Ontario Real Estate Salesperson Licensing Exam (OREA/Humber) — Questions and Answers

Question 1: What is 'Teraview' in Ontario's land registration system?

The electronic gateway software used by authorized users to search title, register documents, and conduct transactions in Ontario's land registration system (Correct answer)
A property viewing platform for buyers
A satellite mapping service
A property management software

Correct answer: The electronic gateway software used by authorized users to search title, register documents, and conduct transactions in Ontario's land registration system

Teraview is the proprietary software application developed by Teranet that provides authorized users (primarily lawyers) with access to Ontario's electronic land registration system for title searching, document registration, and other property-related transactions.

Question 2: In Ontario, what is the difference between 'void' and 'voidable' contracts in real estate?

A void contract has no legal effect from the beginning; a voidable contract is valid until one party chooses to set it aside (Correct answer)
Both types require court approval to enforce
There is no difference
A voidable contract is more serious than a void contract

Correct answer: A void contract has no legal effect from the beginning; a voidable contract is valid until one party chooses to set it aside

A void contract has no legal force from its inception — it is as if the contract never existed (e.g., a contract for an illegal purpose). A voidable contract is valid and enforceable but can be set aside at the option of one party (e.g., due to misrepresentation or lack of capacity).

Question 3: Under Ontario law, what is the significance of 'Teranet' in real estate?

It is a mortgage lending institution
It is a real estate brokerage franchise
It is the company that manages Ontario's electronic land registration system and provides title searching services (Correct answer)
It is an internet service provider for real estate agents

Correct answer: It is the company that manages Ontario's electronic land registration system and provides title searching services

Teranet manages Ontario's electronic land registration system, providing access to property records, title searches, and document registration services. It operates the POLARIS (Province of Ontario Land Registration Information System) database.

Question 4: What is a 'chain of title' and why is it important in the Registry system?

The order in which offers were received
A list of all mortgages on the property
The sequential history of all documents and transfers affecting ownership of a property, which must be searched to verify good title (Correct answer)
A decorative chain on the property boundary

Correct answer: The sequential history of all documents and transfers affecting ownership of a property, which must be searched to verify good title

The chain of title is the complete chronological history of documents (deeds, mortgages, easements) affecting a property. In the Registry system, a buyer must search the chain of title for a minimum period to verify that the seller has good and marketable title.

Question 5: In Ontario, who is legally authorized to prepare and register mortgage documents?

A licensed real estate salesperson
A licensed lawyer (Correct answer)
A registered mortgage broker
A certified title insurance agent

Correct answer: A licensed lawyer

In Ontario, preparing and registering mortgage documents constitutes the practice of law and must be performed by a licensed lawyer, not a mortgage broker or real estate salesperson.

Question 6: What is a 'discharge' of a mortgage/charge in Ontario's registration system?

A registered document that releases the property from the security of the mortgage/charge after the debt has been paid (Correct answer)
A construction permit completion certificate
A notification of property tax arrears
The termination of the real estate agent's contract

Correct answer: A registered document that releases the property from the security of the mortgage/charge after the debt has been paid

A discharge is a document registered on title that removes the mortgage (charge) from the property's title, confirming that the secured debt has been fully paid and the lender no longer has a claim against the property.

Question 7: In Ontario, what is the 'first to register' rule?

The first person to visit a property gets the first right to buy
When two competing interests exist, the one registered first on title generally takes priority over the one registered later (Correct answer)
The first real estate agent to list the property gets the commission
The first offer received must be accepted

Correct answer: When two competing interests exist, the one registered first on title generally takes priority over the one registered later

The first to register rule (priority of registration) means that when two or more competing interests exist for the same property, the interest registered first on title takes priority. This makes timely registration critically important.

Question 8: In Ontario, what must a seller provide to the buyer on closing day?

Only the house keys
Vacant possession (unless otherwise agreed), all keys, garage door openers, alarm codes, and any fixtures and chattels included in the agreement (Correct answer)
A home warranty
A financial statement of all expenses related to the property

Correct answer: Vacant possession (unless otherwise agreed), all keys, garage door openers, alarm codes, and any fixtures and chattels included in the agreement

On closing day, the seller must provide vacant possession of the property (unless tenants are part of the agreement), along with all keys, garage door openers, alarm codes, and any included fixtures and chattels. The property should be in the condition agreed upon.

Question 9: What is a 'parcel register' in Ontario's land registration system?

A registry of all real estate agents
A register of all parcels available for sale
The official record maintained for each property that lists the owner and all registered interests affecting the property (Correct answer)
A shipping register for real estate documents

Correct answer: The official record maintained for each property that lists the owner and all registered interests affecting the property

The parcel register is the central record for each property in the Land Titles system. It identifies the current owner, the legal description, and lists all registered interests (charges, easements, liens) affecting the property. It is the definitive record of title.

Question 10: In Ontario real estate, what is an 'escape clause'?

A clause allowing either party to exit at any time without penalty
A clause that only applies to rental agreements
A fire safety requirement in the contract
A clause that allows a seller to continue marketing the property while a conditional offer is in place, and to give the buyer a specified time to waive conditions if another offer is received (Correct answer)

Correct answer: A clause that allows a seller to continue marketing the property while a conditional offer is in place, and to give the buyer a specified time to waive conditions if another offer is received

An escape clause (also called a time clause or 48/72-hour clause) allows the seller to keep the property on the market while a conditional offer exists. If another offer comes in, the first buyer is given a specified time period to remove their conditions or the first offer becomes null.

