Module 5 & 6 Flashcards

Question

what can saleperson do after they finish the education process and are waiting to be registered?

Answer 1

- order business cards - create database of potential buyer and seller - create a website to promote themselves as sellers

Answer 2

NOT PERMITTED

Answer 3

NOT PERMITTED

Answer 4

ertain individuals are exempt from registration when performing specific activities under specific circumstances. Some exemptions to registration include: • An auctioneer when auctioning property • A full-time salaried employee of a builder • A real estate lawyer disposing of a property to settle an estate • A financial institution disposing of a property under a mortgage default • A person selling their own home • A person who arranges leases under the Residential Tenancies Act, 2006

Answer 5

The brokerage must provide the Registrar with the name of the broker of record in writing. If the broker of record changes, the brokerage must notify the Registrar within five days of the change. Sole Proprietorship: A sole proprietorship is one of several entities that may be permitted to act as a real estate brokerage and trade in real estate. This type of ownership is subjected to registration restrictions and other notable restrictions under the Act. A brokerage carrying on business as a sole proprietor must do so using the name of the broker. As noted above, the sole proprietor must be the broker of record. See the full legislation below: “12(1) Every brokerage shall, (a) designate a broker who is employed by the brokerage as the broker of record and notify the registrar of his or her identity; and (b) notify the registrar if the broker of record changes, within five days of the change.” –Act, Subsec. 12(1) “12(2) The broker of record shall ensure that the brokerage complies with this Act and the regulations.” –Act, Subsec. 12(2) “12(3) If a brokerage is a sole proprietorship, it shall designate the sole proprietor as the broker of record even though other brokers may be employed by the brokerage.”–Act, Subsec. 12(3)

Answer 6

“10(1) An applicant that meets the prescribed requirements is entitled to registration or renewal of registration by the registrar unless, (a) the applicant is not a corporation and, (i) having regard to the applicant’s financial position or the financial position of an interested person in respect of the applicant, the applicant cannot reasonably be expected to be financially responsible in the conduct of business,”– Act, Subsec. 10(1)(a)(i) The application for registration requires disclosure of certain circumstances, including unpaid judgements or debts outstanding, bankruptcy or a consumer proposal (discharged or otherwise), personal insolvency, or as a party to a bankruptcy or insolvency proceedings. An applicant must submit full details of the circumstances and specific documentation with their application to RECO for the Registrar’s review.

Answer 7

In addition to the financial position of the applicant, the Registrar will consider their past conduct. This includes any past conduct that gives reasonable grounds to believe that the applicant will not conduct business with integrity, honesty, and in accordance with the law. Registration could also be affected by convictions or pending criminal charges against an applicant, as well as whether a license or registration of any kind has been refused, suspended, or revoked. “(10)(1)(a) An applicant that meets the prescribed requirements is entitled to registration or renewal of registration by the registrar unless, (ii) the past conduct of the applicant or of an interested person in respect of the applicant affords reasonable grounds for belief that the applicant will not carry on business in accordance with law and with integrity and honesty” –Act, Subsec. 10(1)(a)(ii)

Answer 8

An applicant must provide full and complete information on their application. The Registrar may consider non- disclosure of required information or false statements made in the application as grounds for refusal to register. “(10)(1)(a) An applicant that meets the prescribed requirements is entitled to registration or renewal of registration by the registrar unless, (iii) the applicant or an employee or agent of the applicant makes a false statement or provides a false statement in an application for registration or for renewal of registration;” –Act, Subsec. 10(1)(a)(iii)

Answer 9

At any time, if the Registrar believes the applicant does not meet the requirements regarding financial responsibility, past conduct, and false statements, the Registrar may: • Refuse to register an applicant • Suspend or revoke a registration • Refuse to renew a registration

Answer 10

A complaint can be sent to RECO from the public, another registrant, or any other party impacted by the actions of a registrant. To assess the relevance of any inquiry, concern, or complaint received, RECO will notify the registrant of the nature of the complaint with enough details necessary for the registrant to be able to respond fully to the allegations. RECO may also request additional information regarding the complaint, and the salesperson is obligated to provide the information within a specific time period after receiving a written request. “19(1) If the registrar receives a complaint about a registrant, the registrar may request information in relation to the complaint from any registrant. (2) A request for information under subsection (1) shall indicate the nature of the complaint. (3) A registrant who receives a written request for information shall provide the information as soon as practicable.”–Act, Section 19 ***Note that while RECO can enforce a range of disciplinary options, RECO cannot award compensation or damages to complainants, or cancel a contract between a seller or buyer and a brokerage. Every decision by RECO is made on a case-by-case basis.**

