Phase 3 - Sample Exam Set

Sample Exam C3 Res 3
1. What does the Statue of Frauds require when it comes to contracts related to real estate?
a. That the parties to the contract must be at least 21.
b. That the contract for that sale of real estate must comply with the vendors and purchasers Act.
c.
.--. ;
The contract must be in writing and signed by all the party in order to be enforceable .
d. That the parties to a contract for the sale of real estate situated in Ontario must use an Ontario Real Estate
Association form.
2. Jane is a buyer who has signed a buyer representation agreement with ABC Reality Inc. Jim is a salesperson who is
employed by XYZReal Estate Ltd. Are there any circumstances under which Jim can have Jane sign a second buyer
representation agreement with his brokerage while the original agreement is still active?
a. Yes, provided that there is no commission obligation in Jim's agreement with Jane.
b. Yes, provided the geographic locations entered in the two agreements are different. ,""
c. No, it would be considered interference with another registrant and therefore a violation of REBBA2002.
d. No, in Ontario only one brokerage is permitted to represent the interests of a buyer at anyone time.
3. What are the requirements of the Real Estates and Business Brokers Act 2002 with respect of providing copies of a
listing agreement to the sellers of a property?
a. Seller must be given a copy of the listing agreement at the same time as an ofi~r is~eiBgpresented to them.
b. Eachseller must be given a copy of the listing agreement upon signing it'4~ +\.
c. One copy of the listing agreement must be given to the sellers within 2A/Q"oursof it being signed.
d. A copy of the listing agreement must be given to the seller within 2~.hourS'0fa~eguest to do so.
4. Jim Smith has signed a listing agreement with ABC Reality Inc. MandyJ8l~gS~aSSigQ$8a customer service
agreement with the same brokerage. Mandy wants to make an offer on Jim's prop erty. What does ABC Reality Inc
A "
needs to do in order to comply with REBBAwith respect to this relation~hip? '
a. Prior to showing the property and presenting an offer, ABC must ob '.'in written permission from seller that it can
provide customer service to the buyer. \; l'
b. Prior to presenting any offer, ABCneeds to inform seile~"an uye. "the relationship it has with each of
them. J/"
c.Prior to presenting any offer, ABCneeds to obtain informed written consent of seller and buyer agreeing to the
multiple representations.
d. Prior to showing the property and presenting an offer ABC must obtain written permission from the buyer that it
can provide client service to the seller.
5. According to the Real Estate and BusinessBrokers Act 2002, at what point in time must a registrant advise sellers of
the potential for multiple representations?
a. As soon as the seller has sign~d the listing agreement.
~. Prior to entering into ,i;\7r,epresE!n.!atig.p
agreement with sellers to sell their property.
c. Prior to an offer on th'ei~;'8rppertyb.ejng presented to the sellers.
d. Prior to marketing and adV~hi!!i(lg the sellers property.
6. The proceeds of crime and terrOriSt'financing act requires that a brokerage must maintain all record relating to
identifj.catjon, verification and receipt of funds for a period of:
a. /5 year~
b7 10 years",
./c. 3 months~
d. 7 years
7. ABCReal!ylps, is representing a buyer for the first time. What is the latest point in time that the brokerage must
'\:-~:>1;:-_/
complete ~9)individuaIID for records?
a. When the subject of agency ID first explained to the buyer.
/6. When an offer is being submitted by that buyer.
c. At the first meeting between the buyer and the sales representative.
d. At the time the buyers deposit is placed in the trust account.
8. A property sells using aREA Agreement of Purchasing and Salewith June zs'' inserted as the Requisition Date.
Which of the following would not be included in a buyer's lawyer's requisition letter to a seller's lawyer?
L~" A request for a transfer of existing fire insurance from the seller to the buyer.
b. A request for a declaration that the seller has occupied the premises.
c. A request for existence that all buildings have been built in compliance with municipal by laws.
Course 3 General & Advanced Residential Page 18

d. A request for existence that the seller is not a non-resident.
9. Two weeks after the offer was accepted, the buyer and seller would like to change the completion date that was
originally agreed for the property, 25 Johnson Street. The offer was made on form 100. How should this change be
accepted?
Ca. An amendment to agreement of purchase and sale form should be used.
if.
The completion date in the original copies of agreement of perchance and sale should be changed.
c. A counter offers form should be used.
d. A new agreement of purchase and sale would be completed by the parties.
10. What current legislation covers some of the operational matters in a Care Home which provides facilities and
assistance for mature adults?
a. The Condominium Act
(§., The Residential Tenancies Act
c. The Co-operative Corporation Act
d. The Tenant Protection Act
11. A landlord gives a month-to-month tenant a 60 day notice to vacate because the landlord wants the landlord's son
to occupy the unit. The tenant owns a cottage property and would like to vacate as sO'on as possible-whlch of the
following statements best describes the tenant's situation?
a. The tenant must also give 60 days' notice based on month-to-month tenancy.
@) The tenant can give as little as 10 days notice and pay rent for the 10 dp~{iod.
c. The tenant does not have to move if it the landlord's son, not the landlord;", '11 be assuming
d. The tenant cannot vacate the premises until the end of the 60 dal
12. The owners of 237 Shutter Street have decided to sell a 2 acre portion oftH'~j.r 10 'acre vacant lot to a builder. In
''k ." .• ,
order to comply with the Planning Act and complete the sale, the owner needs to obtain a:
a. Subdivision approval for the lot
\E~ Consent to sever the lot
c. Zoning review
d. Building permit for the lot development
13. Agnes wants to buy a cottage with frontage oriasmall landlocked lake and then construct a dock or boat house on
the shoreline. Who would Agnes need to contact to obtain the requisite permit?
a. The local conservation authority
b. Ministry of the environment
'. c.' Ministry of natural resources
d. Department of Canada Heritage
14. Which of the following is correct with re~~!£l;fo the generation, distribution and use of electricity?
a. Electromagnetic fields increase in str~n·gfh as they get farther away from their source.
4' "'~
(b:- Electromagnetic fields are created when an electric current is flowing.
\. c. Electromagnetic fields travels rapldlv in air but not penetrate most materials.
d. Electric transrfis'Sions Wnes generate large amounts of raw energy.
15 .. When it comes r(; reside~iClI construction, asbestos is most frequently encountered in:
a.' Roofin~ mat~'!~I~and~.\per coverings
b. Foundation wallttii:c:Hloor joists
c. Plumbing fixtures and windows
d. Electrical systems and washroom fixtures
16. Which of the following is a correct statement with respect to a property designated as a heritage property?
a. The property is subject to the same rights and restriction as any other property except for the installation of an
historical plaque.
b. Insurance premises are typically lower than other homes of the same size.
c. Because of the value inherent in the historical nature of the property municipalities lend to levy higher realty
taxes.
~.: Alterations to a property required the written approval of the municipal council.
17. As a general rule, which of the following statements would be correct with respect to assigning a contract?
a. Agreements of purchase and sale are not assignable.
b. An independent contractor agreement between brokerage and sale is assignable.
,c-.,\ A mortgagee can assign a mortgage but a mortgagor cannot.
d. AI residential lease are assignable and do not require that landlords consent.

18. This type of prospecting of effective for three reasons: potential buyers can view the listed property; the seller
knows that a sincere effort is being made to sell the home; the salesperson has an opportunity to meet prospects.
What type of prospecting is being described above?
a. Cold calling
b. For sale by owners
" •..,
le; Open house
d. Expired listing
19. Hannah is the owner of 236 Logan Street. She has signed a listing agreement with ABC, at a commission rate of 5%
on March 3'd and expiry on may 3rd. There is a two month holdover clause. On May 4th, Hannah signs a new listing
agreement with XYZ which an expiry on august 4th and commission rate of 6%. Amy is a buyer who had been shown
the property march 23'd but does not make an offer until May io" which is accepted on May 11th. Tf'letransaction
closes on Sept is".
Based on the information presented, will Hannah own ABC commission and wh '"
a. Yes, but the amount will be 1% as that is the different between the commission rate on trlisting withAeC and
XYZ.J'~"i)Y
b. Yes, the full 5% will be owned because the property was seen by Amy during the termfro'Hhe listing agreement
with ABC and purchased during the holdover period of that listing.
c. No, the closing date for the sale of the property is after both listing and holdo...,., ••;,in th. original listing.
(}b No, even though Amy saw the property during the original listing and broughfit'd.,. ing'~h~::holdover, it was sold
,_v under a new listing where the commission payable was higher than theoriginallistlng/t
20. Jane has signed an OREA buyer customer service agreement with ABC, commencing May1st and expiry on June zi".
On June t", she drops into an open house and meets with Jim, who works for XYZ. Jane tells Jim that she is not
happy with ABC and would like to find another brokerage. Jim explains the advantages of buyer representations and
[ane signs an OREA buyer customer service agreement with XYithatda,y. Has Jim violated the REBBA by this action?
~j No, Jane is a customer and the buyer customer service agreement is'aQon exclusive agreement.
Yes, Jim s not permitted to speak to any buyer whojias sig~ed a b~w~r" sto er service agreement.
c. No, provided either the property type or the geographic 10catiQl'"ii$diff in both agreement.
d. Yes, Jim did not obtain written consent from ABC to comnJuni'cat~ directly with their customer.
21. Mabel is a listing salesperson with ABC. She h~s just received four offers on 22 Ajax Street. The first offer is
registered at 2pm and was for $395,000. The second offer was registered at 2.30 pm and was for $398,000. The
third was registered at 3 pm and was for $392,000. The fourth comes at 4 pm with $400,000. Mabel presents all the
offers to the seller at 7pm that night. Based on the information, which of the following scenarios might result in
serious legal problem and should never be recommended?
a. The seller first reviews the ojfer that received at 4pm and after reviewing the other offers, accept it.
@; The seller looks at all offers iQth"e order in which they were received and decides to counter all 4 offers at a
~ higher price of $415,099. -s
c. The seller reviews the'" 'ers i~\~~~rticular order, rejects all 4 and requests that each buyer come back with a
better offer.
d. The seller revn order in which they were received and decided to counter one of the offers at a
higher price $405,0 Oi.lff
22. There are 2 basic types of l~meshare projects; one gives a fee ownership interest and the other gives a right-to-use
interest. Which ofthgjoll6wing statement correctly describe a right-to-use interest timeshare?
a. A requires a registering the property as a condominium .
.11. Each timeshare period is separately registered on title.
\.f:.. The timeshare owner obtains a contractual notice of lease that designates the specific period of time.
d. Timeshare owner obtain shares in the corporation that owns the property.
23. A property owner has complained to the municipality that a nearby farm is creating a nuisance. There is an awful
smell and noise coming from the farm. The municipality looks into it and finds that the farm practice is violating its
zoning by law with respect to noise and odour. Are there any circumstances under which the farm could be allowed
to continue these nuisances even though it is a violation of zoning by law?
Answer: Yes, farmers are protected.
24. Various techniques can significantly reduce energy consumption in a residential home. Which of the following would
I
assist in the reduction of energy cost?

I. Zone heating/cooling systems and improved ductwork distribution.
11. Decreased thermal resistance in all insulation.
Ill. Separation of furnace and hot water system.