Question 11: What is the purpose of the Discipline Committee under REBBA 2002?

To hear and decide complaints of professional misconduct or incompetence against registrants (Correct answer)
To set commission rates for the industry
To manage RECO's annual budget
To approve new real estate developments

Correct answer: To hear and decide complaints of professional misconduct or incompetence against registrants

The Discipline Committee hears matters referred by the Registrar involving allegations of professional misconduct, incompetence, or breaches of the Code of Ethics by registrants.

Question 12: In Ontario, what is the effect of a 'zoning by-law' on a property?

It determines the property tax rate
It only applies to commercial properties
It determines who can purchase the property
It specifies the permitted uses, building height, setbacks, and density for the property (Correct answer)

Correct answer: It specifies the permitted uses, building height, setbacks, and density for the property

Zoning by-laws enacted by municipalities under the Planning Act specify how land can be used (residential, commercial, industrial), building heights, setbacks from property lines, lot coverage, and density requirements.

Question 13: What is a 'legal description' of property in Ontario's registration system?

A description of the building on the property
The property's street address
A general description of the neighbourhood
The precise identification of a property's boundaries and location using lot and plan numbers, metes and bounds, or PIN, as recorded in the land registration system (Correct answer)

Correct answer: The precise identification of a property's boundaries and location using lot and plan numbers, metes and bounds, or PIN, as recorded in the land registration system

A legal description precisely identifies a property using methods such as lot and plan numbers (in a registered plan of subdivision), metes and bounds (bearings and distances), or the Property Identification Number (PIN). The street address alone is not a legal description.

Question 14: Under Ontario law, what is a 'minor variance' under the Planning Act?

A minor deviation from a zoning by-law that can be approved by the Committee of Adjustment (Correct answer)
A small change in the purchase price
A variance in the mortgage interest rate
A change in the closing date

Correct answer: A minor deviation from a zoning by-law that can be approved by the Committee of Adjustment

A minor variance allows a property owner to deviate slightly from the requirements of a zoning by-law (such as a reduced setback) without requiring a formal zoning amendment. It must be approved by the Committee of Adjustment based on four statutory tests.

Question 15: What is 'tender' in Ontario real estate contract law?

A deposit paid at the time of offer
A request for proposals from contractors
A type of bidding process for commercial properties
The unconditional offer to perform one's obligations under the contract, typically by being ready, willing, and able to close on the closing date (Correct answer)

Correct answer: The unconditional offer to perform one's obligations under the contract, typically by being ready, willing, and able to close on the closing date

Tender means presenting oneself as ready, willing, and able to complete the transaction on the closing date. If one party tenders and the other fails to close, the tendering party can pursue legal remedies for breach of contract.

Question 16: What is a 'fee simple' estate in Ontario property law?

A type of lease agreement
A simplified fee for property registration
A reduced-fee ownership for first-time buyers
The highest and most complete form of land ownership, giving the owner the right to use, sell, or transfer the property (Correct answer)

Correct answer: The highest and most complete form of land ownership, giving the owner the right to use, sell, or transfer the property

Fee simple is the most complete estate in land recognized in law. The owner has the right to use the property, sell it, lease it, mortgage it, or pass it on by will. It is subject only to government limitations (taxes, zoning, expropriation).

Question 17: What is the 'first-time home buyer's land transfer tax rebate' in Ontario?

A rebate on property insurance
A rebate of up to a specified amount of the Ontario land transfer tax for eligible first-time homebuyers purchasing a qualifying home (Correct answer)
A rebate on home inspection costs
A federal tax rebate for all homebuyers

Correct answer: A rebate of up to a specified amount of the Ontario land transfer tax for eligible first-time homebuyers purchasing a qualifying home

Ontario offers eligible first-time homebuyers a rebate of up to a maximum amount of the provincial land transfer tax. To qualify, the buyer must be a Canadian citizen or permanent resident, at least 18 years old, and must not have previously owned a home anywhere in the world.

Question 18: What is the minimum down payment required in Canada for a home purchase priced at $500,000?

5% of the purchase price (Correct answer)
20% of the purchase price
10% of the purchase price
15% of the purchase price

Correct answer: 5% of the purchase price

For homes priced at $500,000 or less in Canada, the minimum down payment required is 5% of the purchase price under federal mortgage rules.

Question 19: What is the role of the 'Residential Tenancies Act' in Ontario real estate transactions?

It governs the rights and obligations of residential landlords and tenants, including protections that survive property sales (Correct answer)
It is only relevant to purpose-built rental buildings
It only applies to commercial properties
It sets the price for rental properties

Correct answer: It governs the rights and obligations of residential landlords and tenants, including protections that survive property sales

The Residential Tenancies Act governs the relationship between residential landlords and tenants in Ontario. Tenancy agreements survive the sale of a property — a new owner cannot simply evict existing tenants.

Question 20: In Ontario, what is a 'license' in property law and how does it differ from an easement?