Answer 11

Every complaint received by RECO is unique and there are many potential outcomes. In the following list of infractions and their potential outcomes, the severity of offence increases as we move down the list: 1. A registrant makes an error that costs money to fix (for example, a registrant loses a key) // RECO Dispute Resolution - The parties agree to settle their dispute when registrant agrees to cover costs of changing the locks 2. A registrant breaks an advertising rule (for example, the advertisement doesn’t clearly state the name of the brokerage) // issued a warning 3. A registrant repeatedly breaks an advertising rule // issued a warning, required to take educational course and corrective action, such as establishing and following a policy 4. A registrant gives a client access to a home that is for sale, but doesn’t accompany the client // breach of Code of Ethics, $6,000 fine 5. A registrant makes a promise to give a client a rebate and does not keep the promise // breach of Code of Ethics, $6,000 fine 6. A registrant fails to disclose pertinent information to all buyers, giving unfair advantage to one buyer (for example, not disclosing that one of the buyer’s representative is waiving commission) // breach of Code of Ethics, $10,000 fine 7. A registrant signs a document as a witness when in fact they were not a witness // breach of Code of Ethics, $12,000 - $15,000 fine 8. A registrant causes financial harm to a client by signing or doing something on behalf of the client (for example, a registrant representing both a seller and a buyer fails to tell their seller client about a second, higher offer from another buyer) // breach of Code of Ethics, fine of up to $50,000 9. A registrant makes an improper declaration on a registration renewal application (for example, the registrant fails to disclose criminal history) // guilty under REBBA 2002, fine on an individual of up to $50,000 and/or prison term of up to 2 years less a day and/or proposal to revoke registration 10. A registrant fails to put a client’s deposit into a trust account // guilty under REBBA 2002, fine on an individual of up to $50,000 and/or prison term of up to 2 years less a day or fine on a corporation of up to $250,000 11. A registrant takes money from a trust account without authorization // issued a proposal to suspend or revoke registration with or without an immediate suspension; must replace funds, faces criminal charges 12. A registrant commits mortgage fraud // issued a proposal to suspend or revoke registration with or without an immediate suspension; faces criminal charges

Answer 12

Some infractions are honest mistakes. However, if the same infraction — such as not complying with REBBA’s advertising regulations — is made repeatedly, something more serious is happening. Hence, RECO often takes a progressive discipline approach as follows: 1-For the first offence, the discipline approach is Warning, i.e., Must correct the problem. 2- For the second offence, the discipline approach is Warning + Course, i.e., Must correct the problem. Must take the RECO Advertising Workshop Course ($225 + HST). 3- For the third offence, the discipline approach is Discipline Hearing, i.e., a potential fine of up to $25,000 for the broker of record and/or up to $25,000 for a sales representative.

Answer 13

When RECO receives any complaint or when a misconduct is alleged, RECO’s jurisdiction defines the next course of action. Not all inquiries or complaints result in action taken against a registrant. If the complaint is outside of RECO’s jurisdiction, or there is no evidence to support the complaint, no action is taken.

Answer 14

When there are minor offences, RECO Registrar makes the decision. Examples of potential penalties are as follows: • Given a warning • Ordered to take an educational course • Required to make a correction, such as fix an advertisement

Answer 15

More serious offences could either be breaches of Code of Ethics or breaches of REBBA 2002 other than Code of Ethics. When there are breaches of Code of Ethics: • The matter goes to Discipline Hearing • RECO prosecutes and the Discipline Committee makes decision • Examples of potential penalties are as follows: o Ordered to take educational courses o Salespeople and brokers are ordered to pay a fine of up to $50,000; brokerages are ordered to pay a fine of up to $100,000 When there are breaches of REBBA 2002 other than Code of Ethics: The matter goes to Provincial Offences Court • RECO prosecutes and Justice of the Peace or judge makes decision • Examples of potential penalties are as follows: o Individuals: fines of up to $50,000 and/or prison terms of up to 2 years less a day o Corporations: fines of up to $250,000

