OREA Residential Transactions 5

Question 1

In Ontario, what is a 'pre-delivery inspection' (PDI) for new construction homes?

Accepted Answer

A walkthrough of a newly built home by the buyer and builder before closing to identify defects, incomplete work, or items not meeting the builder's specifications

Answer

The PDI is a walkthrough conducted before closing where the buyer and builder inspect the new home together. Any defects, incomplete items, or deficiencies are documented on a PDI form. Tarion requires builders to provide this opportunity.

Question 2

What is an 'interim closing' or 'interim occupancy' in Ontario new construction?

Accepted Answer

A period when the buyer occupies the new home before final closing, paying occupancy fees to the builder instead of mortgage payments

Answer

Interim occupancy occurs in condominiums when the unit is ready but the condominium has not yet been registered. The buyer moves in and pays interim occupancy fees (estimated mortgage interest, property taxes, and common expenses) until final closing and registration.

Question 3

In Ontario, what is the 'HST rebate' for new homes?

Accepted Answer

A partial rebate of the federal and provincial portions of HST paid on a new home, available to qualifying buyers who will use it as their primary residence

Answer

Buyers of new homes may be eligible for a rebate of a portion of the HST (Harmonized Sales Tax) paid if they intend to use the home as their primary residence and the purchase price is within eligible limits. The rebate covers both the federal (GST) and provincial (PST) components.

Question 4

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

Accepted Answer

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

Answer

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 5

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

Accepted Answer

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

Answer

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.

Ontario Real Estate Practice Test

Ontario Real Estate Practice Test

OREA Residential Transactions 5