A license can only be granted by the government
A license and an easement are the same thing
A license is a personal, revocable permission to use land that does not create an interest in land, while an easement creates a lasting property interest (Correct answer)
A license provides more permanent rights than an easement

Correct answer: A license is a personal, revocable permission to use land that does not create an interest in land, while an easement creates a lasting property interest

A license is personal permission to use someone's land that is revocable and does not create a property interest (it cannot be registered on title). An easement creates a property interest that runs with the land and binds future owners.

Question 21: In Ontario, what is 'title insurance' and why is it important?

An insurance policy that covers the real estate agent's errors
Insurance that covers the building against fire damage
An insurance policy that protects against losses arising from defects in title, including fraud, forgery, encroachments, and survey issues (Correct answer)
Insurance required only for commercial properties

Correct answer: An insurance policy that protects against losses arising from defects in title, including fraud, forgery, encroachments, and survey issues

Title insurance protects property owners and lenders against financial losses arising from title defects that were not discovered during the title search. It covers issues like fraud, forgery, encroachments, zoning violations, and survey errors.

Question 22: What is the difference between 'fraudulent misrepresentation' and 'negligent misrepresentation' in Ontario real estate?

Fraudulent misrepresentation involves intentional deception; negligent misrepresentation involves a failure to exercise reasonable care in making a statement (Correct answer)
Negligent misrepresentation is more serious than fraudulent
Both require proof of intent to deceive
There is no legal difference

Correct answer: Fraudulent misrepresentation involves intentional deception; negligent misrepresentation involves a failure to exercise reasonable care in making a statement

Fraudulent misrepresentation requires proof that the statement was made knowingly, without belief in its truth, or recklessly. Negligent misrepresentation occurs when a person with a duty of care makes a statement without exercising reasonable care to verify its accuracy.

Question 23: In Ontario, what is the role of the 'co-operating brokerage' in a residential transaction?

A government agency that oversees the transaction
The brokerage representing the buyer that cooperates with the listing brokerage to complete the transaction, sharing the commission (Correct answer)
A brokerage that shares office space with the listing brokerage
A brokerage that provides administrative support

Correct answer: The brokerage representing the buyer that cooperates with the listing brokerage to complete the transaction, sharing the commission

The co-operating brokerage (also called the selling brokerage or buyer's brokerage) represents the buyer in the transaction. They cooperate with the listing brokerage to facilitate the sale and typically receive a portion of the commission as agreed through the MLS or other arrangement.

Question 24: The maximum Total Debt Service (TDS) ratio most institutional lenders in Canada will accept is:

36%
44% (Correct answer)
32%
50%

Correct answer: 44%

Most institutional lenders accept a maximum TDS ratio of 44%, meaning total monthly debt obligations—including housing costs and all other debts—should not exceed 44% of gross income.

Question 25: What are the essential elements required to form a valid contract for the sale of real estate in Ontario?

Only the signatures of the buyer and seller
A verbal agreement and a handshake
Only a written offer and acceptance
Offer, acceptance, consideration, intention to create legal relations, capacity of parties, and legality of purpose (Correct answer)

Correct answer: Offer, acceptance, consideration, intention to create legal relations, capacity of parties, and legality of purpose

A valid real estate contract in Ontario requires all essential elements of contract law: a clear offer, unconditional acceptance, consideration (usually the purchase price), intention to be legally bound, legal capacity of all parties, and a lawful purpose.

Question 26: What is the purpose of the representation agreement under REBBA 2002?

It is only required for commercial transactions
It is a receipt for the deposit
It transfers property ownership
It formalizes the relationship between the brokerage and the client, outlining duties and terms (Correct answer)

Correct answer: It formalizes the relationship between the brokerage and the client, outlining duties and terms

A representation agreement is a written contract between the brokerage and the client that outlines the services to be provided, the obligations of both parties, the term of the agreement, and the commission or remuneration.

Question 27: What is 'expropriation' and what rights do Ontario property owners have when their property is expropriated?

Property owners can refuse expropriation entirely
Property owners have no rights during expropriation
Expropriation only applies to abandoned properties
Government can take private property for public purposes, and owners are entitled to fair compensation, a hearing, and the right to challenge the amount of compensation (Correct answer)

Correct answer: Government can take private property for public purposes, and owners are entitled to fair compensation, a hearing, and the right to challenge the amount of compensation

Expropriation allows government to acquire private property for public purposes. Under the Expropriations Act, property owners have the right to a hearing, fair market value compensation, and can challenge the compensation amount through an inquiry.

Question 28: Under REBBA 2002, what authority does the Registrar have regarding investigations?

The Registrar can only investigate after receiving a formal complaint
Investigations can only be conducted by external auditors
The Registrar can appoint investigators to conduct inspections and investigations at any time (Correct answer)
The Registrar must obtain a court order before any investigation

Correct answer: The Registrar can appoint investigators to conduct inspections and investigations at any time

The Registrar has broad authority under REBBA 2002 to appoint investigators who can conduct inspections and investigations of registrants, including examining books, records, and documents, without requiring a formal complaint.

Question 29: What is 'assignment' of a real estate contract in Ontario?

The delegation of duties to a real estate agent
The same as listing a property for sale
The registration of a mortgage
The transfer of one party's rights and obligations under a contract to a third party (Correct answer)

Correct answer: The transfer of one party's rights and obligations under a contract to a third party

Assignment occurs when a party to a contract transfers their rights (and sometimes obligations) to a third party. In real estate, a buyer might assign their Agreement of Purchase and Sale to another buyer before closing, subject to any restrictions in the contract.

