LSO Barrister Real Estate Law 2 — Questions and Answers
Question 1: In Ontario, what does the term 'holdback' mean in the context of construction liens?
- A deposit held by the real estate agent
- A statutory 10% of amounts payable to contractors held back by the owner as a lien fund (Correct answer)
- A portion of the purchase price held in trust
- Funds retained for property tax arrears
Correct answer: A statutory 10% of amounts payable to contractors held back by the owner as a lien fund
Under the Construction Act (Ontario), an owner must hold back 10% of the value of work done as a lien fund available to unpaid contractors and subcontractors.
Question 2: Under the Ontario Residential Tenancies Act, 2006, what notice period must a landlord give a tenant to terminate a month-to-month tenancy for a purchaser's own use?
- 30 days
- 60 days
- 90 days (Correct answer)
- N60 days with 2 months' rent compensation
Correct answer: 90 days
Form N12 requires 60 days' notice to terminate a tenancy for the landlord's or purchaser's own use, with compensation equal to one month's rent.
Question 3: What is 'title insurance' in Ontario and what risk does it primarily protect against?
- Insurance against property damage
- Insurance protecting against title defects, fraud, survey errors, and zoning issues discovered after closing (Correct answer)
- Insurance against mortgage default
- Insurance protecting the real estate agent from liability
Correct answer: Insurance protecting against title defects, fraud, survey errors, and zoning issues discovered after closing
Title insurance protects purchasers and lenders from losses arising from title defects, fraud, encroachments, and certain zoning non-compliances that existed before the policy date.
Question 4: In Ontario, what is an 'easement' in real property law?
- A temporary licence to use another's land
- A right attached to land allowing the owner of one parcel (dominant tenement) to use another's land (servient tenement) for a specific purpose (Correct answer)
- A restriction on the use of land imposed by a municipality
- A mortgage registered against a property
Correct answer: A right attached to land allowing the owner of one parcel (dominant tenement) to use another's land (servient tenement) for a specific purpose
An easement is a non-possessory interest in land that runs with both the dominant and servient tenements and survives changes in ownership.
Question 5: Under the Ontario Condominium Act, 1998, what is a 'status certificate' and why is it important to a purchaser?
- A certificate confirming occupancy permit compliance
- A document disclosing the financial health, governance, and any outstanding issues of the condominium corporation (Correct answer)
- A certificate of insurance for the unit
- A builder's warranty certificate
Correct answer: A document disclosing the financial health, governance, and any outstanding issues of the condominium corporation
A status certificate reveals the condominium corporation's financial statements, reserve fund status, any special assessments, and existing legal proceedings affecting the purchaser's decision.
Question 6: In Ontario, what is the purpose of the 'requisition period' in a real estate transaction?
- The period for the purchaser to arrange financing
- The period during which the purchaser's lawyer may raise title objections and require the vendor to remedy defects (Correct answer)
- The period for the home inspection
- The period during which the vendor may accept other offers
Correct answer: The period during which the purchaser's lawyer may raise title objections and require the vendor to remedy defects
The requisition period gives the purchaser's lawyer time to search title and raise objections to any defects; after it expires, the purchaser may be deemed to have waived the defects.
LSO Barrister Real Estate Law 2
In Ontario, what does the term 'holdback' mean in the context of construction liens?