IV. Shading and glazing of exterior windows .
.:;~. I and IV
'1:>. I and 11
c. 11 and III
d. All of the above
Case Study
Sales person Ahmed of ABC is preparing an offer for his buyer client on a property listed with XYZ. The property at 99
Lester Street is a detached bungalow with a basement apartment. The buyer is intent to move into the main floor of the
house and continue renting out the basement apartment. The buyer mentioned to Ahmed that he wants to ensure that
he won't have to pay HST on top of purchase price.
25. Clause 3 on the OREA agreement of purchase and sale has space to insert a fax no. for delivery of notice to a seller
and buyer. Under which of the following circumstances would it be appropriate for brokerage fax numbers to be
entered in both of those spaces (which is correct)?
a. When the listing brokerage represent the seller and cooperating brokerage represent the buyer.
b. When the listing brokerage represents both seller and the buyer.
c. When the listing brokerage represents the seller and cooperating brokerage is
brokerage.
d. When a private seller has signed a seller customer service agreement with
buyer as the client.
26. How would you complete HST clause 7 in the agreement?
aV Th~ words 'included in' would result ~he seller havin~ .to pay HST if the .property were ~ubject to tax.
-b. This clause would have blank left until the seller certifies whether HST IS payable on this transaction or not.
c. The words 'In Addition to' would result in the buyer having {o pay H?T on chattels included.
d. It depends on the seller and the buyer whether to insert 'Included inf;Dr 'In Addition to'.
- caseStud~;,.u:~,. A>
Sales person Ahmed of ABC is preparing an offer for, his buyer clients~ohaprbperty)isted with XYZ. The offer of $460,000
nd; ••. »cu;•../. ./'
is irrevocable until 6pm on April 2 . The names of theb~y ng the offer ar~ Angel Chow and her spouse Peter
Chow. The buyers are planning to use the property as their matrimonial home. Both names are entered on the OREA
st
agreement as buyers and signed by both at 9am on April 1 . There is a $375,000 mortgage on the property held by the
bank but the buyers do not want to assume it. The seller is going to payout the mortgage from the proceeds of the sale
and there are sufficient funds to do so. However, the actual registration of the discharge ofthe mortgage will not take
place until a few weeks after the transaction closes. The offer was presented to the seller at 1 pm on April i" At 3 pm the
seller Signed the offer back at $475,090 but the irrevocable time period remained the same. The counter offer was
nd
presented to the buyers and they at~epted the counter offer. The following day on April 2 prior to the expiration of the
irrevocable period the seller was given"his
"'- copy of the accepted agreement.
"<, . ">.:;,;
27. With respect to the buve . hose nar:n~ or names must be registered on title at the closing of this transaction?
a. It is up to the bYXTr ~o de+.lJ'rYH'bs~ name should be on it.
b. For the property to bea mathmbnial home, both buyers must be registered on title on the closing of this
transaction.
''''0
c. Neither of the buyers can be registered on the title on closing of the property is being designated as a
matrimonial home.
"-@ Onl'i 6rfebf the buyers name in the agreement can be registered in the title.
28. Is the seller's mortgage going to prevent the transaction from closing because it cannot be discharged on or before
I . 7
crosmg. J~
a. Yes, thl~js"a problem that can only be resolved by having the buyers agree to assume the adjusting mortgage
and apply to the bank for approval.
b. No, it will not be a concern since the seller mortgage is not an encumbrance on the property and as a result the
buyers do not care if the mortgage is discharged or not.
e"
'-Ej No, it is not a problem as one of the pre printed clauses in the offer allows for the discharge of the mortgage
after closing based on the seller giving direction of payment and a lawyers undertaking to do so.
d. Yes, this is a problem because clause 10 states in the first line that the property will be free and clear from
charges and encumbrances on closing and the seller must ensure that the mortgage is discharged prior to
closing.
29. Which of the following would be a realistic completion of the confirmation of acceptance clause on the agreement
of purchase and sale given the information in this scenario?

nd
a. The seller signs confirmation of acceptance on the 2 of April before 6pm.
st
b. The seller signs the confirmation of acceptance at 3 pm on the 1 of April
nd
c. Both buyers must sign the confirmation of acceptance on 2 of April before 6 pm
,''''''
st
\S!;... One of the buyers signs the confirmation of acceptance on April 1 in the evening.
Case Study
In response to Martell's question about the difference between financing agreements between condo and co-operatives,
salesperson Evans makes the following statement:
'In equity co-operative, a mortgage is registered against the entire building and all owners have joined liability and
relation to their proportionate share of ownership, whereas, condo units can be individually mortgaged. Condo owners
are potentially liable for other owner should they not meet their mortgage payments. Co-operatives present a challenge
for financing in circumstances where there is a gap between the proportionate share of the existing mor;tgage on a unit
and the buyer's down payment. Secondary financing for the necessary amount may be hard to secure.' , . .iF
30. There is an error in explanation. Which of the following statements best describes this error?
a. Individual unit owners in a condominium are not responsible for the mortgage payment of other unit owners.
There is no liability on individual unit owners in a cooperative except for their proportionate share of the existing
mortgage.
c. Secondary financing for unit in a cooperative is relatively easy to arrange as the ..s mortgagee the
building. ~, ,;$
d. The proportionate share of an existing mortgage on a cooperative unit;cfn'be incf~ased to accommodate a
buyer's down payment. " _ -
31. The subject of maintenance expenses is raised by one of the salespersbnat the me~fng and Martell asks if anyone
can expand on the topic. Salesperson Martinez makes the following stat~n:!~nt:..Aff
'Condominium owners pay monthly maintenance expenses to maintain the common"f?lements. Owners contribute to the
mointenance expenses based on the proportion outlines in the Condominium Declaration. Since there are no common
elements in co-operative, owners of a cooperative dp noi'/J,qy those fees. If a unit owner in a condominium defaults on
their maintenance expenses can be reduced if the ,qlNner waves or abanaons their right to use part of the common
elements, for example the tennis courts or swimm' 0
The explanation given by sales person Martinez is no ect. Which of the following statements best described
this error?
a. Each condominium unit owner pays and equal share towards the maintenance expenses, not a proportionate
share. -~I
b. Non-payment of condominium maintenance fees, while a concern is not considered serious enough to place a
lien against an owner's unit. '"
c. There are common elements in a CO-OR~I.9tlve but, by its very nature, owners in a co-operative maintain their
own property and there are no maintenance fees.
0\ Co-operatives are alSos~bject to mo~thly maintenance fees and condominium owners cannot reduce their
proportionate s f rri~ii1tenanc~ fee.
Case Study
It is the s" of June an .Sarah C 9YV, a sales person with ABC, has just shown a condo to her client Matt. The property is a
two bedroom unit lo~~ed i~al?ijlding at 57 Bloor Street, listed with XYZ. Even thought it has no recreation facilities,
such as exercise room or swimming pool, Matt is impressed with the condo of the building and decides to make an offer.
The offer is conditional on Matt's lawyer reviewing a condo status certificate with attachments and finding them to be
satisfactory. The condition is written in precedent format and requires that Matt request the status certificate within two
days of acceptance of the offer and it gives him until 5 pm on the 16th of June to satisfy the condition. The closing date is
July iz". The offer is signed by Matt at 6 pm on the s" of June presented to the seller and accepted by the seller on June
s". Matt requests the status certificate from the condo corporations' management company on June ih.
Answer the following three questions based on the information above in the case study as well as the questions
themselves.
32. Does any of the information provided in the case study with respect to the status certificate clause give any cause
for concerns?
a. The only concern would be that a buyer cannot request a status certificate. Only the owner of a unit is entitled
to request this document from the condominium corporation's management company.
b. Yes there would be some concern as the is" of June is far too long a timeframe for a condition such as this. A
more appropriate time frame would be to allow 5 days to obtain the certificate and for the lawyer to review.

c. Yes there would be some concerns. There may not be sufficient time to allow for the status certificate to be
provided to matt and for his lawyer to review.
'Cl, No there are no concerns. The time frame is adequate to satisfy the needs of both the buyer and seller and there
is no problem with the buyer paying for and requesting status certificate.
33. Which of the following documents would be included with the status certificate to be given to matt's lawyer for his
review prior to 5pm on the is" of June?
I. Copy of the most recent condominium budget.
11. The number of units released and the names of the tenants.
Ill. Copy of the declaration and by-laws.
IV. Copies of any outstanding mortgage on the subject unit.
a. The document set out in all four options
b. The documents in option III and IV only
,@, The documents in options I, 11 and III only
d. The documents in option I and III only l
34. The sale closes as scheduled on the rz"
of July. On November is" a special meeting is cailetLby the condominium
board of directors. At the meeting, the board of director proposes spending $300,qp uild\{~'cr€ation centre
with the money coming for the reserve fund which has a current balance of over ,$2,0 ," ,0, A v,,:fu is held and 70%
I.~' A'T',""","
of the unit holders voted in favour of the proposal. The board announces that they,will be8(Q,ceeding with the
,-.Rroposal. Are there any problems with the proposal vote? • ";
\~ There is no problem with the vote to build a recreation centre, but the reserve fu~it~elf cannot be used to pay
for the construction of a brand new common element.
b. There is no problem here at all. A majority of the unit holders",,~foted
'. \.
in favour of the proposal and money can be
';' ",.
taken from the reserve fund to pay for any expenses including facilities such as a recreation centre.
c. Is money is to be taken from the reserve fund from the project propg'sed by the board then the condominium
, v'·; .,.c,.
act requires that 100%of the unit holders must vote in favour of dojpg;so.
"'" , I.iF ;;<f"'>"
d. There is no problem here at all. In fact, th~condo b~;~;~,d/~idQ9t~~en ne~9to request a vote for this proposal as
the Condominium Act allows directors to use the res~iv~fundto'build new common elements at their sole
discretion.
Case Study
Salesperson Grewal of ABC is working with a buyer client Nathan Brand, who is interested in purchasing a home in
Anycity. Grewal finds three properties that r:nJ~etNathan's criteria and arranges to show them to Nathan today. One of
the properties 43 Abitibi Lane is being sold by Lender Inc. under power of sale.
35. While showing 43 Abitibi Lane, Grewal informs Nathan that the property is being sold under power of sale. Nathan is
not familiar with this kind of sale and aSRs.Grewal to explain what it means. Select the correct explanation from the
choices below: ~;;'f;.'
a. Power of sale is a court~t51ered actjon arising from default of mortgage in which the home owner is forced to list
and sell the propert. Tiill';
b. Power of salerfg>~'ffa taken by a home owner when in default of a mortgage in order to sell the property to
fP
satisfy, a debt.
r:\ c.)Power of sale is a legal rjght of a mortgagee to force the sale of a property in the event of default without having
"'_.-, to go to court. ""='c;:F
d.Power of sale is an action in which the title of the property passes to the mortgagee when the mortgage is in
default and is subsequently sold by the mortgagee.
36. Nathan finds this type of sale interesting and would like more information about a power of sale. Grewal responds
with the following statement:
'If a mortgage is in default for 15 days, the mortgagee can send a Notice of Sale Under Mortgage. The mortgagor is given
35 days to bring the mortgage into good standing. In a power of sale, at least one appraisal is typically undertaken to
establish the value of the property. A property is often down priced just below market value in an effort to get a fast sale,
hopefully within a day or two, to enable the mortgagee to be repaid as soon as possible.'
The explanation given by Grewal is not entirely correct. Which of the following statements best describes this
discrepancy?
a. The Mortgage Brokers, Lenders and Administrators Act requires that a mortgagee have three professional
appraisals of property prior to commencing any action.
b. A mortgagee is required to request the court for a Notice of Sale Under Mortgage application in order to
proceed with power of sale.