Answer 16

1-Acknowledgement and undertaking: If appropriate, RECO may accept an acknowledgement from a registrant of their non- compliant behaviour and an undertaking that it will not be repeated. For example, as an undertaking, the registrant promises to follow all advertising guidelines. 2-Apply voluntary conditions:RECO, with the registrant’s consent, may apply voluntary conditions to a registration. Conditions are considered on a case-by-case basis and vary depending on the nature of the complaint. For example, as a condition, the registrant will agree to submit all advertising to RECO for review for three months. 3-Request a meeting: RECO may request a meeting with the registrant to discuss the complaint. At the meeting, the registrant may receive an informal educational reminder, advice, or caution. For example, a meeting with the salesperson includes a review of the requirements for disclosure to all buyers when there are multiple offers received by the listing brokerage for the seller’s consideration. 4-Mediate or resolve the complaint: RECO may attempt to mediate or resolve the complaint. For example, the buyer’s representative missed a showing appointment without notifying the listing brokerage. The parties agree that the buyer’s representative will apologize to the sellers, via the sellers' representative. For example, the buyer complained that the property tax information on the listing was inaccurate, which ended up costing the buyer much more than they anticipated. The buyer demanded that the seller’s representative pay for the difference in the property taxes for several years. The parties agree that the seller’s representative and their brokerage will pay the difference in property taxes for five years in advance. “19(4) In handling complaints, the registrar may do any of the following, as appropriate: 1. Attempt to mediate or resolve the complaint.” –Act, Subsec, 19(4) 5- Issue a written warning: RECO may issue a written warning indicating that if the conduct that led to the complaint continues, further action may be taken. “19(4)2. Give the registrant a written warning that if the registrant continues with the activity that led to the complaint, action may be taken against the registrant.” –Act, Subsec, 19(4) 6- Require educational courses: RECO may require a registrant to take further educational courses. For example, RECO may require a registrant to take a course on ethical business practices as a result of breaching the Code. “19(4)3. Require the broker or salesperson to take further educational courses.” –Act, Subsec, 19(4)

Answer 17

1- Immediate suspension: Registrants who are subject to such an order must immediately cease all activities related to trading and return their certificate of registration to the Office of the Registrar. “19(4)5. Take an action under section 13, subject to section 14.”–Act, Subsec, 19(4) 2- Registrar proposal: When a registrant is in contravention of the Act or any of the associated Regulations (other than the Code of Ethics) RECO can issue a notice of proposal. The proposal would identify the action to be taken, such as revoking, suspending or refusing to register, along with the reasons for the action 3- Director’s action: The Director, under REBBA, may appoint investigators to conduct investigations under the Act. Depending on the severity of the alleged contravention of the Act, a search warrant could be issued as well as a freeze order 4- Provincial offences prosecution: Offences relating to the Act or any of the associated Regulations (other than the Code of Ethics) may be processed in accordance with the Provincial Offences Act. The Act outlines procedures for legal prosecution in the Ontario Court of Justice system including serving an offence notice to an accused person, conducting trials, sentencing, and appeals. Individuals convicted of an offence are subject to fines of up to $50,000 and/or prison terms of up to two years less a day. Corporations are subject to fines of up to $250,000. Courts may also order convicted persons to pay compensation and make restitution. 5-Refer to a law enforcement agency: In serious cases, where the Registrar is concerned a registrant’s actions may constitute criminal activity, the matter is referred to the appropriate municipal, provincial or federal law enforcement agency

Answer 18

One way that RECO regulates the activity of trading in real estate is by conducting inspections for the purpose of ensuring compliance with REBBA. The inspection program is vital to the regulation of the profession, protection of the public interest, and fostering consumer confidence. The Act details the authority of the Registrar or a designate to conduct inspections for the purposes of: 1. Ensuring compliance with REBBA 2. Dealing with a complaint 3. Ensuring a registrant remains entitled to registration RECO has the authority to inspect a brokerage during reasonable hours. Inspectors must be provided access to all documents, records, money, and other valuables relevant to the inspection. No person may obstruct an inspector in carrying out their duties. “20(1) The registrar or a person designated in writing by the registrar may conduct an inspection and may, as part of that inspection, enter and inspect at any reasonable time the business premises of a registrant, other than any part of the premises used as a dwelling, for the purpose of, a) ensuring compliance with this Act and the regulations; b) dealing with a complaint under section 19; or c) ensuring the registrant remains entitled to registration.” –Act, Subsec. 20(1) “20(2) While carrying out an inspection, an inspector, a) is entitled to free access to all money, valuables, documents and records of the person being inspected that are relevant to the inspection; b) may use any data storage, processing or retrieval device or system used in carrying on business in order to produce information that is relevant to the inspection and that is in any form; and c) may, upon giving a receipt for them, remove for examination and may copy anything relevant to the inspection including any data storage disk or other retrieval device in order to produce information, but shall promptly return the thing to the person being inspected. “ –Act, Subsec. 20(2) “20(5) No person shall obstruct an inspector conducting an inspection or withhold from him or her or conceal, alter or destroy any money, valuables, documents or records that are relevant to the inspection.” –Act, Subsec. 20(5)

Answer 19

Registrants may appeal a Discipline Committee decision. An Appeals Committee exists, separate from the Discipline Committee, to consider such appeals. The Appeals Committee can overturn, affirm, or modify the order of the Discipline Committee.

