Formula = annual mortgage payment + annual property taxes + 50% of the annual maintenance fees divided by the
gross annual income
103. What percentages is the GDS ratio typically between?: 27% and 32% for existing lenders in the marketplace but slightly higher if
the borrower has a high credit rating.
104. What percentages is the TDS ratio typically between?: 37% and 40% but higher limits may apply in certain lender situations based
on high consumer credit scores.
105. How do you calculate the TDS?: Annual mortgage payment + annual property taxes + annual total loans divided by the gross annual
income
106. Does a lender complete a credit check before or after the buyer completes a mortgage application form?: After
107. What services will a seller's lawyer provide?: - Prepare Statement of Adjustments
- Prepare deed to the property
108. What services will a buyer's lawyer provide?: - Request and review title search
- Request, arrange and obtain title insurance
- Request other searches, such as tax arrears and work orders
109. What services will BOTH a seller and buyer's lawyers provide?: - Review agreement of purchase and sale, and advise on terms
included
- Conduct closing of property
- Review Statement of Adjustments
 Humber Real Estate - Course 2, Module 6, Understanding
Residential Construction - Structural Components
1. Define 'Frontage': The side of the street that abuts or borders a public street or highway - except for waterfront properties which is
considered the side that border the body of water.
2. Define 'Lot Depth': The distance between the front and the rear lot lines.
3. Define 'Lot Width': The distance between the two side lot lines.
4. Define 'Lot Size': The overall area of the lot. It can be stated in either square feet, square meters, hectares or acres.
5. What is the 'Buildable Area' of a property?: That which is within the setbacks from the lot lines.
6. List and define the most common lot shapes.: - Rectangular lot (most common for residential, frontage is less than the depth)

- Square lot (often found in rural areas where overall lot size is larger)

- Wide-shallow lot (reduced depth and ample frontage; not common in residential)

- Pie-shaped (relatively smaller frontage when compared to the larger read yard area of the lot, with lots of backyard space. Typically
found on a cul-de-sac and a garage is often a focal point of the front, so better for privacy.)

Reverse pie shape - Wide frontage with smaller backyard. Front appearance of this property needs to be a priority for the buyer.

- Corner lot (located at the intersection of 2 roads, additional size and deeper setback requirements on the one side of the property
that abuts the road)
7. What are some other major residential lot considerations to be aware of?: - Additional costs (i.e. an irregular-shaped lot can impact
where buildings can be placed, and extending services such as cable deeper into the house can cost more)

- Property direction (view / exposure direction of sunlight)

- Property features and topography (trees, hilly terrain, a stream)

- Surrounding property uses (proximity to nearby nuisances such as an airport)

8. Is a seller obligated to provide a new survey to a seller?: No. They are only obligated to provide what they already have.
9. Can you use a previous listing of a property to confirm lot size?: No, never.
10. A percentage is a portion or a part of the whole. Every percentage consists of what 3 components?: - Whole (the larger number
expressed)
- Part (the smaller number expressed)
- Rate/Ratio (the smaller number's percentage of the whole) which can be expressed as a decimal or a percentage
11. How can you express 50 feet, 3 inches as a decimal?: 3/12 = 0.25 + 50 ft. = 50.25 ft

Remember: There are 12 inches in a foot. So 3 is the part, and 12 is the whole.
12. If a lot measures 50.25 ft x 100.5 ft., what is the area of the lot in square feet?: 5050.125 square feet
13. Typically what measurement is the first identified in any listing or advertising of a property?: The frontage
14. What are common formulas used to convert lot measurements from Imperial to Metric?: - Feet / Inches to meters: Multiply the
imperial unit (e.g. 8.5 feet) by 0.3048 for the metric conversion (e.g. 2.59 meters)

- Square feet to square meters: Multiply the imperial unit (e.g. 790 square feet) by 0.0929 for the metric conversion (e.g. 73.39 square
meters)

- Acres to hectares: Multiply the imperial unit (e.g. 8 acres) by 0.4047 for the metric conversion (3.24 hectares)
15. - Meters to feet: Multiply the metric unit (e.g. 5 meters) by 3.281 for the Imperial conversion (e.g. 16.41 feet )

- Square meters to square feet: Multiply the metric unit (e.g. 70 square meters) by 10.76 for the imperial conversion (e.g 753.2
square feet )

Hectares to acres: Multiply the metric unit (e.g. 8 hectares) by 2.471 for the imperial conversion (19.77 acres): What are common
formulas used to convert lot measurements from Metric to Imperial?
16. What factors can influence land use and structure placement?: - Zoning
- Topography
- Site plan control
- Soil conditions
- Water tables and flooding
- Lot size
- Services available
17. Define 'Site Plan Control': A method of development regularly imposed by a municipality (or appropriate planning approval body)
during the planning and development process.
18. In what ways can site plan control affect land use and structure placement?: - Adequate landscaping and buffering from adjacent
properties
- Grading of the lot
- Widening of roads abutting the site, including a provision of curbs, signs and walkways
- Storm, surface and water runoff facilities
19. Why are soil conditions so important?: They can significantly influence the location of structures. Building foundations require a stable
and strong soil to retain their structural integrity as building systems are constructed on top of them.
20. What is the strength and stability of soil dependant on?: Its physical properties. The most desirable soil for structure placement is a
mixture of soil composition.
21. Properties located within flood plains typically fall under the regulations of the ________ _________, who are directly involved in
administration of flood plains (regulated areas). Regulated areas refer to lands adjacent to watercourses that require special
considerations.: Conservation Authorities
22. What does 'The Conservation Authority' regulate?: Approvals for building construction, fill placement and watercourse alterations in
regulated areas it oversees. Development applications are reviewed to prevent, eliminate or reduce the risk to life and property from
flooding, erosion of river banks and slop instability.
23. What factors influence structure style?: - Topography (wildlife, vegetation, rivers, lakes, etc.)
- Budget
- Personal preferences
- Sustainability
- Lifestyle of the owner
- Structure conformity
- Structure age
24. What is 'Tract Housing'?: A type of housing development or neighbourhood in which groups of nearly identical houses are build on a
tract of subdivided land. The appearance of these properties may have to conform in terms of layout, construction materials,
landscaping and approximate square footage.
25. During what decade were bungalows most popular?: The post-war years of the 1940s.
26. When did the bi-level / split entrance bungalow gain prominence?: 1970s
27. When did one-and-one-half storey houses gain popularity before giving rise to the two-story design?: 1940s & 1950s
28. Describe the role of an 'Architect': - Responsible for the design of the building
- Must ensure the building complies with the Building Code, which is the legislative framework for the construction and renovations of
structures
29. Describe the role of a 'Structural Engineer': - Designs the load-bearing elements of a building to ensure structural integrity, ensuring
that the design components will be secure and will withstand the loads that will and could potentially be placed onto the building
- Works in partnership with the architect to ensure the feasibility and integrity of the structure throughout the design process
30. Who reviews and approves building permits and for larger proposed construction projects, site plans?: The municipality
31. List the residential parking options.: - Garages
- On-street parking
- Parking pad
- Shared/mutual driveway
- Carport
32. What are some advantages of a garage?: - Convenience offered by being directly connected to the home
- Reduced construction costs using pre-existing walls
- Easier to heat and ventilate
- Easier to install services including electricity and water
33. What are some considerations when looking at a property that only offers on-street parking?: A parking permit through the local
municipality may be required, typically at an additional cost.
34. Describe a Parking Pad.: - The most commonly recognized type of front yard parking (i.e. parking in your front yard or on a
boulevard), especially in urban areas.

- Created by widening the existing driveway up to the front steps to the house.

- A permit is often required from the local municipality, particularly for one directly in front of the home.

- Most municipalities have extensive application processes and stringent guidelines regarding coverage size and material used for
front yard parking. (i.e. sometimes must be constructed from water permeable materials such as interlocking bricks)

- This type of parking may have additional costs associated with it, including the application fee and annual fee.
35. What are the characteristics of a shared/mutual driveway?: - Jointly used by the owners of the properties it gives access to

- Has a right-of-way registered on the title for both homeowners

- Provides each party with the legal right to pass through the grounds or property belonging to the other party.

- Owners often will get a city permit to widen the driveway or create a parking pad to use the shared/mutual driveway as a parking
option.

- Neither party is allowed to park in a way that would prevent the other party from the use and enjoyment of the driveway.
Neighbours sometimes have verbal agreements about how to park with a shared driveway.
36. Describe a carport.: - Not completely enclosed, unlike a garage.

- May be extensions of a property's roof structure that is used for covered parking.

- The extension to the roof is typically supported by 2 walls and can have multiple opening for access to the vehicle.
37. Is a building permit required to construct a garage or a carport?: Yes, and they must meet specifications as set out in the Building
Code.
38. What factors are covered by the Building Code that pertain to structure design in general but may also relate to garages?: -
Specific uses and related occupancy requirements including acceptable fire and safety standards, means of exit, accessibility, service
facilities and loads.

- Structural loads, foundations and design requirements for structural materials.

- Wind, water and vapour protection including vapour barriers, air barriers, control of groundwater and rain penetration and material
specifications.

- Heating, ventilating and air-conditioning including air duct systems, heating appliances, piping, refrigeration systems and
chimneys/venting equipment.

- Plumbing, including materials, equipment and specific requirements concerning piping, drainage and venting, along with stipulations
regarding the use of potable and non-potable water systems.

- Change of use requirements and renovations.

39. When building carports or garages, what codes are excellent resources to identify pertinent requirements?: - The Ontario Fire
Code
- The Building Code
- The Electrical Safety Code
40. How is a privately owned or independent driveway defined?: As being entirely within the boundaries of the property.
41. List residential driveway finishes.: - Poured concrete
- Asphalt paved driveway
- Stamped concrete driveway
- Gravel driveway
- Interlocking pavers
- Exposed aggregate
42. What are the characteristics of a poured concrete driveway?: - Easy to install
- Can be poured to form patterns or sections, which allows for contraction or expansion
- Need to be sealed with a chemical compound, often on an annual basis, to prevent staining and moisture penetration from vehicle
leakage
- Treatment also delays or prevents scaling or flaking
- This type of driveway finish is expensive compared to other types
43. What are the characteristics of an asphalt paved driveway?: - Very popular
- Less expensive than concrete
- Requires more maintenance than concrete from cracking but is generally easier to repair
- Requires resealing approximately every 2 years, at a relatively small cost to the homeowner
44. What are the characteristics of a stamped concrete driveway?: - Consists of concrete poured on a surface
- Before it dries, it's flattened with moulds of a brick pattern or patterned design
- The mixture can be combined with accent colours to provide a more visually appealing appearance
- Relatively expensive to install and annual sealing is important to protect appearance, the same as poured concrete
45. What are the characteristics of a gravel driveway?: - Popular option for homeowners, particularly in more rural areas
- Over time can compact and provide a firm surface for parking
- Maintenance for this type of driveway finish is minimal but potholes may form and require filling to prevent damage to vehicles
46. What are the characteristics of interlocking pavers?: - Can be made from either cement, concrete or brick and shaped so that they
are able to interlock with other pavers of the same shape, like a jigsaw puzzle
- Easily installed without the use of mortar to connect them and provide the appearance of cobblestone
- Must be laid out on top of a solid base to prevent shifting, which can cause cracks and gaps to appear or vehicles can cause ruts to
appear
- This type of driveway provides variability in design, patten and colour
- May require pressure washing to remove stains from oil, tires or other contaminants because they are porous
- Similar to stamped concrete driveways, requires sealing to preserve the appearance
47. What are the characteristics of exposed aggregate driveways?: - Relatively popular trend in driveway finishes
- Can vary in terms of colours and sizes
- This style of driveway is formed by using a specialized concrete mix that combines the unique aggregates exposed on the surface
- The finished driveway provides a smooth, non-slip texture of stones and pebbles that are part of the concrete's surface
- Although this finish is primarily concrete-based, very little of the exposed surface retains the dull grey colour of traditional concrete
driveways
- Relatively expensive type of driveway finish that requires annual maintenance
48. What type of parking is commonly seen in townhouses or stacked townhouses?: Underground parking.
49. How can you determine the legal status of a parking pad?: - Observe a metal plaque attached to the front of the house, which may
be issued to homeowners by the municipality
- Verify with the municipality as they may keep a registry of issued licenses
- View the annual invoice issue to the homeowner by the municipality, which can serve as evidence of ownership
50. If a property has an existing parking pad, what steps can you take to protect your buyer client's interests?: - Determine the legal
status of the parking pad
- Insert a clause in the agreement of purchase and sale regarding the legality of a parking pad
- Ensure the buyer understands that they may need to reapply for the parking permit if the parking pad is not registered with the
municipality
51. What is the typical application process for parking permits?: 1. Verify that the area being requested for a permit is available, which
can usually be found through a permit office.
2. Complete the application form, which is typically found on the municipal website.
3. Submit the application form along with photocopies of the requested documentation. This would most likely include your vehicle
registration, driver's license and a method of payment for the application.
52. What are some common problems and restrictions with residential parking?: - Restrictive covenants (homeowners are obligated to
conform to various stipulations)
- Residential parking availability
- Commercial vehicle parking
- Continuous vehicle usage (sometimes must have valid plates to be parked)
- Seasonal parking requirement
53. Where are restrictive covenants often found?: Subdivisions
54. Some residential bylaws may have started out as _________ ________ and later become bylaws.: Restrictive covenants
55. What is a footing in a residential property?: The widened section that helps support the foundation, so the structure does not settle.
56. What are footings made from?: Concrete with rebar (i.e. iron rods) reinforcement, and they are located at the base or bottom of a
foundation wall, pier or column.
57. Footings vary in size depending on what factors?: - Type of soil
- Size or type of foundation (e.g. heavier structures or weaker soil would require larger footings)
58. What 3 essential functions do residential foundations serve?: - Transmit the weight of the structure from the above-grade walls and
floors through to the footings
- Resist the lateral pressure of the soil on the outside of the basement and function as a retaining wall
- Carry the weight of the structure below the frost line, preventing frost heaving, or the upward swell during freezing conditions
59. What can happen if a footing fails?: The entire structure may shift and cause damage to the structure, leading to cracking of the
interior and exterior walls.
60. What are the materials used to build residential foundations?: - Poured concrete
- Concrete block
- Brick/stone
- Insulated concrete forms (ICFs)
- Damp-proofing materials
61. What are the characteristics of poured concrete foundations?: The most common form of residential foundation material because it's
less expensive that other materials and it can easily be poured into any shape to make foundations and foundation walls of various
sizes
62. What are the characteristics of concrete block foundations?: - An alternative to conventional poured concrete
- Less commonly used due to its cost and maintenance issues (i.e. deteriorating mortar between concrete blocks), however this can
vary based on municipalities
63. What are the characteristics of brick/stone foundations?: - Common in older houses

- Durable and have long lifespans, but have largely been replaced with concrete as it is a less expensive material
64. What is a well-known issue when it comes to stone foundations?: They typically have a mortar coating on the interior to help hold
the stones in place. This can deteriorate over time, and will require refilling the voids where old mortar has fallen out. This can be both
a cosmetic and functional problem. Depending on the severity of the damage, masonry foundation issues can lead to moisture
penetration and structural issues.
65. What are the characteristics of insulated concrete forms (ICFs)?: - They use polystyrene building components that function as a
permanent interlocking form in which the concrete is poured.
- Easy to use, contributes to insulation, enhanced damp-proofing and reduced fire hazard risk.
- Can also extend beyond basements to replace all existing exterior walls currently using traditional wood framing systems.
- Can be an expensive material because of the high labour cost required to assemble the interlocking forms, as well as the shipping
and storage expenses.
66. As foundations are located below ground level, they can be susceptible to ________ __________ due to the dampness of the soil, or
leakage during heavy rain.: Water damage
67. What material is applied to the visible surfaces of the foundation above grade to help protect against moisture?: A waterproof
bituminous (i.e. containing asphalt) material and covered with a layer of mortar (called parging).
68. What are some potential problems with residential foundations?: - Inward foundation deflection
- Foundation cracks
- Foundation moisture penetration
69. Describe inward foundation deflection.: Occurs when the foundation is not able to provide sufficient lateral support against the soil
surrounding it, pushing the walls inward.
70. What are some causes of inward foundation deflection?: - Mechanical forces exerted by the equipment during backfilling (i.e.
refilling the excavated hole)

- Backfilling with frozen soil, as the ice will prevent the soil from properly compacting

- Unusual frost development in the soil immediately outside the building, as the soil will freeze and expand

- Foundation walls that are either too thin or not properly reinforced, as they are more likely to yield under pressure against the soil
surrounding them

- The floor system not providing adequate bracing for the top of the foundation wall
71. What are some potential complications from foundation cracks?: Could lead to water penetration or infestation of insects and
vermin.
72. Name a common cause of foundation cracks.: Concrete shrinks as it cures and dries. Interruption of the curing process caused by
changes in temperature can cause this issue.
73. What is efflorescence?: A coating of salt on the surface of a porous material. It's a chemical reaction between water and concrete,
and nearly always indicates moisture penetration.
74. What is a 'Weeping Tile'?: Buried along the outer walls of the foundation, these porous pipes typically made from corrugated plastic
help to damp-proof basements by allowing water to flow away from the footings, thereby eliminating the accumulation of water
around the foundation.
75. Name a sign that damp-proofing has failed.: Efflorescence may occur on the inside walls.
76. What is a post/column in reference to residential construction?: A structural component that carries the load of a beam vertically
down towards the footings of a structure. Each one has its own footing.

They are often made of similar building materials to foundations (brick, concrete blocks, poured concrete, wood or steel).
77. Name some reasons structural movement may occur.: - The piers used are not adequate
- Deterioration (e.g. wood rot) has occurred
- The span between the piers is too large
- Inadequate footings below the piers
78. What is a pier in reference to residential construction?: A vertical load-bearing member, similar to columns.
79. What are some signs of structural movement?: - Structural cracks
- Sagging
- Piers that are out of alignment
80. List the problem areas for posts or columns.: - Out of plumb (no longer in a vertical position and therefore lose their strength /
maintain structural function ... load is no longer balanced)

- Inadequate footing (concrete footings are placed under all load-bearing parts under the foundation such as walls, columns, posts &
piers ... a post sinking is often the result of either a non-existent or inadequately sized footing)

- Undersized component/column (may collapse if too small or has suffered mechanical damage)

- Unsecured component (a post that's not properly secured to a beam located above it may cause the structure to shift during wind
uplift forces)

- Moisture damage (rising dampness is a common problem with brick columns and can be identified by deteriorated mortar and
efflorescence on the bottom of the post)

- Rust (a primary concern for posts or columns constructed with steel ... often found in a chronically flooding basement and will
quickly reduce the load-carrying capacity of a steel post)

- Fire damage (will damage wood and steel posts ... a steel beam will fail much earlier due to heat than a solid wood post, but it will
not burn)
81. The 1/3 rule is used to determine if a wall is what?: Out of plumb
82. Where is cracking on the walls going to be most obvious?: Around doors, windows and in the corners.
83. Name some common signs that you should recommend a foundation inspection to sellers or buyers.: - Wall problems
- Door/window misalignment
- Water movement
- Chimney separation
84. Describe how misalignment of both windows and doors (as a warning sign of foundation problems) can be identified.: - Can be
identified initially in subtle ways, such as doors that may stick or windows that are more difficult to open and close
- Could lead to doors not aligned enough to completely close
85. Describe how water movement can be an indicator of the need for a foundation inspection.: During rainy weather, if the water
appears to run towards, rather than away from, the structure, this could lead to excess moisture in the soil near the foundation and to
foundation problems. This is called negative grade and is often identified by home inspectors.
86. In what ways can chimney separation be indicative of foundation issues?: If a chimney begins to separate from the structure, it
could be a sign that the foundation of the property may have begun to shift, in a similar way to the misalignment of windows and
doors.
87. Name an easy way to quickly identify chimney sag.: Stand across the street from the property and do a visual plumb, comparing the
vertical angle of the chimney to the roof line or some other component of the house.
88. Name the 2 types of framing systems that have been used for residential construction.: - Platform
- Balloon (no longer used)
89. What type of framing is common in older homes?: Balloon framing
90. Why is balloon framing rarely used as a construction technique nowadays?: Because there is no fire break between floors. Fire from
the first floor can travel up the wooden studs without being blocked by the floor of the second storey.
91. Describe platform framing.: Includes a wood joist and subfloor system that's installed on the top of the foundation. After this, the
studs are erected over this system. The platforms or floors are constructed for each structure level, then the wall framing is placed on
each platform.
92. What are some potential problems relating to wood frames?: - Nailing and openings (improper placement of nails or not using
enough can lead to complications with a residential framing system)

- Condensation (e.g. rot to the studs in the exterior walls)

- Low-quality lumber/blocking and bracing

93. When insulation is being replaced in older houses, what issue can occur?: Condensation.

If no plastic vapour barrier is installed over the warm side of the insulation, then condensation can form, causing the wooden studs to
rot.
94. Peeling paint can sometimes be an indication of what type of problem?: Wall condensation (more common in winter)
95. What is a sign that poor quality lumber was used in the framing of a home and the lumber may be warped, twisted or bowed?: -
Bulging or cracked drywall
96. List the various framing and floor system components.: - Beam (long structural component, typically wood, plywood or steel ...
attached to the top of the foundation walls, carries the floor and wall loads horizontally to the foundation)

- Joists (made from wood, metal, plywood or wafer board ... a series of horizontal components that support a floor, ceiling or roof
when attached to beams)

- Sill plate (a level, continuous pad located between the foundation top and the bottom of the framing system ...typically a 2x6 board
laid flat and attached by bolts to the top of the foundation wall ... a layer of "poly", a think plastic, is placed between the concrete
foundation wall and the sill plate to prevent water in the wall from wicking or becoming absorbed into the sill plate)

- Subfloor (located directly overtop the joist system, typically made of plywood or wafer board and may be covered with a finish
material such as tile, carpeting, laminate or hardwood)
97. What are some potential problems with floor systems?: - Springy floors
- Squeaky floors
- Water-damaged floors
- Uneven floors
98. What is a potential solution for a springy floor?: Add bridging or an additional layer of plywood over the subfloor to eliminate the
deflection.
99. What is the cause of a squeaky floor?: Inadequately attaching the subfloor, which leads to poor contact between the subfloor and
the joists.
100. What is a potential solution for a squeaky floor?: Re-nailing, screwing and gluing the subfloor to the joists, and adding shims (e.g.
small wooden wedges), which can be driven between the subfloor and joists.
101. How can water damage be identified in floors?: - Floor discolouration
- A change in texture
- Musty odour
102. What are some causes of uneven floors?: - The irregular installation of joists
- Debris on top of the joists when the subfloor is laid
- Sweller wafer boards
- Delaminating of plywood (i.e. layers become split)
103. Name one possible solution to fix uneven floors.: Replace the existing plywood with new material on top of the subfloor, creating a
smooth surface for the installation of the flooring.
104. What is bridging and blocking used for?: To keep the joists from twisting and help transmit loads from one joist to adjacent joists,
which reduces the springiness in the floor.
105. Describe cross-bridging.: 2 pieces of wood attached through the centre in between the gaps in the joists, resembling an "X" shape.
106. Describe blocking (i.e. solid blocking).: An alternative to cross-bridging that serves the same function. Instead of using 2 pieces of
wood attached in the centre, blocking uses wood with the same dimensions as the floor joists except for length. Traditionally one set
of bridging or blocking is used for each joist span, but this could vary based on the configuration and requirements of the Building
Code.
107. What are some potential residential wall problems and problem indicators?: - Moisture (can cause rotting, wood swelling and
infestation of termites)
- Termites
- Cracked walls
- Wood rot
- Visible nails
108. What is a solution for water damage?: Eliminate the source of water from entering the house and any water-damaged components.
109. What are some indicators of water damage?: Damp patches, bubbling paint, crumbling plaster, yellowing or brown discolouration
or black patches ... can be caused by rain entering through the walls or roof or being absorbed by the ground, condensation or a
combination.
110. Why are studs in energy efficient homes are thinner and spaced farther apart.: To allow additional space for insulation.
111. Name 2 indications of termite infestations.: - Shelter tubes (a small tunnel built across any open surface; made from earth, debris and
a material they excrete that acts as a binder to hold the tubes together)

- Damaged wood (must be probed to identify damage because an infestation can develop unnoticed behind finished basement floors
or walls ... frass [i.e. small grey flecks] can be found inside damaged wood to identify a termite infestation)
112. The chemicals used by pest control professionals are believed to be effective over how many years?: 20 to 30
113. Horizontal cracks in a basement wall are a sign of what?: Major structural failure and need expert attention.
114. How do you identify wood rot?: By its brown, decayed appearance caused by a fungus attacking the wood cells, causing the cells
and the wood to collapse.
115. What is the cause of wood rot?: A lot of moisture (e.g. water leaking through a shower stall into the wood below)
116. What's causes of popped nails?: Drywall screws and nails will begin to loosen over time, which causes the drywall to move and push
the head of the nail or screw outward, leading to a bubble or blistering of the drywall.
117. How can you fix the problem of visible nails?: Re-securing the drywall to the framing with new nails and using a hammer to depress
the popping nails back to their original location.
118. Why are internal drainage systems often installed?: To remedy dampness issues or to redirect the inflow of ground water into a
basement.
119. What are some causes of water penetration?: - Improper grading
- Defective or absent eavestrough/downspout system
- Improperly designed window wells
-Ineffective drainage system components
120. How can improper grading be visually identified?: From the build-up of water around the exterior walls of the basement.

If the ground around a foundation is level or negative grade (i.e. slopes towards the structure), then the natural run-off water may lead
towards the basement.
121. What is likely the cause of negative grading?: The soil next to the house was likely backfilled without being compacted and then
later settled.
122. How do you solve improper grading problems?: Identify where and how the water flows and redirect it by placing earth around the
house to create a slope away from the foundation at a rate of 1 inch per foot, for at least the first 6 feet

Note: If the general topography is such that water is directed toward the structure, further measures to divert the water may be
required (e.g. installing drain tile around the perimeter of the structure)
123. What is the purpose of a window well?: To prevent water penetration through the window an water damage to the window frames,
and to allow for egress (exit) out of the basement in case of an emergency.
124. How can you tell if a window well is not functioning properly?: There is a build-up of water around its base.
125. How can an improperly designed window well be fixed?: - Level the bottom of the window well so that it slopes toward the drain
and coat the bottom with stones, which can minimize the collection of water.

- Install a window well cover to prevent water from collecting in the bottle of the window well hole.
126. What is a 'Sump Pit'?: A hole dug in the basement floor into which a pump is placed. If water is present under the basement floor, it
will enter the pit first as it is lower than the surface of the basement floor. When the water reaches a certain height, the pump will start,
and the water will be pumped to the outside of the house by way of a drain hose.
127. What is used to maintain the removal of excess water from soil below the surface?: Drainage tiles
128. How can you visually identify if a sump pit is not effectively controlling the flow of water?: By the build-up of excess water.
129. What are some reasons that a sump pit or drainage tiles could lose their effectiveness?: - Pipe collapse
- Clogging
- Broken pump connection
130. What are some indicators of basement leakage?: - Efflorescence
- Rusting
- Mould & mildew
- Stains or discolouration
131. Mould and mildew in basements can often be the result of some form of what?: High moisture areas and poor ventilation.
132. What are some causes of mould and mildew in the basement?: - Leaking foundation
- Condensation from appliances, such as hot water heaters, humidifiers or from poorly ventilated basement bathrooms
133. What are the different types of roof styles?: - Gable
- Hip
- Gambrel
- Mansard
- Flat
- A-Frame
134. Describe a 'Gambrel Roof': - More commonly recognized with barn structures although they are also used in residential roofing

- Identified from its symmetrical two sides that slope more steeply approximately halfway down the length of either side

Pros: Can be structured in a way that can incorporate an attic to the property, which can serve as additional bedroom space or living
areas

Cons: - Not ideal for areas with frequent high winds or snowfall)
- May require more frequent maintenance than other roof styles
135. Describe a 'Gable Roof': - Has 2 sloped sides and a gable (i.e. enclosing portion at the end of any pitched roof) on either end
- When viewed, has the appearance of an inverted letter "V"

Pros: Relatively easy and inexpensive to construct

- Allow for more ventilation, which could provide more space for an attic or vaulted ceiling

Cons: Not ideal for areas with frequently high winds, as this may cause the materials to peel away
136. Describe a 'Hip Roof': - Sometimes called cottage roofs

- Refer to a layout that has slopes on all 4 sides, all equal in length and join at the top to form the ridge

- Found in both square and rectangular structures

Pros: Recognized for their stability, making them ideal for areas with high winds and snow

Cons: Typically, difficult and expensive to construct due to their complex truss and rafter system
137. Describe a 'Mansard Roof': - Contain may similar features as a gambrel roof, including an allocation of sufficient space for the
inclusion of an attic, which can sometimes be referred to as a garret

- Identified by their 2 slopes along all 4 sides, which become steeper approximately halfway down

- Can often include dormer style windows

Pros: Can allow space for dormer windows, giving more natural light to the top floor

Cons: Typically, more difficult, costly and time-consuming to construct because of their complex design, additional materials and
labour
138. Describe a 'Flat Roof': - More common in commercial and industrial buildings
- Can also be used for residential properties
- Not completely flat; they have a slight slope to prevent the collection of water

Pros: - Relatively inexpensive to construct, and often a lower maintenance cost than other roof styles
- More accessible for cleaning and inspection than other roof styles

Cons: May be problematic for a homeowner, as the buildup of rain and snow can place additional weight on the roof
139. Describe an 'A-Frame Roof': - Identified by their steep, triangular shape that runs directly to ground level, which functions as walls for
the structure

- Were a popular design in the mid-1950s to the 1970s

- Structures with this type of roof are typically smaller and are often one-and-one-half storey structures

Pros: - Highly durable and relatively simple to construct

- The steepness of the slope allows for efficient shedding of debris

Cons: - Due to the smaller size of the structure the living space can be relatively limited
- As the roof is often used as a portion of the wall, this slope can be problematic for wall hangings, decorating and painting
140. When describing a roof's pitch, what does '6 in 12 roof' mean?: Has a vertical rise of 6 feet over a horizontal distance of 12 feet.
141. What are the 3 different ratios of roof pitch?: - Conventional roof system (a roof with a pitch greater than 4 in 12)

- Low slope roof system (a roof with a pitch between 4 in 12 and 2 in 12)

- Flat roof system (a roof with a pitch less than 2 in 12)

142. What are the components of a residential roof system?: - Flashing
- Sheathing
- Truss
- Rafter
- Collar tie
- Knee wall
143. What is 'Flashing'?: - Thin pieces of impervious material installed in joints or gaps to prevent water from seeping into a structure

- Could be used anywhere dissimilar building materials meet, which happens in valleys, around chimneys, dormer windows extending
from the side of a roof and skylights

- Also used wherever a material changes directions on a roof

- Typically composed of galvanized steel, but tin, aluminum or copper may also be used
144. What is 'Roof Sheathing'?: - Typically composed of wood plank, plywood or wafer board panels

- Serves to support the roof covering and transmits live roof loads such as snow and ice towards the rafters, trusses or roof joists
145. What is a 'Roof Truss'?: - Holds up the sheathing and shingles while transferring the roof loads to the outside or the bearing walls of a
structure

- Contain triangle-shaped webs inside their frame that serve as additional support
146. Trusses are typically designed using wood come in what kinds of design?: - The fink truss, with internal support beams or web
members, form the shape of the letter W

- The Howe truss uses the same material but in a vertical web running up to its peak

Note: The Howe truss is considered the stronger of the 2, but both are adequate to support a roof system.
147. What is a 'Rafter'?: - A roof component commonly associated with sloped roofs

- Supports the roof sheathing and transmits the roof loads to bearing walls and beams below

- Some support finished ceilings, such as cathedral ceilings (insulation is often fitted between the rafter)

- Considered better suited for smaller constructions such as smaller houses, sheds and garages
148. What is a 'Collar Tie'?: - Laterally placed wood members installed between opposing rafters approximately halfway up the attic
space

- Designed to prevent rafters from sagging inward

149. What is a 'Knee Wall'?: - A small wall, typically built with two-by-four wood studs in the attic that prevents rafter sag

- In one-and-one-half or two-storey houses they sometimes form the walls of a room on the upper floor as they run from the attic
floor up to the underside of the rafters near their midpoint

- Upper rooms created by this approach often have partly sloped ceilings
150. What are some potential problems with roofs?: - Ice damming

- Tree branches touching roof (abrasive and can damage the roof / give easy access to pests like squirrels)

- Sheathing issues (condensation causing moisture in the attic, too thin resulting in sagging, lack of edge support leading to differential
movement between two panels, further leading to horizontal ridges appearing in the roofing)

- Truss issues (cutting a truss in one spot may compromise the entire truss structure; truss uplift where the bottom member of the truss
deflects upward during winter weather .... this issue is common in new houses)

- Rafter issues (rafter spread/over-spanned; condensation)

- Collar tie issues (Buckling; Missing; Bracing; Wrong location; Low slope roof)

- Knee wall issues (rot, termites, mechanical damage, fire damage)

- Flashing issues (becomes loose and separate from the surface its intended to seal)
151. Describe the problem of 'Ice Damming': - Occurs when snow and ice collect in a certain area of the roof, often the eaves

- Melting snow on the upper portion of the roof cannot drain properly as it is trapped behind the ice dam

- It will back up under the shingles and leak into the eaves, the exterior walls or the building interior

- Normally happens after periods of heavy snow when day time temperatures are at, or slightly above, freezing and night time
temperatures are below freezing
152. What is a common cause of 'Truss Uplift'?: - Temperature and humidity changes in the attic during winter affects the sections of the
truss above the insulation level differently than the bottom chord buried in the insulation, resulting in an upward bowing of the bottom
chord

Note: It's not a serious structural problem.