A mortgagee should allow a reasonable time period for marketing purposes before accepting an offer on a
property and it should not be priced below market value.
d. A mortgagor has 60 days to bring the mortgage into good standings, not 35, and the form is called Notice of
Default Mortgage.
37. Nathan decides to make an offer on 43 Abitibi Lane. In order to protect Nathan's interest, what important
information should Grewal make Nathan aware of prior to entering into an Agreement of Purchase and Sale.
a. A buyer's name will be registered on the title upon acceptance of his offer and the buyer will then have the right
to being the existing mortgage into good standing prior to the closing date of the transaction.
@ In the event that the mortgagor brings the mortgage into good standing, the buyer's offer may be declared null
and void. Also, he is buying the property 'as is' with no warranty from the mortgagee as to the condition of the
property. %
c. The buyer will be responsible for any money owing if the purchase price of the property is lessthpr1 the amount
owing on the mortgage in default. #""'~> .• d '!
d. Once the sale has been completed, if the financial situation of the mortgagor who wentinto def~tilt improves
and the mortgagor
can pay the mortgage amount, the sale may be nullified by the co
Case Study
Jim is a salesperson with ABC. Mary and Bob are interested in purchasing a cottage anq.~ n
Jim and sign a buyer representation agreement with ABC. Mary and Bob live in Anyt00ri·an. ay.~.)1ever owned a cottage
before. Over the course of a few weeks, Jim takes the buyer to a number of different cottage.?.~
38. Jim has made an appointment to show the buyers a cottage on a fairly remote lake abOLla 2 hours drive from
Any town. During the drive they start asking questions about wells, zoning; utilizes and municipal services to the
property. Jim makes the following statements in response to their questions:
." 1. Some cottage owners may actually own the hydro lines and poles'carrving electricity to their cottage and have to
pay for their upkeep and repair.
2. All homes, even cottages in remote areas of Ontario, are r~'uire o 04be provided fire protection by the
local municipality.
3. Bell Canada may not provide Telephone service toa cot~ag~ even though hydro service is already provided to
that property.
4. Municipalities use the low water mark in lakes to determine the setbacks of cottage properties fronting onto
lakes.
5. The most common type of wells being installed in cottage properties today are either drilled or bored.
Evaluate each of the above statements made by Jim and select those statements that are correct.
a. Options 2 and 4 are correct.,
(G) Options 2 and 5 are correct~,'
c. Options 1, 2, 3 and 4 qr~ correct.
d. Options 1, 3 and 4 ari:ic8r~.ect.
39. Jim's second appoi~trr~fl~ Rd. which is located 90 minutes from Any town. This property has a 75
is·ia~\;t.:t~;'i.~·each
year old cottage with awell.andfront onto a small lake. The septic system is only 2 years old and has a raised
absoq:~tft>Qbed. There is an 'old boathouse. The buyers tell Jim that if they bought the property they would knock
down the old boathouse and replace it with a brand new 2 storey boathouse that would have accommodation for
fl
.gtrest. ThJy,would
l.ih
also like to create a sandy beach using infill, In response, Jim makes the following statements:
;' 1 The t/oothouse sits on shore lands at the water's edge. Shore lands can be publicly or privately owned and they
include land that is seasonally covered by water.
2. Shore Ipnds are regulated by the ministry of the environmental and certain types of work on shore land require
obtailJl~~ a work permit.
3. You Will not need a work permit to remove the old boathouse or to create the beach, but you will need a work
permit from the ministry of the environment to construct the new boathouse.
4. A permit is required for any dredging or infilling on shore land.
5. Two storey boathouses with living accommodation are allowed in Ontario on public land but you may have to
pay rent under a boathouse leasing program.
Evaluate each of the above statements made by Jim and select those statements that are correct:
a. Statements 2, 3 and 4 are correct.
b. Statements 1and 5 are correct.
c. Statements 2, 3, and 4 are correct.
~') Statements 1, 4, and 5 are correct.

40. The following weekend, Jim takes the buyers back to the property at 123 Beach Rd. as Mary is walking towards the
old boathouse that sits at the water's edge; she asks Jim whether all the land between the cottage and water
belongs to the cottage. Jim correctly tells her that there is an unopened shore road allowance between the cottage
and the lake itself. Mary starts asking lots of questions about this shore road allowance. Jim makes the followings
statements in response.
1. A shore road allowance, that is 66 feet in width, is adjacent to the lake shore.
2. The boathouse would not be an encroachment on public land unless the road allowance became open.
3. The public has no right to go across an unopened road allowance. So that is not a worry for you.
4. You may be able to buy the unopened road allowance in which case it would become your private property.
5. Obtaining approval to close a shore road allowance is a simple and inexpensive procedure.
a. Statements 1, 2,4, and 5 are correct.
® Statements 1 and 4 are correct.
c. Statements 2, 3, and 4 are correct.
d. All five Statements are correct.
nd
41. Jim shows the buyer a number of other cottages and on June 2 they decide that they wouldlike to make an offer
on 123 Beach Rd. Even though it is only 2 years old, the buyers mention that they b;:lve some concerns about the
x % .,;
septic system with its raised absorption bed. They would like to be sure that the system had.~all the requisite
approvals, was installed correctly and is in good working order. Jim responds with the following statements:
1. A new septic system has to be installed in accordance with the Ontariq(B~il~jng Code.
2. Raised absorption beds are usually needed when there is rocky terr in, ina'd~ uate drainage and poor soil
percolation.
3. You should obtain a bacteriological analysis of the septic system prior e 'reJ!l6ving the home inspection clause.
This is common practice. '.<~ :/
4. Raise absorption beds have been designed in such a way that they remove the need for minimum clearances
from wells or dwellings. . 'W
5. I will include the following home inspectiori'clause and that will cover any concerns that you might have. This
offer is conditional upon inspection of the;?ubjectprop.~rty by a home inspector at the buyers own expense and
the obtaining of a report satisfactory to the buyers sole and absolute discretion. Unless the buyer gives notice in
writing delivered to the seller not later than 6 pm on the lath of June, 2009, that this condition is fulfilled, this
offer shall be null and void and the deposit shall be.teturned to the buyer in full deduction. This condition is
included for the benefit of the buye(Ohd may be waived at the buyer's sole option by notice in writing to the
seller within the time period stateCt'herein.
Evaluate each of the above st<;ltefuen '. ade by Jim and select those statements that are correct.
a. Statements 4 and 5 are correct
b Statements 1, 2 and 4are correct
c. Statements 1, 3 and 4 are' correct'
% "
d. Statements 1 an e correc!';;,
42. Jim now prepare n .....for 123 Beach Rd. and it is for $290,000. The deposit is $8,000 and it is to be submitted
upon acceptanc of the ~ff.~~.There will be a supplementary deposit of $17,000 payable on the is"
of June. The
deposits will eo .....out of t~e buyer's down payment of $94,000. The offer is conditional on being approved to
assume an existi~'g,firstm"6"rtgage on the property of $146,000. To make the sale attractive to the buyers, the seller
has agreed to take back the mortgage for the balance of the offer price for a period of three years at a rate of 5%
with an amortization of 15 years.
The agreement is presented to the seller who, after much discussion with his representative, counters the offer by
increasing the purchase price by $8,000; increasing the deposit by $2,000 and increasing the supplementary deposit
by $3000. The buyers are not in a position to increase their down payment so the seller agrees to increase his seller
take back mortgage to cover the purchase price.
Calculate the balance due on completion based on the counter offer outlined in this question.
~) $64,000
b. $152,000
c. $122,000
d. $268,000
43. John has successfully passed the 80 hour Course 3 General and Advanced Residential exam and has submitted his
application to RECD. He intends to work as a full time salesperson with ABC Realty Inc. and is not waiting to obtain

confirmation of registration from RECO. Which of the following activities can John get involved in while he is waiting
for his registration?
G> Build a data base of potential clients from his list of friends, acquaintances and business contacts.
b. Call friends, acquaintances and business contacts to ask them if they are interested in selling their homes.,
c. Develop his marketing material and then send fliers marketing himself to his friends, acquaintances and business
contacts.
d. Assist with an open house for the public with another salesperson from ABC Realty Inc to get a feel for the
business.
44. A mortgage is in default. What would most likely be the reason why a lender would choose power of sale as the
remedy for the default?
a. Because the borrower prefers power of sale over foreclosure.
b. Because there is no need to obtain possession of the property when using power of sale.,
c. Because the amount of mortgage is small in comparison to the value of the property.
:-:,. Because it is relatively inexpensive and the most fair to the mortgagor. I
45~ Buyer X is in Australia and is interested in buying a property. Salesperson Y from ABC is a~)
being used a Grow House. What must the salesperson do?
a. Buyer X is in Australia and salesperson does not need to inform him of the hO"l.fS s now been shut
down. ij/
G~~/
c.
Salesperson Y should include a full disclosure in the offer and inform buyer X befo~~,drafting
Since there will be an inspection
an offer,
done, there is no need to inform as the inspector will' not any deficiency.
d. Salesperson does not need to do anything.
46. Salesperson Ahmed has just signed a seller representation with the following commission rates. According to REBBA
2002 what commission rate is allowed?
I. 5% for the first $200,000 + 4% for the next $100,000 + 3% for next $300,000.
11. 4% + $40,OOO,~\
"I. 4% + 1% rebate if seller buys another prpperty.
IV. 4% for the first $300,000 + 5% for the ni:!xt$200,OOO + 6% for the next $100,000
a. I and IV
b. "and "I
c. I and "I
I and 11 and IV i:rJ
47, Buyer's sister, Mary is going to a minlrrilum bid auction. Buyer calls you and asks you what Mary should be aware of
when going to the auction.
a. Buyer can reject the auction if the ho itl~pection is not satisfactory.
(S\ Buyers lawyer should do a little search.Before the auction
~) Buyer should get the mortg~gee to inspect the property before financing
d. Buyer should get e inspection done prior to auction.
\~
Answers Sample Exam C3 Res 3

'fu....
1.C 02 ..B 3. B 4. B 5. B
6.A 7. B 8.A 9.A 10. B
11. B 12.B 13. C 14. B 15.A
16. D 17.C 18.C 19. D 20.A
21. B 22.C 23. - 24.A 25.A
26.A 27. D 28.C 29. D 30.A
31.D 32.D 33. D 34.A 35.C
36.C
41. B
37. B
42.A
38
43V
\;;;;:;
39. D
44.D
l_
4°'b
45&
46.C 47. Band C