Answer 20

All brokerages must establish and maintain a real estate trust account which is used to deposit all money received by the brokerage in trust for other persons in connection with the brokerage’s trades. at all times, these deposits are to be kept separate and apart from money belonging to the brokerage. All transactions must be authorized by the broker of record and all trust cheques must be signed by the broker of record. The broker of record is primarily responsible for all deposits and must complete monthly bank reconciliations to ensure there is no shortfall in funds. Every brokerage shall, a) maintain in Ontario an account designated as a trust account, in, I. a bank, or an authorized foreign bank, within the meaning of section 2 of the Bank Act (Canada), II. a corporation registered under the Loan and Trust Corporations Act, or III. a credit union within the meaning of the Credit Unions and Caisses Populaires Act, 1994; b) deposit into the account all money that comes into the brokerage’s hands in trust for other persons in connection with the brokerage’s business; c) at all times keep the money separate and apart from money belonging to the brokerage; and d) disburse the money only in accordance with the terms of the trust.” –Act, Subsec. 27(1)

Answer 21

1- Deposit within five business days: 2- Disbursements: 3- Interest earned on trust funds: 4-Receiving a buyer’s deposit:

Answer 22

1- Deposit within five business days: Under REBBA, a brokerage must deposit funds into the real estate trust account within five business days of receipt. Business days exclude Saturdays, Sundays, and statutory holidays. For many transactions the deposit is held by the listing brokerage. Receipt by the brokerage includes any employee receiving the deposit, such as the salesperson representing the seller or an employee in the brokerage office.

Answer 23

Disbursements: A brokerage is required to disburse funds from the trust account as soon as possible, subject to the terms of the trust. A brokerage must be advised by the seller’s lawyer that the transaction has closed, and the funds can then be disbursed to pay towards the remuneration owed. If a transaction does not close, funds may only be disbursed by: * The seller and buyer signing a mutual release or direction agreeing to the disbursement * A court order authorizing the disbursement if the seller and buyer did not agree

Answer 24

3- Interest earned on trust funds: REBBA requires detailed disclosure regarding interest earned on trust funds. For example, if a brokerage is holding the buyer’s deposit in an interest-bearing trust account, the brokerage is obligated to disclose the interest rate the brokerage receives on the funds. The determination of interest payment should be clearly outlined in the agreement of purchase and sale including the interest terms and who is paid the earned interest

Answer 25

4-Receiving a buyer’s deposit: A salesperson should understand the responsibilities regarding handling a deposit from a buyer. Important points to remember about the deposit: Deposits should be made by cheque, money order, or bank draft and amounts must be exactly as agreed to in the agreement of purchase and sale • There could be instances where a certified cheque is required to ensure the funds are available, otherwise cheques must be currently dated and capable of being accepted for payment • Where a co-operating brokerage receives a deposit that is directed to another party (for example, the listing brokerage), a receipt from that brokerage should be obtained • A buyer’s salesperson should ensure the buyer understands their obligations regarding a deposit and provide the deposit to the deposit holder without delay

Answer 26

FALSE, the saleperson should tell the buyer that the offer identifies who the deposit holder will be, which is typically the brokerage but never under any circumstances the saleperson

Answer 27

True, however its better to deposit it the same day its received or the next day

Answer 28

Sec30 of the Act states, “No brokerage shall, (a) employ another brokerage’s broker or salesperson to trade in real estate or permit such broker or salesperson to act on the brokerage’s behalf; (b) employ an unregistered person to perform a function for which registration is required; or (c) pay any commission or other remuneration to a person referred to in clause (a) or (b).” Restrictions impacting a salesperson generally align with the above requirements. A salesperson may only trade in real estate on behalf of the brokerage they are employed by, and may only accept remuneration, such as a referral fee, from the brokerage which employs them. Sec31(1) of the Act sates, “No broker or salesperson shall trade in real estate on behalf of any brokerage other than the brokerage which employs the broker or salesperson. Sec 31(2) of the Act sates, “No broker or salesperson is entitled to or shall accept any commission or other remuneration for trading in real estate from any person except the brokerage which employs the broker or salesperson.”