153. A salesperson is representing a seller and has noticed several ridges on the roof of the house. The salesperson recommends
that the seller have the roof inspected, and believes that this problem is linked to a specific roofing component. Which
components cause the ridges to appear on the roof?: - Sheathing
- Rafters
- Truss
154. What are 'Soffits'?: - The material that covers the underside of the overhang of a roof

- Without them, the ends of the rafters and trusses would be visible

- Serves both aesthetic and functional purposes for a residential structure

- Protect the truss from weather conditions (exposed rafters could increase the potential for mould and the rotting of beams to occur)

- Vented soffits can also help regulate air circulation to upper level floors, including attics
155. What is 'Fascia'?: - The wooden board or otherwise flat piece of material that covers the ends of the rafters, and is visible from the
exterior of a property.

- They hold the eavestroughs in place and can be used to prevent moisture from entering the attic.
156. What are 'Eavestroughs and Downspouts'?: - Attached to both the fascia board and downspout

- Collect rainwater that flows through the downspout to grade level, protecting against wall damage and localized ground level
erosion caused by roof run-off

- Help keep basement areas dry by directing water away from the foundation

- Should be directed a good distance from the house; 6 feet or more if possible and are typically aluminum, galvanized steel, plastic
or copper

- Can be connected to the weeping tile at the base of the footing which then carries the water away from the foundation (though this
practice is being discouraged in many municipalities due to sewers becoming overloaded and increasing the risk of basement
flooding)
157. Describe and 'Attic Venting System': - A crucial factor for residential structures

- Attics can be a common area for the formation of mould and wood rot

- Sufficient air circulation is required to eliminate moisture from collecting in the attic

- One solution is to install a continuous ridge-and-soffit ventilation system that creates a continuous flow of air upward from the eaves
or soffits out through the ridge
158. What are some signs of improper attic venting systems?: - Snow melting unevenly in the winter
- Curled or cracked shingles
- Mould or mildew inside the attic
- Rusy nails
- Insulation that is wet or compressed
159. List the most common residential roof finishing materials.: - Asphalt shingles
- Metal
- Wood shingles and shakes
- Slate (a premium roofing material but can be easily damaged and they're heavy so the support system must be reinforced - have a
utility period of 60-100 years)
- Concrete/clay tile (rarely seen in Ontario, high quality roofing system, 50-100 years, heavy, brittle)
- Corrugated plastic tile (single-ply surface, used over patios and light structures, low quality and subject to fading, discolouration
and leaking at the joints)
160. What are some advantages to metal roofs?: - Can effectively withstand most weather conditions
- Can reflect solar rays and enhance energy saving costs
- Low maintenance, resistance to decay, durability as they can last approx. 40-70 years

Cons: Cost is expensive

161. What is the utility period for wood shingles?: 30-40 years
162. What is a downside to wood shingles / shakes?: Exposure to frequent sunlight can dehydrate the shingles and cause them to become
brittle, and excessive shade or moisture can lead to rot and enable moss to grow
163. What are the components of a residential door?: - Head (portion of the door frame located on the top of the door and runs
horizontally across from one side to the other)
- Jamb (pertains to both the left or right portion of the door frame running vertically up and down the length of the door)
- Sill (located at the bottom of the door at the floor level and runs horizontally to support the frame of the door)
- Stop (Continuous projection attached to the head and the jambs of a door, which functions to prevent the door from swinging past
the frame when closing or opening)
- Buck (the sub-frame around the door - sometimes referred to as the casing. Typically designed from either wood or pressed metal)
164. What are the types of residential exterior doors?: - Wood
- Panel
- Glass
- Sliding
- Steel
- Fibreglass
165. How would you fix a door that won't remain closed because of it's sagging or misaligned, or because of a latch that has become
loose and doesn't align with the door?: Realign the hinges of the door or readjust the height of the latch.
166. What is a common sign of deterioration in windows?: Condensation. The window becomes foggy and is an indicator of
condensation build up. The seal between the glass panes of windows was not able to prevent the moisture penetration.
167. What is the difference between double-glazing that is factory sealed vs. vented?: - Factory sealed is designed to have no air
infiltration or exfiltration between the 2 panes

- Vented allows for outside air movement to the space between the 2 panes
168. What is inert gas fill (such as argon or krypton) used for in windows?: To reduce window heat transfer and cold spots at the window
base between the panes. Argon is most common because krypton is more expensive.
169. What is tempered glass?: A specialized glass that is stronger than conventional glass used in residential windows. Through controlled
thermal or chemical treatments to increase strength, windows with tempered glass are scratch- and damage-resistant and provide
better insulation.
170. What is the CSA Group?: A standards organization that promotes efficient and effective standardization across Canada.
171. In relation to windows, what is the CSA Group's primary focus?: - Air tightness
- Water tightness
- Wind resistance
- Condensation
- Forced entry
- Ease of operation
- Visible transmittance
172. Windows are rated according to CSA standards and the ER which stands for what?: Efficiency Rating
173. What does the ER (Efficiency Rating) represent in a window rating?: The heating required for a window during the heating season
based on the combined analysis of solar heat gain, heat loss (through frames, spacers and glass) and air leakage.
174. What does the CSA efficiency rating measure?: The thermal performance in which a positive number indicates that the window
generates more solar heat gain than heat loss.

A negative number indicates that more heat is lost than gained.

Value ranges are from a low of -80 (very poor) to +12 (excellent).

For example, a rating of -8 to to +12 would roughly correspond to an R-value of a 5 and a window between -15 and +15 would
represent an R-value of 4.
175. What factors affect window quality?: - Heat gain or loss
- Moisture penetation
- Security
- Functionality
176. What does a CSA certification on a window mean?: That the window has met the criteria that enables it to be considered high
quality.
177. What does Low-e mean?: Low-e (low emissivity) refers to the ability of a surface to reflect long-wave radiation.

Low-e glass contains a thin metallic layer that allows sunlight into the structure during winter months. This layer slows down the
outward flow of internally generated furnace heat.

In summer, this same glazing allows sunlight into rooms but reduces unwanted heat, which translates into lower cooling costs.
Another bonus is limited short-wave and long-wave infrared solar radiation and ultraviolet rays which can damage draperies,
furnishings and carpeting.
178. What does U-value mean?: A measure of heat flow through an object (e.g. window glazing), often referred to as the heat transfer
coefficient. It's a component for establishing the efficiency rating (ER) of windows.

The U-value is the reciprocal of the R-value commonly associated with insulation. If the U-value decreases, the R-value increases.
179. If the U-value decreases, what happens to the R-value? : It increases.
180. True or false? A house's orientation can impact its desirability (e.g. a house facing North / North-East will get more sunlight
during the daytime.): True
181. True or false? A parking pad approval from the municipality runs with the land.: False.

Buying a property with a parking pad does not entitle the new homeowner to continue using it. They must re-apply for a permit even if
it was legally registered by the previous homeowner.
182. What is the problem when a roof's collar ties are an inadequate size, leading to bending in the middle?: Buckling
183. What roof component is affected by unsupported edges?: Sheathing (which can cause ridges to appear).
184. Describe 'Balloon Framing'.: A type of framing system in which the walls are constructed first and the floor systems are hung from the
walls.
185. When does 'Deflecting' occur?: When roof sheathing is too thin and leads to sagging of the roof line.
 Humber Real Estate - Course 2, Module 7, Understanding
Residential Construction - Mechanical Systems

1. How does electrical service enter a building?: From the street via the electrical service entrance cable into the electrical main
disconnect, where it can be shut off.

From there it goes to the Distribution panel and gets sent through circuits to various outlets, where appliances can be plugged in.

The electrical main disconnect is often incorporated into the distribution panel.
2. When an electrical system has fuses in the distribution panel, each of these fuses must have the same _________ as the wire it is
protecting.: Rating
3. What are the 3 types of wiring?: - Copper (most modern & desirable)
- Aluminum (older, prone to oxidization, softer and more brittle than copper, can pose fire risk)
- Knob-and-tube (Used prior to the 1930s, not grounded, can be dangerous)
4. What type of outlet should be used in a bathroom?: One with a ground fault circuit interrupter (to help avoid electrocution risk in
locations near water).
5. What are some warning signs you should look for that may indicate problems with an electrical system?: - Frequent blown fuses or
tripped circuit breakers
- Hot or charred outlets
- Burning smells
- Flickering or dimming lights
- Electric shocks
- Light bulbs burning out too quickly
6. What are the benefits and financial incentives or using solar panels?: - Can be installed in homes with enough roof space and
access to sunshine
- With a net metering system, more electricity can be created during the summer months, creating a surplus in the form of credit,
which can be used to offset the cost of electricity bills for days with decreased availability of sunlight (can also be sold to the electric
company for credits)
7. What is the ideal direction a house's exposure for solar panels to work effectively?: South / South-West
8. What are the primary requirements of any heating system?: - Size (large enough to provide adequate heat on the coldest day)
- Reliability (reliable and safe)
- Cost (Economical to install and operate)
- Equal heating distribution (Capable of heating all parts of the home equally)
9. Heating systems are rated for capacity and efficiency. Capacity tells homeowners what?: How much heat a heating system can
generate.
10. What are the 2 types of capacity in reference to heating systems?: - Input capacity (How much fuel is consumed for every hour of
operation in British Thermal Units [BTU] per hour)

- Output capacity (How much usable heating or cooling the unit provides to a home)
11. A heating system's input capacity + Output capacity = ?: Efficiency rating, expressed as a percentage.
12. What are heating system efficiency ratings based on?: The Annual Fuel Utilization Rating (AFUE), which measures how much fuel is
converted to heat in a heating system.

Example: If a heating system has an AFUE rating of 60%, then 40 cents of every dollar spent on heating are being wasted.
13. Canada's Energy Efficiency Regulations mandate that gas furnaces manufactured after December 31, 1999 must have a minimum
efficiency rating of ____%: 90
14. What types of heating systems are there?: - Forced air
- Steam (radiators, good for allergies)
- Hot water (radiators, good for allergies)
- Electric (good for allergies)
- Radiant (good for allergies)
- Ground source heat pumps
- Air source heat pumps
15. How does a radiant heating system work?: Warms the house by circulating water through pipes embedded in the floor (copper or
PEX).
16. How does a ground-source heat pump or geothermal system work?: Uses the earth, groundwater or both as the source of heat in
the winter and as the sink for heat removed from the home in the summer.

Liquid (usually antifreeze) circulates through a loop under the ground. The heat collected from the ground is distributed through the
house with an air handling system.
17. Describe an air source heat pump.: A system that transfers heat from outside to inside a building, or vice versa. Similar to ground
source heat pumps, except that they extract heat from the air rather than the ground and use it to heat the house.
18. What are the types of furnaces available?: - Electric
- Gas
- Oil
- Gravity (found in old homes ... fuelled by either gas or oil)
19. Which furnace is most expensive to operate and takes the longest to heat up the house? Gas, electric or oil?: Electric
20. In areas where gas isn't available, what is often used instead in a furnace?: Propane
21. How often should above-ground oil tanks be replaced and at what cost?: Every 10 years for approx. $3000
22. What is the least efficient type of furnace?: Gravity furnaces
23. What are the 2 components of a boiler?: A heat exchanger and a burner
24. What are the two types of boilers?: - Open (no longer common, uses an expansion tank, uses gravity rather than a circulating pump)

- Closed (water is pressurized a few pounds higher than what is required to force it up to the highest level within the structure ...
typically have a circulating pump to force water through the system)
25. What are some benefits of gas furnaces?: - More expensive to install BUT are cheaper to operate in the long run
- Can run off mainline gas, therefore don't need large storage tanks in the basement
- Emit less pollution than oil furnaces
- More energy-efficient than electrical furnaces
- Required by the Building Code to have a minimum efficiency rating of 90%, which is higher than oil furnaces
26. The heating part of an __________ system is provided by different types of furnaces, boilers or heat pumps.: HVAC
27. How does an air conditioning system work?: A refrigerant is put under pressure by a compressor until it becomes liquid, which is
cooled by a condenser and then evaporates again.

The evaporation process cools the air around it, which provides the cooling effect. This cooled air is distributed throughout the
structure via ductwork.
28. What is Space PAC?: An air conditioning system that uses smaller pipes to circulate air and so requires less modification if installed in
an existing house.
29. What are some advantages to using a ductless air conditioner?: - Can be placed wherever most needed
- More energy-efficient due to cooling the room directly without ductwork (no leaks)
- Best option for old houses without a forced air system already, due to being much less expensive than installing ductwork
- Low noise levels indoor and outdoor
- Can set cooling levels for rooms individually
- Can also be used to heat a home with a heat pump installed
30. What are some potential complications from clogged filters?: - Can restrict the flow of air and reduce the effectiveness of a system
- If not cleaned or replaced regularly can lead to costly repairs
- Ice can develop on the evaporator coil on the air conditioner
31. What are the potential complications from a cracked heat exchanger in a gas furnace?: - Can leak carbon monoxide, which can be
fatal
- Can leak soot, which isn't good for your health
32. What are the potential complications from leaking refrigerant?: - Will cause inefficient cooling
- Will lead to elevated electricity bills
33. What are the advantages of gas and propane fireplaces over a wood fireplace?: - More energy-efficient
- Draw air for combustion from outside so they don't use the heated air in the room
- The don't burn wood, so they don't deplete forests
- Can cost less to run as gas is often a cheaper fuel than wood
- No ashes or soot
- No annual chimney cleaning
- Direct vent will lose less heat than a chimney
34. Describe a zero clearance fireplace.: - Pre-manufactured gas fireplaces that can be placed close to walls, wood or panelling
- Can be used in tight spaces
- Vented to the outside rather than chimneys so can be used to add a fireplace to houses without a chimney
- Very energy-efficient
- Cheaper to install than wood fireplaces
35. What is a fireplace insert and what are their benefits?: - Inserted into an existing masonry fireplace just like a wood stove can be
- A way to make fireplaces more efficient and can be powered by electricity, gas, propane, wood or pellets
- They consist of a firebox surrounded by a steel shell
- More efficient than a traditional fireplace because of the closed design
- Reduce harmful emissions
36. A gas furnace and a gas hot water heater on the same level may share one __________.: Flue
37. What are the various components of a fireplace?: - Chimney
- Flue
- Chimney cap
- Smoke shelf
- Smoke chamber
- Control damper
38. What is a WETT Inspection?: A Wood Energy Technology Transfer Inspection
39. What is the purpose for a WETT inspection?: - Includes a thorough inspection of all wood-burning appliances, such as stoves and
open fireplaces, by a certified WETT inspector

- A WETT specialty inspection is a requirement when securing insurance

- Can identify areas that need to be improved to continue using a wood-burning appliance
40. What components will a WETT inspection cover?: - Chimney (chimney and cap, liner and flue tiles, smoke chamber, proper flue pipe
installation and venting, overall condition of the woodstove, fireplace and its chimney)

- Fireplace (Dampers, firebox and firebricks/linings, hearth and floor protection)

- Clearances (Mantle and clearances to combustible walls and ceilings, heat shield construction for reduced clearances, clearance to
combustible exterior items)
41. If a wood stove is shielded, how close can it be to a wall?: 91 cm (otherwise 152 cm from the top and 123 cm from each side)
42. How does the venting of a water system help it work?: - Air is placed in front of the waste to be pushed out of the way so that the
waste can move through the pipes

- Air is re-introduced to the piping after the water has passed so that there are no vacuums in the piping

- Sewer gases escape outside via a venting stack so they do not remain in the system
43. What's the potential issue with older water service pipes being 3/8" in diameter?: Low water pressure
44. What are the characteristics of PEX pipes?: - Cross-linked polyethylene piping
- Cheaper and won't corrode even in areas w/acidic water
- Quicker to install than copper
- Flexible, can be bent around obstacles
- Used with compression fittings requiring a special tool (crimper)
- Glue not required so good for low ventilation areas
- Used for both drainage and venting
45. What are the most obvious signs of a leak in a water service pipe?: - Water accumulation in the basement

- Wet spot on the lawn

46. What is the result of a partially closed or obstructed water shut-off valve?: Low pressure in the whole system (can also occur in the
street shut-off valve)
47. What's the problem with shared water service pipes between older semi-detached houses?: - Poor water pressure for both houses
48. What is the normal water pressure in modern municipal water systems?: 50 psi
49. What can be done if water pressure is too high?: A pressure regulator can be installed to reduce pressure to normal levels to avoid
damage to appliance pipe hoses and plumbing joints.
50. Why should service pipes either be heated or buried below the frost line?: To avoid freezing
51. What is the ideal water service pipe size?: 1/2" - 3/4"
52. What are the 2 types of water that waste systems deal with?: - Black water (contains human waste)
- Gray water (washing dishes, laundry, etc. and no human waste)
53. What are the potential problems associated with an older neighbourhood where storm sewers and sanitary sewers are
combined?: A backup in the system may cause flooding that contains storm water and raw sewage, which is a serious health concern.

Note: Often sewer check valves are installed on the street side of the sewer pipe to stop any backups from overflowing into the house.
54. What are the characteristics of a sewer line that runs from the house to the street?: - Often made of clay in older homes
- Vulnerable to collapse and obstruction by tree roots and soil, which can cause flooding or a sewer backup in the basement
- Can lead to severe damage and serious health issues
55. What is a potential complication of expanding the plumbing system of a house?: Municipalities sometimes place a limit to how
many fixtures can discharge into any drain pipe to avoid overloading.
56. If galvanized steel is used for venting, does it need to be replaced?: No. This is fine because contamination isn't possible.
57. ______ ______ increases the rate of corrosion in galvanized steel pipes.: Hot water
58. Why can PVC pipes not be used for hot water (warm and cold water are okay)?: They will warp.
59. Why should PVC pipes not be used outside?: It breaks down when exposed to UV light.
60. What are the main benefits of PVC piping?: Lightweight, low-cost and generally low-maintenance (though fittings can be more
expensive than those required for copper pipes).
61. What are the characteristics of galvanized steel pipes?: - Used until the 1950s

- Coated with zinc

- Can contain lead

- Rusts on the inside, then diameter reduces resulting in buildup and therefore low water pressure

- Rust at the joints causes brown water when faucet is first turned on

- Rust can result in leaks

62. What are the characteristics of CPVC Piping?: - Made from PVC that has chlorine added to it during manufacturing

- All the same benefits of PVC but with added durability

- Less noisy when water is going through it due to its smooth interior

- More flexible than metal tubing

- Fire resistant

- More expensive than PVC

- Can be used for all water distribution in all the same ways as PVC

- Can handle temperatures up to 93 degrees and so can be used for hot water appliances where PVC cannot

- Commonly used for waste plumbing

63. What are the characteristics of lead pipes?: - Used until the 1950s

- Should be replaced as it can contaminate the water supply

64. What are the characteristics of copper pipes?: - Has existed since 1990 but most common since 1950s

- Lasts a long time but can need replacing in harsh water or soil conditions

- Expensive and being replaced with plastic piping where allowed by building code

- Short portions are often used to connect PEX to boilers because PEX can't connect directly due to the heat
65. What are the characteristics of Kitec piping?: - Flexible aluminum pipe between inner and outer layer of plastic PEX pipe with brass
fittings

- Less expensive than copper

- Has problems like brass fittings have high zinc content & can cause corrosion restricting water pressure or cause fittings to fail
leading to flooding & water damage

- Pipes can leak or burst if the hot water system is run too high a temp or too high pressure level
66. What some suggestions for homeowners who want to improve water efficiency?: - Update fixtures to low-flow fixtures (they use
about 40%-50% less water than those made prior to 1995)

- Install dual-flush toilets

- Install grey water systems (e.g. reusing water such as from a dishwasher or shower to flush toilets or water the lawn ... up to 60% of
household water can be reused) ... can be difficult and expensive to install after a house is built.

- Install pressure control valves (cuts down on water waste from pressure that's too high for the needs of the house)

- Install cisterns (large plastic or metal tanks, aka rain barrels, that collect rainwater for use in outdoor tasks such as watering the
garden, washing the car, etc.)
67. What is the 'recovery rate' of a water heater?: The amount of hot water the water heater is capable of providing in a given period of
time.

This rate depends on the size of the burner or element in the heater and on which fuel it uses.
68. What fuel provides the fastest recovery rate of a water heater?: Oil, then gas, then electricity.
69. The energy efficiency of water heaters depends on the __________ __________.: Recovery rate
70. The faster the recovery rate of a hot water heater, the more water than can be drawn off without _____________ the hot water
supply.: Depleting
71. What are some common problems with water heaters?: - Burners or elements can burn out over time, leading to loss of efficiency or
malfunction

- Can leak and severely damage property

- Over time, sludge can accumulate in the bottom of the tank, limiting water pressure in the system and leading to low volumes of hot
water. 5-10 litres should be drained out of the system monthly to prevent this.

- In areas with hard water, lime can build up inside the tank and lead to a need for early replacement (a water softener can help).
72. Do water heaters need to be vented?: Yes, if they use oil or gas (electric does not). They are usually vented through the wall using
specialized piping.

Safety Note: They should be located away from where people sleep and at least 45 cm above floor level in a garage to avoid igniting
gasoline.
73. Describe the characteristics of a tankless water heater.: - Powerful gas or propane-powered heaters
- Heats water as it is needed
- Have a burner, heat exchanger and venting system, but no storage capacity
- Cost less to run
- Can me wall-mounted and need less room
- Don't run out of hot water
- Have a longer lifespan
- Slight delay when turning on hot tap
- Limited flow of hot water
- Need a minimum flow to engage the burners
- Can take 6-12 years of use to cover the extra costs
- Gas-fired tankless burners need high pressure gas to function correctly and they can become clogged with limescale more easily in
hard water areas
74. In general, __________ a water heater can save money for homeowners whose families are growing and who may look to move out
and into a bigger property in the near future.: Renting
75. What are the advantages of renting a water heater?: - Costs $30 a month vs. buying one for $1000 + installation charges

- Repairs and on-going maintenance are covered

- On some contracts, the renter can shift to rent-to-own when it becomes financially viable for them
76. What are the disadvantages of renting a water heater?: - Buying a new more energy-efficient heater may be more energy-efficient
and cheaper in the long run.

- Since older water heaters are less efficient, their operating costs may become high. If customers are planning to live in a house for
many years, buying can be more cost-effective.

- Depending on the contract, returning a rented water heater and terminating the contract can be difficult and costly.
77. If an unpleasant odour is coming from a plumbing fixture, what could this indicate?: A blocked sewer vent stack.
78. Well installation is regulated under what Act?: The Ontario Water Resources Act
79. Any contractors who work on wells must be licensed by who?: The Ministry of the Environment, Conservation and Parks
80. What are the 4 classes of a well technician's license?: Class 1: Drilling
Class 2: Digging and boring
Class 3: Special
Class 4: Installing pumps
81. Who is responsible for maintaining the quality of wells and their water?: The well owners
82. Who performs routine testing of well water (for bacteria such as E. coli and coliform) free of charge?: The local public health
authority
83. Who performs testing of well water for contaminants such as heavy metals?: The Ministry of the Environment, Conservation and
Parks lab in Toronto
84. When buying or selling properties, mortgagees will demand a water test before advancing funds for closing. What are wells
inspected for?: - Water flow
- Potability
85. Who is responsible for decommissioning a well if it's either temporarily not being used (and being maintained for future use) or
no longer being used as a well?: A registered contractor (ordered by the owner of the well).
86. A well that is not properly decommissioned can have what negative effects?: - Post safety problems for adults, animals and
children
- Contaminate groundwater
- Affect the water quality of neighbouring wells

Note: Once a well is abandoned, a well record must be sent to the Ministry of the Environment, Conservation and Parks.
87. What are the various methods of constructing wells?: - Dug
- Drilled
- Bored
- Point (driven) wells
88. Describe the characteristics of a dug well.: - Used in sandy and gravelly areas

- Made by digging down to the water table with a hand shovel or a backhoe until the water enters faster than it can be bailed out

- Usually no more than 10 meters deep and are normally lined with cement and capped in concrete to reduce potential contamination
by surface water draining into the well

- Found in older properties and are rarely constructed in new homes

89. Describe the characteristics of a drilled well.: - Used in rock and hard soil areas

- Made using a cable tool or rotary drilling machines

- As drilling can disturb loose material, they need a casing and screen to ensure that they do not collapse or collect sediment

- The depth of drilled wells will depend on the location of the underground water source

- Typical well for residential use will be anywhere from 100-500 ft. deep but could be 1000+ ft.

- Usually sealed with grouting material made of cement or clay, which prevents well water from getting contaminated by surface
water draining downward
90. Describe the characteristics of a bored wells.: - Used in gravelly, sandy or silty areas

- Created using a large-diameter bore or drill

- Can be deeper than dug wells and can get water from less permeable materials, such as clay, fine sand or silt

- Can have a large diameter and this be exposed to a larger area of the soil that contains the groundwater

- They tend to be shallow, making them subject to running dry when water drops below the water table (the level below which the
ground is saturated with water)

- Do not have a continuous casing or grouting, which means they can be contaminated by surface water
91. Describe the characteristics of a point (driven) well.: - Used in sandy and gravelly areas

- The simplest type of well

- A small sharpened pipe is driven into shallow water-bearing sand or gravel

- Economical and easy to construct

- Can only use shallow water sources and so are susceptible to contamination from surface sources, such as fertilizers used on nearby
soil

- If driven by hand, they can only be around 30 feet deep, but machine-driven wells can be up to 50 feet deep
92. When shared wells are used, there should be a formal __________ _________ between the users of the well, which may be registered
on title.: Well-sharing agreement
93. Who is billed for electricity to run the submersible pump for a shared well?: The owner of the property where the well is located.
94. Neighbours who share access to a shared well are typically expected to equally share the costs of what?: Well maintenance,
repairs and a contribution to the electricity costs.
95. Once water from a shared well reaches each property, owners are often responsible for their own individual _________ _________ and
pressure systems for each property.: Water treatment
96. What are some considerations before using lakes or rivers as a source of water?: - Lake water can easily become contaminated (to
avoid this, water supply pipes should extend as far out into the lake as possible to avoid brackish shoreline water, which has more salt
than fresh water).

- Lake or river water may look and taste clean but still contain microorganisms that make people sick. This can be treated in several
ways, from boiling it to treating it with reverse osmosis, ultraviolet light, chlorine dioxide and chlorine tablets.

- Year-round homes with pipes that are close to the surface will require a heated water line to prevent freezing in the winter months.
97. Before a well is drilled, a ________ is required from the Ministry of the Environment, Conservation and Parks.: Permit
98. What are some causes of a low yield hole when drilling a well?: - Low water table
- Interference from other wells and geological conditions
99. Wells should usually be drilled away from steep slopes and ______ _______ ________ to avoid contaminated runoff entering the well.:
Poorly drained areas
100. What are some potential contaminants if a well is drilled too close to public roads, septic tanks or leeching beds?: - Salt used on
roads can seep into wells if they are too close
- Septic effluent can enter wells
- Streams can contaminate wells when they flood
101. What are the components of a well system?: - Well caps (keeps out debris, etc.)

- Casing (lines a drilled well; prevents contaminants; sealed with grouting; can be PVC, carbon steel or stainless steel, fibreglass or
concrete; type used depends on soil; steel costs more than PVC & is stronger but can corrode and build up scale)

- Pumps (jet pumps used for shallow wells: to pull up water using suction; and submersible pumps for shallow or deep wells: to push
up water from below.)

- Well screens (installed at the bottom to filter out sediment from the water as it enters the well ... 3 types: 1. Pipes with holes; 2.
Continuous slot screens made of rods wrapped in plastic or wire; 3. Slotted pipe screens with slots cut in a steel or plastic casing
used in clay-rich areas.

- Pitless adapter (connect the well casing with the water line that discharges the water from the well into the house; designed to be
sealed against contaminations and are installed beneath the frost line where they divert the water to prevent it from freezing.)
102. How are new wells tested?: - With a bailer or a pump for one hour - measuring the rate at which water can be withdrawn from the
well and how quickly water in the well can recover after it has been withdrawn (this is known as the recovery rate).

- Test the quality of water in the well and whether it's potable (safe to drink)
103. A copy of a ______ ______ _______ must be supplied by a contractor to the well owner, and a copy myst be filed with the Ministry of
the Environment, Conservation and Parks.: Water well record
104. What information is contained in a water well record?: - Recovery rate
- How the well was constructed
- Location
- Results of any pumping tests performed
- General info on water quality and the groundwater
- Quality of water over time
- The amount of water it can provide
- Evidence of decommissioning
105. When constructing a well, a contractor must provide the well owner with a copy of the well record within _____ days of the
structural stage being completed.: 14
106. When constructing a well, a contractor must provide the government with a copy of the well record within _____ days of the
structural stage being completed.: 30
107. How can you access a well record?: Via the Ministry of the Environment, Conservation and Parks online through Service Ontario's
website.
108. The well owner should not reduce the height of the ______ ________ to less than 40 cm above the ground.: Well casing
109. What are the reasons for well agreements?: - To ensure that neighbouring properties have access to wells that are not on their
property

- Can provide a formal agreement of costs for well users if one user regularly shares a larger share of water than others

- Some lenders will require a formal well agreement when financing a home with a shared well
110. What are the water treatment systems available?: - Water softening (for areas with hard water, will remove minerals, extend the
lifespan of the plumbing system.)

- Reverse osmosis (tightly woven membranes to remove solids from the intake water through the porous membrane under slight
pressure. Can be installed to treat all water for the home or mounted directly to faucets for treatment on demand.)

- Granulated activated carbon filtration (uses carbon to effectively remove odours, bad tastes and discolouration caused by lead,
chlorine and other dangerous chemicals in the local water supply. Whole-home carbon systems can be easily installed for immediate
results.)

- Ultraviolet systems (one of the most common ways to treat water; works by using ultraviolet light to neutralize any bacteria present
in the water.)

- Iron deionizer (removes iron and avoid red / orange staining of fixtures & appliances)

- Chlorine injector units (used to kill many bacteria in water and remove odours ... they don't kill all bacteria or viruses, but when
combined with filtration, they're effective at making water safe for drinking.)

- Desalinators (removes salt from the water supply as fresh water can become contaminated with salt from various sources.)
111. When should well water be tested?: When they are first constructed and then once or twice per year after that, unless something
happens that might affect the water quality.
112. What's involved in testing well water?: Taking 3 separate samples 1-3 weeks apart.
113. How many samples and how often should rural cottages take samples of their water?: 2-3 samples per season, with the first taken
at the start of the season when the cottage is opened (or whenever the property is sold).
114. Wells can be tested for chemicals and bacteria. How is the water tested for each?: - Chemical analysis tests for the presence of
chemical contaminants such as metals, fluoride, hardness and pesticides. (Tested by the Ministry of the Environment, Conservation and
Parks or private companies)

- Bacteriological analysis tests for the presence of harmful bacteria. (Tested by Public Health)
115. What does chemical analysis of well water test for?: - Metals (such as arsenic, cadmium, mercury or lead)

- Fluoride (can damage tooth enamel in children if too high)

- Hardness (heavy minerals which can leave deposits on appliances and water lines & cause deterioration)

- Red or black staining (on fixtures can mean there's too much iron or manganese in the water)

- Organic contaminants/pesticides (can happen close to agricultural land especially)

116. When a well is tested for supply, what aspects are measured?: - Capacity (A standard drilled well that is 15 cm in diameter can
store about 10 litres per foot)

- Flow rate (In litres per minute that can be extracted or pumped from a well. Avg household needs 400-500 litres per person per day
and a flow rate of about 20-50 litres per minute)

- Recovery rate (the rate at which water can be pumped out of a well without it running dry)
117. What is a combined sewer?: - Used in old neighbourhoods

- Storm and sanitary sewers combined into one

- A surge of storm water can cause water and raw sewage to back up through basement floor drains into the house

- Insurance premiums are higher due to the risk of backup/flooding

118. What is a separate sewer?: - Used in modern areas

- Sanitary sewers carry household waste, while storm sewers handle rain and snow melt

- When storm sewers get backed up, the basement is less likely to get flooded

- Insurance premiums are lower due to less risk of backup/flooding

- Floor drains should connect to the sanitary sewer, while downspouts and eavestroughs go to the storm sewer
119. Where backing up is a common problem, homeowners often install ______ _______ in their floor drain.

These valves let water flow into the drain but prevent it from coming back up. However, sewage can still back up into the house
through the basement plumbing fixtures if the pressure is very high.: One-way valves (aka backup valves)
120. Where the street sewers are not deep enough, the main drain pipe from a house must leave the house above the __________
__________.