Question 30: What is a 'bridge loan' or 'bridge financing' in Ontario real estate?

A government subsidy for first-time homebuyers
Short-term financing that helps a buyer who is purchasing a new property before the sale of their existing property closes (Correct answer)
A long-term mortgage with a low introductory rate
A loan for building a bridge on the property

Correct answer: Short-term financing that helps a buyer who is purchasing a new property before the sale of their existing property closes

Bridge financing is a short-term loan that covers the gap when a buyer's new property closes before their existing property is sold. It allows the buyer to access the equity in their current home to fund the new purchase until the sale proceeds are received.

Question 31: In Ontario, what is a 'representation agreement' in the context of real estate contracts?

An agreement between a brokerage and a client that outlines the terms under which the brokerage will represent the client in buying or selling property (Correct answer)
A power of attorney for property
A listing agreement between the seller and buyer
A contract between two real estate agents

Correct answer: An agreement between a brokerage and a client that outlines the terms under which the brokerage will represent the client in buying or selling property

A representation agreement (either a listing agreement for sellers or a buyer representation agreement for buyers) formalizes the relationship between the client and the brokerage, specifying the scope of services, commission, term, and obligations of both parties.

Question 32: In Ontario, what is a 'Schedule' in an Agreement of Purchase and Sale?

A timeline for the closing process
A list of property showings
An additional page attached to the standard agreement that contains extra terms, conditions, or details that supplement the main agreement (Correct answer)
A mortgage amortization schedule

Correct answer: An additional page attached to the standard agreement that contains extra terms, conditions, or details that supplement the main agreement

Schedules are additional pages attached to the standard OREA form that contain supplementary terms, conditions, or details. They form part of the agreement and are used when the standard form does not have enough space or when additional clauses are needed.

Question 33: What is a 'listing agreement' in Ontario residential real estate?

A written contract between the seller and a brokerage authorizing the brokerage to market and sell the property under specified terms, including the listing price and commission (Correct answer)
An agreement between the seller and the buyer
An agreement between two brokerages to share a listing
A rental listing contract

Correct answer: A written contract between the seller and a brokerage authorizing the brokerage to market and sell the property under specified terms, including the listing price and commission

A listing agreement authorizes the brokerage to act as the seller's agent in marketing and selling the property. It specifies the listing price, commission rate, term of the agreement, duties of the brokerage, and obligations of the seller.

Question 34: In Ontario, what is a 'caution' registered on title under the Land Titles Act?

A notice registered on title by a person claiming an interest in the property, warning that no dealings should be registered without notifying the cautioner (Correct answer)
A traffic warning near the property
A building inspection warning
A warning about dangerous property conditions

Correct answer: A notice registered on title by a person claiming an interest in the property, warning that no dealings should be registered without notifying the cautioner

A caution is a notice registered on title by someone who claims an unregistered interest in the property. It prevents the registration of any dealings with the property without the cautioner being notified, giving them an opportunity to assert their claim.

Question 35: What is 'novation' in Ontario real estate contract law?

A minor amendment to the contract terms
The substitution of a new contract for an existing one, or the substitution of a new party for an original party, with the consent of all parties (Correct answer)
A type of property renovation
A new type of mortgage product

Correct answer: The substitution of a new contract for an existing one, or the substitution of a new party for an original party, with the consent of all parties

Novation is the creation of a new contract that replaces an existing one, or the substitution of one party with another. Unlike assignment, novation requires the consent of all parties and completely extinguishes the old contract.

Question 36: Under the Real Estate and Business Brokers Act, 2002 (REBBA), which regulatory body is responsible for administering and enforcing the Act in Ontario?

The Canadian Real Estate Association (CREA)
The Ministry of Government and Consumer Services
The Ontario Real Estate Association (OREA)
The Real Estate Council of Ontario (RECO) (Correct answer)

Correct answer: The Real Estate Council of Ontario (RECO)

RECO (Real Estate Council of Ontario) is the delegated administrative authority responsible for administering and enforcing REBBA 2002, including licensing, education, and discipline of registrants.

Question 37: Under the Ontario Statute of Frauds, what is required for a contract for the sale of land to be enforceable?

Electronic agreements are never enforceable
Only a witness is needed for verbal agreements
The contract must be in writing, signed by the party to be charged (Correct answer)
A verbal agreement is sufficient

Correct answer: The contract must be in writing, signed by the party to be charged

The Statute of Frauds requires that contracts for the sale of land or any interest in land must be in writing and signed by the party against whom enforcement is sought. Verbal agreements for the sale of land are generally unenforceable.

Question 38: Mortgage default insurance (such as CMHC insurance) is designed to protect:

The borrower against unexpected interest rate increases
The buyer against undisclosed property defects
The lender against losses if the borrower defaults (Correct answer)
The seller against buyer non-performance on closing

Correct answer: The lender against losses if the borrower defaults

Mortgage default insurance protects the lender (not the borrower) by covering losses if the borrower defaults, which makes high-ratio lending less risky for financial institutions.

Question 39: In Ontario, what are 'metes and bounds' descriptions?

