OREA Ontario Real Estate Law 2

Question 1

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

Accepted Answer

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

Answer

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 2

What is the purpose of a 'status certificate' under the Ontario Condominium Act?

Accepted Answer

To provide financial and legal information about a condominium corporation and a specific unit

Answer

A status certificate provides critical information about the condominium corporation including its financial health, reserve fund, pending lawsuits, rules, and any special assessments, as well as details specific to the unit being purchased.

Question 3

Under the Ontario Building Code Act, what is required before construction or renovation of a building?

Accepted Answer

A building permit must be obtained from the local municipality

Answer

The Building Code Act requires that a building permit be obtained from the local municipality before commencing construction, renovation, or demolition of buildings. This ensures compliance with safety standards.

Question 4

In Ontario, what is the effect of a 'certificate of pending litigation' (CPL) on a property?

Accepted Answer

It serves as notice that there is a court action affecting the property, which may affect its marketability

Answer

A CPL is registered on title to give public notice that a court action has been commenced that may affect the property. It can cloud the title and make it difficult to sell or mortgage the property until the litigation is resolved.

Question 5

Under Ontario law, what is 'adverse possession' and does it apply under the Land Titles system?

Accepted Answer

It is the acquisition of title through continuous possession, and it generally does not apply under the Land Titles system

Answer

Adverse possession allows a person to acquire title to land by occupying it openly and continuously for a prescribed period. Under the Land Titles system in Ontario, adverse possession claims are generally barred, unlike under the Registry system.

Ontario Real Estate Practice Test

Ontario Real Estate Practice Test

OREA Ontario Real Estate Law 2