1. Complete the following sentence: (According to the requirements of the real estate and business brokers act, a
registrant must deliver a copy of an accepted agreement of purchase and sale to the party being represented or
being provided with customer service.)
a. Only if the client or customer makes a request in writing.
b. Within 5 business days of acceptance of the offer.
c. Within 72 hours of the acceptance of the offer.
d. At the earliest practical opportunity.
2. What does the Statue of Frauds require when it comes to real estate contract?
a. The contract for the sale of real estate must comply with vendors and the purchasers act.
b. The parties to the contract must be at least 21 years old for it to be enforceable. .
c. The parties to the contract for the sale of real estate situated in Ontario must use an Ontario Re~1Estate.
association form.
d. The contract must be in writing and signed by all parties in order for it to be enforceable.
3. What are the requirements of the Real Estate and Business Brokers Act 2002, with respect to providing copies of a
listing agreement to the sellers of the property? . .> .'1
a. One copy of the listing agreement must be given to the sellers within 24 h04(s of it beingsig~ed.
b. Sellers must be given a copy of the listing agreement at the same as an ,C(fferi~ being s!gned.
c. Each seller must be given a copy of the listing agreement immediatel:stt:pon signing it:'
d. A copy of the listing agreement must be given to the sellers withio,74 hoOr ""'Of a request to do so.
4. Can a listing agreement have a term of more than 6 months?
a. Yes, providing the seller initials the multiple listing service agreement o~tion9n the first page.
b. No, local real estate boards will not accept listings on their.MLS syst~ms for'! period of more than 6 months.
c. Yes, providing the seller initials the listing agreement next/to the ~~p'lry;date.
d. No, REEBA 2002 limits the term of a listing agreement to a'maximum of 6 months.
5. According to the Real Estate and Business Brokers Act 200:2, at what point in time must a registrant advise buyers of
the potential for multiple representations? ..~::,'~.
a. As soon as the buyers have signed a buyer representation; agreement.
b. Prior to entering into a buyer representation agreementw'ith those buyers. N
c. Prior to representing the buyers offer. »
d. Prior to preparing an offer of property for the buyers.
6. Adriana has signed a listing agreement'iiwith ABC Reality Inc. Marvin has signed a customer service agreement with
the same brokerage and is not a client o'h~e brokerage. Mohan wants to make an offer on Adriana's property.
What does ABC Reality Inc. needto do in<qrder to comply with REBBA 2002 with respect to disclosing the nature of
relationships? p
a. Prior to showing the property and presenting an offer, ABC Reality Inc. must obtain written permission from the
seller that it can ·p[@ytde cu~tomer serviced to the buyer.
b. Prior to pres\'!rftlng(anyqffe?ABC Reality Inc. needs to obtain written informed consent for multiple
representation for the 'b'uyer customer.
c. Prior to showingJ.~e property and presenting an offer, ABC Reality Inc. must obtain written permission from the
buyer that it can provide client services to the seller.
d. . Prior to presenting any offer ABC Reality Inc. needs to inform both the seller and the buyer in writing of the
relationship it has with each of them.
7. Both chattels and fixtures are often included in the sale of the property. What is the best description of chattels?
a. Items that are included in the property unless they are listed in the agreement of purchase and sale as excluded
items.
b. Items in a property that are leased rather than owned.
c. Property that is permanently enriched to a building.
d. Personal moveable items that are not part of the real property.
8. Which of the following statements is correct with respect to an agreement for sale?
a. An agreement for sale provides the buyer with more security and protection then a sale financed with a
mortgage.
b. The buyer has a contractual interest in the property that gives the buyer possession but the seller redeems title
to the property until the required payments are made.

c. An agreement for sale is an agreement of purchase and sale in which the seller takes back a mortgage on the
property.
d. And agreement for sale is an assignment of an agreement of purchase and sale.
9. Which of the following information can be obtained by a buyers lawyer performing a non-title search of a property?
a. Previous owners of a property.
b. Records of discharged mortgages.
c. Outstanding mortgages.
d. Status of property taxes.
10. Just two weeks after the offer was accepted, the buyer and seller would like to change the completion date that was
originally agreed to for the property at 134 Bayview Avenue. The offer was made on an OREA Agree of
Purchase and Sale Form 100. How should this change be accomplished?
a. The completion date in the original copies of the agreement of purchase and sale should be chang
b. The counter offer form should be used.
c. An amendment of agreement of purchase and sale from should be used.
d. A new agreement of purchase and sale form should be used.
11. The following statements are with respect to Life Lease projects. Which of the follqyiiQg'i
a. Life lease projects allow seniors to purchase the right to occupy a unit for theiijJife~fm
b. Life lease projects provide an alternative for seniors who want to live in a conidi15mi~ium
maintenance fees. "' "
c. Life lease projects are designed to give tenants security for tenure and a monthly rent that will not increase over
their lifetime.
d. Life lease projects give occupants a fee simple interest in their unit plusa leasehold interest in various amenities
such as fitness facilities with gym equipment. 0»"
12. What kind of legislation covers some of the operational matters in a cafe home which provides independent and
assisted living for mature adults? <;;;b:1);;I,.",! \" .
a. The Tenant Protection Act.
b. The Condominium Act.
c. The Co-operative Corporations Act.
d. The Residential Tenancies Act.
13. In an agreement of purchase and sale f~:~.building a iot;rnlch of the following guidelines should be followed?
a. A description of the building to be bJJilt on the lot should be included in the present use section of the
J
agreement. t
b. The buyer should verify or make the offer conditional on verifying which services are available to the property.
c. If a severance is required there is no heed for a condition as it is covered in the pre-printed clauses.
d. The lot dimensions should not be included as minor discrepancies in lot sizes are common.
14. Anna wants to buy a cottage with a frof)tage on a small lands locked lake, and then construct a dock or boathouse
on the shoreline. \AI ..~~X\(ould ~h~a n'ee'd to contact to obtain the requisite permit?
a. The local conse:rvatl~}A:uthc5Ht(.
b. Ministry of Environment)
c. Ministry of Natural Resources.
d. Department of Caflgdian Heritage.
15. What might be one of the indications that a suspicious transaction could possibly be taking place?
a. A client purchasing multiple properties in a short space of time without inspecting them.
b. A buyer client with substantial assets not wanting to give a large deposit with their offer.
c. A seller client insisting on over pricing their property and not seeming concerned whether it sells or not.
d. A buyer client that is insisting on putting numerous conditional clauses in their offer but not insisting on
additional inspections prior to closing.
16. Which of the following would be an environmental concern for a buyer when purchasing a residential property?
a. Access to the property is by way of a private road.
b. The property has an oil fired furnace but had no visible oil tank.
c. The property is being sold by a mortgagee under a power of sale.
d. The property is zoned for both residential and commercial.
17. Which of the following is a correct statement with respect to a property designated as a heritage property?
a. Alternatives to a property require the written approval of the municipal council.
b. Because of the value inherent in the historical nature of the property municipalities tend to FRI reality taxes.

c. Insurance premiums are typically lower than other homes of the same size.
d. The property is subject to the same rights and restrictions as any other property except for the installation of a
historical plate.
18. As a general rule which of the following statements would be correct in respect to assigning a contract.
a. An independent contractor agreement between brokerage and salesperson is assignable.
b. A mortgagee can assign a mortgage but a mortgagor cannot because a liability cannot normally be assigned to
anyone else.
c. Agreements of purchase and sale are not assignable.
d. All contracts are assignable without any restrictions or limitations.
19. This type of prospecting is effective for three reasons.
1. Potential buyers can view the list of properties.
2. The seller knows that a sincere effort is being made to sell the home.
3. The salesperson has an opportunity to meet prospects.
Which type of prospecting is being described above?
a. Open Houses
b. Cold Calling
c. For Sale by Owners
d. Expired Listings
20. The National Do-Not Call List applies to telemarketers making phone calls to solicit businesses. In this connection it
would be correct to say that:' ". "
a. The National Do-Not Call List applies to cold calls made to consumers to solicit business whether the cold call
was made by phone, fax, door knocking or by email. ...;.",
b. Salespeople are exempt from the regulations under the NqtlOharD -Not Call List as they would not be
considered telemarketers under REBBA 2002. I>.
c. You may call a consumer on the do not call list ifthey haJ~rspecificalgiven.permission to be contacted.
:~:. ~ A.., n,1.t# •
d. The do not call requirements apply to cold calling for listings)5ut do not apply to soliciting buyers.
21. Jamieson is a buyer interested in purchasing 45 Lakes Drive. The basement is finished however there is significant
structural problem with the foundation, and a persistent problem of water leaking into the basement. There is also
a broken window pane on the main floor. On the day that Jamieson viewed the property there was no evidence of
the leaky basement or the structural problem with thejoundatlon which was impossible to view. Because of the
finished basement, he also did not see the broken window pane. Joshua purchases the property through a
cooperating brokerage. The listing salesperson was aware of the problems but the selling salesperson was not
informed. Based on this scenariRwhat concerns do you have with the contract for the purchase of 45 Lakes Drive
with respect to genuine intentiop:-
a. There is a problem as the listing salesperson failed to disclose both the problem with the basement and the
broken window. Theyar'e-both ~latehallatent defects.
b. There is a problemqsth~I ~sal~sperson failed to disclose the problem with the basement, and it is a
material latent defect.
There is no problem under contract law as both problems are patent defects and do not need to be disclosed.
'"
here is no problem under contract law, as both problems are material latent defects and do not need to be
isclo?ed.
~.
2 . Arl10ld is a'buyer who has signed an Ontario Real Estate association Buyer representation agreement with ABC
Re~lity 1r;c. at a commission rate of 3% commencing on the 3'd of May and expiry on August 3'd. There is a 3 month
hOldo~"e~.!.~.~.~
.~.
. Arnold does not renew the buyer repre!entation agreement on the 3'd of august and signs no
further agr.eement with any other brokerage. On July 30 Arnold became aware of and went to see a property
which wai'being sold property. He makes an offer on the property on the s" of august which is accepted the next
day. The transaction is set to close on December ia".
Based on the information presented, would Arnold owe ABC
Reality Inc. a commission under the buyer representation agreement and why?
a. No because the closing on the sale of the property was after both the term of the buyer representation
agreement and the holdover period contained on the contract.
b. Yes because he saw the property during the term of the buyer representation agreement and made an offer
which was accepted during the hold over period.
c. No because he made an offer on the property only after the term of the buyer representation agreement had
expired.
d. Yes but only if the brokerage had made him aware of the property and had accompanied him to the property.

are written in the subsequent
rson with ABC Reality Inc, showed the

b e offer was presented to the sellers
a.m. on Feb. s" Jim contacted the buyer by phone,
Jim met with the buyer to finalize the agreement.
te would be or next to the buyers signature in the
se and sale.