Standard lot sizes in subdivisions
Building measurement standards
A method of describing property boundaries using compass directions, distances, and physical landmarks or reference points (Correct answer)
The height and depth restrictions for buildings

Correct answer: A method of describing property boundaries using compass directions, distances, and physical landmarks or reference points

Metes and bounds is a method of describing property boundaries by specifying compass bearings and distances from a starting point (point of commencement), following the property's perimeter. It is one of the oldest methods of legal description and is still used for irregular parcels.

Question 40: What is the role of a 'lawyer's undertaking' in an Ontario real estate closing?

A marketing strategy for law firms
A guarantee of the property's condition
A lawyer's opinion on the property's value
A personal promise by a lawyer to perform a specific act, breach of which can result in professional discipline (Correct answer)

Correct answer: A personal promise by a lawyer to perform a specific act, breach of which can result in professional discipline

A lawyer's undertaking is a solemn professional promise to perform a specific act (such as registering a discharge of mortgage after closing). It is personally binding on the lawyer, and failure to fulfill an undertaking can result in professional discipline by the Law Society.

Question 41: In Ontario, what is the 'parol evidence rule' in real estate contracts?

A rule requiring witnesses for all contracts
A rule that generally prevents parties from introducing prior or contemporaneous oral evidence to contradict, vary, or add to the terms of a written contract (Correct answer)
A rule about parole conditions for property offences
A rule requiring all contracts to be oral

Correct answer: A rule that generally prevents parties from introducing prior or contemporaneous oral evidence to contradict, vary, or add to the terms of a written contract

The parol evidence rule provides that when parties have put their agreement in writing, they cannot introduce prior or contemporaneous oral statements to contradict, vary, or add to the written terms. Exceptions include fraud, mistake, or ambiguity.

Question 42: What is the maximum amortization period permitted for a standard insured (high-ratio) mortgage in Canada?

35 years
30 years
40 years
25 years (Correct answer)

Correct answer: 25 years

The maximum amortization period for most insured mortgages in Canada is 25 years, as required by federal mortgage insurance rules.

Question 43: What is the 'buyer's obligation' regarding closing funds in Ontario?

The buyer must provide the balance of the purchase price (less the deposit) to their lawyer, typically by certified cheque or wire transfer, before the closing date (Correct answer)
Cash payment at the closing table
Payment by personal cheque on closing day
Payment in installments over 30 days

Correct answer: The buyer must provide the balance of the purchase price (less the deposit) to their lawyer, typically by certified cheque or wire transfer, before the closing date

The buyer must arrange for the balance of the purchase price (purchase price minus the deposit and any adjustments) to be available to their lawyer before closing, typically through certified cheque or wire transfer. This ensures funds are guaranteed and available for closing.

Question 44: What happens if a brokerage closes or is terminated under REBBA 2002?

All ongoing transactions are automatically cancelled
Clients must find new representation on their own
RECO takes over all active listings automatically
The Broker of Record must ensure all trust funds are properly disbursed and records are transferred or retained (Correct answer)

Correct answer: The Broker of Record must ensure all trust funds are properly disbursed and records are transferred or retained

When a brokerage closes, the Broker of Record has a continuing obligation to ensure all trust funds are properly disbursed, all parties to pending transactions are notified, and records are retained for the required period.

Question 45: What is an 'abstract of title' in Ontario's Registry system?

A brief description of the property's location
A summary of the property's architectural features
A financial summary of the property's value
A condensed chronological summary of all documents registered against a property, including deeds, mortgages, liens, and other encumbrances (Correct answer)

Correct answer: A condensed chronological summary of all documents registered against a property, including deeds, mortgages, liens, and other encumbrances

An abstract of title is a summary of all documents that have been registered against a property in the Registry system, listed in chronological order. It allows a lawyer to trace the chain of title and identify any encumbrances.

Question 46: What is the 'nemo dat' rule and how does it relate to land registration in Ontario?

A rule about construction permits
A rule about property taxation
A rule about mortgage interest rates
The principle that no one can give what they do not have — a person cannot transfer better title than they possess (Correct answer)

Correct answer: The principle that no one can give what they do not have — a person cannot transfer better title than they possess

The 'nemo dat quod non habet' rule means that a person cannot transfer a greater interest in property than they themselves hold. However, the Land Titles system modifies this principle through the concept of guaranteed title, which can override certain defects.

Question 47: In Ontario, what is the 'Family Law Act' requirement regarding the matrimonial home in a real estate transaction?

Spousal consent is only needed for properties over $500,000
Both spouses must consent to the sale or disposition of the matrimonial home, even if only one spouse is on title (Correct answer)
The matrimonial home can be sold without the spouse's knowledge
Only the spouse on title needs to consent

Correct answer: Both spouses must consent to the sale or disposition of the matrimonial home, even if only one spouse is on title

Under the Family Law Act, both spouses must consent to the sale, mortgage, or other disposition of the matrimonial home, regardless of which spouse holds legal title to the property.

Question 48: What is 'dower' and does it still apply in Ontario?