This means that plumbing fixtures cannot be put in the basement without the waste being pumped up to the main drain level.:
_________ __________
121. What are the sewage system classes?: Class 1
- Waterless toilets, including pits, privy vaults (vaults from which waste is removed periodically), portable toilets, chemical and
composting toilets

Class 2
- Grey water systems. These are soak or leaching pits that are used for non-human waste water. These have a maximum sewage flow
set by the Ontario Building Code.

Class 3
- Similar to Class 2 system, but designed for human waste and is also known as a cesspool. These are often dumping stations for
recreational vehicles.

Class 4
- Septic tank and leaching bed system. This is the most common class of on-site system used. It uses a tank to break down solid waste
and distribute it into the soil using a leaching bed.

Class 5
- A system that uses a holding tank for retaining sewage, which is collected and taken away for treatment.
122. In relation to a septic system, what is sludge?: Heavy solids
123. In relation to a septic system, what is scum?: Oil and grease
124. How often should septic tanks be pumped out?: Every 2-3 years or sooner if required.
125. What is a leaching bed?: A network of buried perforated pipes that disperse the effluent, allowing it to seep into the ground where
bacteria and other organisms break it down even further.
126. In order for a leaching bed to function property, the soil needs to be ___________ enough for the liquid to flow into it.: Permeable
127. What are the 3 types of leaching beds?: Conventional
- Where land is well-drained and and stone filled dug trenches can be installed below ground level, a conventional bed is created.

Rocky terrain
- Used in areas such as Northern Ontario, where there's a lack of soil depth for a standard leaching bed, a raised absorption bed is
often created. Special sand and soil filtering materials are brought to the site and a raised bed is created above the ground.

Limited space
- The bed area is excavated and a filter bed is created using special filtering sand, which enables the pipes to be placed closer
together. This allows for the leaching bed to use a smaller area of the property.
128. Under the Ontario Building Code, how is the size of a septic system determined?: The total number of water fixtures in a house, the
total living area and the number of bedrooms.

When extra rooms fixtures or area are added to a house, the capacity of the septic system will need to be upgraded to deal with the
extra load.

*Zoning setbacks should also be considered when septic systems are upgraded to large sizes.
129. Under the Ontario Building Code, a ______ _______ must be conducted for new and replacement sewage systems.: Site evaluation
130. Under the Ontario Building Code, how is the location of leaching beds dictated?: By the time it takes for the effluent to percolate
(be absorbed) into the soil. This is measured by either a percolation test or by soil classification according to accepted standards.
131. How is a percolation test performed?: - A minimum of 3 possible locations on the site are tested

- The area with the fastest percolation time is used

132. What are the minimum clearances for LEACHING BEDS?: - 5 meters from any structure
- 15 meters from wells with casings, lakes, ponds, reservoirs, rivers and springs
- 30 meters from a well with no watertight casing

*Note: For raised absorption beds, there are larger minimum clearances, which are based on the height of the absorption bed.
133. What are the minimum specifications for septic/sewage holding tanks under the Ontario Building Code?: - Must have a capacity
of at least 3,600 litres

- Must have at least 2 chambers in them, and two-thirds must be in the first compartment

*If tanks are not large enough, they can become flooded with water and dilute or destroy the bacteria in them, making them less
effective.
134. Under the Ontario Building Code, what's required when applying for a permit to install or upgrade a SEPTIC SEWAGE SYSTEM?:
Technical drawings of the Site Plan, including:

- The proposed location and dimensions of the septic system

- The location of buildings on the property, whether existing or proposed
- Roads, driveways and rights of way
- Zoning bylaw setbacks to lot lines
- An illustration of drainage patterns
- Cross sections showing the materials that make up the septic system
- Locations of the septic tank and leaching bed
- Details of the leaching bed, including size, elevation, soil type and number of pipes
135. In order to apply for a permit to build a septic system, what information needs to be included about the LEACHING BED?: -
Location
- The number of fingers that it has
- Diameter of the pipes (weeping tile) used in it
- Overall area of the leaching bed in square meters
- Location in relation to zoning setbacks
136. In order to apply for a permit to build a septic system, what information needs to be included about the SEPTIC TANK?: - Size in
cubic meters
- Location on the lot
137. Under the Ontario Building Code, what are the minimum clearances for SEPTIC TANKS?: - 1.5 meters from any structure
- 3 meters from a property line
- 15 meters from a well, lake, pond, reservoir, river, spring or stream
138. Septic tanks must not be placed in locations where _________ can occur, unless they are watertight, anchored and protected from
storm water.: Flooding
139. What is the cause of most septic system issues?: Misuse, usually because the homeowners do not understand how they work.
140. What are some common issues with septic systems?: - Blocked leaching pipes

- Malfunctioning valves in septic tank

- Buildup of solids in septic tank

- Construction over leaching bed

- Vehicle damage

- Too many plumbing fixtures

141. What happens when a septic system becomes overloaded or hasn't been pumped to remove sludge?: Pipes can become blocked
by algae growth or by unprocessed solids making it into the distribution from the septic tank.

This sewage can percolate to the surface posing health risks and bad odours.
142. What is the cause of effluent leaking back into the house in a home on a septic system?: Malfunctioning valves
143. Why is using excess water potentially detrimental to septic tanks?: The septic tank can become filled up before the material in it
has been broken down. This will send the solid matter out of the septic tank into the distribution tubes in the leaching bed (these tubes
are only designed to deal with fluids and solids will block them).

It's good practice to minimize the amount of water that you use at any one time by spreading out clothes washing over a few days,
taking shorter showers and using low-flow appliances.
144. What are some common homeowner behaviours which can negatively impact a septic system?: - Using excess water

- Flushing non-biodegradable items (can become stuck)

- Using too much detergent or bleach (can encourage algae to grow which can block distribution pipes, and bleach can kill the
bacteria required to break down solids)

- Flushing harsh chemicals into the system (can kill the bacteria required to break down solids)
145. How often should septic tanks be inspected and pumped?: Every 3-5 years
146. What will an inspector look at during a septic tank inspection?: - Roof drains, storm, surface or foundation water should never run
near a septic tank and/or leaching bed area

- The depth of sludge in the bottom, which should not exceed one third of the depth of the tank (if more, the tank needs to be pumped)

- The capacity of the tank to ensure it's adequate for the house

- That backup valves at the entry and exit of the septic tank are functioning correctly

- Opinion on the general condition of the septic tank and assess its remaining life

- Perform a visual inspection of the leaching bed to ensure no liquid wastes are coming to the surface and that no harmful vegetation
is near it

- Minimum distances of the tank from wells, streams, lakes, structures & property lines
147. How many amps are electrical systems in modern houses using?: 100-200 amps
148. How many amps did old houses use in their electrical systems?: 60
 Humber Real Estate - Course 2, Module 8, Understanding
Residential Construction - Internal & External Finishes

1. What are the materials used for exterior wall finishes?: - Brick veneer wall
- Brick masonry wall
- Vinyl siding
- Metal siding
- Wood siding
- Stone
- Stucco
2. What are the characteristics of a brick veneer wall?: - Composed of a single external layer of brick (known in construction as a
wythe) and an inner frame most often made of wood. The inner-frame is the load-bearing component, not the brick.

- Popular with homebuyers, this material has been the most common exterior wall finish used in Ontario by builders for single-family
homes since the early 1970s.

- Attached to the frame with "brick ties" to prevent the veneer from falling away from the house. An air space between the brick veneer
and stud wall enables air circulation to prevent moisture build-up.
3. What are the characteristics of a brick masonry wall?: - Solid and has 2 layers (or wythes) of bricks attached together by another
layer of bricks called a header course. The header course prevents the inner and outer wythes from separating. This is often referred
to as double brick, because there are two layers of brick.

- When build, bricks are generally laid lengthwise, but the header course is laid at a 90-degree angle with the short end facing
outward to join the two layers of wall together.

- Unlike brick veneer finishes, which do not have header courses, brick masonry walls are load-bearing.

- Following changes to the National and Ontario Building Codes in the early 1970s requiring insulation in exterior walls, builders
generally no longer use brick masonry walls on single-family homes since brick is not a good insulator and double brick makes the
walls particularly thick.

- In a brick veneer or brick masonry wall, bricks can be made from cement or clay. Cement bricks consist of cement, water and an
aggregate, typically sand. Clay bricks are made with clay, soil, water and sand. Like stone, cement and clay bricks are popular
construction materials because they are strong, hard-wearing, low maintenance and inexpensive. The cost and colour range of cement
bricks make them more popular than clay bricks, which are more time-consuming to produce and have limited earth tones.
4. What are the characteristics of vinyl siding?: - Made from polyvinyl chloride

- Fastened to the frame on top of building paper and over flashings on exterior walls and are butted against the exterior trim.

- There's usually a 6 inch minimum clearance at the bottom of the siding above the finished grade level.

- Affordable, durable & low-maintenance

5. What are the characteristics of metal siding?: - Can be made of steel or aluminum

- Is installed vertically or horizontally, fastened to the frame

- Aluminum is more commonly used, typically for soffits and fascias located just under the roof

- Popular because they are affordable, durable and low-maintenance

6. What are the characteristics of wood siding?: - Commonly used in residential construction due to its aesthetic appeal and range of
styles, textures and finishes

- Generally installed horizontally, fastened to the frame in overlapping joints

- Moderate to expensive, depending on the type of wood used

7. What are the characteristics of stone exteriors?: - Are bricks or blocks carved from granite, sandstone, limestone or marble

- Popular materials in construction because of their strength, durability and weather resistance

- Low-maintenance and versatile in terms of the shapes and sizes that can be formed from it

- Synthetic stones are also used in construction; they're glued to exterior wall finishes and closely resemble natural stone finishes

- Like brick veneer, the inner frame is the load-bearing component, not the stone.
8. What are the characteristics of stucco exteriors?: - A fine, durable plaster used for covering exterior walls

- Consists of cement, lime, aggregate and water

- Applied wet to the exterior wall, then hardens naturally

- Offers the advantages of being cost effective, good for insulation and energy efficient
9. What is the difference between brick veneer and brick masonry?: With solid masonry, the brick is holding up the house.

With brick veneer, the house is holding up the brick.

10. What is the rainscreen principle?: - Used in the construction of brick veneer finishes to disperse rain and prevent moisture and water
from getting trapped in the space between the structural inner wall and the outer brick veneer section.

- This involves bricklayers applying just a small amount of mortar between 2 bricks in the first course every 3-4 bricks apart, leaving
spaces called weep holes that are visible in the exterior finish

- The underlying principle acknowledges that a wind-driven rain will pass through the brick wall. A one-inch air space is left behind
the brick between the inner face of the brick and the sheathing on the wood studs. Water that has passed through the wall drips down
the inner face of the brick or the outer surface of the sheathing paper and exits through the weep holes.
11. How can you identify brick masonry?: - By its pattern of header courses, which are required to hold the 2 wythes together

- Although the same size as a normal brick, from the outside, the header courses appear to be shorter than regular bricks due to
being installed as a 90-degree angle. The end of the brick is exposed to the exterior, not the side of the brick, which is visible in the
other courses.
12. What are the potential problems with brick veneer wall?: Weep holes are created to allow water and moisture to escape may
mistakenly be filled in by homeowners who do not understand what their purpose is, and may consider the weep holes to be defects
in the brick work.

Filling in the weep holes could then cause any water that penetrates the porous material to become trapped, possibly leading to
mould. Over time, mortar may need to be repaired.
13. What are the potential problems with brick masonry walls?: - Cracks caused by the wall expanding due to excessive heat or
contracting due to extreme cold.

- Over time, mortar may need to be repaired.

- Most structure-related issues with brick masonry occur over openings if proper support has not been installed under roof eaves or in
areas where the structure is overloaded.

- Cracks can be caused by the failure of the window arches or lintels around the openings.

- With wood lintels, cracks may appear as wood sags or decays

- With steel or iron lintels, cracks may be caused if they progressively rust or deflect
14. What are the potential problems with wood siding?: - With wood siding, rot and water penetration occur most commonly at joints in
the siding

- Many wood systems require the installation of trim over the joints

- Wood-soil contact should be avoided as it promotes rot and provides an ideal environment for wood-boring insects, such as
termites
15. What are the potential problems with vinyl & metal siding?: - Should be ventilated to allow air and moisture pressures to equalize
on either side of the metal

- Majority of problems associated with installation as opposed to the material itself

- A lack of proper securing and improper detail work at edges and corners are the most common deficiencies

- Some vinyl sidings discolour with age (most come in a limited colour selection)

- Vinyl siding can become brittle and crack during cold weather
16. What are the potential problems with stone exteriors?: - May be difficult to work with

- Has limited natural colour choices

- Could be porous and may require resealing and grouting

- Some types, such as marble, may be more expensive than others and some stone constructions often appear austere (i.e. severe)
17. What are potential problems with cement and clay bricks?: - Porous and will absorb rain water

- Water may become trapped and penetrate the bricks, which may lead to mortar deterioration and spalling, where pieces of the brick
may break off
18. What are potential problems with stucco?: - Can shrink and crack easily, particularly in locations where there is a freeze-thaw cycle

- This material is better applied over masonry walls than over wood frames because humidity and changing weather temperatures can
cause wood frames to expand and contract at a different rate than stucco, leading to cracks, bulges or loose stucco

- Cracks can lead to water penetration, which can cause damage to the structure of the wall behind if not detected in time

- To prevent these problems, innovations in materials and installation techniques are helping this exterior option better withstand the
Canadian climate
19. Is peeling paint on a wooden exterior a problem?: Yes. It can indicate deterioration and should be inspected.
20. What are the potential causes of leaning and bowing of a wall's outer wythes?: - The inner and outer wythes were not tied together
properly during construction

- Foundation movement

- Thin walls with weak load-bearing capability

- Leans and bows are most often cosmetic in nature and could be caused by warping (unless severe this would not compromise the
house)
21. Spreading roof rafters may cause the top of the walls to tilt _____________. While considered cosmetic, leaving this unchecked could
make the structure unstable.: Outwards
22. What is a potential cause of an out-of-plumb wall?: - Impact damage (e.g. hit by a vehicle)

- Considered cosmetic unless the incline becomes severe due to a failure of a different component in the building
23. Why can waviness occur in walls?: - If construction was completed too quickly, not giving the mortar used in the bricklaying enough
time to set and strengthen, a common problems with old lime

- If ties or headers were used every 5-7 courses, a full mortar bed would have been used on these courses only, and waviness may
occur

- If insufficient mortar was used, it would only cover the front edge of the brick, causing the back to come together and a bulge to
form at the front

- Bulges in wavy walls could compromise the structural integrity of the wall
24. Why can walls develop cracks / deterioration?: - Stress in the concrete caused by shrinkage, where concrete loses moisture and
contracts as it cures and sets

- Usually hairline cracks

- Also potentially caused by settlement, foundation movement or contraction and expansion in seasonal weather
25. Are cracks in a wall a cause for concern?: Depends on the direction and kind.

- Hairline or vertical cracks are not a cause for concern

- Horizontal cracks could indicate a structural problem with the foundation

26. If left untreated, what further problems can horizontal cracks in walls create?: - Water penetration or insect infestation
27. What is the R-value?: The resistance value or measure of resistance to heat flowing through a given thickness of material.

The higher the R-value, the greater resistance to heat transfer and the better the thermal insulating properties of an object.
28. Where are the minimum requirements allowed for new structures based on R-values defined?: In the Ontario Building Code
29. In what areas of the house is minimum insulation required according to the Ontario Building Code?: Building elements exposed to
exterior or unheated spaces like ceilings below attics, foundation walls and floors.
30. Why would an attic require a higher R-value of insulation than a basement?: Because heat rises and typically escapes through the
roof.

Also, basements are surrounded by soil which is a natural insulator.

31. What is the typical R-value to insulate most attics?: Between R38 and R60, depending on a region's climate.
32. What is a typical R-value for basements?: R8
33. What is the R-value range for main floor areas encompassing floors, crawl spaces, walls and ceilings?: R12 to R26
34. What are the different types of insulation available?: - Glass fibre (aka fibre glass)
- Cellulose fibre
- Spray foam
- Foam board
35. Describe the characteristics of glass fibre (aka fibre glass) insulation.: - Pink in colour

- Consists of very fine flexible glass fibres of different

thicknesses

- Comes in the form of batts (sheets of matted fibres), rolls or loose fill (which can be blown into tight spaces)

- Used for insulating floors, flat ceilings, unfinished walls, cavity walls and in spaces with few obstructions from pipes and wiring

- Recommended R-value is 2.9-4.2 per inch and can be installed in a high R-value area (such as an attic) or a low R-value area (such
as a basement)

- Relatively inexpensive and easy for contractors to install but can leave gaps where air can circulate, and this can lead to
condensation)
36. Describe the characteristics of mineral wool / rock wool insulation.: - Made from fibrous materials that are formed by melting rock
or rock minerals (such as slag and ceramics) and spinning them into fibres to that they resemble the texture of wool

- Comes in batts, rolls or loose-fill forms

- Recommended R-value of 3.0-3.2 per inch offers better thermal insulation than most other types of insulation

- Extremely fire resistant, and its properties make it a high-performing, long-lasting insulator

- Suitable for use in sidewalls, attics, crawl spaces and floors

- Expensive
37. Describe the characteristics of cellulose fibre insulation.: - Made from 85% recycled material, generally paper, and is treated with
chemicals to make it fire- and insect-resistant

- Can be sprayed into new homes or loose-filled into existing homes

- Good method for adding insulation to irregularly shaped areas and around obstructions

- In existing structures, it's installed by removing a strip of exterior siding, drilling a row of 3 inch holes and inserting a special filler tub
into the top of the wall cavity, then blowing the insulation into the building cavity

- Recommended R-value is 3.4-3.6 per inch

- Since cellulose has a higher R-value and denser properties than glass fibre, it's a popular choice in attics as an effective thermal
insulation
38. Describe the characteristics of open-cell spray foam insulation.: - Consists of polyurethane

- Has a lower insulation density and is more porous than close-cell spray foam, therefore it has a lower R-value

- Recommended R-value is 3.5-3.7 per inch and has a sponge-like texture when sprayed

- Less expensive and typically installed on the interior of homes

39. Describe the characteristics of foam board insulation.: - Can provide good heat resistance in a home and is produced in varying
levels of thickness, based on whether the insulation is polystyrene, polyurethane or polyisocyanurate

- Typically produced in the form of rigid panels of 3 different thicknesses

- Can offer a high insulation value for relatively little thickness and can be installed between exterior finishes (bricks or siding) and
exterior wall studs, in floors and in ceilings

- Can be very dangerous in the event of a fire since the active 'styrene' ingredient being released into the atmosphere would be toxic if
inhlaed

Recommended R-values are as follows:

Polystyrene - 3.6-5.0 per inch

Polyurethane & Polyisocyanurate - 7.0-8.0 per inch
40. Describe the characteristics of closed-cell spray foam insulation.: - Has a higher insulation density and is more rigid than open-cell,
and is moisture-proof

- Recommended R-value is 5.5-6.8 per inch and its resistance to heat flow makes it the more effective insulation type

- Its rigidity also means that it can offer greater structural strength than open-cell spray foam (less wall movement caused by wind,
vibration or activity due to home dwellers)

- More expensive and commonly used on exterior walls or areas requiring greater insulation and moisture prevention
41. What are the 2 types of spray foam insulation?: Open-cell and closed-cell
42. What are the 3 types of insulation that may have harmful health implications?: - Urea Formaldehyde Foam Insulation (UFFI)

- Asbestos

- Vermiculite

*These are considered a latent defect and if the seller knows it is present, it must be disclosed.
43. What are the characteristics of UFFI?: - Widely used in the 1970s and banned in Canada in 1980

- Formed by mixing a urea formaldehyde-based resin & water

- Resembles shaving cream

- Became unpopular after being associated with health problems like headaches, nose bleeds, fatigue, skin & eye irritations which
were blamed on the formaldehyde gas released by the resin used to produce the insulation on-site

- Must be disclosed by sellers (known as UFFI Warranty)

44. What are the characteristics of asbestos?: - A fibrous silicate mineral that was often used in construction due to its heat-resistance
and insulation properties

- Difficult to identify visually because it is typically mixed with other materials to form insulation boards, cement sheets, ceiling tiles
and other construction resources

- Can be identified by a specialist laboratory

- If confirmed, it must be removed by certified specialists and disposed of according to the Occupational Health and Safety Act

- Used in insulation for hot water systems, radiators, boilers and distribution pipes

- Likely to be found in homes build before the 1950s & banned in 2018

- If disturbed, can release fibres into the air which, if inhaled, can cause serious or fatal diseases like asbestosis and lung cancer (can
take more than 20 years to develop)

- It's critical that homeowners never disturb this material

45. What are the characteristics of vermiculite?: - Flat, shiny material ranging in colour from silver-gold to grey-brown that expands
when heated

- For use as insulation, it goes through a process called 'exfoliation', in which the material is heated to 1,000 degrees Celsius to
produce lightweight pellets with an accordion-like texture

- Loose-fill pellets are then poured into spaces and cavities in attics and walls to provide thermal insulation

- Has not been used in Ontario since the mid-1980s but may still exist in houses build before that time

- Not known to be a health risk, but may contain asbestos fibres that could be harmful if inhaled (shouldn't be disturbed ... once
enclosed in a wall, it doesn't pose a health risk)

- Only contractors who are trained and certified to handle hazardous materials should remove it
46. What is the R-2000 program?: Established in the 1980s, this program, managed by the Office of Energy Efficiency (Natural Resources
Canada), includes technical performance standards that exceed the energy efficiency requirements already contained in existing
building codes.
47. What are the technical requirements used to certify an R-2000 house?: - Ventilation
- Minimum air leakage
- The type of insulation material used
48. Is the R-2000 program mandatory?: No. It's voluntary.
49. Are R-2000 homes more expensive?: Yes, by 2% - 6% but they will lead to energy savings over time.
50. What is heat loss?: When heat is transferred from inside the building to outside.
51. What is heat gain?: When heat from the outside flows into a building.
52. How are heat loss and heat gain measured?: In kilowatts (KWs)
53. Through what processes does heat loss and heat gain occur?: Convection, conduction and radiation.
54. Define 'Conduction': - A process in which a substance is transferred through a solid material

- In a home, it's the transfer of heat from a warmer object toward a colder object through the fibre of the building, such as basements,
walls and ceiling components

- Often accelerated through thermal bridges that exist in most structures, such as highly conductive window frames (an important part
of energy-efficient design involves eliminating or reducing thermal bridges)

- Can be minimized by using non-conductive insulation materials in a home's exterior structures

55. Define 'Convection': - Involves the transfer of heat in a gas or liquid due to changes in density (e.g. heat is transferred by the upward
flow of hot air or downward flow of cold air, thereby producing a convection loop)

- In real estate, it's typically controlled by minimizing the leakage and flow of air between a structure's interior and exterior surfaces

- A major source of heat loss in most structures is caused by leakage around doorways and windows

- An air leakage test is usually completed as part of an energy audit

56. Define 'Radiation': - Involves the transfer of energy as particles or waves from one source through a medium or space and the
subsequent absorption of this energy by another source (such as a roof, walls or windows).

- This type of heat travels at the speed of light and its intensity depends on the transmission angle and absorption quality of the
receiving source material.

- The best example of this type of heat produced by sunlight entering a room on a cold winter's day. Although the outside temperature
-10 degrees Celsius, the room can be passively heated to 20 degrees Celsius or higher.

- This type of heat, which can either be absorbed or reflected, is an important factor in residential construction when installing
insulation and windows.
57. What is the most effective way to reduce convection (such as drafts and cold floors)?: By using mass insulation products,
appropriate sealing techniques and energy-efficient building components (such as windows).
58. What does a typical energy audit check?: - Air leaks and their source
- General condition of insulation within walls and ceilings
- Humidity levels and any signs of moisture that can cause mould
- Windows and other openings
- Assess the contribution to heating/cooling loss (fireplaces, etc.)
- Furnace and duct distribution systems and water heater systems
59. Who should be consulted about any changes to a load-bearing wall and who should do the work?: - A structural engineer should
be consulted first
- Specialized contractors should then do the work
60. Non-load-bearing walls are also known as what?: Partition walls
61. What are both plaster and drywall made from?: Gypsum
62. What is the difference between plaster (seen pre-mid-1940s) and drywall?: - Drywall is pre-manufactured

- Plaster is mixed and applied to wooden or metal laths or plasterboard and installed on the walls on site (3 coats are applied)
63. What are some benefits of plaster over drywall?: - Thicker, therefore offering the advantage of greater air and sound barriers

- Better for shaping curved or uneven areas

64. What are some downsides to using plaster?: - Labour-intensive and time-consuming

- Durable but still may crack due to settlement or inadequate installation, requiring maintenance or structural renovation

- Cracks are more difficult to repair and it may be harder to update wiring with plaster walls
65. What are some benefits of drywall?: - Less labour-intensive and time-consuming to install

- Can be cut to the size and shape of a wall and installed horizontally or vertically on the frame using glue, nails or screws
66. What are some downsides to using drywall?: - Prone to surface blemishes such as cracks and bulging, but these flaws can be easily
repaired
67. The walls behind drywall are insulated but _________ walls generally do not have insulation behind them.: Plaster
68. Vaulted ceilings are also known as _____________ ceilings.: Cathedral
69. Exposed beams can create depth and contrast to the ceiling and make a room appear more __________ ____ __________.: Open and
spacious
70. When is a building permit required?: To build, demolish, renovate or convert a building.
71. Each municipal council in Ontario appoints a _______ _______ _________ and the required number of building inspectors.: Chief building
official
72. Who issues building permits, unless the plans do not comply with the Building Code Act, the Ontario Building Code or other
laws?: The chief building official
73. True or false? A buyer should contract their local municipality for for any type of alterations.: True
74. What are the steps required to apply for a building permit?: Step 1. Application
- Submit an application to local municipal building department, along with detailed plans, property survey (or site plan) and fee.

Step 2. Review
- Local municipal building dept. reviews all documentations to ensure planned construction meets with applicable building codes,
local zoning by-laws & other regulations.

- Drawings must conform to zoning by-laws & comply with mechanical (HVAC & plumbing) and architectural/structural Building Code
requirements.

Step 3. Permit
- Legal permission is granted to start construction. Permit must be posted prominently on the site and building plans must be kept on
site.

- Any changes require review and approval as per Step 1 and 2.

Step 4. Inspections
- Requests for inspections must be made 24 hours before work proceeds beyond stages set out in the permit.

- Failure can result in work stoppage until remedies are made.

75. What are some potential consequences of not having a valid building permit or lying on the application?: - A potentially costly
stop work order could be ordered, delaying building work

- Applicants who provide false information, intentionally or not, could face significant fines or in extreme cases, imprisonment

- The municipality could issue an order for all construction work already completed to be undone if they conclude that the work was
not performed correctly or safely

- Homeowners could also face having to do more work and spend more money than planned and budgeted for originally

- Construction work performed without a permit could also negatively affect mortgage or financing applications or insurance claims
76. A building inspector is a municipal employee responsible for what?: Ensuring compliance with building permits within Ontario in
accordance with the Ontario Building Code.
77. True or false? As a municipal employee, a building inspector can enter any property or land subject to a building permit at any
reasonable time to inspect the building.: True.

An inspector can also enter a property or land at any reasonable time without a warrant to inspect for unsafe conditions. And order
can then be issued for remedial steps to be taken within a specified time period. The order may require immediate repairs in the case
of an emergency.
78. What action does a building inspector take if a violation is found?: The inspector is authorized to issue an order for corrective action
to be taken immediately or within a specified period of time. If work is not completed according to the order, the inspector may issue
a "stop work" order.
79. What information is specified on a building permit?: - Project location
- Scope of work
- Conditions imposed for the work
- Building inspections required, depending on the project size
80. When will a building inspector typically perform inspections?: At different intervals as the construction work progresses.
81. Unincorporated townships are only located where?: Northern Ontario
82. Who is typically issued a "Letter of Conformity"?: Property owners in unincorporated townships before construction work starts.
83. After a building inspector notifies the municipality that construction work completed on a property meets the requirements of
the Ontario Building Code, the municipality will then provide what to the homeowner?: An Occupancy Permit
84. What is an "Accessory Apartment"?: A self-contained unit within a house, making it a house with 2 residential units. Legislation
commonly refers to such properties as two-unit houses.
85. Approval of an accessory apartment requires what 2 separate inspections?: - An electrical inspection (in accordance with the
Electrical Safety Code enacted under the Power Corporation Act)

- Inspection by the local fire department

86. Who is responsible for enforcing the Ontario Electrical Safety Code?: The Electrical Safety Authority (ESA)
87. What is the job of the Electrical Safety Authority (ESA)?: - To ensure property owners meet all requirements and inspections, and to
issue certificates of inspection.

- To provide important information about electrical safety for property conversions, retrofits and renovations
88. Does a homeowner need to register an accessory apartment with the 'Landlord and Tenant Board'?: No.
89. If a property is more than _____ years old, the insurer will want more details on the roof, heating, plumbing and electrical
systems.: 25
90. What are the pros and cons of insulated concrete forms (ICFs)?: Pros:
- Ease of use
- Added insulation value
- Improved damp-proofing
- Fire hazard reduction (as compared to traditional framing)

Cons:
- High labour costs associated with the assembly of numerous interlocking forms
- Shipping/storage expense (as compared with traditional form boards, which are reused)
91. Describe exterior insulation and finishing systems (EIFS).: - An attractive, continuous exterior surface (except doors and windows)
consisting of several component layers

- Outermost layer is a sprayed-on acrylic/stone finish applied over mesh and insulation attached to the building structure

- This method has proven effective in expelling moisture, limiting air leakage and providing an effective building envelope

- Can minimize heat and cool air loss found in traditional structures due to thermal bridges created by studs and other wall
components that permit conduction from inside to outside and vice versa
92. Describe compressed wood fibre.: - This material combined with weather-resistant adhesives is gaining popularity.

- May be used for trim in housing components such as baseboards, crown mouldings and cabinetry.

- Less expensive than solid wood, making it a popular building material.

93. A notable market niche for factory-built homes (FBH) is ______ ______ communities, but in recent years growth is attributed to
modular homes in new house subdivisions.: Land lease
94. What is a factory build home (FBH)?: Homes that are built at an alternate site and delivered to the final building location. Can be
divided into 2 broad categories: modular and manufactured.
95. The term __________ is also used to generally describe off-site construction.: Prefabricated
96. What is a modular home?: - Build in sections at a factory, transported on truck beds, and assembled at their destination.

- Local building inspectors make certain that the structure meets requirements and that all finished work is done properly.

- These homes typically have truss (pre-assembled) floors designed to go on a basement or foundation.

- The most recent innovation involves near-site factories that assemble virtually the entire structure and then transport the house on a
special truck bed the short distance to the subdivision.
97. What is a manufactured home?: - Traditionally refers to mobile homes and trailers built on chassis (including wheels), transported to
the site using those wheels, and often placed on concrete blocking piers or cement pylons.

- The range of options has expanded over the years. Now includes separate units that are transported as with modular homes, but on
truck beds rather than their own wheels.

Note: Manufactured homes (including mobile homes) are built to a different standard than modular homes. However, manufactured
homes can be upgraded to modular standards. Manufactured homes are usually less expensive than modular homes.
98. What are some benefits of using factory-built units as additions?: - Homeowners can increase the size of their home quickly and
affordably

- All components are built in a climate-controlled factory, so their construction is not subject to delays caused by bad weather

- Construction time is significantly faster than traditional on-site construction

- There is minimum disruption for the homeowner since the units are built in a factory and transported to the home site
99. What is 'Flex-Housing'?: - A new approach to building developed in response to changing requirements of Canadian families

- Introduced and promoted by Canada Mortgage and Housing Corporation

- Emphasizes versatility in residential construction for meet everyone's needs, from young singles to aging parents

- The key concept is to build structures that readily adapt to changing generational needs without costly renovations

- Doesn't refer to any particular architectural design but rather a compilation of individual features (such as levered door handles
rather than knobs for older people or wider hallways and doorways for occupants with special needs) that can be installed easily and
cost-effectively during initial construction
100. Flex-housing is all about _______, ________ and _________.: Adaptability, convertibility, flexibility
101. What is radon?: An invisible, odourless, tasteless gas produced by the decay of uranium that occurs naturally in the earth's crust.

The gas itself is not dangerous but becomes dangerous when it breaks down into smaller components that cling to dust and soil
particles.