c. A phase 1 audit involves reviewing related records and documents and testing soil and water samples to identify
the extent of the environmental problems.
d. A phase 1 audit determines if recent success to indicate the property may have environmental contamination.
29. Why might a buyer insist on a condition to obtain fire insurance for the property in schedule A. of an agreement of
purchase and sale?
a. A clause in the agreement would be required if the buyer wants to obtain title insurance.
b. Because there is no mention of insurance in the standard pre-printed clauses in the agreement.
c. A buyer may want a clause that describes the sellers existing insurance because the buyers is obligated to
assume the policy.
d. The buyer may not want to complete the transaction if the cost of the coverage is too high.
30. Why might a salesperson choose independent contractor status over employee status?
a. The salesperson wants to minimize book keeping duties and dealing with tax related matt~;
salesperson can concentrate on prospecting and selling. fi;
b. According to the Real Estate and Business Brokers Act 2002 an independent contracto frsales pers
status and authority then an employee salesperson.
c. Obtaining support and assistance from the brokerage management is a priority,for)he sale"u"L~on. '1-
d. The salesperson would like to minimize and control and supervision exercise of:the br6keragJ~/ Ch f
Case Study ." ..."'"
Salesperson Bruce of ABC Reality Inc is preparing an offer for his buyer client ol)a:i~~9perty listed with XYZ Real Estate
Ltd. The property at 93 Lester St. is a detache~.bungalow with a b se ent a,~,'l:he buyer intends to move into
the main floor of the house and continue renting out the basement aparttrl'eQ~;(he buy~entioned to Ahmed that he
wants to make sure that he won't have to pay GST on top of the purchase price.~ns~er the following 3 questions related
to the scenario above, and the wording of the OREA agreement of pu rcha~ and s'ale~
31. Clauses 3 notices on the OREA agreement of purchase and sale, has spaces to insert a fax number for delivery of
notices to a seller and delivery of notices to a buyet~;Under which of the following circumstances would it be
appropriate for brokerage fax numbers to be ;e-;'tered in both of those spaces in clause 3 of the agreement of
purchase and sale. "
1. When the listing brokerage represents the seller and the co-operating brokerage represents the buyer.
2. When the listing brokerage represents both the buyer and the seller.
3. When the listing brokerage represents the seller and the cooperating brokerage is a sub-agent of that listing
4/;e. .
brokerage. k'f;:
4. When a private seller has signed a '§ell er customer service agreement with the same brokerage that has the buyer
as a client.
a. Only in circumstances described ingri' 1.
b. Only in circumstances described in options 1 and 2.
c. In all 4 circumstances. ' ..
d. Only in the circu~st~ncesde~sribes in options 1, 2 and 3.
32. How would Bruc~ifa~:e,~~'mpl~ted Clause 7 GST in the agreement of purchase and sale and why?
a. The clause w~uld havlpeen left blank until the seller certified whether the GST is payable in the transaction or
not. L
b. The words 'in add!iion to' would have been typed as: 'This would result in seller having to pay a GST if the
property was subject to this tax.'
c. The words 'included in' would have been typed in as this would result in the seller having to pay GST if the
property was subject to this tax.
d. The words 'in addition to' would have been typed in as the seller would be confirming that the transaction
would be subject to GST.
33. As stated previously, the basement apartment in the property is currently being rented to a tenant. If Bruce leaves
the 'present use' link blank in clause 8 (title search) of the agreement? What effect would this have on the
transaction?
a. The seller is representing that the basement apartment is illegal.
b. It makes the agreement voidable because essential information is missing.
c. The property has a basement apartment and the seller is representing that is use is legal.
d. The seller is representing that the property can legally be used a single family residence.

Case Study
Rudy Sanchez is a salesperson employed by ABC Reality Inc. He is currently preparing an offer for his buyer client on a
property at 93 Elm St. listed by XYZ Real Estate Ltd. The buyer is offering $375,000 check as a deposit upon acceptance.
The buyer does not require any financing as he has enough money in the bank to pay all cash for the property. The buyer
is particularly interested in this property as it is a bungalow with a large unfinished basement in which he intends to
create an accessory apartment. One of his friends has already agreed to rent the apartment when it is finished. The
property is currently occupied by the seller and the zoning of the property is Rl residential which allows single family
residential. The offer is being drafted on an aREA agreement of purchase and sale from 100. A copy of which is in the
Appendix. Answer the following questions based on the case study.
34. What reporting obligation must be met by Rudy Sanchez and ABC Reality Inc. based on the financial details of the
offer?
t.i) A receipt of funds record mist be completed for the deposit and the transaction and retained f r.nve years.
15. Since there no new financing involved in the offer the entire purchase price must be treateCVasalarge cash
transaction and reported to FINTRAC. Ai .s- r '.,";:
....
c. The deposit was by way of a check rather than cash so no receipt of funds record need to,be completed.
d. Because the deposit check exceeds $10,000 a large cash transaction report mugt e"r'k" TRAC.
35. What effect does the pre-printed wording of the agreement of purchase and sale;~'~s bu 's plans to finish
and rent out an accessory apartment? <;,~
a. The title search clause permits the buyer to make an objection to tltle.Eased on t, s. le family residential use .
.'__" The seller must apply to have the use changes prior to closing withbuyer can nullifYtile agreement.
\b. I The present use of the property is single family residential. The selleris making no warrant as to the possibility of
'-"
. changing the use.
c. The premise of the present use clause is to allow the buyer to describe the intended use of the property.
d. The reference to the title insurance in the agreement will'permit fh~'seller to purchase title insurance in favor of
the buyer to cover any risks associated with recreation arid rental (&tH~apartment.
',' -;X~,:: ·:n~> ..../':::1', ~;;,; ...".;." .....:4"
36. The buyer's offer is accepted and prior to closing it is revea.I••;..~\tb,a~.!r!'l!Selle~iof 93 elm street is a non resident of
Canada, and a significant amount of capital gains tCl.~~o@:t'?,e.;o;ing·on the property.
Which of the following describes how the buyer can 'protect himself from the possible liability to pay the sellers
capital gains tax?
a. The buyer must file a declaration with the Canada revenue agency stating that he is a resident of Canada.
b. The seller will need to provide the buyer with a ministry of national revenue certificate within 30 days after
closing showing that the taxes owing on the property have been paid.
c. If the seller cannot prove thN the capital gains tax has been paid prior to closing, the buyer cannot declare the
agreement null and void and,refuse to close the transaction.
'~d.J On closing the buyer c n withh "d he amount that is necessary to pay the sellers capital gains tax for the
<;:
transaction.
Case Study
Tim is a salesperson working for.the C Reality Inc. His client Jane Arckett has just been shown a suite 50675 Danforth
St. A 2 bedr;?Q!llluxury condominium, based on Jane's instructions, Tim has prepared an agreement to lease in which the
monthly, lent and deposit is $1750 and there is a 1year lease term. Jane signs the agreement and it is faxed to the
owner's sales r~presentative at XYZ Real Estate Ltd. The owner counter offer with a monthly rent of $1800 and a deposit
of $2500 and ad(j~a no pet provision into the Schedule A of the agreement. Jane does not have a pet and accepts the
owners counter offer.
Answer the foJloWing three questions based on the information provided.
'%.>'-
37 i--'s there a PJiPblem with respect to the owners respect for a rent deposit?
I _0/ Yes a rent deposit is allowed but it cannot be more than a monthly rent of $1800.
b. Yes the residential tenancies act prohibits both security and rent deposits.
c. Yes another residential tenancies act. Rent deposits are not allowed although security deposits are allowed.
d. No a landlord is entitled to negotiate a rent deposit with the tenant and it is up to the parties as to what amount
is agreed.
38. Jane moves into the condominium and five months later she buys a dog. The property manager the owner about the
dog and the owner demands that Jane remove the dog from the premises. Does Jane have to comply with the
request?
•......•
~ lane will have to comply and remove the dog, if there is a no pet provision in the condominium declaration
document.' .

b. Jane will have to comply with the request, because the lease does not contain a clause stating that a dog is
permitted.
c. Jane would only have to comply if she owned a dog prior to the lease being assigned, and kept this information
for the owner.
d. The residential tenancies act protects pets and this act overrides any provisions in the condo's declaration
approving the dog.
39. Jane's lease expires on September The owner/landlord so".
wants her mother to move into the unit and on May
10th gives Jane a written 30 day notice of termination. Can the owner's mother move into the unit on June io">
a. No the property is leased until September so''
and the notice cannot require vacant possession before the end
of the lease.
b. No a landlord can only terminate the lease if it was the owner who wanted to move into the property.
(3) No a 60 days' notice is required for a relative and so the earliest that the mother could move in would be the i"
of august.
d. Yes the residential tenancies act allows a landlord to terminate a lease at any time for the purposes of moving a
parent into the premise.
Case Study
It is the s" of June and Sara Chow a salesperson with ABC Reality Inc has just shown ac~nd~ ium to client, Matt.
The property is a 2 bedroom unit located at 57 Bloor St. and listed by XYZ Realty Real Estate: Even though it has no rec-
rooms, swimming pools or exercise rooms, Matt is impressed with the conditiop:8fthe building and decided to make an
offer. The offer is conditional on Matt's lawyer reviewing the condominium astat~ c~tifi~ate, with judgments finding it
to be satisfactory. The condition is written in a precedent format and requi~ttbat Mat~;!quest a status certificate
within two days of acceptance of the offer and it gives him until Sp.m. on the 16~hofJune to satisfy the condition. The
closing date is July 12'h. The offer is signed by Matt at 6pm on s" of June, presented to the seller and accepted by the
seller on June s". Matt requires the status certificate from the condominium corporation's management company on
~ . r~
June 7 . /JIt >' '"<,
Answer the following 3 questions based on the inf?hl'lation provided in t~..~ case study above.
40. Does the information provided in the case shj 0 the status c:ertificate cause for any real concern?
a. The only real concern is that the offer sholllb r:lditional on the seller's lawyer (and not the buyer's
lawyer) reviewing the status certificate with accompanying attachments and proving them in order for the buyer
to waive the condition.
b. Yes, there is a concern. Even though the condominium corporation is legally allowed 10 days in which to provide
the status certificate there may not be sufficient time to allow for the document to be provided to Matt and for
his lawyer to review.
c. The only concern would blthat a buyer could not request a status request. Only the owner of the unit is entitled
to request this document anlth~ request must go to the Ministry of Municipal Affairs and Housing.
d. Yes, there would beS6me:~onc~na~the
:'ii'i;W:~';;". J ,~y
time of is" of June is far too long a time frame for such a condition. A
more appropriate ti.rrle frCinj.€<WQuldbe to allow 5 days to update the certificate and for the lawyer to review.
41. Which of the followirlgaocum~'~ts~ould be included with the status certificate to be given to Matt's Lawyer for this
reviewp!i.0r to Spm on the is" of June?
1'A copy of the most recent condominium budget.
2. A credit reports on the seller and the board of directors .
.1;-;-;,-:/,'-.
3. c~pyof the declaration of bylaws.