Dower is the right of children to inherit property
Dower is a type of property tax exemption for seniors
Dower is a spouse's right to one-third of the property and it still applies in Ontario
Dower was a wife's common law right to a life estate in her husband's lands, but it has been abolished in Ontario and replaced by Family Law Act provisions (Correct answer)

Correct answer: Dower was a wife's common law right to a life estate in her husband's lands, but it has been abolished in Ontario and replaced by Family Law Act provisions

Dower was a common law right giving a wife a life estate in one-third of her husband's lands. It has been abolished in Ontario and replaced by the spousal rights provisions under the Family Law Act, including matrimonial home protections.

Question 49: In Ontario's Land Titles system, what is the 'Land Titles Assurance Fund'?

A fund for first-time homebuyers
A government fund that compensates persons who suffer loss due to errors or omissions in the Land Titles register (Correct answer)
A deposit protection fund managed by RECO
An insurance fund for real estate agents

Correct answer: A government fund that compensates persons who suffer loss due to errors or omissions in the Land Titles register

The Land Titles Assurance Fund provides compensation to persons who suffer financial loss because of an error, omission, or misdescription in the Land Titles register. It supports the government's guarantee of title accuracy.

Question 50: In Ontario, what is 'electronic registration' and what are its requirements?

Posting property listings online
Scanning paper documents and emailing them to the registry
Using a credit card to pay registration fees online
The process of registering legal documents affecting title electronically through Teranet's system, requiring authorized users with digital signatures (Correct answer)

Correct answer: The process of registering legal documents affecting title electronically through Teranet's system, requiring authorized users with digital signatures

Electronic registration in Ontario allows authorized users (lawyers and their delegates) to register documents affecting title electronically through Teranet's e-registration system. Users must be authorized, use digital signatures, and comply with electronic registration requirements.

Question 51: In Ontario, what does 'caveat emptor' mean in the context of real estate?

The government guarantees the condition of the property
The seller must disclose all defects
The real estate agent guarantees the property's condition
Buyer beware — the buyer is responsible for inspecting and investigating the property (Correct answer)

Correct answer: Buyer beware — the buyer is responsible for inspecting and investigating the property

Caveat emptor ('buyer beware') is a common law principle meaning the buyer is generally responsible for inspecting the property and discovering defects before purchase. However, sellers must still disclose latent defects they know about.

Question 52: Under Ontario law, what remedies are available to a buyer if the seller breaches an Agreement of Purchase and Sale?

Specific performance, monetary damages, rescission, or a combination depending on the circumstances (Correct answer)
Only monetary damages
No remedies are available — the buyer must find another property
The buyer can only cancel the contract

Correct answer: Specific performance, monetary damages, rescission, or a combination depending on the circumstances

When a seller breaches the agreement, the buyer may seek specific performance (forcing the sale), monetary damages (compensation for losses), rescission (canceling the contract and returning the parties to their original positions), or a combination of remedies.

Question 53: In Ontario, what is a 'prescriptive easement'?

An easement created by a government regulation
An easement acquired through continuous, open, and uninterrupted use of another's land for a statutory period without permission (Correct answer)
An easement that is prescribed by a doctor for health reasons
An easement that requires annual renewal

Correct answer: An easement acquired through continuous, open, and uninterrupted use of another's land for a statutory period without permission

A prescriptive easement is acquired when someone uses another person's land openly, continuously, and without permission for the statutory limitation period (typically 20 years under the Registry system). Like adverse possession, prescriptive easements are generally not available under the Land Titles system.

Question 54: How does the Registry system differ from the Land Titles system in Ontario?

The Registry system records documents affecting title without guaranteeing ownership; the Land Titles system guarantees title (Correct answer)
The Registry system is newer than the Land Titles system
The Registry system provides stronger title guarantees
There is no practical difference between the two systems

Correct answer: The Registry system records documents affecting title without guaranteeing ownership; the Land Titles system guarantees title

Under the Registry system, documents affecting title are recorded chronologically, but the government does not guarantee who owns the property. The buyer must search the chain of title to verify ownership. The Land Titles system provides government-guaranteed title.

Question 55: In mortgage financing, a 'blended payment' refers to:

A payment amount that changes with fluctuations in the prime rate
A payment structure combining two separate mortgage loans
A regular payment that combines both principal repayment and interest (Correct answer)
A payment applied solely toward the outstanding interest balance

Correct answer: A regular payment that combines both principal repayment and interest

A blended payment combines principal repayment and interest into one consistent payment amount, which remains constant throughout the term of a fixed-rate mortgage.

Question 56: What is an 'entire agreement clause' in an Ontario real estate contract?

A clause stating that the written contract contains the complete agreement between the parties, superseding all prior negotiations and agreements (Correct answer)
A clause that lists all the properties included in the sale
A clause that prevents any amendments to the contract
A clause requiring all parties to attend closing

Correct answer: A clause stating that the written contract contains the complete agreement between the parties, superseding all prior negotiations and agreements

An entire agreement clause declares that the written contract constitutes the whole agreement between the parties. It supersedes all prior oral or written negotiations, representations, and agreements, reinforcing the parol evidence rule.

Question 57: In Ontario, what is the difference between a 'dominant tenement' and a 'servient tenement'?

The dominant tenement benefits from the easement; the servient tenement is burdened by the easement (Correct answer)
The dominant tenement pays more property taxes
The dominant tenement is the larger property
There is no difference — the terms are interchangeable

Correct answer: The dominant tenement benefits from the easement; the servient tenement is burdened by the easement

In an easement arrangement, the dominant tenement is the property that benefits from the easement (e.g., the property that uses the right-of-way), while the servient tenement is the property over which the easement passes and which bears the burden.