These radioactive particles also attach themselves to lung tissue when the gas is inhaled.
102. True or false? Radon detectors are not a legal requirement.: True
103. What are volatile organic compounds (VOCs)?: Potentially toxic compounds produced from building materials like adhesives, resins,
caulking, fillers, finishes, carpeting, paints, stains, varnishes and cleaning supplies.
104. What is sick building syndrome (SBS)?: - Involves circumstances under which building occupants experience health-related problems
apparently arising from time spent in a structure

- Symptoms can be diverse but typically centre on dizziness, nausea, lack of concentration, allergic reactions, throat irritations,
headaches and asthma
105. What are typical causes of sick building syndrome (SBS)?: - Inadequate building ventilation
- Lack of proper air filtration to limit external entry of contaminants
- Inappropriate measures to control moisture (which can give rise to bacteria and moulds)
- Building products that emit VOCs
106. __________ design in construction makes buildings accessible and barrier-free for people with access needs.: Universal
 Humber Real Estate - Course 2, Module 9, Preparing to
Market a Residential Real Property

1. What details can be confirmed on GeoWarehouse?: - Property lot measurements

- Registered owner(s) of the property
- Last sale date of the property, with the sale price
- Assessed value of the property
- Legal description of the property
- Description of the property (i.e. "single-family detached home"
- Total square footage of the property
- Various reports about the neighbourhood (crime rates, etc.)
2. Before a pre-listing presentation, what details can you find in the archives of the local listing service?: - When did the seller buy
the property?
- How much did the seller pay for the property?
- Are there any past disclosures about the property?
3. How can you determine any misuse or stigma associated with a property?: - Check with the local police department
- Do an internet search using the property address
4. Before scheduling a pre-listing presentation, what question should you ask the seller?: Are you working with another salesperson
or brokerage? If they say yes, you should end further communication with them.

If not, you can ask them why they are selling their property.
5. What are the components of a pre-listing presentation?: - Information about the history and success of the brokerage

- Information about yourself

- Applicable forms, such as a representation agreement,

data sheet and property disclosure forms

- Past and current client testimonials

- Supporting documentation (i.e. other listings, market trend information and related analysis to assist in the discussion)

- Overall strategy for establishing a listing price and marketing their property

- Information about current market conditions (i.e. whether it's a seller's market, buyer's market or balanced market)
6. How long is a FINTRAC form kept on file for?: 5 years
7. What tools are required for taking your own measurements of the property?: - Measuring tool (i.e. laser measuring device, digital
measuring wheel, tape measure)
- Flashlight
- Camera
- Notepad
8. What type of defect would it be if a property experienced extensive basement flooding during the spring thaw but cannot be
detected in the winter?: A material latent defect.
9. True or false? The non-disclosure of a known serious latent defect may invalidate the contract.: True
10. To avoid future legal issues and protect both the seller and the brokerage, you would do what during a pre-listing presentation?:
- Ask the seller questions about the condition of the property

- Use a seller property information statement to help identify known latent defects and obtain the seller's permission to make this
statement available to all interested parties

- Ensure the seller understands the importance of making accurate statements about the condition of the property, particularly relating
to material latent defects

- Remind the seller of their legal obligation to disclose known latent defects to all potential buyers

- Advise the seller that non-disclosure of a serious latent defect may invalidate the agreement of purchase and sale or lead to legal
consequences
11. During a visual inspection, what should you look for in the attic and basement?: - Finished or unfinished
- Cracks
- Moisture
- Mould
- Peeling paint
- Water stains
12. During a visual inspection, what should you look for in relation to floors and staircases?: Floors:
- Type of floors (hardwood, laminate, broadloom, ceramic)
- Condition of the floors (slanted, warped)

Staircase:
- Safety rail
- Slanted or loose stairs
- A large number of stairs that would be a problem for a person with limited mobility
13. During a visual inspection, what should you look for in relation to the foundation?: - Cracks
- Efflorescence (indicates previous presence of moisture)
14. During a visual inspection, what should you look for in relation to heating, ventilation and air conditioning (HVAC)?: - Type of
heating source (e.g. electric, gas, ground source, oil, propane, solar or wood)

- Type of air conditioning (e.g. packaged or central air)

15. During a visual inspection, what should you look for in relation to plumbing and wiring?: Plumbing:
- Kitec plastic plumbing
- Pipes (e.g. lead, galvanized metal, cast iron)
- Insulated pipes (possible asbestos insulation)
- Leaks
- Out-of-date systems

Wiring:
- Knob-and-tube wiring
- Aluminum wiring
- Out-of-date systems
- Inadequate amperage
16. During a visual inspection, what should you look for in relation to walls and ceilings?: - Cracks
- Moisture
- Water stains
- Mould
17. During a visual inspection, what should you look for in relation to the exterior areas of the house?: Exterior wall - cracks, water
stains

Doors - type, peeling paint, how easily it opens and closes

Windows - type, age, closure

General wear and tear

18. During a visual inspection, what should you look for in relation to the front yard and back yard?: Grass/lawn - whether grass is
overgrown, presence of weeds

Unusual depressions in the lot grading

Potted plants/garden - whether it appears vibrant, well-kept

Condition of any fencing

Pipes sticking out of the ground (could be an indication of a buried oil tank)
19. During a visual inspection, what should you look for in relation to the roof?: - Type of roof covering
- Age of the shingles
- Missing shingles
20. During a visual inspection, what should you look for in relation to secondary structures?: Detached garage - general wear and tear
(e.g. peeling paint) or does its roof encroach on another property?

Shed - does it encroach upon another property?

21. What are the rules surrounding a property disclosure form?: - A seller is not legally bound to complete one

- If they do, the answers must be truthful and potential buyers and their salespersons must be told that the form exists and be given a
copy, unless instructed otherwise by the seller
22. What key property information will you need to gather from the seller?: Ownership and title:
- Who is registered on the title
- Is there spousal interest? (i.e. not on the title but has an interest in the property)
- Is the property subject to a first right of refusal (meaning there is a third-party interest or claim on a property, such as a mortgage)
- Mortgages, lines of credit or other debt obligations registered against title

Land use restrictions:

- Encroachments, easements or rights of way indicated on the survey
- Disputes with neighbours about the above issues or other boundary-related disputes
- Special designations, such as a heritage property

Zoning:
- Zoning bylaws and restrictions
- Compliance with the zoning
- Municipal plans for re-zoning the property or neighbouring properties, if any

Property taxes and notice of assessment:

- Current property tax bill based on assessment provided by the Municipal Property Assessment Corporation (MPAC)
- Acknowledgement that the property taxes have been paid
- Special assessments (if the seller is unclear, the salesperson should check with the local municipal office)

Other costs associated with ownership:

- Confirm & obtain copies of utility bills and other costs/bills for the past 12 months
23. How should you verify the accuracy of the lot size?: - Review and retain a copy of the survey from the seller and keep it on file for
reference

- Review and compare source documents, such as the tax bill and notice of assessment from MPAC, which contain the lot frontage
and depth

- Include the frontage and depth for rectangular lots, full dimensions for irregular lots, and dimensions and/or exact acreage for larger
tracts
24. How should you verify the accuracy of the total living area?: - If your brokerage is a member of organized real estate, check with
the local real estate board for measuring guidelines; for example, a range of square feet/square meters

- Purchase a report from GeoWarehouse

- Obtain the builder's floor plans from the seller, if it's a newer construction
25. How should you verify the accuracy of room sizes?: - Document any irregularly shaped rooms, including how that room was
measured (e.g. "from the widest point")

- Measure rooms yourself; you should not rely solely on previous listing information, which should be used only as a source of
comparison
26. How should you verify the accuracy of the information about the HVAC system?: Review source documents to verify the following:

- Determine the age of the HVAC system and whether the components are owned, leased or rent-to-own

- Determine whether the heating fuel source is gas, electric, wood or propane

- Determine the age of the hot water tank and a water softener, and whether they are rented, leased or owned
27. What questions should you ask a seller to verify the information about a well and/or a septic system?: - Is the property connected
to municipal water/sewer services; if the seller does not know, contact the local municipality

- Obtain available documentation regarding any existing well or septic system

- Ask the seller if they ever had their municipal water tested; if yes, ask why and request a copy of the report if available

- Ask if the seller is a party to a community or shared well (if yes, review the agreement and obtain a copy for your files), and whether
the well is dug or drilled

- Ask if there is a cistern (a tank for storing water)

- Ask whether the water is pumped from a lake or river (if there is no municipal water supply or existing well)

- Ask when the septic tank was last pumped and any services/repairs that may have been completed; Ask for a copy of these reports
28. What questions should you ask a seller to verify the information about wiring?: - Determine the type of electrical system in a newer
house (60-amp, 100-amp or 200-amp service) ... in older homes the panel may have been upgraded to accommodate 100 amps, but
the actual wiring is only 60 amps. If in doubt, rely on an electrician to make the determination.

- Are there any sub-panels in the house, the garage and other buildings on the property?

- Is the wiring copper or aluminum and if there's any knob-and-tube wiring

29. If the wiring is visible in an unfinished part of the basement, words stamped on the insulation, such as Alcan, alum or aluminum
will indicate ______________ wiring. Do not take the cover off an electrical panel or junction box to inspect the wiring, which can be
dangerous. A professional electrician should verify this information.: Aluminum
30. How can you verify the accuracy of information about plumbing?: - Visually inspect the plumbing to determine whether it's copper,
PVC, Kitec, lead or galvanized

- If Kitec exists, recommend that an inspection and written report be completed by a licensed plumber regarding the current condition
of the plumbing
31. If any items (such as alarm/security system, thermostat, hot water tank, water softener, water filtration system, furnace) are
rented, what details should you confirm with the seller by asking to see the contract?: - Can a potential buyer assume the rental
contract?

- Is the item a conditional sales contract disguised as rent-to-own?

32. If any item in a home sale is included in a rent-to-own program, you should do what?: - Advise the seller that the outstanding
balance of the contract may have to be discharged on or before the completion date of sale and cannot be assumed by the new
owner

- Advise the seller to contact the service provider to verify any costs associated with a transfer of the contract to a new owner or if
the contract can be cancelled, if necessary

- At the offer stage, provide a copy of the original contract to the potential buyer for their review
33. What are the 4 principles that explain how the condition and appeal of the neighbourhood and surrounding properties can
impact the marketability and value of a property?: Conformity
- Reasonable conformity within the neighbourhood ... not too different, not too similar (i.e. a unique house that fits in is more appealing
than a townhouse that's identical to 10 others)

Progression
- In a neighbourhood where properties are not similar, the presence of a superior property will have a positive impact on the value of
an inferior property.

Regression
- In a neighbourhood where properties are not similar, the presence of an inferior property will have a negative impact on the value of
a superior property (i.e. the inferior property will decrease the value of the superior property).

External Factors
- A variety of situations or circumstances that can affect the value of a property (i.e. the value may increase or decrease depending on
the property's proximity to services, amenities, environmental conditions, etc.)
34. What are some factors that can affect the price of a property?: - Area schools

- Public transit

- Municipal water and sewers vs. private systems

- Proximity to environmental hazards and stigmatized land uses (i.e. toxic waste sites, landfills, petrochemical refineries, airports,
prisons, etc.)

- Amenities

- Municipal plans

- Economic/market conditions
35. What is the Appraisal Institute of Canada?: A national society of professional real estate appraisers dedicated to serving the public
interest by advancing high standards for members of the appraisal profession by granting professional designations.
36. Who published the Building Measurement Guideline handbook of residential and commercial guidelines?: The Appraisal Institute
of Canada (AIC)
37. According to the AIC guideline, how is the "total livable area" defined?: Area above grade that provides heated year-round use.
38. How do you measure the area of a one-storey residential structure?: • Exterior length x Width of the base of the dwelling

• Exterior length x Width of projections and *cantilevered areas

*A cantilever is an overhang where one floor extends beyond and over a foundation wall.
39. What is a cantilever?: An overhang where one floor extends beyond and over a foundation wall.
40. Are below-grade basement areas (whether developed or undeveloped) considered livable floor area?: No
41. How do you measure the area of a one and one-half-storey residential structure without dormers?: Ground Level:

• Exterior length x Width of the base of the dwelling

• Exterior length x Width of projections and *cantilevered areas

Note: Ground level is calculated the same way as a one-storey dwelling.

Upper- or Second-Level Measurement:

• Interior length x Width to knee wall (angle where the wall meets the ceiling)

Note: An additional 15-20 cm (approx. 6-8 inches per side) may be included to account for the exterior walls.
42. How do you measure the area of a two-storey residential structure?: • Exterior length x Width, then x2
43. How do you measure the area of a two-storey residential structure with a built-in garage?: Ground Level:

• Exterior length x Width, excluding garage

Upper Level:

• Exterior length x Width

44. How do you measure a split-level residential structure (generally the most difficult to measure, according to AIC)?: • Exterior
length x Width of the livable area that is above the sill plate (the bottom horizontal part of a wall)

Note: Basement and crawlspace areas are not considered to be livable floor area. Living space beside the garage that does not have a
crawl space area or a basement is considered livable floor area because it is above-grade.
45. What is a sill plate?: The bottom horizontal part of a wall.
46. What rooms are not included in a calculation of the total livable area of a house?: - Extra bedrooms / finished areas in the
basement
- Crawlspaces
- Any three-season rooms such as sunrooms, walk-up attics, porches, verandas, garages/heated garages. These items would be
itemized separately, but still described in the listing.
47. What is considered "below grade" according to AIC guidelines?: If earth is adjacent to a portion of a given wall, the entire level is
generally considered below-grade.

Occasionally, exceptions may apply, especially with dwellings build into slopes or hills.
48. How can you determine if an area of the house is included in the livable floor area calculation?: - Is it finished with walls, floors
and ceilings or materials accepted for interior construction?

- Is it heated by a conventional heating system or systems, which are permanently installed in the dwelling?

- Is it directly accessible from the other living areas through a door or heated hallway or stairway?
49. What are the pros and cons of laser measuring devices?: PROS:
- Accurate within 3mm
- Measures a range up to 325 meters and more
- Lightweight and compact
- Extended battery life
- Efficient; precise and doesn't require 2 people to operate it
- Certain versions have cameras, capabilities for area and volume calculations, and metric & imperial conversions

CONS:
- Most models ideal for interior measurements but not ideal for exterior
- Errors can occur due to user misuse (accuracy and care required)
- Brightness levels can vary, sometimes tough to see in daylight
- Shorter range compared to other measuring tools
- Rough or angled surfaces can provide challenges for obtaining a correct reading
- Transparent materials, such as windows, can provide challenges for obtaining a correct reading
50. What are the pros and cons of a digital measuring wheel?: PROS:
- Effective for calculating exterior measurements
- Current models are lightweight & accurate
- Suitable for large areas or linear measurements because of greater range

CONS:
- Not useful for measuring uneven surfaces, which can prevent the wheel from running in a consistent, straight line
51. What are the pros and cons of a tape measure?: PROS:
- Available in a variety of lengths and materials suitable for most applications
- 30-foot retractable tape measures can help for hard-to-reach interior spaces
- 50- to 100-foot retractable tape measures indicate linear footage in tenths of a foot

CONS:
- Inaccurate measurements can result from running the tape around obstacles, such as trees, landscaping, chimneys and downspouts
- Possibility of misreading the measurement due to human error
52. If your measurements of a property don't match those listed on source documents, what steps should you take?: - Measure 2 or 3
more times, and if you're confident in your measurements, use yours for the listing.
53. When measuring a property for a listing, you should also consider the policies and practices of the local area in which the
property is located. Depending on the location, differences may exist regarding what is included in the area calculations. What
do these differences typically affect?: Below grade rooms and other unique features.
54. What size details are included in a listing agreement?: - Lot size dimensions
- Room size dimensions
- Total living area
55. What size details are included in the agreement of purchase and sale?: Lot size dimensions only.
56. What are the 3 measurements you will mostly use to measure a property?: - Metres/Feet (for rooms and lots)

- Square metres/Square feet (area of a house or condo)

- Hectares/Acres (total and workable farm area & rural/recreational vacant land and building lots)
57. How do you convert meters into feet?: Multiply by 3.28084
58. How do you convert feet into meters?: Multiply by 0.3048
59. How do you convert square meters into feet?: Multiply by 10.76
60. How do you convert square feet into meters?: Multiply by 0.0929
61. One hectare = how many acres?: 2.471 acres
62. One acre = how many hectares?: 0.4047 hectares
63. How do you determine the total area of an irregular rectangular living area?

*Note: These calculations are best learned by looking at the illustrations in the lessons and practicing the examples.: Calculate
the total area as if a rectangle, and then subtract the non-livable floor area.
64. How do you calculate the total area of a right angle triangle?

*Note: These calculations are best learned by looking at the illustrations in the lessons and practicing the examples.: 1/2 x (Base
x Height)
65. How do you calculate the total area of a parallelogram?

*Note: These calculations are best learned by looking at the illustrations in the lessons and practicing the examples.: Length x
Perpendicular Height
66. How do you calculate the total area of a trapezoid?

*Note: These calculations are best learned by looking at the illustrations in the lessons and practicing the examples.: Sum of
Parallel Sides x (1/2 x Perpendicular Height)
67. Inches, Feet, Square Feet and Acres are units used in what measurement system?: The Imperial System
68. Centimetres, Meters, Square Meters & Hectares are units used in what measurement system?: The Metric System
69. The total area of a house is based on __________ measurements.: Exterior
70. How do you measure the exterior of a house?: - Make a sketch of the house before you start measuring

- Start at one corner of the house and measure each exterior wall

- Round off the measurement to the nearest centimetre or inch

- As you measure each wall, record the measurement on the sketch

- Measure other areas not considered "livable" according to the AIC guidelines and record these measurements separately
71. If you can't measure one of the exterior surfaces, how can you measure for that side?: You should measure the interior perimeter
wall and add an allowance for each exterior wall using the thickness of the windows to determine the thickness of the exterior wall.
72. When inspecting the house to identify spaces that should be excluded, what should you consider?: - Offsets, such as portions of a
wall that jut out
- Adjust the measurements for an overlap of the exterior walls or overhangs in the upper levels of the dwelling
73. In relation to measuring properties, what are significant structures?: Above-grade portions of the main dwelling on the property,
including the house itself, garage (attached or detached), covered porches and patios.
74. In relation to measuring properties, what are accessory buildings?: Outdoor structures on the property such as a pool house, sauna
or shed.
75. In relation to measuring properties, what are other exterior improvements?: Renovations or additions to the structure that are above
grade, weatherproofed, suitable for year-round use, and have the necessary permits. For example, an enclosed patio with a fire pit.

*Note: If it's accessible via a heated hallway or a door, above-grade and suitable for year-round use, it's included in the total living
area.
76. If an attic is finished, how would it be measured and noted on the listing?: As a finished walk-up attic.
77. What improvements offer the best return on investment according to a study conducted by the Appraisal Institute of Canada?: -
Windows and doors (improve functionality, energy efficiency and security)

- Painting

- Fixtures

- Bathroom

- Kitchen

- Basement
 Humber Real Estate - Course 2, Module 10, How Property
Conditions Impact Disclosure Requirements

1. In Ontario, what 2 regulatory authorities oversee 11. What is the goal of the Ministry of Natural Resources and
environmental contamination issues?: - The Building and Forestry?: To protect and conserve wetland areas wherever
Development Branch of the Ministry of Municipal Affairs and possible.
Housing (who administers the Ontario Building Code) 12. What are some signs that a house was previously used as a
grow-op for cannabis?: - Mould in corners where the walls
- The Technical Standards and Safety Authority (who regulates and ceilings meet
standards regarding buried oil tanks)
2. In Ontario, what 2 regulatory authorities protect the - Unusual number of roof vents or signs of roof vents
environment?: - The Ministry of the Environment,
Conservation and Parks - Fresh paint on window frames to cover damage caused by
high levels of humidity
- The Ministry of Natural Resources and Forestry
3. The Ontario Building Code is a regulation under what Act?: - Painted concrete floors in the basement with circular marks
The Building Code Act, 1992 where pots once stood
4. What does The Building Code set out qualifications for?:
- Evidence of tampering with the electric meter (damaged or
Sewage system inspectors and for those in the construction,
broken seals) or the ground around it
installation, repair, servicing and cleaning or emptying of
sewage systems.
- Unusual or modified wiring in the interior or exterior of the
5. How often does the Ministry of Municipal Affairs and
house
Housing review and amend the Building Code?:
Approximately every 5 years.
- Brownish stains on the underside of beams or arches that
6. In relation to septic tanks, what are the municipality's bleed down a wall
responsibilities (unless they have designated the authority
to a health unit or conservation authority that has - Concrete masonry patches or alterations on the inside of the
jurisdiction in that particular municipality)?: - Issuing permits garage
- Collecting fees
- Conducting inspections - Patterns of screw holes on the walls
- Storing various documents about septic tank installations
7. Unused underground fuel oil tanks may remain abandoned i - Fireplace alterations
the ground only if approved by a TSSA variance. The 13. How can a salesperson spot galvanized pipes?: The coating
homeowner submits an application for a variance to TSSA, metals usually have a chalky look and feel.
and they respond within _____ days.: 21 14. How can you determine if a home contains lead paint?: Ask
8. What are the 5 types of orders that can be invoked by the the seller and if they don't know, advise the seller to send
minister or the director of the Ministry of the Environment, paint chip samples to a laboratory for analysis.
Conservation and Parks?: - Remedial 15. Where does radon enter a home?: Anywhere there is an
- Preventative opening where a property contacts the soil.
- Waste removal
16. If testing shows the radon level is above Canadian
- Control
guidelines in the home, how can the level potentially be
- Stop
reduced?: - Increasing mechanical ventilation to allow for
9. What are the main responsibilities of the Ministry of Natural more frequent air exchange
Resources and Forestry?: - Manages Ontario's fish and
wildlife resources - Sealing cracks and openings in foundation walls and floors,
and around pipes and drains
- Leads the management of Ontario's Crown lands, water, oil,
gas, salt and aggregate resources (including making Crown - Increasing ventilation in the basement by installing a small
land available for renewable energy projects) pump to draw the radon from below the concrete slab to the
outside before radon can enter
- Ensures the sustainable management of Ontario Crown
17. Blue wiring could be an indication of what?: Aluminum wiring
forests
18. True or false? There is no legislation or case law in Ontario
10. What are the 5 major types of wetlands?: Swamps, bogs,
that suggests a seller or their salesperson is required to
fens, marshes and open water less than 2 metres in depth.
disclosed the existence of stigma to buyers.: True.
19. A salesperson is not obligated to disclose the existence of a stigma in a ___________ ____________ scenario when representing a seller
who has given the salesperson instruction not to disclose the stigma.: Single representation
20. If a seller gives consent for multiple representation, they are agreeing that any information you know about a stigma will have
to be shared with ______ __________ as part of the brokerage's duties to the buyer.

If the seller objects to this, advise the seller that they do not have to consent to multiple representation.: The buyer
21. What is the responsibility of the Ministry of the Environment, Conservation and Parks?: - Protection of Ontario's air, land and water,
and administers the Environmental Protection Act, 1990 (EPA).

- Investigates matters concerning pollution, waste management, waste disposal and litter management/disposal

- Exercises search and seizure provisions to ensure adherence to environmental regulations

22. Which authority issues licenses, permits and certificates of approval concerning a range of activities that impact the environment
(e.g. permits relating to private water wells and approvals concerning herbicide use by cottage owners)?: Ministry of the
Environment, Conservation and Parks
 Humber Real Estate - Course 2, Module 11, Property Value
and Listing Price Considerations

1. What does CMA stand for?: Comparative Market Analysis 6. What does a narrative appraisal report consist of?: -
2. What are the 2 organizations that designate appraisers in Appraisal summary
Canada?: - The Appraisal Institute of Canada (AIC) - Letter of transmittal
- Title page
- The Canadian National Association of Real Estate Appraisers - Table of contents
- Taxes and assessment
3. The Appraisal Institute of Canada (AIC) offers 2 designations
- Area & neighbourhood analysis
for appraisers. What are they called and what are they
- Site and improvement analysis
qualified to do?: Canadian Residential Appraiser (CRA):
- Approaches to value
- Qualified to undertake any valuation and consulting
- Reconciliation (how value estimate was determined)
assignment on dwellings containing not more than 4 self-
- Limiting conditions
contained family housing units or on residential dwelling sites.
- Exhibits (maps, diagrams, floor plans)
Accredited Appraiser Canadian Institute (AACI): 7. A potential seller has recently inherited a residential
- Qualified to undertake any valuation and consulting property and wishes to know how much it's worth for tax
assignment on residential, commercial, industrial, institutional, purposes.
agricultural, land and special use property types.
Should you refer the seller to a designated appraiser?: Yes.
4. The Canadian National Association of Real Estate Appraisers
(CNAREA) is a not-for-profit, independent association and 8. A seller would like to refinance his home prior to listing.
offers 3 designations for appraisers. What are they called Should you refer the seller to a designated appraiser?: No.
and what are they qualified to do?: Designated Appraiser You should refer them to a mortgage broker and the lender
Residential (DAR): may ultimately hire a designated appraiser to establish the
- Qualifies to perform appraisal and consultation assignments value of the property.
of residential property types consisting of not more than 4 9. If you receive a request from a seller asking for a signed,
housing units and non-complex commercial properties with a written appraisal report on the value of their property, ask
residential component. the seller why they need it. Before you complete any type
of appraisal, written or verbal, what 2 questions should you
Designated Appraiser Commercial (DAC) ask yourself?: A. Do I have the appropriate education and/or
- Qualified to provide valuations on all real property types, the experience to provide an opinion of value or advice about
including residential properties. the value of the subject property for the purpose requested?

Certified Appraisal Reviewer: B. Do I have errors and omissions insurance that will cover the
- Are DAR or DAC designated members who have achieved a type of appraisal being requested?
higher level of training and certification in appraisal review.
They are qualified to author either field or technical appraisal You should tell the seller that you do not have the
review reports on all types of appraisal reports. education/experience or the insurance coverage to complete
5. In what forms are appraisals typically provided?: - Form the opinion of value requested. The solution may be to refer
report (Short form, usually used for financial institutions, them to a CRA or AACI.
relocation companies and government agencies) 10. The Comparative Market Analysis (CMA) is not a formal
appraisal but an _________ _____ _________ of a property.: Opinion
- Narrative report (More detailed and could be several pages of value
long) 11. What does a CMA form include?: Homes currently for sale,
have recently sold or did not sell in a defined time period.
12. Where can you get a CMA form?: Through the local listing
service or can be purchased through an independent third
party.
13. Where can you find information for a CMA such as lot size,
dimensions, builder's floor plan, living space, etc.?: The
municipality
14. When gathering information for a CMA, you may need to 22. When preparing a CMA, in order to arrive at
adjust the price a comparable house sold for to the price it recommendations for the seller, what 2 factors do you need
would sell for in the current market. This will require making to consider?: - Current market conditions (what type of market
a _________ _________.: Time adjustment it is)
15. When preparing a CMA of comparable sold listings, how do - Motivation of the seller (do they have time to wait or are they
you make a time adjustment?: - If sold recently, no time in a hurry to sell?)
adjustment is made. 23. The CMA should only mention comparable listings for the
last ____ months.: 12
- If sold 6 months ago, and prices of housing have increased 24. What a property is worth - its value - can be either ________
since then by x per cent, then an x per cent adjustment will be or _________.: Objective or subjective
made.
25. When is a property's value objective?: When it is tied to the
16. When preparing a CMA of comparable sold listings, how do cost of reproducing the property or replacing the property
you make a location adjustment?: - If sold house is in the with one of equal usefulness.
general location of the subject property, no adjustment is
26. What is a property's subjective value also referred to as?:
made.
Highest and best use
27. Explain 'Highest and Best Use': The use that, at the time of the
- If sold house is in an inferior location compared to the
valuation, is most likely to produce the greatest net return in
subject property, a positive adjustment is made (and vice
money or amenities to the land over a given period of time.
versa)
17. When analyzing the data for a Comparative Market Analysis
Net return for a single-family dwelling may take the form of
(CMA), what information about comparable properties do
amenities, such as pride of ownership, comfort and
you need to take into consideration before choosing a
convenience.
price to recommend to a seller?: - Date of the sale
28. The estimate of value of a property is related to what?: A
- Location of the sale
typical buyer with a reasonable knowledge of the market and
- Marketing time
property would use or do with the property.
- Lot size
- Square footage 29. What questions should you ask to determine if the current
18. When preparing a CMA of comparable sold listings, how do use of a property is its highest and best use?: 1. Do the
you make a marketing time adjustment?: - The length of time improvements conform to the zoning, or are they legal non-
a comparable home spends on the market affects the value. conforming?
The longer a property stays on the market, the less it will
generally sell for. 2. Do the improvements conform to the other homes in the
area?
19. When preparing a CMA of comparable sold listings, how do
you make a lot size adjustment?: - Depends on the going
3. Do the improvements add value to the land; that is, would a
rate of the cost per square foot being charged by the
typical purchaser pay for the buildings over and above what
municipality.
they would pay for the land?
20. When preparing a CMA of comparable sold listings, how do
you make a square footage adjustment?: - A salesperson If the answer to all 3 types of questions is YES, then the
estimates the value per square foot by taking the sale price current use is most likely the highest and best use of the land.
and dividing it by the square footage of the property. This
provides the salesperson with the sale price per square foot of If the answer to one or all the questions is no, then you may
comparable homes. need to consider that the value of the site should be based on
21. When preparing a CMA, what is the objective in relation to a different highest and best use.
comparable properties?: - Adjustments are made to the 30. What are the 3 approaches used by an appraiser to
comparable properties determine the value of a property?: - Income Approach
- The objective is to bring the comparable in line with the - Direct Comparison Approach
subject property - Cost Approach
31. True or false: If a property has been renovated and the 37. What are the disadvantages of the Cost Approach?: -
renovation cost $50,000, therefore $50,000 has been Difficult to estimate depreciation, particularly in older
added to the market value of the property.: False. buildings

Only the market can dictate value. If the house would only sell - While the cost of construction appears relatively easy to
for $30,000 more, for example, the renovation wouldn't be estimate, no exact cost figure can be given as several methods
truly worth the money put into it. yield varying costs
32. When measuring a property's total living area, should you
include unfinished areas?: No. They should be measured and - Construction costs are constantly changing
noted separately, but cannot be included in the final 38. Why can't the Cost Approach be used for valuing a
measurement. Only completed, 100% above-ground level area condominium and why?: This is because the buyer of a unit in
should be included. a condo building / complex takes ownership of the unit itself,
33. Explain the Cost Approach as used by appraisers.: - Primarily and a tenant in common with others in relation to the shared
focused on objective value, which means that the cost to common elements.
create is the main criterion in estimating value.
This approach cannot be used because the cost of the unit
- This approach is guided by the principle of substitution - a from the entire property would need to be extracted.
wise buyer will pay no more for a property than the cost of 39. What are the benefits of using the Income Approach?:
producing or creating an equally desirable property providing Applicable in estimating the value of investment properties by
no delay occurs in making the substitution. means of cash flow analysis
34. Explain the Income Approach as used by appraisers.: - Based 40. What are the disadvantages of using the Income Approach?:
on the theory that the value of an investment property is the - Difficulty in selecting an appropriate capitalization for direct
present worth of the future benefits or income the property is capitalization (or a discount rate in the case of yield
capable of producing. capitalization)

- This approach involves capitalizing the net income of the - Estimating income and operating expenses can sometimes
property by an appropriate rate into an indication of value. prove difficult, and a slight error in either estimate is magnified
on capitalization
- Based on the assumption that the value of income-producing
properties is related, in one degree or another, to their income- - Of limited use in the appraisal of owner-occupied and/or
producing potential. special-purpose properties
41. What are the benefits of using the Direct Comparison
- Only used to estimate the value of an income-producing Approach?: - Consumers generally understand and use it
property only, not residential or condo.
35. Explain the Direct Comparison Approach as used by - Avoids various problems associated with estimating and
appraisers.: - Based on the proposition that an informed buyer forecasting (e.g. building costs, depreciation, revenues,
will pay no more for a residential property than the cost of expenses and cash flows)
acquiring an existing property with the same utility.
- Generally accepted by courts and the general public
- In this approach, the subject property is compared to other, 42. What are the disadvantages of using the Direct Comparison
recently sold similar properties, and adjustments are made for Approach?: - Sometimes difficult to obtain good comparable
the differences between the properties. sales

- In limited ways, this approach is used by salespersons when - Making adjustments for differences in properties requires
preparing CMAs careful judgement and experience; in some instances, such
36. What are the benefits of the Cost Approach?: - People adjustments are often difficult to support and explain
understand it satisfactorily

- Often the only method to use in the appraisal of special- - Difficult to obtain relevant information relating to each sale,
purpose properties particularly with reference to seller or buyer motivation

- Relatively easy to make a cost calculation - Data are historical in nature

43. What are the 4 primary qualities that a good comparable 50. A properly completed reconciliation will include the what 2
property should have?: Time and Market Conditions: things?: - The final estimate
Sold at or near the date of the valuation - Written justification
51. What are the steps to prepare a reconciliation?: - Check all
Market Value: calculations
An "arm's length" transaction; that is one in which the seller and - Review the comparability of each sale
buyer of each comparable property acted independently and - Give less weight t the sales requiring extreme adjustments
do not have any relationship to each other - Give more weight to the sales with the highest degree of
comparability
Similarity: - Make a final value estimate
Physically similar to the subject property
52. Typically, how many adjusted sale prices for the most
comparable properties are included in a reconciliation?: 3
Proximity:
Within the local market area 53. When is it best to give a value range instead of a single
value point during a valuation?: - When there have been few
44. What are the 4 basic steps of the Direct Comparison
recent sales
Approach?: - Select the comparables

- When there are few comparable properties to the subject

- Make the adjustments - plus or minus dollar value
property
adjustments are made to comparables

- When the property is unique and these unique aspects may

- Establish the adjusted sale price - original sale price plus or
add value, depending on the buyer (e.g. a "green" property
minus total dollar value adjustments
designed by a renowned architect)

- Complete the reconciliation - value estimate based on

- When there are changing market conditions and anticipated
adjusted sale prices
days on the market to sell
45. Adjustments to a property valuation can be made in what 4
areas?: - Time - When value with and without renovations is being done
- Location
- Lot size
- Physical characteristics
46. A salesperson will calculate lot size adjustments based on a
per front foot/metre, with little regard to minor differences
in _________.: Depth
47. What are 3 major factors to consider during the
reconciliation process of an appraisal?: 1. The most recent
sale is normally the best indicator of value, assuming that
minimal adjustments have been made.