4. Copies of all previous offers on the subject unit.
a. The documents in option 3 and 4 only.
f
" '-4
b. The docyments in option 1 and 3 only.
AF
c. The documents in option 1,3 and 4 only.
d. The documents in option 2 and 4 only.
th
42. The sale closes as scheduled on the 12'h of July and on November 19 a special meeting is called for the
condominium board of directors. At the meeting of directors propose spending $300,000 to build a recreation
centre with the money coming from the reserve fund which has a balance of over 2 million dollars. 70% of all unit
holders vote in favour of the proposal. The board announces that they will be proceeding with the proposal. Are
there any problems with the proposal?
a. Yes, the reserve fund can only be used to pay for the day to day common expenses such as heat, hydro, and
employee wages. In addition to this, the recreation centre can only be built if 100% unit owners vote in favour
and it is approved by the courts.

b. Yes, the Condominium Act expressively prohibits additions, alternations or improvements to any part of an
existing condominium building, including the common elements.
c. If money is to be taken from the reserve fund for the project approved by the board then the Condominium Act
requires that a 100% of all unit owner's and 50% of all tenants must vote in favour of the project.
d. There is no problem with the vote to build the recreation centre. But the reserve fund itself cannot be used to
pay for the construction of a brand new common element.
Case Study
Chander is a newly registered salesperson working with ABC Reality Inc. he is at a listing appointment with Paula Jones,
who wants to sell her property at 120 Browns Street and buy a large property just outside of the town. Answer the
following three questions related to this case study.
43. Paula agrees to let Chander list her property for sale as Jim starts to complete the listing agreement Ilefe is the
deeds when he comes to the commission section of the form. The options that he has considering are:
_1. 3% of the first 200,000, 4% of the next 100,000, 5% of any amount over 300,000.
\6. 5% of the first 200,000, 4% of the next 100,000, 3% of any amount over 300,000.
r 4% of the selling price was 2000 flat fee.
4. 5% of the selling price with a rebate of 1% to Charlotte of she buys the through ABC Reality Inc.
Which of the above commission options are permitted by REBBA 2002?
~ Only options 2 and 4 are permitted by REBBA 2002.
b. All 4 options are permitted by REBBA 2002.
c. Only options 1, 2 and 3 are permitted by REBBA 2002.
d. Only option 3 is permitted by REBBA 2002.
44. Paula signs the listing agreement and then mentions that her sister is thi Ing,9Jepuying her property at a minimum
bid auction. She asks Chander if he could advise her as to what sort of things hetsister needs to consider before
registering her interest in the property. In response\~handermakes th'e'following statements:
1. A buyer tends to bid on a property at this kindbf"~u.ction )~~d needs:fin~ncing, should get there lender to inspect
the property and give a letter of commitment prior to the auction.
2. A buyer at a minimum bid auction does not have-to complete the purchase if after the auction the buyer obtains
an unsatisfactory home inspection report. . ...'C.<.
3. A buyer needs to have a buyer check the title and make 't,'necessary title and long title searches prior to the
auction.
4. It is the buyer who is really in contr6)Of the process at a minimum bid auction and sellers are found that these
types of auctions are not succes.sfutwhen it comes to unique properties.
Which of the following statements made from Chander about minimum bid auctions are correct?
Only statements 1, 3 are correct. "'.71'
....
b. Only statements in 1,2, and 3 are corrict.
c. Only statements in 2; 4 are correct.,
d. Only statements ...Ip,,2,.3, anc:l4,are correct.
45. Two days after thetlisti'rl!t'agree~ent is signed, Chander takes Paula to see several properties including 197 Airwood
Rd. Paula is very interested, in this property as it is a large and located on the outskirts of town. The property has 180
ft X 200 ft lot with acenturv old home situated on the east side of the lot. This property is under a power of sale
from a private lender,fc;iui'a is the keen on buying the property, moving into the old home and selling a portion of
the lot, 80 ft X200 ft. The property has been on the market for a while, and Paula has heard rumours from a number
of people in the area that a battery factory used to be located next to the property and has contaminated the soil
before th~building was demolished. These rumours have been recorded in the local newspaper. Paula has asked
Chander to advise her about the issues that need to be addressed in making an offer and possibility of sale of the
part of the property.
Chander responds with the following statements:
1. The seller may agree to representing and warranty of a successful outcome of an environmental audit. The first
phase of that audit would be to conduct an analysis on the soil to see if there is a problem. The second phase of
the audit would be to find out if there was a battery factory on or near the site.
2. Even if it turns out that there are no environmental problems there could still be a stigma attached to the
property as a result of all of the rumours and press records. A stigma could continue to have a negative influence
on the property's value and we would be null advised to disclose the stigma to any potential purchaser of the
portion of the lot that we intend to server.

3. You can sell a portion of the property which has not yet been severed but the sale will not close unless a
severance has been approved.
4. It is typical that the buyer of a property being severed would be asked to pay for the severance, and that is made
clear in Clause 15 of the aREA Agreement of Purchase and Sale.
Which of the above statements made by Chander are correct?
a. Only the statements in I, 2 and 3 are correct.
b. Only the statements in 2 and 3 are correct.
c. Only the statements in 2, 3 and 4 are correct.
d. Only the statements in 1 and 4 are correct.
Answers Sample Test 2
1.d 2.d 3.c 4.c

6.d 7.d 8.b 9.d
11. a 12.d 13. b 14.c
16. b 17. a 18. b 19.a
21. b 22.d 23.b 24.d
26.c 27.d 28.a 29.d
31.a 32.c 33.d 34. a
36.d 37.a 38.a 39.c
41. b 42.d 43.a 44. a

1. When the contract is signed under seal, which of the following statements hold true?
a. The consideration mayor may not exist to make it a valid contract.
b. All contracts signed under seal should have some consideration of value.
c. Contracts under seal are not voidable when signed with minors.
~ contract under seal is valid even without signatures.
2. Which of the following searches do not related to title but are still performed by buyer's solicitor?
@ Seller's status as resident or non-resident.
b. Seller's compliance with the Planning Act.
c. Restrictive covenants on the property.
d. Unregistered easements on the property.
3. Which of the following statements are true about the Commission Trust Account?
a. It is mandatory for every brokerage according to REBBA 2002.
l
b. Every salesperson/broker must have his/her own Commission Trust Account. "
(9 Commission claims are not covered by RECO Insurance if Commission Trust Account is nofma,intained by a
brokerage and the salesperson knows it'»:i';;' .
d. Commission Trust Account enables salespersons/brokers to withdraw part of con,missiBhmon. in advance.
4. When the buyers and sellers sign the agreement, which of the following cannot sign~~ wjtne'~s'f~r seller's signatures?
a. A close relative of seller.
b. The signatory of the agreement.
\~ The seller's salesperson.
d. Anyone who has age of majority.
5. Which of the following statements are correct about the Planning Act clause?
a. It provides that the agreement remains a legally binding agreement ifJ~~ buyer does not use the property
according to the provisions of the Planning Act.i\, i '
b. It provides that the buyer should get necessary consents from appropriate aiHhorities before completion for any'
improvements done on the property by the seller.'
~, It provides that the buyer may terminate the agreement if the seller has not complied with the Planning Act .
. It provides that the seller must comply with the Planning ACt before accepting the agreement.
6. Which of the following statements is correct about the timing of completing the Individual Identification Information
Form?
a. The listing brokerage must complete this form at the time of signing the Listing agreement.
b. The co-operating brokerage must complete this form when the buyer signs the Agreement of Purchase and Sale.
~ The listing brokerage is respci~sible for completing the form for both the buyers and the sellers when the seller
accepts the offer.
d. The co-operating brokerage ust col!'plete this form for both buyers and sellers when the buyers submit the
offer.
7. Which of the following statements' areincorrect about Title Insurance?
a. The .selter may avoid the cost of a new survey for the property.
b. ~ast minutes closing problems may be avoided.
~the solicitors may insist that buyers obtain Title Insurance to cover document errors.
d. Title Insurar,ce may covers all document forgery and acts offraud.
8. Which of the following situations would make a contract void?
a. When the contract is accepted within the time frame given in the offer.
b. When th~,terms and conditions are not definite and clear.
c. When th~ parties to the contract have reached the age of majority.
@. When the contract is signed under seal and has no consideration.
9. Evan is the listing salesperson for 123 Main Street. He has just received three competing offers from three different
brokerages. What is he required to do regarding those offers according to the Real Estate and Business Brokers Act?
~ Disclose and provide details of the competing offers to each buyer.
~) Provide confidentiality to the seller by ensuring that the buyers are not aware of the competing offers.
c. Disclose the number of competing offers to each buyer.
d. Request that each buyer come in with their best buyer.
10. According to the Real Estate and Business Brokers Act, at what point must a listing agreement be reduced to writing
and submitted to a seller for his/her signature?

a. At the earliest practical opportunity but at the latest before any buyer makes an offer.
b. At the earliest practical opportunity, but at the very latest prior to a for sale sign being placed on the property.
JB. At the earliest practical opportunity, but at the very latest before the property is advertised for sale.
a. At the earliest practical opportunity, but at the very latest prior to the property being shown to any buyer.
11. Which of the following would be a duty owned to a brokerage by a buyer who has signed Buyer Representation
Agreement?
a. Full disclosure
b. Accounting
c. Competence
Remuneration
12. Which of the following information could be obtained by a buyer's lawyer performing a non-title search of a
property?
~ Planning Act complete
~ Outstanding mortgages
c. Status of property taxes
d. Restrictive covenants affecting a property
13. The purchase of title insurance can benefit a buyer as it could result in their being able the expense of:
a- A new survey for the property
b. Insurance on a high ratio mortgage
c. Fire insurance for the property
d. A home inspection on the property
14. Which of the following is a correct statement as it relates to condominium'?'",\:: ".
a. The purpose of the reserve fund is to pay for the regular maintenance of the common elements/
~ Unit owners in a condominium are typically subject to use restrictiol1s,e.g. no signs permitted unless approved by
the corporation. .",
c. Liens registered against a unit for non-payment of common expet1s~stake pr-rority over all other encumbrances
whether registered or unregistered.
d. The amount of common expenses payable by a unit owner isdetermined by dividing the current budget by the
number of units in the building.
15. Mobile home parks where the homes are being used on a permanent basis by the families that live there are subject
to legislative requirements set out in the:
a. Condominium Act
b. Co-operative Corporations Act
c. Landlord and Tenant Act
~ Residential Tenancies ~c,ti ",
a
16. Which of the following is teflMjreme~tJor underground storage tanks?
a. The requirements apply tot~n~?!or both fuel and for water.
b. All tanks that are Uridergrou~d~ust be removed
CS) All contractors working on fuel oil equipment must be registered with TSSA.
d. Fuel oil tanks within building levels that are below grade are considered to be underground.
17. May is purchasing an older cottage and intends to put in a new septic system. The size of the septic system will be
determined by:'
® The frontage and depth of the cottage lot.
b. The 16c:;atiQnof the well on the property.
c. The number of kitchen and bathroom fixtures in the cottage.
d. The size of the bathroom in the cottage.
18. Seller Smith has listed his property with ABC Realty, Inc. A buyer when inspecting the property asks if the nearby
school offers secondary education. The seller who did not know about it asked the question to his neighbour who
affirmed the fact. The buyer relied upon this information and purchases the property. Later, the buyer discovers that the
nearest secondary school is about 3 miles away. As a result, the buyer decided not to close the deal. What is the basis of
buyer's decision to terminate the contract?
a. Fraudulent misrepresentation.
b. nnocent misrepresentation.
c. Negligent misrepresentation.
d. Reckless disregard of truth.