Question 58: What restrictions does REBBA 2002 place on a registrant who is buying or selling their own property?

No restrictions apply when dealing with personal property
The registrant must disclose their registration status to all parties in writing before any offer is made (Correct answer)
Only verbal disclosure is required
The registrant can act without disclosure if using a different brokerage

Correct answer: The registrant must disclose their registration status to all parties in writing before any offer is made

When a registrant is personally buying or selling property, they must disclose in writing to all parties that they are registered under REBBA 2002, even if they are not acting in a professional capacity.

Question 59: What is the standard form 'Agreement of Purchase and Sale' used in Ontario residential transactions?

A form created by each individual brokerage
A government-issued contract form
The OREA Form 100, a standardized form used by real estate registrants for residential resale transactions (Correct answer)
A form issued by the Canadian Real Estate Association

Correct answer: The OREA Form 100, a standardized form used by real estate registrants for residential resale transactions

The OREA (Ontario Real Estate Association) Form 100 is the standardized Agreement of Purchase and Sale used for residential resale transactions in Ontario. It includes standard clauses and space for additional terms and conditions.

Question 60: What is the 'Expropriations Act' and how does it affect property owners in Ontario?

It allows municipalities to increase property taxes
It allows property owners to expand their lot boundaries
It only applies to commercial property seizures
It governs the process by which government can compulsorily acquire private property for public purposes, with fair compensation (Correct answer)

Correct answer: It governs the process by which government can compulsorily acquire private property for public purposes, with fair compensation

The Expropriations Act sets out the process by which government bodies can acquire private property for public purposes such as road widening or infrastructure projects. Property owners are entitled to fair compensation and have the right to a hearing.

Question 61: What is the legal significance of a 'deposit' in an Ontario real estate transaction?

It is paid directly to the seller immediately
It is refundable under all circumstances
It serves as consideration, evidence of good faith, and may be forfeited as liquidated damages if the buyer breaches the contract (Correct answer)
It is simply a goodwill gesture with no legal significance

Correct answer: It serves as consideration, evidence of good faith, and may be forfeited as liquidated damages if the buyer breaches the contract

A deposit serves multiple purposes: it is part of the consideration, demonstrates the buyer's good faith and ability to complete the transaction, and may be forfeited to the seller as a form of liquidated damages if the buyer breaches the agreement without lawful excuse.

Question 62: What is an 'irrevocable' period in an Ontario Agreement of Purchase and Sale?

The period during which the buyer can withdraw without penalty
The period after closing during which the deal can be undone
The period during which the offer cannot be revoked by the offeror, giving the recipient time to consider it (Correct answer)
A mandatory 10-day cooling-off period

Correct answer: The period during which the offer cannot be revoked by the offeror, giving the recipient time to consider it

The irrevocable period is the time during which the person making the offer agrees not to withdraw it. This gives the other party time to consider, negotiate, or accept the offer. Once the irrevocable period expires, the offer lapses if not accepted.

Question 63: When a buyer assumes an existing mortgage, the original borrower:

Cannot transfer the mortgage without fully discharging and refinancing it
May remain liable for the debt unless the lender formally releases them (Correct answer)
Is automatically released from all mortgage obligations upon transfer
Must pay a penalty equal to three months' interest before release

Correct answer: May remain liable for the debt unless the lender formally releases them

When a mortgage is assumed, the original borrower remains liable for the debt unless the lender grants a formal release (novation), substituting the new borrower as the sole obligor.

Question 64: What is the 'Development Charges Act' and how does it affect new real estate development in Ontario?

It allows municipalities to impose charges on new development to pay for infrastructure needed to serve that development (Correct answer)
It only applies to government construction projects
It charges a fee for listing properties for sale
It regulates interest rates on development loans

Correct answer: It allows municipalities to impose charges on new development to pay for infrastructure needed to serve that development

The Development Charges Act allows municipalities to collect fees from developers when new development occurs to fund the infrastructure (roads, sewers, water systems, parks) needed to support the growth.

Question 65: What is a 'plan of subdivision' in Ontario's land registration system?

A floor plan for a condominium unit
A survey plan registered with the land registry office that divides a large parcel of land into individual lots, blocks, and streets (Correct answer)
A landscape design plan
A marketing brochure for a development

Correct answer: A survey plan registered with the land registry office that divides a large parcel of land into individual lots, blocks, and streets

A plan of subdivision is a survey plan approved under the Planning Act and registered in the land registry office that divides a larger parcel of land into individual lots and blocks, with streets and other features clearly shown. Each lot receives its own legal description.

Question 66: In Ontario, what is the 'Crown patent' in property history?

A special tax exemption for Crown land
A permit to build on government-owned land
The original grant of land from the Crown to the first private owner, which represents the origin of title (Correct answer)
A patent for inventions registered by the government

Correct answer: The original grant of land from the Crown to the first private owner, which represents the origin of title

The Crown patent is the original document by which the Crown (government) granted title to land to the first private owner. It represents the root of title and is the starting point of the chain of ownership in Ontario's property history.

Question 67: What is an 'encumbrance' in the context of Ontario land registration?