2. The sale requiring the least number of adjustments is the

most comparable to the subject property and should be given
appropriate weighting.

3. The range of adjusted sale prices is a good measure of

comparability between the subject property and the
comparables.

*As a general rule, the most weight is given to the best

evidence and the least weight to the poorest.
48. What is the most widely used method for valuing a
residential real property?: The Direct Comparison Approach
49. A leading practice is not to make time adjustments for
comparables that were sold less than 1 ________ ago.: Month
 Humber Real Estate - Course 2, Module 12, Listing and
Marketing Properties

1. What documents are required to list a seller's property?: - 4. What information is included in a listing Data Sheet?: - Legal
Data sheet (accompanies the listing authority) description and confirmation of owners (via a deed or survey)

- Warranty information for anything that has a transferable - Lot size (via a survey, property tax bill - not all municipalities
warranty - or GeoWarehouse report)

- Municipal Property Assessment Corporation (MPAC) - Age of principal structure(s) (via seller, original owner,
assessment builder or sometimes municipality records i.e. a building
permit and/or a GeoWarehouse report)
- Verification of home owner's insurance
NOTE: *If age is unknown or approx. age is indicated only, you
- Statements and contracts for any rental equipment items as a salesperson must clearly identify this fact in the listing or
any marketing.
- Supportive documents for any home improvements (for
example, receipt for a new roof, Building Permit, if seller - Living area of principal structure(s) (take your own
claimed that the new deck is done with permit) measurements or use verified source documents such as a
floor plan or GeoWarehouse reports)
- Copy of municipal tax bill
- Room sizes
- Copy of a survey that they seller may have in their
possession - Assessment/taxes

- Copy of a lease if the property is leased - Zoning

- Deed to help verify ownership - Wiring

2. What items are listed on The Property Checklist?: -
Verification of property ownership - Plumbing

- Any major capital improvements to the property, the date - HVAC (heating, ventilation and air conditioning)
they were completed and supporting documents
- Chattles/fixtures
- List of chattels included and fixtures excluded (document
rental items and term details) - Rental equipment
5. If a lot is rectangular, what details are required when listing
- Major repairs on septic and well systems the lot size?: Frontage and depth
6. If a lot is irregular, what details are required when listing the
- Utility costs for the year lot size?: Full dimensions
7. If a lot is a larger tract of land, what details are required
- Survey - if available
when listing lot size?: Dimensions and/or exact acreage.
8. Do you include a garage if it is attached when measuring
- Easements or encroachments
total living area?: No.
3. After filling out a data sheet for a new listing, where is the
document uploaded to?: The local listing service database. 9. Is including square footage for a listing always mandatory?:
No. In some areas, just a range in area is provided.
10. True or false? It is mandatory in all areas to list the source
when the square footage is a requirement on a data sheet.:
False. It's not mandatory.
11. True or false? When detailing an electrical system on a data
sheet, the determination of the system capacity is
mandatory.: False.

This is beyond the expertise of a salesperson and is not

generally a mandatory field on a residential data sheet.
12. Heating and air conditioning systems older than ____ years 22. If working at a branch office, what is the proper protocol for
are more likely to become increasingly unreliable and may document retention according to REBBA?: Original
need to be replaced.: 15 documents must be sent to the designated location (chosen by
13. A listing which takes advantage of an a la carte / fee-based the Registrar) within Ontario, as soon as possible.
commission structure is also called a _______ ________ _________.:
Limited service listing If no location is designated, the documents should be sent
from the branch to head office.
14. What is a 'Collateral Agreement'?: A second rate of
commission identified in the listing agreement, which would 23. What is a 'Broker Load Practice'?: The listing information is
take effect under certain circumstances. entered into the local listing service from a brokerage or
salesperson's computer rather than being sent to the local real
15. Under what circumstances might a collateral agreement be
estate board / association office for entry.
used?: - If there is no co-operating brokerage involved in the
transaction and the listing brokerage sells the property to a 24. What are some benefits of hosting a hour tour for other
buyer, this provides for a reduction in the commission paid. salespersons?: - They provide an opportunity for
salespersons to view the property without an appointment.
- If the seller is selling their home privately and has an
interested buyer. The seller then decides to list the property - Salespersons will be better informed to provide listed
and signs a representation agreement but requests to have the property information to a buyer.
potential buyer excluded from the agreement.
- Can assist them with providing first-hand knowledge to a
*Note: If these agreements impact a seller's decision to accept seller whose property listing would be in competition with this
the offer with the special agreement or another offer, then the new listing.
existence of the special agreement must be disclosed to 25. What is a 'Mere Posting'?: When a seller does not require the
anyone that makes a competing offer, as required under the full services of a brokerage, a limited services agreement
Code of Ethics. could be established. This occurs when a brokerage agrees to
16. What are the steps you must follow to ensure your list a property for sale but provides no further services.
obligations to convey offers are in accordance with The 26. What obligations does a brokerage have under a mere
Code of Ethics are met?: 1. Explain the pros and cons of posting?: - Confirming information about renovations, specific
delaying offers to your client. features, square footage and taxes that appear on the listing

2. Explain to your client that a delayed offer presentation - Providing a description of the services being provided under
might lead to pre-emptive offers. the agreement and at what cost

3. Find out how your client wants to handle pre-emptive - Providing a copy of the agreement to the seller immediately
offers. upon signing

Step 4. Document your client's instructions. - Providing conscientious and competent service for the
17. True or false? An owner's mortgage details and their reason activities the brokerage has agreed to perform
for moving are not part of a Data Sheet.: True.
- Advising on matters after completing the required due
18. Once completed, a copy of the data sheet should be given
diligence, such as an appropriate listing price
to who?: Each seller
27. True or false? A salesperson has obligations to fulfill all
19. What is a 'Shadow File'?: Your copy of all documents used for
requirements under REBBA, regardless of the type of
a trade. All original copies are retained at the brokerage.
listing agreement, whether it is a mere posting/limited
20. Ontario Regulation requires the brokerage to retain all service or full service.: True. It doesn't make a difference.
documents required for the business of trading in real
28. When documenting listing information, you cannot include
estate for at least ___ years.: 6
any information that cannot be verified by ________ ________.:
21. According to REBBA, trade-related documents must be kept Source documents
in a location specified by the _________.: Registrar
29. To advertise a property after a sale is completed, do you need written consent?: Yes. The original consent only extends until the
time the property is sold. Depending on when the advertising takes place and the content of the advertisement, consent must be
obtained from the seller, the buyer or both parties. Before the sale, the seller. After the sale, the buyer.
30. When advertising a property, the ad must not include any image or text that could reasonably be used to do what?: - Identify any
party to the transaction, unless they have consented in writing

- Identify the specific property, unless the owner of the property has consented in writing
31. If any terms of the representation agreement are included in an ad (i.e. sold for 95% of asking price), all parties must consent ___
_________ regardless of when the advertisement is being placed.: In writing
32. What are some potential requirements for a high-rise condominium open house?: - Permission by the condominium board of
directors or management company to hold an open house

- Multiple salespersons present with the listing person for an open house

- A salesperson who greets visitors at the front door, verifies their identity, and then lets them enter the building, and - if possible -
escorts them to the unit, with another salesperson showing the unit

- Permission for signage for the open house

33. Are open house attendees allowed to take photos inside the home?: No, unless approval is given in writing by the seller.
 Humber Real Estate - Course 2, Module 15, Introducing a
Residential Agreement of Purchase and Sale

1. What is considered the 'Offer Date'?: When an offer is drafted, 12. How can you verify that an individual has the authority to act
not signed. as an estate trustee?: Ask for a notarized copy of probate
2. Does the date of an offer change?: No. Even if terms are documents to ensure all the trustees have signed and have the
changed on a following day and the offer is re-submitted, the power the sell under the will.
offer date remains the same. 13. True or false? An estate trustee can list a property for sale
3. What are the minimum requirements of using a legal name prior to obtaining probate?: True, but the title cannot be
for a seller or buyer when drafting an offer?: Use the full transferred until probate has been obtained.
legal names, and if the individual has one or more middle 14. What is a Power of Attorney (POA)?: A legal document giving
names, at a minimum identify the initial(s). authority for someone to act on behalf of another person.
15. How can you verify someone's Power of Attorney (POA)?: -
Tip: Whenever possible, use the full middle name(s) as this Obtain an original copy of the Power of Attorney (POA) or a
helps distinguish the seller or buyer who has a common first notarized copy of it.
and last name.
4. When drafting an offer, where can the seller(s) full legal - You must also verify that the POA is legally valid, gives the
name(s) be obtained?: From the listing information. attorney the authority to sign that particular type of agreement
5. To confirm joint ownership of a property, both names must and that the POA is still in full force and effect (e.g. hasn't been
appear on the ________.: TItle revoked by the Donor or has not expired if it had an expiry
date).
6. If only one spouse is on the title, but the property is
considered a matrimonial home, the spouse on title is 16. When the person represented by a Power of Attorney dies,
identified as a _________ and that spouse signs the agreement the POA is no longer _________.: Valid
of purchase and sale as a seller. 17. Why might a buyer use a trustee to make an offer?: To
remain anonymous or to incorporate a company.
The non-titled spouse is asked to provide their consent.: 18. To ensure a complete description for each property is
Seller identified, what information would be included in an
7. What are the requirements of signing agreements when a agreement of purchase and sale?: - Address
corporation is a seller or buyer?: Use the full legal name to
identify the corporation and ensure the appropriate officer(s) - Side of the road the property is fronting on
are identified, and the corporate seal is used with their
signature. - Municipality, city, township, region
8. If a corporation does not have seal to stamp an agreement
with, individuals signing can write what phrase on the - Lot size
signature lines on the agreement?: "I/we have the authority
to bind the corporation" - Legal description including any easements
9. When preparing an agreement of purchase and sale for a 19. How can you determine the direction a house is fronting
partnership, you should take what steps?: - Use the on?: Put yourself facing the front of the house. The direction
partnership name you are facing is the side of the road the property is fronting
on.
- Confirm who the partners are, and who has the authority to 20. When filling out an agreement of purchase and sale, if a
bind the partnership property is listed in the lower tier, you should also include
10. What's the difference between a general partnership and a the _______ _____.: Upper tier
limited partnership?: - In a general partnership, one partner 21. When looking for a source document to confirm the legal
can sign the agreement which binds the partnership description of a property, what is considered a primary
document?: A deed or survey.
- In a limited partnership, a limited partner may not have this
authority Note: Secondary documents include the property tax
11. Who is the only person with legal authority to manage or statement or property assessment notice.
distribute an estate, and who would be named in the 22. In an agreement of purchase and sale, where would an
deceased's will?: An estate trustee easement be described?: In the legal description.
23. In the legal description of a property on an agreement of 30. What are some important things to remember when using
purchase and sale, when an easement is described, it can schedules in agreements?: - Identify schedules sequentially;
either be T/W or S/T. What do these each mean?: T/W - for example, A, B, C, D, etc.
Together with (if the property is the dominant tenement)
- Ensure all parties to the agreement have initialled each
S/W - Subject to (if the property is the servient tenement) schedule
24. In the following legal description, what does the '99M-5683'
represent?: 99 - The Land Registry Office - Attach all schedules in the same sequential order as listed;
for example, A, B, C, D, etc.
M - Identifies the plan of subdivision is registered under Land
Titles - Ensure each schedule has enough information to be able to
connect it to the correct agreement of purchase as sale
5683 - Plans are registered in sequential order, and this plan is 31. Is there a minimum irrevocable time required?: No, but the
number 5683 time should be reasonable.
25. When a larger property is being sold and the overall 32. Irrevocability must address what 3 items?: - Party making the
acreage is not verified, the purchase price could be offer
identified based on the ________ ______.: Estimated size. - Time limit
- Consequences of failure to achieve an accepted offer
For example, $7,000 per acre. Once a survey has been 33. Based on contract law, what are the 2 requirements for
completed, the lawyers for the seller and buyer will adjust the acceptance of an offer?: - The offer must be open for
purchase price based on the terms agreed to. acceptance for a reasonable period of time
26. What is a down payment defined as?: The equity invested
into the purchase of the property, and includes any money - The acceptance must be communicated to the person
paid as a deposit. making the offer within the time required
34. Who dictates the length of irrevocable time?: The person
For example, a buyer is purchasing a property for $250k, and making the offer.
submits a $10k deposit upon acceptance of the offer. The
35. When can the actual transfer of title happen on the day of
buyer is obtaining a new mortgage for $175k, and has sufficient
closing (the completion date)?: Any time during the day, and
funds to pay the balance of the purchase price. The buyer's
no later than 6 pm.
down payment is $75k. The deposit of $10k is taken from the
36. If a buyer requires vacant possession, the completion date
buyer's down payment, not in addition to the down payment.
must not conflict with the requirements for notice under
27. What is a deposit defined as?: Any monies paid by the buyer
the __________ __________ _______.: Residential Tenancies Act
toward the purchase price prior to the transaction being
completed. 37. If a tenancy is month-to-month, how much notice must a
tenant be given to vacate a property?: 60-day written notice
28. True or false? If a deposit is identified as "herewith", and the
(60 days from the date on which the rent is paid)
deposit was placed into the brokerage's trust account, but
the offer was never accepted, the brokerage can refund 38. If a tenancy is within the term of a lease, the notice to
the deposit to the buyer without any documentation signed vacate cannot be effective any earlier than when?: The end
by the seller and buyer.: True. of the term.
In this case a brokerage would retain a copy of the 39. What are notices?: Any documentation connected to the
unaccepted offer to show why the funds were deposited and transaction.
disbursed. 40. When is a notice considered to be sent?: Once sent by email
or fax, and all signatures on the document are deemed to be
Conversely, if a deposit should be returned because a original.
condition on an offer couldn't be fulfilled, the brokerage 41. If a notice isn't faxed or emailed, a notice is deemed
requires signed, written direction from the seller and buyer, received only when?: It's been delivered personally or hand-
prior to returning the deposit. delivered to the seller's or buyer's address for service
29. True or false? A buyer can make a deposit using an provided in the agreement of purchase and sale.
electronic funds transfer provided a clause allowing for this
method of payment is added to the Schedule A of an
agreement of purchase and sale.: True
42. True or false? Under multiple representation, a brokerage is 53. What is the requisition date?: The date for the completion of
not allowed to act on behalf of the buyer or seller for the the title search, as included in an agreement of purchase and
purpose of giving and receiving notice.: True. sale.

In these instances, the notice is not deemed received until the This date cannot be a Saturday, Sunday or stat holiday.
seller or buyer receives the notice. 54. What are the 2 types of title objections that could be
uncovered by a buyer's lawyer?: 1. Root of title objection -
This can be done by inserting the seller's or buyer's fundamental title issues, i.e. an old mortgage still registered
information in the fax or email address portion of the clause or against the property.
by delivering the notice to the party's address for service.
43. Chattels are _________ ______ the purchase price unless they are 2. Matters of title objection - Title issues that the seller does
specifically noted in the agreement of purchase and sale.: not have the right or authority to remove. i.e. a right-of-way is
Excluded from granted to another party and is registered on the title.
44. Fixtures are _________ ____ the purchase price unless they are 55. How long after any conditions in the offer should the
specifically noted in the agreement of purchase and sale requisition date be?: A reasonable time period, but generally
that they are not.: Included in no later than 2 weeks before the scheduled completion date.
45. Does the Canada Revenue Agency collect HST on new
homes?: Yes. This gives the lawyers time to solve any potential problems
with the title that may arise.
But NOT on resale residential properties, as long as the home 56. What is a non-title search?: When a lawyer researches
has only been used for residential purposes (vs. commercial). matters such as:
46. If a home was used for 50% business, how much HST would
be due on the resale of the home?: HST would be calculated - Outstanding work orders
based on 50% of the home's resale price. - Deficiency notices
- Confirming that the present use of the property is permitted
47. Inserting the phrase "included in" places the risk on _____
under the zoning bylaw
_________ should the property be subject to HST.: The seller
- Whether fire insurance on the principal building can be
48. If a property is not subject to HST, the seller must certify
obtained
this by when?: Before the transaction is completed.
57. What are the 2 options for determining the non-title search
49. The words "___ __________ ___" places the HST onus on the completion date?: 1. 30 days from the Requisition Date or the
buyer. This indicates that any HST owed on the sale of the date on which the offer conditions are fulfilled or waived,
property must be paid by the buyer in addition to the whichever is the later date, or
purchase price.: In addition to
2. 5 days before closing.
*Note: This is seldom used in residential sales but is standard
58. On an agreement of purchase and sale, should you state the
wording for commercial sales.
current use or zoning designation (i.e. R1 for residential)?:
50. If a resale home has been substantially ___________, or a home Current use (i.e. single family dwelling)
was rebuilt that was destroyed by a fire, it may be treated
59. If a buyer has a different future use in mind than the
as a new home for the purposes of charging HST on the
property currently is zoned for, how can you protect the
sale.: Renovated
seller, buyer and yourself?: By adding an acknowledgement
that the seller and buyer understand there is no representation
*Note: Tax credits may apply.
or warranty of any kind that the future intended use of the
51. Should a salesperson determine whether HST is applicable property by the buyer is or will be lawful.
to a sale?: No. The buyer or seller should be referred to a
third party professional. A condition should be inserted allowing the buyer the
52. A residential property that is being sold has a tenant on a opportunity to investigate the potential for a re-zoning, or
month-to-month lease. Which clause on the agreement of confirm the present zoning would allow for the intended use.
purchase and sale should you review to avoid a conflict with 60. What is the purpose of the future use clause in an
the requirements of the Residential Tenancies Act?: The agreement of purchase and sale?: It is an acknowledgement
completion date clause that there is no representation or warranty by the seller that the
intended future use of the property by the buyer is or will be
lawful.
61. What are some examples of allowable easements that do 70. In an agreement of purchase and sale, what clause entitles
not impact property use, and can't be used by a buyer as the buyer to a survey the seller possesses?: Documents and
an excuse to object?: Drainage, sewer, utility lines, etc. that Discharge clause.
do not materially affect the property or the use of the
property. This clause sets out obligations for mortgage discharge, title
62. What is the purpose of title insurance?: To remove, remedy deed and property survey.
or satisfy a title objection. 71. In an agreement of purchase and sale, what clause requires
63. What is the purpose of the inspection clause in an the buyer to cover the cost of preparing any mortgage
agreement of purchase and sale?: - To acknowledge the documents where the seller is providing financing to the
buyer has had the opportunity to inspect the property prior to buyer and the cost of Land Transfer Tax Affidavit?
submitting an offer
OR
- To acknowledge that the buyer had an opportunity to put a
requirement in the agreement for a property inspection report. In an agreement of purchase and sale, what clause helps
ensure compliance with the Planning Act?: Document
64. After an offer has been accepted, who is responsible for
Preparation clause.
the property?: The seller is, until closing, and must maintain
any insurance policies until completion.
This clause assigns responsibility for paying costs to prepare
65. If substantial damage should occur to the property prior to
specific documents involved in the transaction and covers a
closing, the agreement of purchase and sale identifies what
requirement concerning the Planning Act.
options available to the buyer?: - Terminate the agreement
72. In an agreement of purchase and sale, what clause
- Complete the transaction and collect any insurance proceeds
stipulates that the deed/transfer will be registered
provided by the seller's insurance policy
electronically?: Closing Arrangements clause.
66. Is insurance coverage transferred at closing?: No.
This clause details the closing procedures for a transaction to
The seller will terminate the existing coverage on the property,
be completed by electronic registration, and recognizes that
and the buyer will be required to purchase a new policy.
the exchange of closing funds, keys fobs, remotes,
67. True or false? A seller is required to have insurance on the undertakings, etc. does not all occur at the exact same time as
property until closing.: False (surprisingly!) the registration of the transfer/deed.
73. Who is responsible for paying for the transfer/deed?: The
Even though the seller is legally in charge of the house until
seller is responsible.
closing, there is no legal requirement for them to have
74. A seller and buyer have agreed to sell/buy a piece of land
insurance.
that requires a consent for severance.
68. Compliance with the Planning Act is not required when
listing a property for sale, however it is required for the In the agreement of purchase and sale, what clause
property to be _________ ___ ____ ________.: Transferred to the requires the seller to obtain any necessary consents for
buyer severance by completion of the agreement?: Planning Act
69. If the property does not comply with the Planning Act, 1 of clause.
what 3 considerations will impact the agreement?: - Invalid
if Not Compliant (agreement is deemed invalid if by This clause acknowledges that if the severance is not
completion, any necessary consents are not obtained) approved, the agreement will be deemed invalid.
75. Who is responsible for the cost of preparing any mortgage
- Required Prior to Completion (the seller must comply with document where the seller is providing financing to the
the provisions under the Planning Act by completion) buyer, and the Land Transfer Tax Affidavit?: In this case, the
buyer is responsible.
- Seller Involvement (if a condition in the offer requires the
76. The Income Tax act places obligations on the buyer to
seller to obtain the necessary consent, the seller must proceed
ensure the tax payable by the seller is remitted to who?:
diligently at their expense to obtain such consent. Be aware
The Minister of National Revenue
that a consent can take 3-6 months, but much longer periods
may be necessary if difficulties arise.
77. In regards to the Income Tax Act, what information is 86. Does the UFFI Warranty in an agreement of purchase and
required in the agreement of purchase and sale?: - The sale cover all building in a multi-unit building, even if just
seller will provide a Statutory Declaration to the buyer that one of the units is being sold?: No. The UFFI clause states
they are not, and will not on completion, be a non-resident of that "if the building is part of a multiple unit building, this
Canada. If received, the buyer has no liability under the warranty shall only apply to that part of the building which is
Income Tax Act. the subject of this transaction."
87. What does the Consumer Reports clause warranty?: That the
- If the seller is a non-resident, the seller can provide a buyer acknowledges that a consumer report containing credit
certificate showing that the seller has filed the necessary and/or personal information may be referred to in connection
documents and paid the required taxes. with this transaction.

- If the seller is a non-resident and the certificate has not been For example, in a take back mortgage, the seller wants to
provided, the buyer may claim a credit towards the purchase ensure the buyer is in good standing credit-wise.
price with the amount necessary to pay to the Minister of
88. What does the Agreement in Writing clause warranty?: -
National Revenue in respect of the tax payable by the seller.
Any information inserted into the agreement takes precedence
78. The issue of Income Tax Act compliance may be particularly over the pre-set text, should there be a conflict or discrepancy.
relevant in areas that are common to what type of
properties?: Vacation and leisure properties such as cottages. - All representations, warranties, collateral agreements or
79. The Property Assessment clause in an agreement of conditions affecting the agreement must be included in the
purchase and sale acknowledges what?: That the buyer and agreement (i.e. if a buyer states they'll only buy the property if
seller understand that MPAC may change the assessment of the seller promises there hasn't been water leakage, this must
the property and therefore the property taxes may change. be included in the agreement to be a valid condition.)
80. What does 'Tendering' mean?: An unconditional offer (ready,
willing and able) to perform their part of the contract and - The parties acknowledge that "seller" and "vendor" have the
complete the transaction. same meaning, as do "buyer" and "purchaser"
81. Should either the seller or the buyer refuse to complete the
- Any wording related to gender and number are to be read
transaction for unjustified reasons, the party _________ is then
and understood with any change required for the wording to
in a position to seek remedies under breach of contract.:
accurately apply to the reference (i.e. "we" for 2 buyers)
Tendering
89. In the event a seller or buyer dies prior to completing the
82. What are the possible remedies for a seller or buyer who is
transaction, the ________, _________, ___________,_________ _____
tendering but the other party is refusing to complete the
_________ of the seller and the buyer are bound by the
transaction?: - Recision (ask that the contract be cancelled)
agreement.: Heirs, executors, administrators, successors and
assigns
- Damages (ask for financial compensation)
90. True or false? The time and date referred to in any
- Specific performance (ask that the contract be completed) agreement is the time where the individual (seller or buyer)
lives.: False.
83. What clause states that the buyer or seller must provide the
purchase price (from the buyer) or the transfer/deed (from
It's based on where the property being sold is located.
the seller) on the date set for completion?: The Tender
clause 91. What does the Legal, Accounting and Environmental clause
warranty?: An acknowledgement by both the seller or the
84. What clause states that the seller or buyer cannot make a
buyer that neither the brokerage, nor its representatives, have
claim against each other or any brokerage, broker or
provided legal, tax or environment advice.
salesperson for a reassessment that results in any changes
in property taxes?: The Property Assessment clause 92. When signing an agreement of purchase and sale, should
the seller and buyer use their full legal name or their usual
85. Can a buyer make a claim after taking ownership of a
signature?: Their usual signature, as they would sign any
property should they discover the seller misrepresented
government document (i.e. a driver's license).
the status of UFFI in the building?: Yes, under the UFFI
Warranty clause in the agreement of purchase and sale.
93. In an agreement of purchase and sale, what does the 109. All schedules to the agreement must include what
irrevocable instruction from the seller say that precedes information?: - Buyer(s) name(s)
the seller's signature?: The statement instructs the seller's - Seller(s) name(s)
lawyer to pay the brokerage any commission agreed to, plus - Address of the property
HST, from the proceeds of the sale prior to the seller receiving - Date of the offer
any payment. 110. All agreements of purchase and sale must include a clause
94. When an individual signs an agreement for a corporation, relating to the buyer's obligations to pay the balance. This
you should indicate their __________ in the corporation.: clause should contain what 6 key elements?: 1. By whom
Position 2. The amount
95. Who can witness a signature?: Any competent individual who 3. Adjustments
is not party to the agreement. 4. To whom
5. When it will be paid
96. What is 'Consideration'?: An exchange of something of value
6. How it will be paid
between the parties.
97. On any page of the agreement of purchase and sale where
Note: You do not need to include the name or the seller or the
a signature is not obtained, what is required instead?: Initials
closing date in this clause.
98. Is it a requirement for a non-titled spouse to give consent
111. The amount due on completion be calculated using what
to approve the terms of an offer?: No, but it can help to
formula?: Purchase price less:
keep them apprised to help avoid problems completing the
sale.
S - Seller take back mortgage
99. Does REBBA require a non-titled spouse to be given a copy A - Assumed mortgage (buyer takes seller's mortgage)
of the completed agreement of purchase and sale?: No, it's D - Deposit(s)
not required as they are not party to the agreement.
112. What is a seller take-back mortgage?: A unique kind of
100. A non-titled spouse should sign the agreement of purchase mortgage where the seller of the home extends a loan to the
and sale no later than when?: An agreement has been buyer to secure the sale of the property. This type of loan can
reached between the buyer and seller. benefit both the buyer and the seller.
101. The Confirmation of Acceptance is signed by who?: The last
person accepting the offer. If a take-back mortgage was given to buyer for $300k, the
102. What is a Commission Trust Agreement?: Signed by both buyer would not provide these funds to the seller on
brokerages, it's an agreement that indicates the funds will be completion, rather the buyer would make mortgage payments
held in trust by the listing brokerage. to the seller as agreed to in the offer.

103. When is a Commission Trust Agreement signed?: After the 113. If an offer contains a seller take back mortgage or the
acceptance of the offer (not when the offer is first submitted to buyer is assuming the seller's existing mortgage, the offer
a seller or a buyer for signing). must use a clause which identifies the amount owed.
Otherwise, a clause which states "______________________________"
104. Who can sign a Commission Trust Agreement on behalf of
can be used which does not require the calculation of the
the brokerage?: The salesperson
amount due.: The balance of the purchase price
105. Does REBBA require brokerages to maintain a commission
114. The _______ ___ __________ clause is required on every Schedule
trust account?: No, but it's encouraged to help protect
A.: Payment of balance
commission.
115. True or false? A property facing North would be described
106. A Commission Trust Agreement is only required is a
in an agreement of purchase and sale as fronting on the
____________ ____________ is involved.: Co-operating brokerage
North side of the street.: False.
107. This clause gives the salesperson authority to forward a
copy of the contract to the lawyers for the seller and If you face the house, the direction you are facing is the side of
buyer.: Acknowledgement clause the road the property is fronting on. If a property is facing
108. To use electronic signatures, a salesperson will need to add North, it would be fronting on the South side of a street.
a consent to electronic signatures clause to ___________ _____
of the agreement.: Schedule A
116. True or false? The deposit amount varies based on considerations such as conditions within the local market, and where the
property is situated.: True.

It's generally based on the purchase price of the property and it will vary according to the location and market. A deposit of 5-10% of
the purchase price would not be uncommon in some areas.
117. Root of title issues must be reported by legal counsel before the ________ _______.: Requisition date
118. True or false? The inspection clause does not give the buyer a right to re-inspect the property prior to closing.: True.

This clause only states that the buyer has HAD the opportunity to inspect the property before buying.

A separate clause will need to be added to a schedule in order to provide the buyer with an opportunity for re-inspection.
119. In the following legal description, what does each part mean?

LT 17, PL 23M-1642, S/T EB132958: LT - Lot Number

17 - The lot number assigned to the property

PL - Plan information

23 - The Land Registry Office

M - Identifies the plan of subdivision is registered under Land Titles

1642 - Plans are registered in sequential order, and this plan is number 1642

S/T - Subject to an easement or right-of-way

EB133749 - Indicates an easement number 133749 registered on the property

120. Part of the role of the buyer's lawyer is to confirm _________ for the property.: Zoning
 Humber Real Estate - Course 2, Module 14, The Offer Process
and Regulatory Obligations

1. Is there a standard form used for the Agreement of Purchase and Sale?: No, but there is certain information relating to the rights and
obligations of the parties that must be included.
2. What information relating to the rights and obligations of the parties must be included in an Agreement of Purchase and Sale?: -
The buyer is required to search the title at their own expense and make any objections within 30 days of when the agreement is made.

- The seller has 30 days to remove any objection. If the seller is not able or is unwilling to remove any objection that the buyer does
not agree to accept, the agreement can be terminated and the buyer's deposit is returned.

- All adjustments made to the purchase price (e.g. property taxes, rents & interest) are adjusted as of the date of closing with the day
of closing apportioned to the buyer.

- The deed is prepared by the seller and registered at the expense of the buyer.
3. During negotiations, the agreement of purchase and sale form is referred to as what?: An offer
4. When the offer accepted, but is conditional upon an event (such as the buyer obtaining financing), the offer is referred to as
what?: An accepted, conditional offer
5. When the offer is a legal, binding contract, it's called what?: An agreement
6. What information about the seller, buyer and property are included in the agreement of purchase and sale?: - Full legal names of
the sellers and buyers

- Municipal address and complete legal description

- Purchase price (in words and numbers)

- Deposit amount (in words and numbers)

- Who the deposit holder it (typically the seller's brokerage)

- When the deposit will be provided (typically with the offer, upon acceptance of the offer, or otherwise described)
7. Is a deposit required to have a binding agreement of purchase and sale?: No, but it's considered a show of good faith to the seller
that the buyer is committed to completing the transaction.
8. What are the key components of an Agreement of Purchase and Sale?: - The offer price, deposit and amount due upon completion

- Terms, conditions or other clauses required to address the needs or concerns of the buyer

- Irrevocable date

- Completion date (aka Closing)

- Title search date (aka Requisition Date)

- Chattels and fixtures

- Conditions & applicable dates

9. In most instances, the seller agrees to provide _________ _________ on the date of closing.: Vacant possession

Note: In instances where the buyer has agreed to assume an existing tenancy, vacant possession would not be given.
10. The completion date must be a __________ day.: Business
*Excludes Saturdays, Sundays, & stat holidays as the Land Registry Offices are closed.
11. What is the Requisition Date as included in an Agreement of Purchase and Sale?: The time period in which the buyer's lawyer
completes a search at the Land Registry Office.
12. What is the purpose of a lawyer's search at the Land Registry Office?: To review the information registered on the title and provide
an opinion on these matters, such as confirmation of ownership, any mortgage or lien registered, or any easement affecting the
property.
13. What are the steps in preparing an offer from the buyer's perspective?: 1. Initiate the offer

2. Draft the offer

3. Register the offer with the seller's brokerage

4. Present the offer to the seller

5. Await the seller's response to the offer

14. What are steps required in preparation of drafting an offer?: - Review the listing (confirm all info via GeoWarehouse, etc.)