19. Salesperson Lee of ABCRealty Inc is insisting Mr. & Mrs. Gandhi to provide information r.equired for the Individual
Identification Information Form. Mr. & Mrs. Gandhi have already signed a Buyer Customer Service Agreement with ABC
Realty, Inc and are reluctant to give out any more information. Which of the following is a valid option for salesperson
Leeto comply with the requirements of Proceeds of Crime (Money Laundering) and Terrorist Financing Act?
~Make a note on the form and proceed with the transaction.
'£)'. Inform FINTRACimmediately as it looks like a suspicious transaction.
S. Make it clear to Mr. & Mrs. Gandhi that this is mandatory and he cannot work for them unless they have provided
the necessary identification information.
d. Ask Mr. & Mrs. Gandhi to sign the Buyer Representation Agreement as the identification information is included
in that form.
20. SalespersonGarcia of ABC Realty Inc has prepared an offer for her buyer clients, which is dated lsthofMay; 20xx. The
buyers want to give at least two days to the sellers to consider their offer. The offer is conditional upon arranging a home
inspection within ten business days following the acceptance. The completion date is approximately two months from
the offer date. Garcia inserts the following information in the Agreement of Purchase and Sale.
Irrevocability: By Buyers until 10.00 pm on May 17, 20xx.
Completion Date: July 20, 20xx.
Title Search: May 20, 20xx.
What problems or concerns do you see in these dates?
a. The title search date is too early.
b. There is not enough time for the sellers to consider the offer.
(qThe completion date is incorrect.
'iJ. The conditional time is too long. ,)
21. Buyer's lawyer requests the seller's lawyer that he needs the sYn/~Yof_~.Q;e prbpe y in order to proceed with
completion of the transaction. The seller's lawyer expres~.eshis inability to proVide one. Which of the following are valid
options for buyer? «::"<;
a. Terminate the deal because it is a condition in the pre-printed wording of agreement.

b. Closethe deal without the survey. . .'-
@The seller must provide a new survey at his own expense:~s this is in the agreement.
tf. The buyer must obtain Title Insurance in the absence 0La-survey.
22. SalespersonWard of XYZ Real Estate Ltd. has received'aP.9ffer of $3S9,OOOfrom Salesperson Garcia of ABC Realty Inc.
The buyers have agreed to a deposit of $10,.g00 Upon Acceptance of the offer and another deposit of $10,000 when the
conditions are fulfilled by the buyers. Salesperson looks at the Schedule A of the offer and finds the following clause:
'The buyer agrees to pay afurther sum of ten thousand dollars ($10,000) by negotiable cheque to ABC Realty Inc
not later than the date set for fulfillment of conditions by the buyers. This amount is for the supplementary deposit
until completion or other termination of this agreement and is to be credited towards the purchase price upon
completion of this transaction.'.
What problem do you se~.t~:jb.h this clause?
a. The words 'subJecftradjustments' is missing.
b. The amount should be given as a certified cheque or bank draft.
(f) It is unclear when this amount is to be submitted.
d. There is no provision that the amount should be held in trust account.
23. Seller Smith received an offer for his property, which had an irrevocable date at 5.00 pm next day. He accepted the
offer and called his sales representative but he did not call back until 4.30 next day. The salesperson took the accepted
offer from seller Smith and called the listing salesperson about acceptance of offer. He then faxed the offer to listing
brokerage office at 5.15 pm. The listing salesperson then presented the offer accepted by seller to his buyer client.
i) The buyer may sign the offer and sign acknowledgement anytime as the offer has already been accepted.
ii) The buyer may refuse to sign the acknowledgement as the irrevocable time has expired.
iii) The listing salesperson should tell the buyer to sign the accepted offer and insert 4.30 pm time.
iv) The contract will be binding as the offer and acceptance has been confirmed.
Which of the above statements is correct?
a. i) and ii) statements are correct.
b. i) and iii) statements are correct .
. ii) and iv) statements are correct.
d. None of the above statements is correct.

24. Jerry is the listing salesperson for 123 Main Street. At 6:00 pm on Friday the is" of March, he received an offer on the
property from a co-operating brokerage. It was irrevocable until 12:30 pm on Monday, March zi". Jerry was going away
for the weekend but would be returning late Sunday night. As a result, he did not call his seller clients until 8:00 am on
Monday; March 21st to let them know there was an offer. An offer presentation was scheduled for 9:00 am on Monday
morning. Has there been any violation of the Real Estate and Business Brokers Act?
a. Yes. At the very least, Jerry should have called the buyer's salesperson to advice that he would be away for the
weekend and ask for an extension of the irrevocable date.
b. No, the offer presentation is taking place well before the end of the irrevocable period and the seller client has not
been disadvantaged.
c. No, the irrevocable time period does not start to run until the offer is presented to the seller.
(g) Yes, when jerry received the offer, he should have immediately called the seller to advise of the
for the offer presentation.
25. Jim is the owner of 123 Main Street. He has signed an Ontario Real Estate Association Listing f\'~t!e
commission rate of 5%. The listing brokerage brigs a firm offer with no conditions for $275000, ';'ch is ac by Jim.
However, the sale does not close as a result of the buyer not being able to obtain sufficient fin Will Jim still owe
the listing brokerage a commission?
a. No. The listing agreement specifies that commission is only every payable unonstlu
@ No, the listing agreement specifies that commission is only payable on
result of the fault of the seller.
c. Yes, the agreement of purchase and sales contains a clause stating th t the commtsstm
originally schedules completion date.
d. Yes, the listing agreement specifies that commission is payable of a transaction regardless of
which party was at fault.
26. The property at 55 Willis Lane is listed with ABC Reali;tv Inc. uti Listing Agreement. The listing
salesperson is in receipt of 2 offers on the property. Qne<bfthe of er being represented by a co-
operating brokerage and the other is from a buyer t')l'lmes Ahmed n aREA Buyer Representation
Agreement with ABC Realty Inc. informs both the C~K8e~f,?~ing rage and Ahmed of the competing offers. Ahmed
demands to know the details of the other offer sinc~ABERealty I has a copy of that other offer and is representing
him and owes him the fiduciary duty of full disclosure. How shou.LABC Realty Inc. proceed and why?
a. ABC Realty Inc should not disclose any details of the'9fteFfrom the co-operating brokerage and this was agreed to
in the Buyer Representation Agreement signed by Ahrhed.
b. Since both buyers are clients, the Re<'11 Estate and Business Brokers Act requires ABC Realty Inc to disclose the
details of both offers to both buvers in
order to ensure that their best interests are being promoted.
c. The Real Estate and Business rs Actrequires that in a competing offer situation, ABC Realty Inc. must inform
Ahmed that there is a c petin r and the details contained in that offer.
d. Ahmed is a client of A based on the duty offull disclosure, ABC Realty Inc. must disclose that
there another off ails of that other offer.
27. Ahmed has just b at 123 Main Street which is co-operative building. He is impressed and would
like to make an offer hat is being purchased by Ahmed?
a. The exclusive py and use the suite and shares in the capital of the corporation that owns the property.
b. The fee simple in the unit and a tenancy in common interest with respect to the common elements.
The fee simple ownership in the nit and a percentage ownership of the common elements.
d. A leasehold interest in the unit and exclusive rights to the common elements.
28. John bought <'1 brand new, two storey home and took possession on the 15ht of January. On may zo"
of the following
year, john sold thEiproperty to Judy and the transaction closed two months later on July zo".
Within a month of the
closing, Judy finds that several of the interior doors are no longer opening and closing properly as a result of their being
installed improperly by the builder. Would Judy be able to make a claim under the Tarion Warranty Protection Program
for this problem?
a. No, there would be no coverage as Judy was not the original owner of the property.
b. Yes this problem would be covered by the two year warranty protection program.
c. No this problem would only be covered by the seven year warranty protection program.
d. Yes this problem would be covered by the seven year warranty protection program.
29. Which of the following situations must be reported by a registrant to FINTRAC?
I. $5000 in cash is handed over by a buyer client to a salesperson as a deposit for an offer on a property.

rd
11. A buyer client gives a $6000 cash deposit to a salesperson at 4pm on April 3 and then another $7000 in cash as a
further deposit at 9pm on April 4th.
Ill. $11000 in cash is handed over by a buyer customer to the salesperson working with them as a deposit for an offer
on a property.
IV. A $20000 uncertified cheque is handed over by a buyer client to their salesperson as a deposit for an offer on a
property.
a. I, 11, and III only
b. I, III and IV only
c. 11 and III only
d. III and IV only
30. Registrants should ensure that all registered owners names appear on the Agreement of Purchase and Sale and that
they all sign the Agreement. Which of the following statements is correct as it related to owners and signatures?
a. When dealing with a corporation, in lieu of a seal, the person signing the offer should have signingCluthority and
i""<"
beside their signature, they should write 'I have the authority to bind the corporation'.
b. When dealing with an estate where there is more than one trustee, only one trustee's signature is required on an
Agreement to make it valid and enforceable.
c. A power of attorney to sign for the owner of a property can be verbal rather th n'tf theperson appointed
" -:%J;\:.:L'
as the power of attorney is a relative or the lawyer of the owner. '/>;t"
d. All persons who have an interest in a property must be shown as owners OHtl1e Agreemint of Purchase and Sale.
31. John has successfully passed the 80 hour course 3 General and AdvancedResid~htial e~~m'··and has submitted his
application to RECO. He intends to work as a full time salesperson with ABC ReClJty Inc and is now waiting to obtain
confirmation from RECO. Which of the following activities can John g~til}~olvedlfl yvhile he is waiting for his registration?
a. Build a database of potential clients from his list of friends, acquairjtances and business contacts.
b. Call friends, acquaintances and business contracts to ask them if the\/~~~ interested in selling their homes.
c. Develop his marketing material and then send fliers marketing hirnselfte.his friends, acquaintances and business
clients.
d. Assist at an open house for the public with another salespersonfrom ABC Realty Inc to get a feel for the business.
32. A mortgage is in default. What would most likely be the reason why a lender would choose a power of sale as the
remedy for the default?
a. Because the borrower prefers power of sale over foreclosure.
b. Because there is no need to obtain possession of the property when using a power of sale.
c. Because the amount of the mortgage is small in comparison to the value of the property.
d. Because it is relatively inexpensive and the most fair to the mortgagor.
33. An environmental contractor who is working on remedial steps and costs associated with the process is performing
which of the following stages of ~nvironrD~ntal audit?
a. Phase 1\[;("
b. Phase 2
c. Phase 3
d. Pha~.~4;, .
34. Whicji"of the following statements is correct regarding a stigmatized property?
a, TtJe valu~j$likely to increase due to stigma associated with the property.
b. Stigma ty~Tcally reflects real risk to the buyer as opposed to a perceived risk.
c. Stigma can remain as such for many years, particularly given the widespread media coverage and associated
notoriety:
d. Stigma can ri'~ver be remedied.
35. Developer Andrew is planning to renovate an existing old factory and convert it into condominium lofts. The property,
in addition to a factory, contains eight existing row houses which will be retained, renovated and sold as condominium
town houses within the same development. Will Tarion warranty cover Andrew's project if he is a registered builder with
Tarion?
a. Yes, because Andrew is a registered builder .:
b. No, because the condominium units are not new but only renovated.
c. No, because the Tarion does not cover any property that was previously being used as a factory.
d. Yes, because the property will be registered as a new condominium.
36. Farms are typically divided into various types. Which of the following is not one of them?
a. Viable farm