A type of property insurance
Any claim, lien, charge, or liability attached to and binding on the property, such as a mortgage, easement, or restrictive covenant (Correct answer)
A structural problem with the building
A government subsidy for property development

Correct answer: Any claim, lien, charge, or liability attached to and binding on the property, such as a mortgage, easement, or restrictive covenant

An encumbrance is any right or interest held by someone other than the property owner that affects the title or use of the property. Common encumbrances include mortgages, easements, liens, restrictive covenants, and leases.

Question 68: What is the 'Land Registrar's' role in Ontario's land registration system?

To administer the land registry office, accept or reject documents for registration, and maintain the accuracy of the land register (Correct answer)
To represent buyers in real estate transactions
To sell properties on behalf of the government
To appraise properties for tax purposes

Correct answer: To administer the land registry office, accept or reject documents for registration, and maintain the accuracy of the land register

The Land Registrar is the official responsible for administering the land registry office, examining and accepting or rejecting documents submitted for registration, and maintaining the integrity and accuracy of the land register.

Question 69: What is 'mutual mistake' in Ontario real estate contract law?

When both agents provide incorrect information
When both parties make a typo in the contract
When both parties forget the closing date
When both parties share a fundamental misunderstanding about a material fact in the contract, which may render the contract void or voidable (Correct answer)

Correct answer: When both parties share a fundamental misunderstanding about a material fact in the contract, which may render the contract void or voidable

Mutual mistake occurs when both parties are mistaken about the same fundamental fact (such as the identity of the property or its essential characteristics). If the mistake is about something fundamental, the contract may be void; if about a less essential matter, it may be voidable.

Question 70: A mortgage commitment letter from a lender typically includes:

The approved loan amount, interest rate, term, amortization, and any conditions (Correct answer)
The mortgage default insurance premium calculation only
Only the maximum purchase price the buyer can afford
The legal title search results for the subject property

Correct answer: The approved loan amount, interest rate, term, amortization, and any conditions

A mortgage commitment letter outlines the key terms of the approved mortgage, including loan amount, interest rate, term, amortization period, and any conditions that must be met before funding.

Question 71: In Ontario, what is 'title searching' and why is it important?

Browsing real estate listings online
The process of examining the land registration records to determine ownership, verify the legal description, and identify any encumbrances or defects affecting the property (Correct answer)
Verifying the real estate agent's license
Checking the property's street name

Correct answer: The process of examining the land registration records to determine ownership, verify the legal description, and identify any encumbrances or defects affecting the property

Title searching involves examining the land registration records to verify who owns the property, confirm the legal description, and identify any registered interests (mortgages, easements, liens, restrictions) that affect the property. It is essential for ensuring clear title.

Question 72: In Ontario, what is a 'charge' in the Land Titles system?

A property tax assessment
The equivalent of a mortgage — a registered interest securing a debt against the property (Correct answer)
A fee for registration services
An electrical service connection

Correct answer: The equivalent of a mortgage — a registered interest securing a debt against the property

In the Land Titles system, a mortgage is referred to as a 'charge.' The borrower is the 'chargor' and the lender is the 'chargee.' The charge is registered against the property to secure repayment of the loan.

Question 73: In Ontario real estate, what is a 'condition precedent' in an Agreement of Purchase and Sale?

A condition that only applies to commercial transactions
A condition that must be fulfilled after closing
A mandatory clause required by RECO in all contracts
A condition that must be satisfied before the contract becomes binding, such as obtaining financing or a satisfactory home inspection (Correct answer)

Correct answer: A condition that must be satisfied before the contract becomes binding, such as obtaining financing or a satisfactory home inspection

A condition precedent is a clause that must be fulfilled before the contract becomes firm and binding. Common conditions include financing approval, satisfactory home inspection, and sale of the buyer's existing home. If the condition is not met, the buyer can usually walk away.

Question 74: What is the maximum loan-to-value (LTV) ratio for a conventional (uninsured) mortgage in Canada?

95%
80% (Correct answer)
90%
85%

Correct answer: 80%

A conventional mortgage requires a minimum down payment of 20%, resulting in a maximum loan-to-value ratio of 80% and no requirement for mortgage default insurance.

Question 75: What is a 'restrictive covenant' in Ontario real estate?

A government regulation on building heights
A clause in a mortgage agreement
A limitation on the use of land that binds current and future owners, typically restricting certain activities or uses (Correct answer)
A requirement to maintain property insurance

Correct answer: A limitation on the use of land that binds current and future owners, typically restricting certain activities or uses

A restrictive covenant is a promise registered on title that restricts how the property can be used. Common examples include restrictions on building types, commercial activities, or property alterations. They run with the land and bind future owners.

Ontario Real Estate Salesperson Licensing Exam (OREA/Humber)

The Ontario real estate salesperson licensing exam tests knowledge of real estate law, land registration, mortgage financing, contract law, and regulatory frameworks (TRESA/REBBA) required to practice as a licensed real estate salesperson in Ontario.

Questions

150 min

Time Limit

75%

To Pass

Checking for saved progress...

Exam Rules

You can skip questions and return to them later
Flag questions for review before submitting
No feedback shown until you submit the entire exam
Unanswered questions count as wrong — answer everything
10 pretest questions are mixed in and don't affect your score
Timer auto-submits when time runs out
Your progress is auto-saved every 30 seconds