- Contact the salesperson (enquire if there are any other offers registered on the property)

- Complete a comparative market analysis (CMA)

- Obtain details from the buyer

- Organize the required information

15. What is the definition of a 'Registered Offer'?: There is an offer signed by a buyer which may or may not have already been
presented to the seller.
16. If more than one registered offer occurs it is referred to as what?: Competing offers
17. Why is it important for a buyer to know if there are other offers, and the number of competing offers?: It could impact the buyer's
decisions regarding the terms of the offer, including whether to continue with making an offer.
18. At what point can an offer not be withdrawn?: Once presented to the seller, the offer becomes binding.
19. Describe 'Registering the offer': Once an offer is signed, the seller's brokerage is advised and arrangements are made to have the
offer presented to the seller.

Note: When in contact with the seller's brokerage or the listing salesperson, you would not discuss any details of your buyer's offer. If
there are any offers also registered on the property, the listing salesperson is required to advise you of how many offer are currently
registered.
20. A leading practice is for the __________ salesperson to be present when the listing salesperson reviews the offer with the seller.:
Buyer's
21. What is a benefit of being present at an offer presentation?: You can answer any questions the seller has directly, or be able to
quickly contact your buyer and make the necessary inquiries. Being in attendance also allows you the opportunity to promote the
offer and your buyer to the seller.
22. What are the steps in the offer process from the seller's perspective?: Step 1. Arrange offer presentation time.

Step 2. Prepare the seller for offer presentation.

Step 3. Update seller on current market conditions.

Step 4. Review and analyze the offer.

Step 5. Discuss options to address the offer.

Step 6. Negotiate the offer.

23. When arranging a time to present an offer to your seller, you should also do what?: Follow-up with any other salespeople who
have shown the property and inform them that an offer has been received.

This is done so the salespeople can let their buyers know that if they intend on placing an offer, this should be done right away as the
property could be sold.

Advice the other salespeople of the time when the seller will be reviewing the registered offer and encourage others to submit any
offers prior to that time.
24. If additional offers are received you must notify all of the ____________ , with registered offers, how many offers are registered
without divulging the contents of the offers.: Brokerages
25. Does a seller have to ask questions or make decisions during an offer presentation?: No.
26. Is it ok for the seller to discuss other offers in front of other salespersons?: No. All details of other offers must be kept
confidential.
27. If there is more than one offer on a property, and non of the offers are acceptable, can the seller counter all the offers?: No.

Only one, because if 2 counter offers are accepted by different buyers it means the house would be sold twice.
28. Once a seller make an offer back to the buyer, the seller is obligated to that offer for the __________ _______ specified.: Irrevocable
time
29. A counter offer is also referred to as a ______ ______.: Sign back
30. If there is more than one offer on a property, a seller may elect to have their salesperson inform all of the competing
salespeople that none of the offers is being accepted. Why would this be done?: To give them an opportunity to go back to their
buyers and improve their offers.
31. Before rejecting all initial offers, what must you caution your seller about?: That some or all of the buyers may drop out of the
negotiations and the seller may be left with no offers on the property.
32. True or false? REBBA requires the seller's brokerage to retain copies of all written offers that it receives.: True. Even if the offer
was accepted, rejected or countered.
33. What are the steps for acceptance of an offer?: Step 1. Accept the offer

Step 2. Confirm acceptance

Step 3. Distribute copies

Step 4. Sign a commission trust agreement

Step 5. Retain a copy for the brokerage

Step 6. Forward a copy to the lawyer

34. To accept the buyer's offer, all sellers must ____ and ______ the agreement of purchase and sale.: Sign, initial
35. Acceptance of the offer must be communicated to the other party prior to the __________ of the _________ time period.: Expiration,
irrevocable
36. In addition to acknowledging receipt of the accepted offer, the seller and buyer will provide the brokerage the authority to
send copies to their respective _________. This process may be paper-based or electronic.: Lawyers
37. What is a 'Commission Trust Agreement'?: This agreement is used when there are 2 different brokerages involved in the transaction. It
protects the co-operating brokerage's commission should the listing brokerage become insolvent or bankrupt.

A salesperson can sign this on behalf of their brokerage.

38. If only one brokerage is involved in the transaction, is a Commission Trust Agreement signed?: No. It's no required.
39. What are the 3 options used to identify when a deposit will be delivered?: 1. Herewith - the deposit will be provided along with the
offer when initially presented to the seller.

2. Upon acceptance of the offer - Most offers will also identify that "upon acceptance" requires the deposit to be provided within 24
hours of acceptance.

3. As otherwise described in the agreement - The deposit will be provided at some other time which is then identified in the agreement
by including the details on a schedule added to the agreement (e.g. 7 business days from acceptance of offer)
40. If a deposit is received on a Wednesday, and the following Monday is a stat holiday, by what day must the cheque be deposited
into the listing brokerage's trust account?: By the Thursday after the stat holiday (5 business days, not including Sat, Sun, stat holiday
Monday OR counting from the day the cheque was received ... Tip: start counting business days from the next day after it was
received.)
41. According to REBBA, what are the specific requirements relating to a brokerage's real estate trust account?: - The trust account
must be designated as a real estate trust account

- Only 1 trust account may be used, unless otherwise approved by the Registrar

- All disbursements must be authorized by the brokerage's broker of record

- All trust cheques must be signed by the brokerage's broker of record

- Brokerages must prepare a monthly reconciliation of the trust account within 30 days of the monthly bank statement
42. Are payments to salespersons and co-operating brokerages paid from the real estate trust account?: No. They are paid through a
separate account; either a commission trust account or the general bank account.
43. If a brokerage's trust account incurs bank charges, are they paid from the trust account?: No. They must be settled from the
brokerage's general bank account.
44. RECO's Insurance Program covers up to how much of a deposit per claim, with no deductible paid for the buyer to make a claim?:
$100,000

*Note: The policy has a limit of $3,000,000 per event, so if the brokerage does not have additional insurance coverage and claims
related to an event (i.e. a brokerage becomes bankrupt) exceeds $3,000,000, the amount recoverable by each buyer may be pro-
rated.
45. When you have a buyer and there is a co-operating brokerage, what steps outline the flow of their deposit?: Step 1. Obtain the
buyer's deposit as identified on the agreement of purchase and sale and provide a receipt to the buyer.

Step 2. Deliver the buyer's deposit to the listing brokerage as soon as possible as soon as possible and obtain a receipt from the
listing brokerage (begins of the 5 business day requirement of the listing brokerage to deposit the funds).

Step 3. Listing brokerage deposits the funds into their real estate trust account within 5 business days. The bank statement will note the
date of deposit.

Step 4. Listing brokerage documents the deposit on a trust ledger. This is completed by the brokerage and a salesperson would not
be required to document anything further regarding the deposit.

Step 5. Monthly reconciliation while the deposit is held in trust. This ensures the deposit is safeguarded while being held in trust.
46. What happens if there is any shortfall in the trust account when the monthly reconciliation is completed?: The brokerage is
required to immediately deposit funds to account for the shortfall.
47. A buyer's deposit will be placed in a __________ _________ trust account unless otherwise provided for in the agreement.: Non-interest
bearing
48. The terms of how ________ is disbursed must be clearly described in the agreement of purchase and sale, and explained to the
parties.: Interest
49. If a brokerage deposits a buyer's deposit into an interest-bearing account, they must explain in detail in the agreement the
terms (i.e. how much interest, how and who is it paid to, etc.) What are the 4 ways payment of interest earned on a deposit can
be arranged?: - Payment of all interest earned
- Payment of interest at a rate less than earned
- Payment of interest earned less than a fee
- Term deposit bearing interest
50. What is the protocol for accepting an Electronic Funds Transfer (EFT) for a buyer's deposit?: - Ensure the deposit is noted as an
EFT payment on the deposit section of the agreement of purchase and sale

- The brokerage should obtain written confirmation of the EFT deposit from the brokerage's financial institution

- The details of the EFT deposit are documented in brokerage's deposit book and the trust account ledger

- The EFT transaction is also recorded on any other document referencing the buyer's deposit, such as a trade record sheet, which is
used to record any money that the brokerage holds in trust, along with every transaction relating to that money
51. Can a seller's salesperson indicate that they have received an offer or convey an offer to the seller if the offer isn't yet in
writing?: No. Verbal interest in a property cannot be presented as an offer.
52. The listing on the seller's property specifies that no offers are to be presented to the seller prior to May 12, which is in 2 days
time. There have been many showings and 2 offers have already been registered. The seller has been advised by the listing
salesperson of several more appointments over the next few days.

Can the seller ask the listing salesperson to change the date so that no offers are to be presented until May 14?: Yes, but they
need to do the following:

- Ask the seller to provide written instructions detailing the change in date

- Update any listing information with the change in dates

- Provide written notice of the change to all persons who have expressed an interest in the property (i.e. booked a showing, gone on a
showing or made an offer.)
53. During multiple representation, what information will a brokerage not disclose / what services will they not perform unless
otherwise instructed in writing?: - The amount a seller may or will accept (e.g. a salesperson may not disclose to the buyer that the
seller will accept less than the listed price)

- Advising a seller how much they should accept (e.g. a salesperson may not disclose to the seller that the buyer will offer more than
the offered price)

- Advising a buyer how much they should offer (e.g. a salesperson may not advise the buyer how much the should offer when
submitting an offer, nor whether any offer from the seller should be accepted)

- The terms of any other offer (e.g. a salesperson may not disclose to the buyer the offered price of any other buyer's offer, nor the
price the seller has agreed to when previously considering a buyer's offer)

- The motivation or personal information about the seller or the buyer (e.g. a salesperson may not disclose to the buyer why the seller
is selling, nor disclose to the seller any motivation the buyer may have to purchase the property)
54. True or false? A co-operating brokerage deals with the buyer only.: True. It's the listing brokerage that would either represent or
provide customer service to the seller.
55. In the case of a FSBO, what do you call the brokerage working with the buyer (keeping in mind the seller doesn't have a
brokerage)?: Buyer brokerage
56. In the case of multiple representation, only the _________ brokerage is listed.: Listing
 Humber Real Estate - Course 2, Module 15, Introducing a
Residential Agreement of Purchase and Sale

1. What is considered the 'Offer Date'?: When an offer is drafted, 12. How can you verify that an individual has the authority to act
not signed. as an estate trustee?: Ask for a notarized copy of probate
2. Does the date of an offer change?: No. Even if terms are documents to ensure all the trustees have signed and have the
changed on a following day and the offer is re-submitted, the power the sell under the will.
offer date remains the same. 13. True or false? An estate trustee can list a property for sale
3. What are the minimum requirements of using a legal name prior to obtaining probate?: True, but the title cannot be
for a seller or buyer when drafting an offer?: Use the full transferred until probate has been obtained.
legal names, and if the individual has one or more middle 14. What is a Power of Attorney (POA)?: A legal document giving
names, at a minimum identify the initial(s). authority for someone to act on behalf of another person.
15. How can you verify someone's Power of Attorney (POA)?: -
Tip: Whenever possible, use the full middle name(s) as this Obtain an original copy of the Power of Attorney (POA) or a
helps distinguish the seller or buyer who has a common first notarized copy of it.
and last name.
4. When drafting an offer, where can the seller(s) full legal - You must also verify that the POA is legally valid, gives the
name(s) be obtained?: From the listing information. attorney the authority to sign that particular type of agreement
5. To confirm joint ownership of a property, both names must and that the POA is still in full force and effect (e.g. hasn't been
appear on the ________.: TItle revoked by the Donor or has not expired if it had an expiry
date).
6. If only one spouse is on the title, but the property is
considered a matrimonial home, the spouse on title is 16. When the person represented by a Power of Attorney dies,
identified as a _________ and that spouse signs the agreement the POA is no longer _________.: Valid
of purchase and sale as a seller. 17. Why might a buyer use a trustee to make an offer?: To
remain anonymous or to incorporate a company.
The non-titled spouse is asked to provide their consent.: 18. To ensure a complete description for each property is
Seller identified, what information would be included in an
7. What are the requirements of signing agreements when a agreement of purchase and sale?: - Address
corporation is a seller or buyer?: Use the full legal name to
identify the corporation and ensure the appropriate officer(s) - Side of the road the property is fronting on
are identified, and the corporate seal is used with their
signature. - Municipality, city, township, region
8. If a corporation does not have seal to stamp an agreement
with, individuals signing can write what phrase on the - Lot size
signature lines on the agreement?: "I/we have the authority
to bind the corporation" - Legal description including any easements
9. When preparing an agreement of purchase and sale for a 19. How can you determine the direction a house is fronting
partnership, you should take what steps?: - Use the on?: Put yourself facing the front of the house. The direction
partnership name you are facing is the side of the road the property is fronting
on.
- Confirm who the partners are, and who has the authority to 20. When filling out an agreement of purchase and sale, if a
bind the partnership property is listed in the lower tier, you should also include
10. What's the difference between a general partnership and a the _______ _____.: Upper tier
limited partnership?: - In a general partnership, one partner 21. When looking for a source document to confirm the legal
can sign the agreement which binds the partnership description of a property, what is considered a primary
document?: A deed or survey.
- In a limited partnership, a limited partner may not have this
authority Note: Secondary documents include the property tax
11. Who is the only person with legal authority to manage or statement or property assessment notice.
distribute an estate, and who would be named in the 22. In an agreement of purchase and sale, where would an
deceased's will?: An estate trustee easement be described?: In the legal description.
23. In the legal description of a property on an agreement of 30. What are some important things to remember when using
purchase and sale, when an easement is described, it can schedules in agreements?: - Identify schedules sequentially;
either be T/W or S/T. What do these each mean?: T/W - for example, A, B, C, D, etc.
Together with (if the property is the dominant tenement)
- Ensure all parties to the agreement have initialled each
S/W - Subject to (if the property is the servient tenement) schedule
24. In the following legal description, what does the '99M-5683'
represent?: 99 - The Land Registry Office - Attach all schedules in the same sequential order as listed;
for example, A, B, C, D, etc.
M - Identifies the plan of subdivision is registered under Land
Titles - Ensure each schedule has enough information to be able to
connect it to the correct agreement of purchase as sale
5683 - Plans are registered in sequential order, and this plan is 31. Is there a minimum irrevocable time required?: No, but the
number 5683 time should be reasonable.
25. When a larger property is being sold and the overall 32. Irrevocability must address what 3 items?: - Party making the
acreage is not verified, the purchase price could be offer
identified based on the ________ ______.: Estimated size. - Time limit
- Consequences of failure to achieve an accepted offer
For example, $7,000 per acre. Once a survey has been 33. Based on contract law, what are the 2 requirements for
completed, the lawyers for the seller and buyer will adjust the acceptance of an offer?: - The offer must be open for
purchase price based on the terms agreed to. acceptance for a reasonable period of time
26. What is a down payment defined as?: The equity invested
into the purchase of the property, and includes any money - The acceptance must be communicated to the person
paid as a deposit. making the offer within the time required
34. Who dictates the length of irrevocable time?: The person
For example, a buyer is purchasing a property for $250k, and making the offer.
submits a $10k deposit upon acceptance of the offer. The
35. When can the actual transfer of title happen on the day of
buyer is obtaining a new mortgage for $175k, and has sufficient
closing (the completion date)?: Any time during the day, and
funds to pay the balance of the purchase price. The buyer's
no later than 6 pm.
down payment is $75k. The deposit of $10k is taken from the
36. If a buyer requires vacant possession, the completion date
buyer's down payment, not in addition to the down payment.
must not conflict with the requirements for notice under
27. What is a deposit defined as?: Any monies paid by the buyer
the __________ __________ _______.: Residential Tenancies Act
toward the purchase price prior to the transaction being
completed. 37. If a tenancy is month-to-month, how much notice must a
tenant be given to vacate a property?: 60-day written notice
28. True or false? If a deposit is identified as "herewith", and the
(60 days from the date on which the rent is paid)
deposit was placed into the brokerage's trust account, but
the offer was never accepted, the brokerage can refund 38. If a tenancy is within the term of a lease, the notice to
the deposit to the buyer without any documentation signed vacate cannot be effective any earlier than when?: The end
by the seller and buyer.: True. of the term.
In this case a brokerage would retain a copy of the 39. What are notices?: Any documentation connected to the
unaccepted offer to show why the funds were deposited and transaction.
disbursed. 40. When is a notice considered to be sent?: Once sent by email
or fax, and all signatures on the document are deemed to be
Conversely, if a deposit should be returned because a original.
condition on an offer couldn't be fulfilled, the brokerage 41. If a notice isn't faxed or emailed, a notice is deemed
requires signed, written direction from the seller and buyer, received only when?: It's been delivered personally or hand-
prior to returning the deposit. delivered to the seller's or buyer's address for service
29. True or false? A buyer can make a deposit using an provided in the agreement of purchase and sale.
electronic funds transfer provided a clause allowing for this
method of payment is added to the Schedule A of an
agreement of purchase and sale.: True
42. True or false? Under multiple representation, a brokerage is 53. What is the requisition date?: The date for the completion of
not allowed to act on behalf of the buyer or seller for the the title search, as included in an agreement of purchase and
purpose of giving and receiving notice.: True. sale.

In these instances, the notice is not deemed received until the This date cannot be a Saturday, Sunday or stat holiday.
seller or buyer receives the notice. 54. What are the 2 types of title objections that could be
uncovered by a buyer's lawyer?: 1. Root of title objection -
This can be done by inserting the seller's or buyer's fundamental title issues, i.e. an old mortgage still registered
information in the fax or email address portion of the clause or against the property.
by delivering the notice to the party's address for service.
43. Chattels are _________ ______ the purchase price unless they are 2. Matters of title objection - Title issues that the seller does
specifically noted in the agreement of purchase and sale.: not have the right or authority to remove. i.e. a right-of-way is
Excluded from granted to another party and is registered on the title.
44. Fixtures are _________ ____ the purchase price unless they are 55. How long after any conditions in the offer should the
specifically noted in the agreement of purchase and sale requisition date be?: A reasonable time period, but generally
that they are not.: Included in no later than 2 weeks before the scheduled completion date.
45. Does the Canada Revenue Agency collect HST on new
homes?: Yes. This gives the lawyers time to solve any potential problems
with the title that may arise.
But NOT on resale residential properties, as long as the home 56. What is a non-title search?: When a lawyer researches
has only been used for residential purposes (vs. commercial). matters such as:
46. If a home was used for 50% business, how much HST would
be due on the resale of the home?: HST would be calculated - Outstanding work orders
based on 50% of the home's resale price. - Deficiency notices
- Confirming that the present use of the property is permitted
47. Inserting the phrase "included in" places the risk on _____
under the zoning bylaw
_________ should the property be subject to HST.: The seller
- Whether fire insurance on the principal building can be
48. If a property is not subject to HST, the seller must certify
obtained
this by when?: Before the transaction is completed.
57. What are the 2 options for determining the non-title search
49. The words "___ __________ ___" places the HST onus on the completion date?: 1. 30 days from the Requisition Date or the
buyer. This indicates that any HST owed on the sale of the date on which the offer conditions are fulfilled or waived,
property must be paid by the buyer in addition to the whichever is the later date, or
purchase price.: In addition to
2. 5 days before closing.
*Note: This is seldom used in residential sales but is standard
58. On an agreement of purchase and sale, should you state the
wording for commercial sales.
current use or zoning designation (i.e. R1 for residential)?:
50. If a resale home has been substantially ___________, or a home Current use (i.e. single family dwelling)
was rebuilt that was destroyed by a fire, it may be treated
59. If a buyer has a different future use in mind than the
as a new home for the purposes of charging HST on the
property currently is zoned for, how can you protect the
sale.: Renovated
seller, buyer and yourself?: By adding an acknowledgement
that the seller and buyer understand there is no representation
*Note: Tax credits may apply.
or warranty of any kind that the future intended use of the
51. Should a salesperson determine whether HST is applicable property by the buyer is or will be lawful.
to a sale?: No. The buyer or seller should be referred to a
third party professional. A condition should be inserted allowing the buyer the
52. A residential property that is being sold has a tenant on a opportunity to investigate the potential for a re-zoning, or
month-to-month lease. Which clause on the agreement of confirm the present zoning would allow for the intended use.
purchase and sale should you review to avoid a conflict with 60. What is the purpose of the future use clause in an
the requirements of the Residential Tenancies Act?: The agreement of purchase and sale?: It is an acknowledgement
completion date clause that there is no representation or warranty by the seller that the
intended future use of the property by the buyer is or will be
lawful.
61. What are some examples of allowable easements that do 70. In an agreement of purchase and sale, what clause entitles
not impact property use, and can't be used by a buyer as the buyer to a survey the seller possesses?: Documents and
an excuse to object?: Drainage, sewer, utility lines, etc. that Discharge clause.
do not materially affect the property or the use of the
property. This clause sets out obligations for mortgage discharge, title
62. What is the purpose of title insurance?: To remove, remedy deed and property survey.
or satisfy a title objection. 71. In an agreement of purchase and sale, what clause requires
63. What is the purpose of the inspection clause in an the buyer to cover the cost of preparing any mortgage
agreement of purchase and sale?: - To acknowledge the documents where the seller is providing financing to the
buyer has had the opportunity to inspect the property prior to buyer and the cost of Land Transfer Tax Affidavit?
submitting an offer
OR
- To acknowledge that the buyer had an opportunity to put a
requirement in the agreement for a property inspection report. In an agreement of purchase and sale, what clause helps
ensure compliance with the Planning Act?: Document
64. After an offer has been accepted, who is responsible for
Preparation clause.
the property?: The seller is, until closing, and must maintain
any insurance policies until completion.
This clause assigns responsibility for paying costs to prepare
65. If substantial damage should occur to the property prior to
specific documents involved in the transaction and covers a
closing, the agreement of purchase and sale identifies what
requirement concerning the Planning Act.
options available to the buyer?: - Terminate the agreement
72. In an agreement of purchase and sale, what clause
- Complete the transaction and collect any insurance proceeds
stipulates that the deed/transfer will be registered
provided by the seller's insurance policy
electronically?: Closing Arrangements clause.
66. Is insurance coverage transferred at closing?: No.
This clause details the closing procedures for a transaction to
The seller will terminate the existing coverage on the property,
be completed by electronic registration, and recognizes that
and the buyer will be required to purchase a new policy.
the exchange of closing funds, keys fobs, remotes,
67. True or false? A seller is required to have insurance on the undertakings, etc. does not all occur at the exact same time as
property until closing.: False (surprisingly!) the registration of the transfer/deed.
73. Who is responsible for paying for the transfer/deed?: The
Even though the seller is legally in charge of the house until
seller is responsible.
closing, there is no legal requirement for them to have
74. A seller and buyer have agreed to sell/buy a piece of land
insurance.
that requires a consent for severance.
68. Compliance with the Planning Act is not required when
listing a property for sale, however it is required for the In the agreement of purchase and sale, what clause
property to be _________ ___ ____ ________.: Transferred to the requires the seller to obtain any necessary consents for
buyer severance by completion of the agreement?: Planning Act
69. If the property does not comply with the Planning Act, 1 of clause.
what 3 considerations will impact the agreement?: - Invalid
if Not Compliant (agreement is deemed invalid if by This clause acknowledges that if the severance is not
completion, any necessary consents are not obtained) approved, the agreement will be deemed invalid.
75. Who is responsible for the cost of preparing any mortgage
- Required Prior to Completion (the seller must comply with document where the seller is providing financing to the
the provisions under the Planning Act by completion) buyer, and the Land Transfer Tax Affidavit?: In this case, the
buyer is responsible.
- Seller Involvement (if a condition in the offer requires the
76. The Income Tax act places obligations on the buyer to
seller to obtain the necessary consent, the seller must proceed
ensure the tax payable by the seller is remitted to who?:
diligently at their expense to obtain such consent. Be aware
The Minister of National Revenue
that a consent can take 3-6 months, but much longer periods
may be necessary if difficulties arise.
77. In regards to the Income Tax Act, what information is 86. Does the UFFI Warranty in an agreement of purchase and
required in the agreement of purchase and sale?: - The sale cover all building in a multi-unit building, even if just
seller will provide a Statutory Declaration to the buyer that one of the units is being sold?: No. The UFFI clause states
they are not, and will not on completion, be a non-resident of that "if the building is part of a multiple unit building, this
Canada. If received, the buyer has no liability under the warranty shall only apply to that part of the building which is
Income Tax Act. the subject of this transaction."
87. What does the Consumer Reports clause warranty?: That the
- If the seller is a non-resident, the seller can provide a buyer acknowledges that a consumer report containing credit
certificate showing that the seller has filed the necessary and/or personal information may be referred to in connection
documents and paid the required taxes. with this transaction.

- If the seller is a non-resident and the certificate has not been For example, in a take back mortgage, the seller wants to
provided, the buyer may claim a credit towards the purchase ensure the buyer is in good standing credit-wise.
price with the amount necessary to pay to the Minister of
88. What does the Agreement in Writing clause warranty?: -
National Revenue in respect of the tax payable by the seller.
Any information inserted into the agreement takes precedence
78. The issue of Income Tax Act compliance may be particularly over the pre-set text, should there be a conflict or discrepancy.
relevant in areas that are common to what type of
properties?: Vacation and leisure properties such as cottages. - All representations, warranties, collateral agreements or
79. The Property Assessment clause in an agreement of conditions affecting the agreement must be included in the
purchase and sale acknowledges what?: That the buyer and agreement (i.e. if a buyer states they'll only buy the property if
seller understand that MPAC may change the assessment of the seller promises there hasn't been water leakage, this must
the property and therefore the property taxes may change. be included in the agreement to be a valid condition.)
80. What does 'Tendering' mean?: An unconditional offer (ready,
willing and able) to perform their part of the contract and - The parties acknowledge that "seller" and "vendor" have the
complete the transaction. same meaning, as do "buyer" and "purchaser"
81. Should either the seller or the buyer refuse to complete the
- Any wording related to gender and number are to be read
transaction for unjustified reasons, the party _________ is then
and understood with any change required for the wording to
in a position to seek remedies under breach of contract.:
accurately apply to the reference (i.e. "we" for 2 buyers)
Tendering
89. In the event a seller or buyer dies prior to completing the
82. What are the possible remedies for a seller or buyer who is
transaction, the ________, _________, ___________,_________ _____
tendering but the other party is refusing to complete the
_________ of the seller and the buyer are bound by the
transaction?: - Recision (ask that the contract be cancelled)
agreement.: Heirs, executors, administrators, successors and
assigns
- Damages (ask for financial compensation)
90. True or false? The time and date referred to in any
- Specific performance (ask that the contract be completed) agreement is the time where the individual (seller or buyer)
lives.: False.
83. What clause states that the buyer or seller must provide the
purchase price (from the buyer) or the transfer/deed (from
It's based on where the property being sold is located.
the seller) on the date set for completion?: The Tender
clause 91. What does the Legal, Accounting and Environmental clause
warranty?: An acknowledgement by both the seller or the
84. What clause states that the seller or buyer cannot make a
buyer that neither the brokerage, nor its representatives, have
claim against each other or any brokerage, broker or
provided legal, tax or environment advice.
salesperson for a reassessment that results in any changes
in property taxes?: The Property Assessment clause 92. When signing an agreement of purchase and sale, should
the seller and buyer use their full legal name or their usual
85. Can a buyer make a claim after taking ownership of a
signature?: Their usual signature, as they would sign any
property should they discover the seller misrepresented
government document (i.e. a driver's license).
the status of UFFI in the building?: Yes, under the UFFI
Warranty clause in the agreement of purchase and sale.
93. In an agreement of purchase and sale, what does the 109. All schedules to the agreement must include what
irrevocable instruction from the seller say that precedes information?: - Buyer(s) name(s)
the seller's signature?: The statement instructs the seller's - Seller(s) name(s)
lawyer to pay the brokerage any commission agreed to, plus - Address of the property
HST, from the proceeds of the sale prior to the seller receiving - Date of the offer
any payment. 110. All agreements of purchase and sale must include a clause
94. When an individual signs an agreement for a corporation, relating to the buyer's obligations to pay the balance. This
you should indicate their __________ in the corporation.: clause should contain what 6 key elements?: 1. By whom
Position 2. The amount
95. Who can witness a signature?: Any competent individual who 3. Adjustments
is not party to the agreement. 4. To whom
5. When it will be paid
96. What is 'Consideration'?: An exchange of something of value
6. How it will be paid
between the parties.
97. On any page of the agreement of purchase and sale where
Note: You do not need to include the name or the seller or the
a signature is not obtained, what is required instead?: Initials
closing date in this clause.
98. Is it a requirement for a non-titled spouse to give consent
111. The amount due on completion be calculated using what
to approve the terms of an offer?: No, but it can help to
formula?: Purchase price less:
keep them apprised to help avoid problems completing the
sale.
S - Seller take back mortgage
99. Does REBBA require a non-titled spouse to be given a copy A - Assumed mortgage (buyer takes seller's mortgage)
of the completed agreement of purchase and sale?: No, it's D - Deposit(s)
not required as they are not party to the agreement.
112. What is a seller take-back mortgage?: A unique kind of
100. A non-titled spouse should sign the agreement of purchase mortgage where the seller of the home extends a loan to the
and sale no later than when?: An agreement has been buyer to secure the sale of the property. This type of loan can
reached between the buyer and seller. benefit both the buyer and the seller.
101. The Confirmation of Acceptance is signed by who?: The last
person accepting the offer. If a take-back mortgage was given to buyer for $300k, the
102. What is a Commission Trust Agreement?: Signed by both buyer would not provide these funds to the seller on
brokerages, it's an agreement that indicates the funds will be completion, rather the buyer would make mortgage payments
held in trust by the listing brokerage. to the seller as agreed to in the offer.

103. When is a Commission Trust Agreement signed?: After the 113. If an offer contains a seller take back mortgage or the
acceptance of the offer (not when the offer is first submitted to buyer is assuming the seller's existing mortgage, the offer
a seller or a buyer for signing). must use a clause which identifies the amount owed.
Otherwise, a clause which states "______________________________"
104. Who can sign a Commission Trust Agreement on behalf of
can be used which does not require the calculation of the
the brokerage?: The salesperson
amount due.: The balance of the purchase price
105. Does REBBA require brokerages to maintain a commission
114. The _______ ___ __________ clause is required on every Schedule
trust account?: No, but it's encouraged to help protect
A.: Payment of balance
commission.
115. True or false? A property facing North would be described
106. A Commission Trust Agreement is only required is a
in an agreement of purchase and sale as fronting on the
____________ ____________ is involved.: Co-operating brokerage
North side of the street.: False.
107. This clause gives the salesperson authority to forward a
copy of the contract to the lawyers for the seller and If you face the house, the direction you are facing is the side of
buyer.: Acknowledgement clause the road the property is fronting on. If a property is facing
108. To use electronic signatures, a salesperson will need to add North, it would be fronting on the South side of a street.
a consent to electronic signatures clause to ___________ _____
of the agreement.: Schedule A
116. True or false? The deposit amount varies based on considerations such as conditions within the local market, and where the
property is situated.: True.

It's generally based on the purchase price of the property and it will vary according to the location and market. A deposit of 5-10% of
the purchase price would not be uncommon in some areas.
117. Root of title issues must be reported by legal counsel before the ________ _______.: Requisition date
118. True or false? The inspection clause does not give the buyer a right to re-inspect the property prior to closing.: True.

This clause only states that the buyer has HAD the opportunity to inspect the property before buying.

A separate clause will need to be added to a schedule in order to provide the buyer with an opportunity for re-inspection.
119. In the following legal description, what does each part mean?