b. Cash crop farm
c. Special purpose farm
d. Livestock farm
37. A disturbance resulting in a complaint for the purposes of a hearing before the Normal Farm Practices Board:
a. Could include odour, dust and flies, but not noise.
b. Would exclude mechanical vibrations emitted due to farming operation.
c. Might involve an agricultural operation that specializes in beekeeping.
d. Would typically exclude any complaints that involve smoke.
38. Which of the following statements is correct regarding vacant land?
a. b. A vacant parcel of land which has not yet been severed cannot be offered for sale until such sever
approved.
b. The only ongoing expense related to holding a vacant parcel of land would be mortgage payments
taxes.
c. The cost of providing hydro services to a vacant parcel of land is always paid by the selle
land is sold.
d. Vacant land can involve long holding period before realizing any return.
39. Which of the following statements are true about heritage property designation?
a. The heritage status may restrict internal or external changes to the structure.
b. Insurance is never available for such properties given their designation.
c. Local Municipal Heritage Committee is appointed by the Ministry of unici
approvals for alternations or renovations of heritage properties.
d. An owner still enjoys all the rights of fee simple ownership e~~9Jt~he
40. The Chattels Included and Fixtures Excluded clauses are for protE!tting!he be erests of the buyers and well as
sellers. If you were working with the buyer and prepari~~!,~he Agr~~ment cWP~fEhase and Sale and, there are certain
built-in items that do not seem to fit in any of the twq!categ()ries, w.b.?t would y.g!J do?
a. Include the items in the agreement so that 'Here is n·o confJsi8i~.~.t~ latef.~ate.
b. Leave the clauses blank so that the seller a de among themselves.
c. Ask the sellers and buyers to take advice fro respec e lawyers.
d. Leave the Chattels Included clause blank because these t-in chattels are always deemed to be included in the
sale.
41. What is the purpose of the reserve fund condominiu ?
a. It is used to pay for the regular m nce of the common elements.
b. It is used to offset the payments wners who default on monthly common expenses.
c. It is used to bring a unit own~r:~c;j~faul t5rtgage into good standing to avoid the possibility of the building
being sold under powe~8! sale., ./
d. It is used for major reparr~.m,gd replacE!ment of common elements and corporation assets.
42. Which of the followin atemeO!?isCorrect with respect to a condominium?
a. The condominii testhe legal framework for registering a deed for a unit in a multiple unit building.
b. The purpose inium corporation is to hold legal title to the units on behalf of the owners.
c. The condomin d by the registration of the condominium declaration and description.
d. of both n esale units are allowed a 10 day period to cancel their purchase.
Case Study
Ben and EllenQ't..eary and their two young daughters have recently moved into town and have signed an offer to lease a
house at 147 Edgeware Road for one year, commencing Feb 1st• when the offer is presented to the owners, they are
satisfied with all of the terms but make a counter offer to the O'Leary's in which they include a no pet clause because
they are concerned about any possible damage being done to their property by a pet. The O'Leary's have no pets and do
not object to the clause being included. As a result, they accept the counter offer, sign a lease with the owners and move
into 147 Edgeware road on Feb. 1st.
43. It is now the rs" of June and the O'Leary's have bought a dog for their daughters. The owners have found out and are
furious. They remind the O'Leary's of the no pet clause in the lease and demand that they get rid of the dog. According to
the Residential Tenancies Act, can the owners legally enforce their demand that the dog be removed from the home?
a. Yes, the O'Leary's are bound by their lease which has a no pet provision and must remove the dog.
b. No the O'Leary's cannot be forced to get rid of the dog. A no pet clause in a lease agreement is void.
c. Yes the no pet provision is valid because at the time the O'Leary's signed the lease, they did not have a dog.

d. No a pet clause can only be enforced if they had a pet at the time the lease was signed but neglected to inform the
owners of that fact.
44. On the zo"
of November, the O'Leary's receive a written notice on the approved form by mail from the owners
informing them there is going to be an increase in rent starting on the i" of February of next year. Based on the
information provided and the provisions of the Residential Tenancies Act, are there any problem with this notice of rent
increase?
a. No. The notice has been given more than the required 60 days prior to the end of the lease.
b. Yes. The notice must be given to the tenant at least 90 days prior to the end of the lease.
c. No. provided that the amount of rent increase does not exceed what is permitted under the Act, the notice can be
given as little as 30 days prior to the end of the lease.
d. Yes. In order to be effective, the written notice must be hand delivered to the tenant at least 60
end of the lease.
4S. On December io".
the owners decide to sell their property at 147 Edgeware Road and list it w·
ABC Realty Inc. At 3pm on December 14th, Ward phones the O'Leary's to tell them that there wi
property at 8:30 pm on December is". The O'Leary's are not happy about this. Based on the
Tenancies Act, do you have any concerns with this showing?
a. Yes. The written notice is required for the showing and the showing must take
b. No. provided the showing takes place before 9 pm, there is no problem.
c. Yes. The O'Leary's are entitled to quiet enjoyment of the property and shci\Nilngs
end of the lease.
d. No. Ward has complied with the Act by giving the tenants 24 hours
Case Study
It is the s"
of May, 2009 and Sarah Graham, a salesperson with A is preparing an offer on an aREA
agreement of Purchase and Sale for a property at 98 SampsCln Co . Judv Dempster. The property is listed
with XYZ Real Estate Ltd. Judy would like to offer $~;is,ooo for t~;p y~The an existing first mortgage with an
interest rate of 7% which Judy is willing to assume i~grq~[rt9helpZhe seller avoi a penalty for early discharge of the
mortgage. To make the sale more attractive to Judy, the ~eller is willing to take back a second mortgage for $25,000 at S%
interest. Judy will be paying the balance of the purchase price fr9rtl her own resources. The offer is for $21S,OOO with a
$10,000 deposit submitted upon acceptance and is condiHopaluhtil May 11th on the buyer being approved to assume the
sellers existing first mortgage. The followin rtgage clauses appear on Schedule 'A' to the Agreement:
This offer is conditional upon the Buyer a g to assume the existing first Charge/Mortgage held by Lender Inc. for
approximately One Hundred and Forty Dollars ($140,000), bearing interest at the rate of 8% per annum,
calculated semi-annually not in adv(Jhc~/.repa:,~(rln blended monthly payments of One Thousand and Fifteen Dollars
and Sixty Cents (1,015.60), inc/yqing bothprjnci,5bl and interest, and due on the ir" of December, 2012. Unless the Buyer
gives notice in writing deliveredtbthe setJ~f;riot later than 6pm on the 11th of May, 2009, that this condition is fulfilled,
this offer shall be null an and the deposit shall be returned to the Buyer in full without deduction. The Buyer hereby
agrees to proceed im .; mafetm application and provide such material as may be required by the
Chargee/Mortgagee.
The buyer agrees to g and the,seller agrees to take back a second Charge/Mortgage in the amount of $25000 bearing
interest at the rate of 5prnum, calculated semi annually not in advance, repayable in blended monthly payments
$164.28 based on a 20 year amortization, including both principal and interest and to run for a term of five years from the
date of completion of this transaction.
The offer is signed by Judy at 6pm on May s", is irrevocable until 6pm on May ih and the completion date is set for July
12'h.
46. How would Sarah Graham have explained the irrevocable time period in Clause 1 of this offer to Judy?
a. You are giving the seller until 6pm on the t" of May to accept the offer and for the mortgage condition to be
fulfilled.
b. You are giving the seller until 6pm on the y'h of May to consider and accept the offer. You are agreeing not to
withdraw the offer within that time period.
c. You have been given until 6pm on the r:
of May to decide whether you wish to proceed with the offer and after
that the seller can accept or reject the offer.
d. You are giving the seller until 6pm on the ih of May to consider and accept the offer. You can withdraw your offer
at any time within that time period.

47. Based on the information provided in the scenario, do you have any concerns with the way the first mortgage clause
was drafted?
a. Yes, the assumption of the mortgage should have been conditional upon the mortgagee's approval.
b. Yes, the first mortgage should contain a postponement clause because the seller is taking back a second mortgage.
c. No, the offer must be conditional upon the buyer assuming the existing mortgage as mentioned in the scenario.
d. Yes, a waiver should have been included in the clause because it's a conditional precedent.
Case Study
Landlord Samson owns a four unit apartment building on a quiet street in Any town. He lives in one of the 2 bedroom unit
and the other three are rented out. Most of his tenants are nice and pay rent on time and abide by verbal, rules and
regulations that Samson tells them from time to time. Samson has some knowledge of the Residential t~narides act and,
generally follows them. Based on this scenario, answer the following three questions.
48. Landlord Samson is always concerned about creditworthiness of tenants in his fourplex apartmilit b~iI9!rlg:Atenant
who is new in the country approaches Samson for renting his 2 bed room apartment. Since theJ~r)ant does'nolhave any
credit history in this country, Samson wants to make sure that the tenant does not default on re'~(pa ments. Which of
the following is a valid option for Samson?
a. Ask the tenant to provide post-dated cheques for rent for the next one year.
b. Ask the tenant to bring a guarantor or a co-signer.
c. Insert a condition of automatic withdrawal of rent from tenant's chequing.account."
d. Ask the tenant to provide six month's rent as security deposit. '"
49. Two months into the tenancy, one of the tenants brings in a big dog. Samson does not like pets at all in his building.
Which of the following is a valid option for him to terminate the tenancy?
a. Samson can terminate the tenancy any time by giving a 120 davsnotice.
b. Termination notice can be served to the tenant if the dog is creating.signlficant nuisance in the building.
c. Samson is not permitted to terminate the tenancy on any grounds., '.", '
d. Samson can serve termination notice to the tenant and the tenant can terminate tenancy within 10 days of
receiving the notice.
50. Tenant Brown's lease has already ended with Samson but he is still staying in his 2 bedroom unit. Brown is paying rent
and Samson is accepting it. Samson's mother is coming from UK in two months and is planning to live with him. Samson
needs to vacate Brown's 2 bedroom unit for his mother. Which of the following is a correct statement regarding
termination of tenancy of one of the tenants?
a. Samson can serve a 60 days notice to Brown to get the unit vacated.
b. Samson must serve a minimum of 120 days notice to Brown.
c. Brown can reject sarnson'sriotlce because he is paying rent and Samson is willfully accepting it.
d. Brown can vacate within week er receiving termination notice from Samson.
Answers Sample Exam C3 Res 1
l.A 2. D 3.C 4. B 5.C

6. B 7.D 8. B 9.C 10.A
11.'0 12.C 13. A 14. B 15. D
16.C 17. C 18.D 19.A 20.A
21. B 22. D 23. D 24. B 25. B
26.A 27.A 28.C 29.C 30.A
31.A 32.D 33.C 34.C 35. B
36.A 37.( 38.A 39. D 40. A
41. D 42.C 43. B 44. B 45.A
46. B 47.A 48.B 49.B 50.A

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Sample Exam C3 Res 3

Course 3 General & Advanced Residential Page 18

Course 3 General & Advanced Residential Page 19

assist in the reduction of energy cost?

Course 3 General & Advanced Residential Page 20

Course 3 General & Advanced Residential Page 21

Course 3 General & Advanced Residential Page 22

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Course 3 General & Advanced Residential Page 24

Course 3 General & Advanced Residential Page 25

Answers Sample Exam C3 Res 3

Course 3 General & Advanced Residential Page 26

Course 3 General & Advanced Residential Page 9

Course 3 General & Advanced Residential Page 10

Course 3 General & Advanced Residential Page 11

rson with ABC Reality Inc, showed the

Course 3 General & Advanced Residential Page 12

Course 3 General & Advanced Residential Page 13

Course 3 General & Advanced Residential Page 14

3. c~pyof the declaration of bylaws.

Course 3 General & Advanced Residential Page 15

Course 3 General & Advanced Residential Page 16

Answers Sample Test 2

1.d 2.d 3.c 4.c

Course 3 General & Advanced Residential Page 17

Course 3 General & Advanced Residential Page 1

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a. Terminate the deal because it is a condition in the pre-printed wording of agreement.

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Course 3 General & Advanced Residential Page 4

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Course 3 General & Advanced Residential Page 6

Course 3 General & Advanced Residential Page 7

Answers Sample Exam C3 Res 1

l.A 2. D 3.C 4. B 5.C

Course 3 General & Advanced Residential Page 8

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