LT 17, PL 23M-1642, S/T EB132958: LT - Lot Number

17 - The lot number assigned to the property

PL - Plan information

23 - The Land Registry Office

M - Identifies the plan of subdivision is registered under Land Titles

1642 - Plans are registered in sequential order, and this plan is number 1642

S/T - Subject to an easement or right-of-way

EB133749 - Indicates an easement number 133749 registered on the property

120. Part of the role of the buyer's lawyer is to confirm _________ for the property.: Zoning
 Humber Real Estate - Course 2, Module 16, Welcome to
Completing a Residential Agreement of Purchase and Sale
Including Terms for a Buyer of Seller

1. What 4 steps should you use to prepare an Offer Plan?: Step 10. Where is it written in an agreement of purchase and sale
1. Summarize the offer mathematics (use the SAD formula to that a deposit will be held in an interest-generating
calculate the balance due on closing) account?: In an attached schedule.
11. Interest on a deposit is separate from the transaction and
Step 2. Identify the required dates (offer date, irrevocable date, does not affect the ___________ _______ _____ _________.: Balance
requisition date, closing date) due on closing
12. If the deposit is placed in an interest-bearing security, what
Step 3. List the required information to be included on a
type of interest-bearing security can the deposit holder
schedule (Schedule A is part of every offer)
use?: An interest bearing investment, such as a GIC
13. Who is responsible for the property on the day of closing?:
Step 4. Identify any additional information required for the
The buyer(s)
offer (Chattels included, fixtures excluded, easements, rental
items, HST included or in addition to) 14. Warrant also means what?: Guarantee
2. What information is included in Schedule A (a part of every 15. If there is a situation where the seller may not be
offer)?: - The balance due on completion comfortable making absolute assurance of a fact, the
- Terms and conditions such as financing or a property wording of the clause could include the phrase
inspection "__________________________________".: To the best of the seller's
3. What does the Insurance clause warranty in an agreement of knowledge.
purchase and sale (written by OREA)?: That the seller will 16. What is a 'Direction / Consent Clause'?: A clause giving
maintain the property and keep fire insurance on the property authority or instruction for a party to take action.
until closing. Note: If you don't use OREA forms which has this 17. A covenant is a promise by one party to another and in real
warranty pre-printed, this isn't necessarily warranted / estate terms can either be ___________ or ____________.:
required by the seller. Permissive, restrictive
4. Where is the details 'Buyer agrees to pay balance' clause 18. What 2 types of conditions are used in agreements of
written by the salesperson?: Schedule A purchase and sale?: - Condition precedents are most
commonly used and can be waived
Also included here is all payment information including any
additional deposit instalments and the terms. - Conditions subsequent are self-fulfilling and tend to be used
5. If spousal consent is required, would the spouse sign in commercial real estate
anywhere on the Acknowledgement clause?: No, it's not 19. For any contract assumed by a buyer, what should a seller
required. provide?: - Proof that the agreement is in good standing

There is a spot, however, under 'Successors and Assigns' - That the seller has made all payments owing under the
clause where spousal consent is required. agreement to the date of closing
6. If only one buyer is available to sign the acknowledgement,
is it possible for them to sign without the other buyer?: No. - That the agreement itself can be assumed by the buyer after
Both must sign. closing at no additional cost or penalty
7. The initial _________ received from the buyer is identified on 20. How many days are typically between the title search and
the first page of an agreement of purchase and sale. An closing dates?: 14-30 days
subsequent ________ __________ are identified in Schedule A.:
Deposit, deposit provisions
8. When are supplemental deposits common?: In transactions
where the buyer has investments that are not readily
convertible to cash on the signing date.
9. A supplemental deposit may also be paid upon notification
or removal of a condition inserted in the offer. To do this,
you will need to add a clause to the schedule detailing
what information?: - The amount of the deposit
- How it will be paid
- The condition
Humber Real Estate - Course 2, Module 17, Writing Conditions
to be Included in an Agreement of Purchase Sale

1. When an offer doesn't contain any conditions, it's a _________ 11. What are some common conditions in a residential offer?: -
_________ once accepted by all parties.: Binding agreement Obtaining financing
2. What methods can be used to draft conditions?: - Condition - Having the property inspected
precedent - Confirming insurance can be obtained
- Condition subsequent - Sale of a buyer's property
3. If a party is not permitted to waive a condition and is 12. What type of condition would be associated with a condo?:
required to fulfill the condition, what is this called?: A true The review of the condominium documents, such as a status
condition precedent. certificate.
4. Describe a 'Condition Precedent': A condition in an agreement 13. What type of condition would be associated with a multi-unit
calling for an event to happen, or an act to be performed, residential property?: An inspection to confirm fire and
before the agreement becomes binding on the parties. building code compliance.

5. Describe a 'Condition Subsequent': A condition referring to a 14. What type of condition would be associated with a rural
future event that, upon its occurrence, causes the contract to property?: Testing the well and/or septic system.
be no longer binding on the parties. 15. What type of condition would be associated with a
waterfront property?: Confirming the legal status of any
Termination of the agreement can only be based on the improvements such as a dock or a boathouse.
defined circumstances identified in the condition. 16. What type of condition would be associated with an
investment property?: Reviewing the leases and financial
If no notice is provided, the conditions within the agreement information.
are deemed to be waived and either party can demand the
17. What type of condition would be associated with vacant
agreement be completed. THEREFORE no waiver provision is
land?: Obtaining a building permit or confirming available
ever included in a condition subsequent clause.
services.
6. The vast majority of residential conditions are ________ ________.:
18. Prior to drafting a condition using the precedent method,
Condition precedent.
ensure the party is able to ________ the condition.: Waive
7. What are the 6 steps to identify information required for the
19. A true condition precedent requires what by a third party,
condition precedent clause?: Step 1. Who is to do it?
independent of the seller or buyer?: Action

Step 2. Who is to pay for it? 20. What is the difference between condition precedent and
true condition precedent?: - Condition precedent can be
Step 3. What is to be done? waived (i.e. a buyer's request for a new survey)

Step 4. Within what time limit? (date & time) - True condition precedent cannot be waived (i.e. a condition
dependent on an Advisory Committee providing consent to
Step 5. What happens in the event it is not done? (No notice is change a zoning bylaw)
required if the party is not proceeding)
- The only difference in the way it's written is that when it's a
Step 6. Can it be waived? (Notice to waive the condition must true condition precedent, the waiver provision is not included
be received by the other party prior to the time period 21. What is 'True Condition Precedent'?: This condition must be
expiring) met; it may not be waived. No waiver provision is possible
8. After a condition is fulfilled, the final step which has to because the condition must be fulfilled for a binding contract
happen before the time limit is what?: Providing notice to the to be created.
other party that the condition has been fulfilled. 22. "The buyer may terminate this agreement through written
notice ..." is the beginning of what kind of condition?:
9. What does inclusion of a waiver provision in a condition
Condition subsequent
precedent allow for?: Allows the party for whose protection
the condition was included to remove that condition entirely 23. "This offer is conditional upon ..." is the beginning of what
rather than fulfilling the condition. kind of condition?: Condition precedent

This action results in a binding agreement.

10. Most conditions in a residential transaction are for the
benefit of the __________.: Buyer
24. What is the primary risk to consider when writing a condition 33. _________ ___________ can affect which financing conditions you,
subsequent?: The "deemed waiver". This means that a buyer as a salesperson, and the buyer would include in the offer
who forgets to deliver a notice may unintentionally that would be in their best interests.
automatically buy a property.
(i.e. in a seller's market your buyer would want to reassure
It's better to have a sale fall through and start over, than to try the seller they can find financing, and therefore provide as
to get out of a sale that the seller thinks is unconditional. many details as possible): Market conditions
25. In relation to conditions, what is the best advice for buyers?: 34. Details about __________ are not usually included in a
To avoid using conditions subsequent wherever possible, or at condition regarding obtaining a mortgage.: Amortization (the
the very lead, use them only for relatively unimportant average period of which is 25 years)
conditions. 35. Why would a buyer want to assume a seller's existing
26. Which type of condition uses the term "offer"?: Precedent mortgage?: - The mortgage may have been arranged at a time
27. For which type of condition is the waiver provision deemed when interest rates were lower than current rates.
included in the clause?: Subsequent
- The buyer can save on appraisal fees, some legal costs and
This type also uses the word 'Agreement'. survey costs.
28. What are the 2 ways of wording conditions related to 36. The buyer may assume existing mortgage financing
arranging a new mortgage?: 1. Specify the minimum provided that who agrees?: The mortgagee (aka the lender)
mortgage terms that a buyer is willing to accept in order to 37. What would the benefit of having a buyer assume the
satisfy the condition. If the terms spelled out in the condition existing mortgage be to the seller?: - Potentially higher sale
are realistic in the current market, this could provide assurance price
to the seller that the buyer is acting in good faith.
- Avoidance of any payout penalty or interest differential that
2. Draft a condition without identifying any specific terms and may apply
leaving it solely in the buyer's discretion as to whether the 38. What is the biggest risk that a seller must be aware of if
terms of an available mortgage would be satisfactory. they allow their mortgage to be assumed by a buyer?:
29. What factors can affect mortgage terms?: The covenant of Unless they are released from the personal covenant by the
the buyer and the specific property being purchased. mortgagee, there is a chance they may be responsible if the
30. If you choose to include the minimum terms that a buyer buyer defaults on the assumed mortgage and the lender takes
would be willing to accept to ensure that all fundamental action under the power of sale.
mortgage particulars are identified within the clause, what 39. Mortgage assumptions typically involved what 2 clause
items would be listed?: - The required minimum principal structures?: - With mortgagee approval (the lender will
amount of the mortgage require the new buyer to meet current lending criteria for the
amount being assumed)
- A maximum interest rate
- Without mortgagee approval
- A minimum term 40. In a seller's market the financing clauses would most likely
include shorter timelines due to what reasons?: - There are
- An estimated mortgage payment more buyers competing for properties
31. Can a condition arranging for a new mortgage be waived?:
Yes, a waiver provision should also be included which would - The seller has a larger buyer pool to choose from
allow the buyer the option to remove the condition whether
the buyer received the planned financing or not. - The seller may not want to tie up their property with too
32. What is the typical time frame for a condition regarding many conditions
mortgage financing?: 5 to 10 days following acceptance of 41. In a buyer's market the financing clauses would most likely
the offer. have longer timelines due to what reasons?: - More
properties on the market than buyers

- Home are more likely to sit unsold

- Buyers have more choices and more leverage to negotiate

42. What are some factors that may impact your timeline for a 46. When a seller take back mortgage is included in an
financing condition clause?: - Lender requirements such as agreement of purchase and sale, what additional clauses
documents to provide a commitment should be considered?: - Credit check clause

- If it is a high ratio mortgage, approval may be required by - Prepayment clause (prepayment is a privilege, not a right ...
the lender and the insurer mortgages can be negotiated as open, fully open, open on
anniversary date, prepayment subject to a bonus ...
- If an appraisal is required it may mean a longer conditional prepayments can only be made if the mortgage is not in
period default)
43. What are the benefits of a 'Seller Take Back Mortgage'
(STB)?: - Can allow for more creative terms negotiated - Renewal clause
between the seller (mortgagee) and the buyer (mortgagor)
- Postponement clause
- Seller might improve the marketability of their property
through attracting terms (it can be included in the property - Over financing prevention (Oklahoma) clause
listing)
- The right to sell the mortgage clause
- Seller could use this as an investment tool to earn a higher
interest rate of the property's capital - Discharge of the existing mortgage clause
47. Explain the Postponement Clause.: - In the event there is a
- By borrowing directly from the seller, the buyer can avoid first mortgage maturing prior to the term of an STB second
certain costs and paperwork typically associated with mortgage, the first mortgage has priority and upon default the
conventional lenders; this will also save the buyer time first mortgage would be paid before any other mortgage on
the property
- The seller can set the interest rate of the STB mortgage
higher than market interest rates - Protects the first mortgagee and this clause would be
44. True or false? A seller take back mortgage could be a first, included in the agreement with the second mortgage.
second or third mortgage.: True.
- Seller is also protected because the clause would also state
For example, the buyer could be assuming the current that if the first mortgage is renewed or replaced at any time,
mortgage but be short of funds. The seller could offer a any increase in the principal amount would be applied to
second mortgage to make up the difference. reducing the second mortgage.

45. All clauses a seller or buyer wishes to appear in a 48. Explain the Over Financing Prevention (Oklahoma) clause.: -
Charge/Mortgage of Land must appear in what?: The If a buyer arranges a mortgage amount higher than stated in
Agreement of Purchase and Sale (e.g. pre-payment, the clause, the excess monies would need to be applied to
postponement, renewals, due on sale, non-assumption, etc.) reduce the second mortgage.

- The buyer has to provide a confirmation of the amount

borrowed to either the seller or their lawyer prior to
completion.
49. Lenders purchasing seller take back mortgages normally 55. What is one of the most notable benefits of a home
require what?: - The seller to declare that there is good title inspection?: Provides a report that includes systems or
other than encumbrances declared in the purchase agreement components in need of immediate repair.
(e.g. additional mortgages) and allow a time limit to check out
that title. It should be noted that title insurance can be required Note: A home inspection would NOT typically determine
in support of title. environmental issues such as the presence or absence of
hazardous substances.
- The seller to sell at a discounted value, to increase the rate 56. When a buyer requests a property report, can the buyer
of return to the investor, unless the mortgage already has designate someone other than a home inspector to provide
terms that are very favourable compared with the current the report?: Yes. This usually happens when the buyer has a
market. close friend, family member or trusted contractor in the home
building or home maintenance business.
- The seller to supply a duly executed assignment of
mortgage document. For example, a third party would likely be a general
contractor, electrician, plumber or other tradesperson.
- The seller to supply an affidavit attesting to the balance of
57. Can inspections be focused on a specific issue, such as a
the mortgage and that such mortgage is up-to-date and not in
retrofit inspection for compliance with the Fire Code or an
default.
electrical inspection?: Yes, though these are less common
than general inspections.
- The agreement to be subject to the buyer of the mortgage
making an inspection of the property. 58. True or false? In a seller's market the buyer could include a
clause that would allow the seller to remedy any
50. Without an inspection clause, buyers should understand
deficiencies.: True.
they are ____________ no inspection report will be obtained.:
Acknowledging
Including this type of clause would possibly make their offer
51. What is an appropriate time period in the condition for a more appealing than a clause that indicates the inspection is in
property inspection by a home inspector to be arranged the buyer's sole and absolute discretion (such as is more
and completed?: 5-10 days (similar to the time for financing) commonly seen in a buyer's market).
52. Who hires the home inspector and receives the inspection 59. The decision to include an insurance clause is typically
report?: The buyer. based on what?: The age, location and condition of the
53. If the buyer orders a home inspection, are they required to property.
provide the seller with a copy of the report.?: No. There is 60. What is the time frame for the insurance condition?: 5-10
no obligation for the buyer to provide the seller with a copy days (similar to the financing or home inspection)
of the report.
61. Addressing the sale of the buyer's property in a condition is
not something seller's usually inclined to accept in a ________
However, the buyer may insert a clause in the agreement to
market.: Seller's
provide a copy of the report showing any deficiencies in the
property to the seller as a good faith gesture. 62. The clause of the condition addressing the sale of the
buyer's property must include what detail about their
Note: A seller may also request this clause be included in the home?: The municipal address of the buyer's property.
agreement in case the buyer does not proceed with the 63. How long is the period of the condition addressing the sale
transaction. The seller may want to remedy the deficiencies of the buyer's property?: 30 to 60 days
prior to placing the property back on the market.
54. True or false? The focus of a home inspection is on the Note: To make the longer conditional time in the buyer's offer
performance of the home, rather than cosmetic, code or more acceptable to the seller, the buyer can insert an escape
design issues.: True. This involves inspecting: clause.
64. How long is the typical time period in an escape clause?:
- The physical structure and mechanical systems within a 24-72 hours
residential structure, particularly the roof, attic, walls, floors,
ceiling, windows, doors, insulation and all other visible
components of the structure.

- The condition of heating, central air conditioning, electrical,

plumbing and related systems.
65. How does an escape clause work?: This clause would allow 71. True or false? A buyer wants to change the zoning on a
the seller to continue offering the property for sale and to building and make it a bed and breakfast. The clause that
accept a second offer during the conditional period of the first requires rezoning to be granted before the condition is
offer. fulfilled would be a true condition precedent.: False.
The consent required to fulfil a rezoning condition comes from
The second offer would be conditional upon being released a third-party regulatory body, BUT the buyer's can change their
from the first offer. mind about wanting the zoning change.

To release the first offer, the seller would need to go back to Because it can be waived, this is NOT a true condition
the first buyer and explain that the original time period to sell precedent, but simply a condition precedent.
the buyer's property is no longer available. The buyer would 72. True or false? A conditional zoning clause can be written
then need to decide whether to waive the condition and for either the seller or the buyer to obtain the rezoning and
continue with the transaction or release the seller from it. either party to pay for it.: True.
The zoning condition should ensure that both the seller and
The escape clause would typically include a time period of the buyer agree to proceed in a diligent manner to acquire the
24-72 hours for the first buyer to make a decision to either rezoning.
waive the condition or not move forward with the transaction.
73. True or false? Any conditional rezoning clause must indicate
66. An escape clause in a condition regarding selling the the current zoning and present use of the property.: False.
buyer's property (before completing their purchase) is an Only the fact that a rezoning is required would need to be
example of what type of condition?: A true condition specified, but the use that is to be allowed for in the rezoning
precedent. must be specified.
74. When verifying the validity of how a clause is written
Neither a seller nor a buyer is entitled to waive this condition.
(remember the 6 steps required?), what should you watch
67. What are some examples of environmental concerns a for when considering 'What happens in the event it is not
buyer may have about a property?: Whether hazardous done'?: - Stating that the offer becomes null and void
conditions or substances exist which would affect the use of - Must ALSO state that there is return of the deposit
the property including an environmentally protected zone,
75. When verifying the validity of how a clause is written for a
floor plain or hazardous land.
home inspection (remember the 6 steps required?), what
68. The water sample used for a bacteriological analysis should should you watch for when considering 'What is to be
be taken by who?: The buyer or a professional retained by done'?: Even if there is mention of obtaining an inspection
the buyer rather than the seller or the salesperson, as it's report on a subject property, there needs to ALSO be a
imperative that the sample be taken from the actual water mention of the report being satisfactory to the buyer in the
supply and not substituted by a sample taken from a different buyer's sole and absolute discretion.
source.
76. When verifying the validity of how a clause is written for a
69. In regards to a condition regarding inspection of a septic home inspection (remember the 6 steps required?), what
system, what would a typical buyer want to make sure of?: - should you watch for when considering 'Who is to do it'?: It's
The system is totally within the property and meets the setback not sufficient for the buyer to be listed here. There MUST also
requirements be mention of the actual person who will be doing the work
for this to be valid (i.e. the Home Inspector).
- It was installed correctly and with applicable permits
70. If a buyer wishes to retain the right to purchase a property,
even though a rezoning or minor variance is not approved,
then what should be included in the clause?: A waiver.
 Humber Real Estate - Course 2, Module 18, Completing a
Residential Agreement of Purchase and Sale, Countering an
Offer, and Working with Competing Offers

1. A counter offer is also known as what?: A sign back.

2. An offer plan should itemize what dates in chronological order?: - Offer date
- Irrevocable
- Expiry of conditions - conditional date
- Requisition - title search date
- Completion or closing date

Note: The order of these dates does not follow the order on the agreement of purchase and sale. Using this chronological order will
help you to determine when different activities must occur for the transaction to be successful.
3. What steps should you use to organize the clauses when drafting an offer plan?: 1. List the conditions with short timeframes, for
example to obtain A) Financing, B) Inspection, and C) Insurance. These conditions can be fulfilled in a week.

2. For a condition with a longer period, such as D) the sale of a buyer's property, the conditional period will be longer, for example 30
days.

3. Use one condition with the same timeframe for A, B, C and D and add an escape clause with a 48-hour notice period.
4. Does waiving one condition in a stack result in all conditions being waived?: Yes.

Therefore if a condition requires an escape clause, keeping it separate allows other conditions to be met separately.
5. What steps should you follow to reduce the wordiness and make terms clear when you are writing multiple clauses?: 1. Review
clauses

2. Be precise

3. Group clauses

4. Be concise

5. Redraft offer
6. When drafting an offer, describe how grouping clauses can help to simplify a condition.: This helps to simplify requirements. e.g. the
buyer of a rental property might want to include a review or confirmation of the following items: Tenant records, rental amounts, fire
safety issues, building code compliance).

You could group these items under one condition that states the property meets all these requirements.
7. What is 'Stacking'?: A way of grouping and writing conditions that are required to be fulfilled by the same date.
8. What is an example of 'Stacking'?: Grouping together the financing, insurance and lawyer's approval clauses that require the same 5-7
days.
9. If a condition expires "60 days after the offer date" and the offer date is considered May 15, when will the condition expire?: July
14
10. What right is often included in Schedule A under 'Other Clauses'?: The right to visit the property once before closing.

Remember - this is a RIGHT, not a condition, therefore it wouldn't be stacked with any other clauses.
11. Why would you not stack a warranty on chattels and fixtures being in good working order until closing?: Because the good
working order warranty lasts until completion of the sale.
12. Once a seller _________ the buyer's offer, the buyer is no longer obligated to their own offer.: Amends
13. What additional requirements relating to document retention pertain to the seller's brokerage only, in relation to offers that are
unsuccessful?

Note: Only applicable in purchasing real estate and not leasing.: 1. When the offer is rejected: That is, the seller does not accept the
offer nor make any offer back to the buyer. The listing brokerage is required to retain the unaccepted offer and all other documents
received relating to the offer for 1 year.

2. When an offer is being countered: That is, the seller is making an offer back to the buyer. The seller's brokerage is required to retain
a copy of the buyer's offer, as submitted, for one year. As a listing salesperson, this requires you to ensure there is one copy of the
buyer's offer, as submitted, retained prior to completing a counter offer by the seller.
14. For every written offer that you receive on behalf of a seller, whether it is a buyer's first offer or an offer with changes made
during negotiations, the offer is considered a _________ _______ and the seller's brokerage is required to retain a copy.: Separate
offer

*In some instances a brokerage will keep a summary document instead of the original unsuccessful offers.
15. How long must a successful offer be kept in its entirety (the agreement of purchase and sale) by the brokerage?: 6 years
16. Under what conditions can you use a summary document rather than the seller's brokerage retaining the offer in its entirety?: -
The seller's brokerage receives the offer on behalf of the seller

- The offer is made through a brokerage on behalf of the buyer

- The offer did not result in a transaction, that is, the offer was not accepted

- The summary contains all the required information

17. When using a summary document in lieu of retaining the offer, what specific information does REBBA require to be included in
the document?: 1. Buyer's name and signature
2. Seller's name and contact information
3. Name of the buyer's brokerage and their representative
4. Name of the seller's brokerage and their representative
5. Address, legal description or other identifier of the property
6. Date and time the offer was made
7. Date and time the offer was received by the brokerage and how the offer was received, such as in person or by fax
8. Date of presentation, if the brokerage presented the offer to the seller
9. Date and time, if any, until which the offer was irrevocable
18. Although a summary document can be used rather than retaining an unaccepted offer in its entirety, it's important to understand
that the summary document cannot be used as a substitute for the ________________________________ form during negotiations.:
Agreement of purchase and sale
19. Since the same agreement is used to make counter offers, etc., it can become messy and hard to read. In this case, how can a
salesperson fix this issue?: By drafting a new offer and having the buyer sign it.

Then retaining the previous offer paperwork on-file in case questions arise about the previous negotiations.
20. To counter an offer, what 3 options do you have?: 1. Written changes (to be initialled by all parties)

2. Draft a new offer.

3. Prepare a counter offer form (to be signed by all parties)

21. During a counter offer, even if the time and date stay the same, the irrevocable is updated how?: The party is crossed out (i.e.
buyer) and is replaced with the other party (i.e. seller).
22. To accept a counter offer from the seller, the buyer must do what?: - Initial all changes made by the seller

- Complete and sign the Confirmation of Acceptance on the agreement of purchase and sale

- Complete and sign the Acknowledgement portion of the agreement of purchase and sale
23. As the salesperson for the buyer, when accepting the offer, you are required to complete what steps?: - Provide a copy of the
accepted offer to each buyer

- Sign the Commission Trust Agreement on the agreement of purchase and sale and obtain the listing brokerage's signature when
providing documents to the listing salesperson

- Provide copies of the accepted offer to the listing salesperson

- Retain a copy of the accepted offer for the brokerage's records

24. What clause does the buyer sign after the Confirmation of Acceptance where they provide their lawyer's contact details, and
confirm they have received a copy of the completed agreement?: The Acknowledgement
25. If there are competing offers, with 2 buyers from 1 cooperating brokerage, the listing brokerage should advise each salesperson
from the brokerage ... why?: So they can make the required disclosures if they are in multiple representation.
26. If a buyer's offer has not been presented to the seller or the seller's salesperson, does the buyer have the option to withdraw
their offer?: Yes.

In this case they can choose not to participate in a multiple offer scenario.
27. In a competing offer situation, multiple representation could occur when?: - The brokerage represents the seller and the buyer in a
transaction. This applies whether it is the same salesperson or different salespersons employed by the brokerage.

- The brokerage represents multiple prospective buyers making an offer in a single transaction. This can apply when the seller is
represented by the same brokerage or a different brokerage.
28. The Code requires a brokerage, when representing or providing services to more than one seller or buyer for the same trade, to
disclose in writing (at the earliest opportunity and before ____ _________ ____ ______, the nature of the brokerage's relationship to
each seller and buyer.: An offer is made
29. True or false? A listing brokerage that represents both the seller and the buyer must make this disclosure to all other competing
buyers.: True.

This disclosure must be made in writing to all competing buyers.

30. True or false? A listing salesperson can offer to reduce their commission if they have a competing offer provided proper
disclosure is made.: True.

Details and terms must be made in writing to all buyers who have made a written offer.
31. List 4 specific facts about a collateral agreement and what it involves.: - A salesperson represents both a seller and a buyer

- The listing salesperson offers a discount to the seller

- The reduced commission serves to entice the seller to choose the buyer with the collateral agreement

- The salesperson representing both the seller and buyer must disclose the discount to other competing buyers
32. What are the 3 rules that apply to multiple representation in competing offer situations?: - You must have written consent from
both the seller and the buyer

- You need to disclose to anyone with a written offer if you are representing both the seller and the buyer

- If you are the listing salesperson and receive 2 offers from the same co-operating brokerage, you are responsible for informing their
salespeople of the multiple representation situation
33. What are some strategies for working with a buyer in a multiple offer situation?: - Best offer first

- Pre-approved mortgage (though it doesn't guarantee funds will be advanced)

- Deposit (larger and by certified cheque provides assurance to sellers)

- Proof of funds (a letter from the lender indicating the buyer's financial ability. This can increase the seller's confidence in the buyer's
offer)

- Completion date (see what the seller's preference of closing date it as listed on the listing information)

- Conditions

- Inclusions (buyers might want to leave out the chattels to simplify the offer and make it more appealing to the seller)

- Irrevocable Period (can be a pro or con depending on the situation)

34. What are the 3 factors sellers should consider in offers and their associated risks?: 1. Conditions
- If a seller accepts an offer with conditions, the risk is the potential loss of the transaction if conditions are not met. Along with that
loss is the potential loss of offers from other interested buyers.

- A buyer not including conditions can also be risky (i.e. no home inspection or arranging of financing)

2. Countering Offers
- The seller can counter an offer for one of the buyers. That buyer, however, may decide against the counter offer. Other buyers who
made offers may have placed an offer on a different property, resulting in the seller losing the opportunity to accept or negotiate
other offers

3. Rejecting Offers
- The seller can reject all offers and advise buyers to bring back their best offer at a specific time. This strategy might result in buyers
deciding not to participate. Once an offer is rejected, a buyer is no longer obligated to the offer.
35. What are some strategies for sellers when working with multiple offers?: - Irrevocable period (If a seller can negotiate one of the
offers during the irrevocable time period of the other offer, this would allow the seller to still consider one of the other offers should
the offer they chose to negotiate not result in acceptance)

- Offer presentation time (allows the seller to have as many buyers view the property and consider placing an offer before addressing
any offer. The intent is to generate interest, build competition and produce more offers for the seller to consider.

- Property inspection report (offering one to all buyers during the property viewing would indicate the seller is providing as much
information possible about the property)
36. In a multiple offer situation, it is a leading practice to encourage your buyer to make the largest deposit they can to
demonstrate their interest and ______________________________.: Commitment to the purchase
37. Before presenting an offer, contact the listing salesperson to confirm the current number of offers. Ensure the buyer is prepared
to enter a competing offer scenario and may be required to make their ________________________.: First offer their best offer
38. What information must be disclosed to all buyers (who have submitted a written offer) in a multiple offer situation?: - The number
of offers

- Multiple representation

- Commission agreements
39. As soon as an offer is registered, what should you do to help generate additional offers for the seller?: Notify the other
salespeople who have shown the property in an attempt to generate additional offers for the seller.
40. Once the seller has accepted an offer, what should you do?: Inform the other salespeople of the offer status.
Humber Real Estate - Course 2, Module 19, Additional Sale-
Related Documents and Other Legal Obligations

1. As a salesperson, you may not be required to prepare a trade record sheet. They are typically done by who?: The brokerage
2. True or false? When an offer has been accepted, there can be no change to the document.: True.

Any changes must be in a new document called an amendment.

Only the altered or amended term(s) are written in the new document, and it's meant to be read in conjunction with the existing
agreement.
3. Just like an agreement of purchase and sale, an amendment has an __________ ______ _________.: Irrevocable time period
4. What steps are required to document an amendment to an agreement of purchase and sale?: - Cross reference the amendment to
the agreement of purchase and sale

- Insert the wording being deleted (when required) exactly as shown on the agreement of purchase and sale

- Insert the new wording (when required) exactly as it should be shown on the agreement of purchase and sale

- Insert the irrevocable date

- Have all required parties - that being all those who signed the original agreement of purchase and sale - sign the amendment
5. True or false? It's okay to have only 1 seller sign an amendment (even though 2 signed the original agreement ).: False.

All parties who signed the original agreement must sign the amendment before the irrevocable time period is over for it to take effect.
6. When an amendment has been accepted, what must also be signed?: The Confirmation of Acceptance, and Acknowledgement (that
they have received their copies of the new paperwork)
7. True or false? The Acknowledgement clause gives the brokerage permission to contact the lawyers for each party (aka solicitor)?:
True. Contact information is also included.
8. An accepted offer containing one or more conditions will require written notice to be provided to the other party.

What will impact the type of notice provided?: Whether the condition(s) included were:

- Condition precedent
- Condition subsequent
- A true condition precedent
9. What type of notice is required for Condition Precedent?: Notice that the condition is either fulfilled or waived.

*Notice is required to make the agreement legally binding.

10. What type of notice is required for Condition Subsequent?: Notice is only required if the party is not able to fulfill the condition or is
not waiving the condition.

In this case, a notice of termination would be provided.

*No notice is required to make the agreement legally binding. If no notice is given and the condition is not fulfilled, the agreement
remains binding.
11. When a condition is fulfilled exactly as in the agreement, the other party is notified using a ______ __ _______.: Notice of fulfillment

Note: If there are multiple conditions associated with the accepted offer, a separate notice may be required for each condition unless
the conditions are fulfilled and completed at the same time. In that case, one notice itemizing the conditions can be used,
12. When completing a Notice of Fulfillment of Condition(s), what steps are required?: - Cross reference the notice to the agreement of
purchase and sale

- Insert the exact clause wording being fulfilled

- The party providing the notice signs and dates the notice

- The party receiving the notice signs, dates and inserts the time when the notice was received

- It's ok for a brokerage to sign only the acknowledgement on behalf of a client but a customer must sign on their own, except 1. If
it's a multiple representation situation, the brokerage cannot receive notices on behalf of the clients

- The acknowledgement must be completed prior to the expiry of the time period provided for in the accepted offer relating to the
condition(s)

- Copies of the notice are provided to each party and a copy is retained by the brokerage(s)
13. A waiver can only be used to waive or remove a condition if the clause in the original accepted offer contains a ________ ________.:
Waiver provision
14. If a condition is a true condition precedent, it cannot be waived and only a notice of ____________ may be used.: Fulfillment
15. A buyer has an insurance condition on their offer, and it was conditional on the insurance quote to be under $1000 for the year,
but it's $1100.

Since this is okay with the buyer and they want to proceed with the sale, should you use a notice of fulfillment?: No. Because the
condition wasn't exactly as written in the agreement, this condition should be waived by the buyer.
16. Can a brokerage sign a waiver on behalf of their client?: No, but they can sign the acknowledgement ... however, they can't if the
buyer/seller is a customer or if it's multiple representation situation.
17. What steps are required to complete a waiver?: - Cross reference the waiver to the agreement of purchase and sale.

- Insert the exact clause wording for the condition being waived.

- The party providing the notice signs, dates and inserts the time when the notice was received.

- It's ok for a brokerage to sign only the acknowledgement on behalf of a client but a customer must sign on their own, except 1. If
it's a multiple representation situation, the brokerage cannot receive notices on behalf of the clients

- The acknowledgement must be completed prior to the expiry of the time period provided for in the accepted offer relating to the
condition(s)

- Copies of the notice are provided to each party and a copy is retained by the brokerage(s)
18. What is used if a condition is not met but the party wants to proceed with the offer?: A waiver
19. Once an offer has become null and void, the parties must do what?: Provide written direction (using a Mutual Release) to the
brokerage regarding the deposit.
20. When a party makes a good faith effort to fulfill a condition, but the proposed transaction becomes null and void, the deposit is
generally ______________________ after a Mutual Release is completed.: Returned to the buyer
21. When a Mutual Release is being completed, what information / actions will be required?: - Cross reference the release to the
agreement of purchase and sale

- Describe the terms for disbursement of the deposit

- Include an irrevocable date to ensure there is no delay in obtaining the required signatures

- The party initiating the release signs and dates the mutual release

- The party receiving the release signs and dates the mutual release identifying agreement

- The confirmation of acceptance is signed, and the time and date of acceptance is inserted

- The broker of record for the listing brokerage and the co-operating brokerage (when applicable) sign and date the release

- Copies of the release are provided to each party and a copy retained by the brokerage(s)
22. When can a binding agreement occur?: - A conditional offer was accepted, and the conditions have been fulfilled or waived by the
party

- A conditional offer was accepted and the conditions were written in a condition subsequent format

- An unconditional offer was accepted

23. When a condition subsequent is included in an offer, there is a ___________ ____________ once the offer has been accepted.: Binding
agreement
24. True or false? A mutual release can be used to terminate a binding agreement?: False.

A mutual release AND a termination notice must be used together to terminate a binding agreement.

A mutual release alone can only be used if the offer has not become binding yet.
25. Does a mutual release have an irrevocability time period?: Yes, it does. Otherwise it becomes null and void.
26. Is a broker or record required to sign a notice of termination of agreement?: No.

They ARE, however, required to sign the mutual release which accompanies the termination of agreement.
27. Does a salesperson have the authority on behalf of the brokerage to sign a mutual release?: No. The Broker of Record must do
this.
28. What is a pre-emptive offer?: If a seller delays their consideration of offers to a specific time, but a buyer decides to ignore these
instructions and directs their salesperson to present an offer prior to the specific time.
29. What is unique about the irrevocable on a pre-emptive offer?: It often expires before the presentation date for all offers occurs.
30. What are the options available to sellers who may receive pre-emptive offers?: - Be notified of the offer but not see the details

- See the details of the offer, but not formally consider the offer until the presentation time

- Consider all offers received before the presentation date and time

- Only consider offers that are above a certain price

- Only consider offers that contain a certain term (e.g. provides a deposit that is at or above a specified amount, is submitted by way
of a certified cheque and is submitted with the offer)

- Only consider offers that do not contain certain terms (e.g. an offer that does not include a condition for a property inspection)

- Not be informed of any offers

31. A summary document of unsuccessful offers may not be used when the person making the offer is not a _______ or ________ of the
brokerage.: Client, customer
32. What is a trade file also known as?: A transaction file
33. Describe a trade file?: - Each trade is uniquely identified with a sequential identifier, often called a trade number

- All documents, communications and details relating to a trade should be included in the transaction file

- As a salesperson, it's your duty to make sure the brokerage is given copies of all the documents that you use so they can be included
in the transaction file
34. What are the most common documents found in a transaction file?: - The representation or customer service agreement
- The agreement of purchase and sale
- Amendments
- Notices (i.e. notice of fulfillment or waiver)
- Receipts for deposits
- Communication with lawyers and other brokerages
- Trade record sheet (provides an overview of the trade)
35. According to REBBA, what are some procedures outlined regarding trade record sheets?: - Procedures for the preparation,
correction, and signature of the salesperson, as well as the review and signing by the broker of record
36. True or false? A trade record sheet is required whether the brokerage represents the party as a client or provides services to
the party as a customer.: True. It's required in both cases.
37. Once a trade record sheet is created, who is required to review and sign the document?: The salesperson and the broker of record
38. When the listing and sale are in the same brokerage, or two or more salespersons are involved, how is privacy maintained when
preparing the trade record sheet(s)?: The brokerage will prepare separate trade records for each salesperson detailing their
individual commission distributions.
39. If an offer is being negotiated (and the deposit submitted with the original offer was deposited into the brokerage's trust
account ), but the offer never got accepted, is a mutual release required?: No.

The brokerage will still create a trade record sheet to document the receipt and disbursement of the buyer's deposit. They will also
retain a copy of the unaccepted offer along with the trade record sheet to support the trust account activities.
40. If an offer is accepted, which brokerage completes a trade record sheet - the buyer's or the seller's?: Both, if applicable.
41. When there are no remaining conditions to be satisfied, you will be required to review the trade record sheet, make all
necessary corrections, initial the corrections, and sign it.

When making a change to the trade record sheet, how should you do it?: Do not erase or eliminate a previous entry - leave the
entry legible.
42. What information must a trade record sheet include?: - Nature of the trade: Identify if the trade involves the sale, lease/rent,
exchange or option

- Description of the real estate sufficient to identify it: Provide the municipal address or legal description

- True consideration for the trade: Sale price, rent, exchange value, option price or a fee for other transactions, such as a referral fee or
appraisal fee

- Names of all parties to the trade: Include all parties, not just the parties being represented or provided services by the brokerage

- Names and contact information for the lawyers, registrants, salespersons and brokerages

- Deposit information (amount of the deposit, description if it's not money e.g. ownership of personal property such as a boat), record
of the disbursement or withdrawal of the deposit

- Amount of commission or other remuneration payable to the brokerage and the name of the party paying it - including the name of
the seller and/or buyer

- Amount of commission or other remuneration payable to another brokerage and the name of that brokerage: Include commission
payable to a co-operating brokerage

- Completion date for the trade - Include any amended completion date when applicable
43. When is the trade record sheet prepared?: When an offer is accepted.
44. Is it a requirement of REBBA for a salesperson to maintain a shadow file?: No, but it is a leading practice.
45. To comply with the Federal Proceeds of Crime (Money Laundering) and Terrorist Financing Act, all brokerages must comply with
what requirements?: - Assign a compliance officer

- Develop a compliance program that includes relevant office policies and procedures
46. To comply with FINTRAC, you are required as a salesperson to understand your client to help accomplish what?: - Identify
suspicious transactions or activities

- Verify the identity of the individuals who are a seller or buyer

- Confirm the existence of corporations or other entities

- Complete ongoing monitoring

- Determine if a third party is acting for a transaction

- Complete additional specific reports relating to a buyer's deposit, suspicious activity or property owned by a terrorist
47. What are the 5 requirements that a brokerage is required to comply with for FINTRAC?: - Compliance officer

- Written policies and procedures

- Risk assessment

- Ongoing compliance training

- Two-year program effectiveness review

48. What are you 3 obligations as a salesperson?: 1. Know your client (ask questions, verify individual's identity, determine third-party
involvement)

2. Reporting

3. Recordkeeping
49. As part of know your client, what questions can you ask to help determine if a transaction is suspicious?: - Why they chose your
brokerage

- How they found you as a salesperson

- Learn about their family

- How they are connected to the community

- What they do for a living

50. What are the acceptable methods for verifying the identity of an individual?: - Photo ID (Single process method)
- Credit file (Single process method)
- Dual process method
51. When confirming someone's identity via Photo ID, what documents are acceptable?: - Photo ID issued by a provincial / territorial
or federal government is acceptable but any photo documents issued by a municipal government are not acceptable.

- A foreign issued driver's license or passport is acceptable. The name and photograph on the identification ID must match.

- The individual must be present when the original document is used to compare the identification with the photo. The recordkeeping
must include the date of verification.
52. For recordkeeping purposes, what information should be recorded from the identification document?: - The individual's name
- Type of ID document and unique document number identifier
- Issuing jurisdiction and country of the ID
- Expiry date of the ID
53. When confirming someone's ID via a Credit File, what documents are acceptable?: - A Canadian credit file in existence for at least
3 years minimum

- The credit file must be from a valid Canadian credit reporting agency such as Equifax or TransUnion, and must provide the following
info: Name, address and date of birth which matches what information they have provided

- The credit search must be conducted at the time you verify the individual's identity ... a previous credit file is not acceptable.

- The credit report cannot be provided by the individual. A copy must be obtained directly by you from a Canadian credit bureau
either directly or by a third-party vendor who is authorized to provide it to you.

Note: This review does not need to be face to face.

54. For recordkeeping purposes, what information should be recorded from the credit file document?: - The source of the credit file
- A reference number from the credit file
- Date of verification
55. When confirming someone's ID via the Dual Process method, what documents are acceptable?: - Two, original, valid and current
identification documents or information from independent and reliable sources can be used

- The two sources must be different issuers/providers who are well known and considered reputable

Reliable sources can include:

* Federal, provincial, territorial and municipal levels of government (i.e. municipal property tax statement or notice of assessment from
the CRA)

* Crown corporations (e.g. statement of employment from Canada Post)

* Financial entities (e.g. credit card statement or bank statement)

* Utility providers (e.g. electric or natural gas bill)

56. What are the rules surrounding the dual process method?: - You may not rely on the same source for the 2 documents.

- If a document does not have an expiry date, it must be a recent version of the document.

- Original documents must be provided. Either the original paper or electronic document the individual received or has obtained from
the issuer.

- For electronic documents, an individual can email the original electronic document, show the document on their phone, tablet, or
laptop, print the electronic document or show the document in the original format such as a PDF
57. When using the dual process method, documentation must verify the client's name and contain 2 out of what 3 requirements?: -
Client's name and date of birth (i.e. birth certificate)

- Client's name and address (i.e. utility bill or a property tax assessment)

- Client's name and confirmation of a financial bank account (i.e. a bank statement, credit card statement or loan with a financial entity)
58. True or false? A client who has previously transacted with the brokerage and their identity was verified at an earlier time, does
not have to be verified again.: True.

This is provided they are recognized and the process used at the time was one of the approved methods for verification of identity.

Leading practice would be to include a photocopy of the original client identification record in the applicable new transaction file.

Note: If any information has changed regarding the individual or entity, then the salesperson should verify their identity and update the
client information record.
59. If there's an unrepresented individual involved in a trade, should you try and confirm their identity?: Yes, but if after reasonable
measures an individual refuses, make note of this refusal, the measures you have taken, the date you took the measures and why they
were unsuccessful. Then, proceed with the transaction.

You may also need to consider any requirement for a Suspicious Transaction Report to FINTRAC for the refusal.
60. What activities are excluded from the requirements to verify the identity of the individual, corporation or other entity?: Any
activity related to property management, such as leases or rental management is excluded. This applies whether the leasing is
residential or commercial in nature.
61. When the client is not an individual but a corporation or other entity, such as a partnership, the existence of the corporation of
other entity must be verified. What information must you confirm?: - Name of the corporation
- Corporate address
- Nature of principal business
- Names of all directors
62. What documents can you use to confirm the existence of a corporation, as well as its name and address?: - The corporation's
certificate of corporate status

- A record that confirm's the corporation's existence (published annual report signed by an independent audit firm, letter or notice of
assessment from a municipal, provincial, territorial or federal government)

- Verification can be paper (must keep a copy as your record) or electronic (must keep a record of the corporation's registration
number, the type of record, and the source)

- Electronic confirmation must be from a provincial or federal database that is accessible by the public (i.e. Corporations Canada
website)

- You will also be required to verify the individual who is acting under the authority of the corporation for the transaction
63. Who can obtain identification verification on your behalf?: Agent:
- Someone representing the client (i.e. lawyer)

Mandatary:
- Someone who has been retained specifically to identify the client (i.e. a salesperson with a brokerage or a lawyer or a notary who is
located in the same location as the client)

* When using an agent or mandatary, there must be a written agreement in place prior to identifying the individual on your behalf
64. What documents can you use to confirm an entity other than a corporation (i.e. a trust, a fund, a partnership, unincorporated
association or organization)?: - Document containing the name and address of the entity, and the articles of association, partnership
agreement or similar document

- Has same rules about recordkeeping as corporations

65. If using an agent or a mandatary to verify someone's identity, what information does FINTRAC require a brokerage to retain as a
record?: - Full name of the agent or mandatary that ascertained client identity

- Client information method used

- Information gathered according to the method used

- Date the identity of the client was verified

- Date the brokerage referred to the client identification information provided by the agent or mandatary

- Copy of the agreement with the agent or the mandatary

66. If there is a third-party involved in a transaction (such as a parent ), their identity also needs to be verified. How can you ensure
the relationship is documented?: - Obtain the third party's name and address

- If an individual, include date of birth and principal business or occupation

- If an entity, include principal business

- If a corporation, include principal business, incorporation number and place of issue

- Record the relationship between the client and the third-party

67. A business relationship is effectively established whenever a brokerage conducts 2 transactions with a seller or a buyer within a
_____-year period where identification verification is required.: Five
68. When a brokerage has established a business relationship with a client, FINTRAC requires that the brokerage take what steps?: 1.
Keep a Purpose and Intended Nature record - this describes the business dealings with the client and will help you anticipate the
types of transactions and activities the client may conduct.

2. Ensure client information is kept up to date - this requires on-going, periodic monitoring of the business relationship to keep their
information and Purpose and Intended Nature record accurate.

3. Keep a record of the measures taken to monitor the business relationship; for example, keeping pertinent records and
correspondence on file.

Note: Once 5 years has passed from the last transaction that required you to identify the client, the business relationship no longer
exists and does not need on-going monitoring.
69. Your brokerage is representing the buyer. Before proceeding with an offer on a home which a seller is selling privately, do you
need to verify the ID of the seller?: Yes, because there is no listing salesperson to do it.
70. Describe the Large Cash Transaction Report (LCTR) as required in certain cases by FINTRAC?: - Submitted when funds received by
a brokerage are $10,000 or more and the funds are provided in cash, within 15 days of the transaction

- A large cash transaction is a red flag for someone wanting to hide the source of funds fro money laundering or terrorist financing.

- Funds of $10,000 or more received in a method other than cash (i.e. certified cheque, bank draft or money order) do not require this
report.
71. Describe the Suspicious Transaction Report (STR) as required in certain cases by FINTRAC?: - Submitted when there are reasonable
grounds to suspect that the transaction is related to the commission or attempted commission of a money laundering or terrorist
activity financing offence

- Suspicion might result from one transaction or attempt or a series of transactions

- There is no monetary threshold associated with the reporting of a suspicious transaction

- The STR must be submitted within 30 days of determining a suspicious transaction(s)

72. Describe the Terrorist Property Report (TPR) as required in certain cases by FINTRAC?: - Submitted when any property is owned or
controlled by or on behalf of a terrorist group, or it is believed to be.

- A report is required when there is a transaction or a proposed transaction relating to that property.

- The process for submitting a TPR is different:

* Contact the RCMP or CSIS immediately to report any suspicions of terrorist financing activity.

* Submit a TPR report without delay to FINTRAC. Also submit a Suspicious Transaction Report is there is a completed or attempted
transaction.
73. What is a receipt of funds?: A receipt of the buyer's deposit.
74. When is a receipt of funds not required?: When funds are received from a financial entity (bank, credit union), a public body
(government agency), or a very large corporation (must meet specific criteria).
75. How long do you keep reports submitted to FINTRAC for?: Large Cash Transaction Report - 5 years

Suspicious Transaction Report - 5 years

Terrorist Property Report - no timeframe

76. When over $10,000 in cash is received and reported to FINTRAC, does the brokerage complete a receipt of funds to document
the buyer's deposit?: No.

Only a copy of the submitted Large Cash Transaction Report is retained.

77. What constitutes mortgage fraud?: When the personal and financial information of an individual and/or the information relating to the
property is falsified so that an approval for mortgage funding can be obtained.

Can include:

- Falsifying information on a mortgage application about income, work status, or other employment information

- Stating the borrower will reside in the residence when they will not

- Obtaining monetary compensation to obtain a mortgage from a specific lender

- Being offered an interest rate or mortgage amount that appears very competitive when the borrower has been declined by other
lenders
78. What are the types of mortgage fraud?: - Straw buyers (an individual is paid to apply for a mortgage on someone else's behalf. This
individual is known as the 'straw buyer' and they unknowingly become liable for the mortgage and responsible to make the mortgage
payments.)

- Falsifying information (falsifying income, etc. to qualify for a larger mortgage than your income or credit history would allow. Also
non-disclosure of a second mortgage to the primary lender. Or the lender believes the borrower has a larger down payment when in
fact the money is borrowed.)

- Identity theft (homeowners can have their identities stolen. The thief obtains a new mortgage on a property and once the mortgage
funds are advanced, the thief doesn't make any payments. The lender will subsequently take steps against the true homeowners for a
mortgage they did not arrange.

- Identity theft can also result in the deceiver transferring a mortgage-free property into their name and selling the property. Once the
funds have been paid and the transaction completed, the true homeowners must take legla action to regain ownership of their
property.

- Value fraud involves purchasing a property then selling it to another purchase at an artificially inflated price. This includes deceiving
a mortgage lender or potential buyer about the value of the property by providing a false appraisal about the estimated value or
falsifying the value of the extend of any renovations completed.
79. Can renovations impact property taxes?: Yes. If the renovations add a lot of value to the home, when it's reassessed it can result in an
increase of property taxes.
Humber Real Estate - Course 2, Module 20, Completing Real
Estate Transactions

1. Is it mandatory to be present at any third-party inspections at the home?: Yes, to ensure the property is protected.
2. At the time an offer is accepted, what documents must be provided to the brokerage?: - A buyer representation agreement or a
buyer customer service agreement

- The accepted agreement of purchase and sale

- The FINTRAC form for identification verification and Receipt of Funds for the deposit
3. Why might a lawyer advise caution when using a waiver?: The conditions are historical evidence of the progress of the parties in
carrying out their various obligations.
4. True or false? In most jurisdictions, a specific clause in the agreement is required for the buyer to attend the property prior to
closing.: True. Additional visits to the property should be negotiated in the agreement of purchase and sale.
5. A ___________________ is negotiated in the offer and typically limits the visit to a shorter time period for the purpose of a final viewing
only.: Pre-closing visit
6. When is a pre-closing visit usually done?: Within the week of closing, but the seller's need to pack and vacate the property may
impact when this is completed.
7. What are some additional considerations for a buyer when moving?: - Contacting Canada Post to forward mail to the new address

- Change of information for any government documents such as a driver's license

- Transferring existing accounts such as telephone, television service and setting up accounts on the new property for other utilities
8. Once the buyers have a firm and binding agreement, most duties are handled by the buyers' lawyer. However, the buyers'
salesperson will still be required to observe due diligence in what matters?: - Ensuring negotiated repairs are completed by the
seller and receipts of the completed work are obtained

- Reminding the buyers to call the utility company to transfer account names on closing day

- Ensuring there have been no changes which would affect the buyers' mortgage or insurance approvals
9. What are some of a seller salesperson's due diligence until day of closing?: - Maintaining contact with the seller

- Coordinating with the seller's lawyer

- Assisting the seller in fulfilling their obligations

- Confirming appointments for additional inspections of the property

- Making the seller aware of moving obligations

- Removing the sold sign

10. What dictates the length of time a "sold" sign can remain on a property?: - This permission only extends to the time the seller is the
owner of the property, so therefore it would be removed by closing day

- Local municipal zoning bylaws or a community association's rules may also dictate the length of time a sold sign will be allowed to
remain on a property

- If requested by the seller, the sold sign should be removed earlier

11. What are the duties of a salesperson on closing day?: - Being available

- Resolving issues after closing

- Delivering keys to the buyers (sellers will typically provide one set of keys to their lawyer which are then passed on to the buyer
once the transaction closes ... additional sets are sometimes left inside the locked property or provided to the buyer's salesperson. If
the law office can't deliver the keys, the responsibility may fall to you.)
12. What is a 'Cloud on Title'?: An encumbrance or claim that affects title to real property, it's any gap or error in the chain of title in the
Registry System.
13. The buyer's lawyer will perform a title search more than once. Prior to closing, a _________ is done to determine if there has been
any change to the integrity of the title.: sub-search
14. What is 'Requisitioning'?: An inquiry, typically referred to as a requisition letter, prepared by the buyer's lawyer to the seller's lawyer,
concerning title matters (questions such as finding out if the seller is or is not a non-resident).
15. Requisition items may include:: - Statutory declaration that a seller is not a non-resident. This is required to assure the buyer that there
will be no need to withhold funds on closing to satisfy the non-resident seller's obligation to pay capital gains tax

- Declaration for payment of funds on closing

- Direction for payment of funds on closing

- Seller's undertaking to pay tax levies, charges, penalties, utility accounts and provide vacant possession

- Evidence of no executions, no contraventions of the Planning Act, and no unregistered liens, rights-of-way, tax arrears, expropriations
and construction liens

- Discharges of any liens, mortgages or encumbrances other than those to be assumed by the buyer

- Compliance of buildings and other improvements with zoning bylaws

- Statement certifying that the sale of the land and premises is exempt from harmonized sales tax, or otherwise, depending on the
circumstances
16. What is an 'Undertaking'?: An assurance or promise given by a lawyer regarding unresolved items at closing.
17. Undertakings may be necessary to resolve last-minute issues arising at closing and are considered one of the following types::
Client: An assurance by the client (typically given through the lawyer)

Best Efforts: The lawyer will diligently take the necessary steps to ensure that specific assurances are carried out

Personal: A personal assurance by the lawyer that something will be done

18. A frequently encountered undertaking involves assurances that an existing mortgage will be ____________ within a reasonable time
after closing.: Discharges
19. Who prepares a statement of adjustments itemizing the financial history of the transaction?: The seller's lawyer.

The statement sets out in balance sheet form all credits to the seller (e.g. purchase price, prepaid taxes, and prepaid utilities), and all
credits to the buyer (e.g. deposits and arrears in taxes prior to the date of closing), and the balance due on closing.
20. The traditional system of registration for title involved the lawyers attending the _______________________.: Land Registry Office
21. What are some eRegistration Methods?: Individuals who are provided access to the system may register documents electronically
from their offices, use a kiosk in the applicable Land Registry Office, or request assisted service by a staff member in the Land Registry
Office.

Not all documents can be registered electronically.

22. What is the eRegistration Procedure?: - Refers to title documents being created, submitted and maintained in electronic form

- Initiated by means of dockets and messaging

- A docket includes registration documents prepared by one lawyer with subsequent forwarding (messaging) by secure transmission to
another user through the Teraview gateway software
23. Who completes the land transfer tax statements, which are information found in the Land Transfer Tax Affidavit that
accompanies the Transfer/Deed of Land?: The buyer's lawyer
24. What 2 types of signatures are required on the final eRegistration document?: Completeness and release
25. Upon registration, a registration number is assigned to the transfer by the ______________ database.: POLARIS
26. The seller's lawyer prepares a final reporting letter for the seller following the closing of the transaction. What is the purpose of
the final reporting letter?: This sets out the particulars from the seller's perspective, such as the statement of adjustments, details of
any seller take back mortgage, the discharge of any existing mortgage, and payment of real estate commission.
27. What items are apportioned in the Statement of Adjustments?: - Property tax
- Fuel
- Metered utilities
- Insurance
- Rent
- Condominium fees
28. What is the method of adjusting property tax?: Take the total taxes for the year and divide it by 365 days (366 days if it's a leap
year). This gives a per diem, or per day, tax amount.

The seller is responsible for the property taxes for the number of days that year they owned the property.
29. If a property is heated by oil or propane, the seller will have the tank filled, typically the day before _______. The seller will then
receive a credit for a full tank of fuel at market price from the buyer at the time of closing.: Closing
30. How are metered utilities dealt with at closing?: Typically the seller will order a meter reading to coincide with the date of closing.
Consequently, no adjustment is required.

Some areas within Ontario may have bulk charges for services provided to residents. Here's an example for how to adjust for those
utilities:

If a seller paid $100 on January 1 as a flat charge for water usage during the calendar year (not a leap year), the credit allowed to the
seller is $50.68 ($100 ÷ 365 x 185) for a June 30 completion date. If the amount has not been prepaid by the seller, the buyer will
receive a credit for the seller's share (on the statement of adjustments) and the buyer will pay the full amount when billed.
31. Is insurance included on a statement of adjustments?: No. Property insurance is not transferable, so the buyer must arrange their
own insurance to take effect on the closing day.

The seller is required to maintain insurance on the property until the transaction has closed, thus no adjustment will be made on the
statement of adjustments.
32. How is rent accounted for in the statement of adjustments?: The buyer would receive credit for pre-paid rent accruing from the
closing date to the next rent due date.
33. How are pre-paid condo fees handled on a statement of adjustments?: In the same way pre-paid taxes are handled - on a daily
basis.
34. When will a seller's discharge of mortgage typically be registered on title?: Within a few weeks of the closing of the sale.
35. If you have to calculate pre-paid taxes for a statement of adjustment, use what formula?: Annual Pre-Paid Property Taxes ÷ 365 x
Days Buyer Will Live At Property Including Closing Date

I.e. $1425 ÷ 365 x 109 = $425.55

Since the seller has paid taxes for the year, the seller receives a credit of $425.55 from the buyer on closing.
36. How is HST handled in relation to chattels?: HST is applicable on all chattels included in the purchase price and further the value of
the chattel would be deducted from the purchase price when calculating the land transfer tax.
37. What is one of the most expensive closing costs borne by the buyer?: Provincial land transfer tax
38. Who is responsible for officially calculating the land transfer tax and adding it to the statement of adjustments?: The lawyer
39. What is the Land Transfer Tax?: A tax applied to the purchase price of a property at the time of the transfer of ownership or
acquisition of a beneficial interest in that real estate.
40. When is the Land Transfer Tax paid?: At the time of ownership registration and it becomes a disbursement item on the statement of
adjustments.
41. What is a Land Transfer Tax Affidavit?: A document which identifies the consideration paid for the property (i.e. the purchase price)
and the tax is calculated based on that amount.
42. What is the current land transfer tax in Ontario?: 0.5% on the first $55,000
1.0% on the portion between $55,001 - $250,000
1.5% on the portion between $250,001 - $400,000
2.0% on the balance between $400,001 - $2,000,000

Where the land contains one or two single family residences, a 2.5% rate applies to any amounts over $2,000,000

Real property including beneficial interests (e.g. life lease, life tenure, equity lease or life tenancy) are also subject to land transfer tax.
43. What is the Municipal Land Transfer Tax?: In addition to the provincial land transfer tax, a municipal land transfer tax (MLTT) is
charged on properties located in the City of Toronto.

Rates are the same as the provincial land transfer tax rates.

As the buyer's salesperson, you have the responsibility of identifying this additional tax burden before the buyers make their
purchasing decision. This is especially important if working with a first-time home buyer who may not be prepared for the additional
amount they are required to pay.
44. What is the First-Time Home Buyer's Refund?: A refund which, if applicable, can significantly reduce the payable land transfer tax.
The maximum refund is $4,000.
45. How can a first-time home buyer quality for the land transfer tax refund?: - Must be 18+ years old

- Must occupy the home as their principal residence within 9 months of the date of transfer

- Cannot have ever owned an eligible home, or had any ownership interest in an eligible home, anywhere in the world, at any time

- Spouse cannot have owned an eligible home, anywhere in the world, while they were the purchaser's spouse. In this instance, no
refund is available to either spouse.

- Must be a Canadian citizen or permanent resident of Canada, or will become Canadian citizens or permanent residents within 18
months following registration of the transfer of ownership to the property.
46. How is the first-time home buyer land transfer tax refund calculated?: The refund is based on the amount of interest the individual
owns in the home.

If the individual owns 100% of the interest and paid $400,000, the amount of land transfer tax payable is $4,475. The buyer will receive
a refund up to the maximum of $4,000.

If, however, the buyer owns 50% interest in the home, the amount will be $2,000 (50% of the maximum refund).
47. How can the first-time home buyer land transfer tax refund be claimed?: - If the sale is registered using the electronic land
registration system, the refund can be claimed immediately by selecting the appropriate statements within the land transfer tax section.

- When complete by paper at the Land Registry Office, the applicant can receive a same-day refund by filling out the appropriate
affidavit along with a transfer/deed and land transfer tax affidavit.

* They can apply for up to 18 months following registration by contacting the Ministry of Finance
48. What are the 2 types of title insurance?: - An owner's policy

- Lender's/loan policy
49. Lenders encourage buyers to opt for the _______ policy under title insurance as it protects the bank's interests in the property
should a problem with the title arise.: Loan
50. Without ___________________, many lenders may refuse to lend mortgage money to the buyer.: Title insurance
51. As the loan policy only protects the lender, buyers are also purchasing the owner's policy under title insurance to protect
themselves against various risks such as what?: - Title fraud

- Encroachment issues

- Unknown title defects affecting closing

52. Where can you obtain title insurance?: Through the lawyer, title insurance company or an insurance agent/broker.
53. Why is title insurance gaining wide acceptance?: Because the policy not only covers loss, but also the expense (i.e. legal fees to
address the situation).
54. Explain the owner's policy of title insurance.: - Protects the owner and in most cases, their heirs, against title defects or frauds that
may be discovered later

- The buyer pays a one-time premium for the owner's policy that stays valid for as long as they or their heirs own the property
55. How long is the lender's policy of title insurance?: It's in effect until the loan is repaid.
56. What are some benefits of title insurance?: - No reliance on lawyer's letter of opinion

- Protection against title fraud/errors

- Addressing concerns at listing (can be bought by the seller so they can assure any potential buyer that a situation, such as a
potential setback issue, has been resolved through insurance coverage)

- Marketing incentive

- Title problems at closing

- Issues covered after closing

57. How much does title insurance typically cost?: Around $500 but could be higher depending on the property.
58. Before the listing brokerage can remove funds from a trust account, they need to receive what from the seller's lawyer?: Written
notification that the closing has occurred and the sale is complete.
59. Once written confirmation from the seller's lawyer is received that the sale has closed, the broker of record transfers the money
held in the real estate trust account to where?: Another account, typically a commission trust account.
60. What happens if there is a surplus deposit (i.e. the deposit is larger than the commission entitlement )?: The excess deposit is first
paid to the seller from the real estate trust account. A cheque or electronic funds transfer will now be used to move the remaining
amount of the deposit to the commission trust account.
61. What are the 6 possible disbursements from real estate trust accounts?: 1. Excess funds - Typically disbursed to seller

2. Offer not accepted - Deposit can be returned to the buyer; no additional documentation is required

3. Return of deposit - Aborted sale; written direction is required after a mutual release is signed by both buyer and seller

4. Unclaimed money - As per RECO procedure; if unclaimed for 2 years must be forwarded to RECO, unless funds held are less than
$25; ... In the case of a missing person ... Funds, along with the trade record sheet, and a letter explaining what action the brokerage
has taken to locate the entitled person) must be forwarded if the brokerage is unsuccessful in locating the entitled person within 1 year.

5. Court order
62. If more commission is owed than what's in the deposit held in the brokerage's trust account, how is that handled?: Typically, a
direction is signed by the seller authorizing the seller's lawyer to forward to the brokerage any balance of commission owed.
63. Who has the authority to disburse funds from the commission account?: The broker of record or a designated individual who has the
authority to do so.
64. In what order are funds typically disbursed from the commission trust account?: 1. Any co-operating brokerage, who will place it in
their commission trust account. From there, the co-operating brokerage will disburse money received from the listing brokerage to their
salespersons from their commission trust account.

2. The salesperson(s) employed by the brokerage involved in the trade.

3. The balance of the commission that represents the brokerage's portion of the commission. The brokerage's share is transferred to
their general account where it is used for the day-to-day expenses of the brokerage.
65. How is HST disbursed when a salesperson is an independent contractor?: The HST applicable to your share as a salesperson is
disbursed to you, and you are responsible for HST remittance to the Canada Revenue Agency.
66. The Professional Liability Insurance Program under RECO has a maximum of how much consumer deposit / commission
protection insurance to protect both consumers and salespersons?: $100,000

This covers events such as brokerage fraud, insolvency or misappropriation of funds, subject to the terms and conditions of the policy.
67. The updating of the trade record sheet happens in what 3 stages?: 1. When the offer is accepted.

2. When the offer contains no conditions. (Update, initial, signed by salesperson and broker of record.)

3. When the transaction has closed.

68. According to REBBA, how long must the trade record sheet and all related trade documents be maintained by the brokerage?:
A minimum of 6 years.
69. If there is a major change to the condition of the property, what should your instruction to your buyer be?: To consult their lawyer.
70. What are some potential reasons a lender may refuse to provide the mortgage, or provide a lesser amount than first agreed to?:
- Any additional debt (i.e. buyer takes out a loan to buy a car or increases debt on their credit card to buy expensive furniture) could
change the Gross Debt Service (GDS) or Total Debt Service (TDS) ratios for the buyer, resulting in the lender withdrawing or altering
their earlier commitment.

- A buyer becoming unemployed or changing jobs with a different income

- If it's a condo purchase, the lender could become aware of other financial obligations associated with the condo (i.e. a large increase
in the condo fee or a special assessment)
71. What are some causes of insurance premiums increasing or no longer being offered?: - Buyer makes a large claim against their
current policy

- Insurer inspects the property and is dissatisfied with the age or condition of certain components, such as the furnace

- Increase in premium due to insurer basing the quote on inaccurate information, which has resulted in insufficient coverage, such as
house size

- Change in policies by insurers, such as no longer providing insurance in certain geographic areas due to extreme weather such as ice
storms, severe cold snaps and heavy rainfall

- A poor credit score, which is used when calculating insurance rates, as insurers use credit scores to assess the level of risk
associated with an individual
72. What are some examples of legal matters for which a seller or buyer should be referred to their lawyer?: - Contractual matters
such as failing to fulfill a term of the agreement

- Title matters include ownership, spousal consent, easements and restrictive covenants

- Non-title matters including non-compliance with zoning, arrears property taxes or obtaining required permits

- Property condition matters including environment issues

73. If during closing a buyer discovers there is a restrictive covenant prohibiting them from parking their recreational vehicle in the
driveway, would this be grounds for an adjustment to the purchase price?: No, because the restrictive covenant (or a bylaw) is out
of the seller's control and must be accepted by the buyer.
74. If the seller and buyer have a serious disagreement and the transaction fails to complete, but neither will sign a mutual release,
what happens next?: The brokerage is not permitted to disburse funds until agreement has been reached or a court order is issued.
75. Why would a brokerage potentially refuse to sign a mutual release if they are disputing some aspect of the failed transaction?:
Because if they do, they could be releasing all parties from any claim that the brokerage may have had for commission or other
remuneration.

However, is it important to note that the brokerage would still be required to disburse the deposit as directed.
76. What happens regarding liability of the brokerage once a seller and buyer sign a mutual release?: The brokerage is released from
all liabilities, obligations, claims and monies arising from the agreement of purchase and sale.