Answer 29

Calculating remuneration (Section 36(1) of the Act): Remuneration or other remuneration can be an agreed amount, a percentage of the sale price/rental price, or a combination of both. “36(1) All commission or other remuneration payable to a brokerage in respect of a trade in real estate shall be an agreed amount or percentage of the sale price or rental price, as the case may be, or a combination of both.”

Answer 30

remuneration percentage (Section 36(2) of the Act): If a percentage is used, the remuneration may include several percentages that decrease as the sale price or rental price increases. For example, a listing identifies remuneration is 5% for the first $300,000 in selling price and then decreases to 4% for the balance of the selling price. If a property is sold for $650,000, the remuneration would be calculated as follows: • $300,000 at 5% = $15,000 • $350,000 at 4% = $14,000 for a total remuneration of $29,000. “36(2) If the commission payable in respect of a trade in real estate is expressed as a percentage of the sale price or rental price, the percentage does not have to be fixed but may be expressed as a series of percentages that decrease at specified amounts as the sale price or rental price increases.”

Answer 31

A remuneration based on the difference between the listing price and the selling price is not allowed. For example, it is prohibited to enter into an agreement where the property is listed for sale at $250,000 and the remuneration is any amount over $250,000 that the property sells for. “36(3) No registrant shall request or enter into an arrangement for the payment of a commission or any other remuneration based on the difference between the price at which real estate is listed for sale or rental and the actual sale price or rental price, as the case may be, of the real estate, nor is a registrant entitled to retain any commission or other remuneration computed upon any such basis.”

Answer 32

REBBA provides specific disclosure requirements if a registrant either directly or indirectly acquires or divests of an interest in real estate. This notice must include: • A statement that the individual is a salesperson, broker, or brokerage • Full disclosure of all known facts that may affect the value of the property • Details of any third-party negotiations for the subsequent sale of the property

Answer 33

A direct interest would mean the salesperson is the individual who is buying or selling

Answer 34

An indirect interest could include representing a family member in a trade or if the salesperson is a partner or shareholder of a corporation that is buying or selling.

Answer 35

An indirect interest is not always evident. A few examples of an indirect interest in real estate include: • When a relative, such as a parent or child of the salesperson, is the seller or buyer • When a salesperson or their relative is a shareholder of a corporation, or a partner in a partnership, that is selling or buying • When a salesperson or their relative has another role in the transaction that is not evident, such as being the lender/mortgagee

Answer 36

When a registrant is involved in a transaction where they have a personal interest in the outcome, be it direct or indirect, a written disclosure must be made. The disclosure must happen before any offer is made and include the following information: • Notice that they are a registered brokerage, broker, or salesperson • All facts within their knowledge that may affect the value of the real estate involved • Notice of any negotiation, offer, or agreement that they have conducted or that has been conducted on their behalf, for the subsequent sale, lease, exchange, or other disposition of an interest in the real estate to any other person • Details of any payment that will be received from anyone as part of the transaction, other than what is listed in a representation or customer service agreement must also be disclosed as required under Section 18 of the Code

Answer 37

The salesperson must obtain written acknowledgment from the other parties that they have received the required disclosure before the offer can proceed. These obligations apply regardless if the property involved is listed for sale with a brokerage or is a private transaction.

Answer 38

Under the Act, it is an offence when a registrant falsifies, or counsels others to falsify, any information or document related to a trade in real estate. It is also an offence for a registrant to furnish, or counsel another to furnish, false or deceptive information regarding a trade. “No registrant shall falsify, assist in falsifying or induce or counsel another person to falsify or assist in falsifying any information or document relating to a trade in real estate.”– Act, Section 34 “No registrant shall furnish, assist in furnishing or induce or counsel another person to furnish or assist in furnishing any false or deceptive information or documents relating to a trade in real estate.” – Act, Section 35

Answer 39

* Including false information in a mortgage application, such as a different selling or purchase price * Advising a buyer to provide false information on their mortgage application, such as their income * Advising a seller to provide incorrect information about their property, such as the square footage of the home * Advising a buyer to indicate to a lender that the property will be their primary residence when it will be an investment property as this would impact the mortgage approval * Omitting facts on documents required by a lender when purchasing a property, such as failing to disclose a second mortgage

Answer 40

Whenever a salesperson is advertising, they are doing so on behalf of their brokerage. Advertising is regulated by other statutes in addition to REBBA, including the Competition Act, the Personal Information Protection and Electronic Documents Act (PIPEDA). The Act prohibits false, misleading, or deceptive statements in advertising by registrants. “37 No registrant shall make false, misleading or deceptive statements in any advertisement, circular, pamphlet or material published by any means relating to trading in real estate.” –Act, Section 37

Answer 41

the Personal Information Protection and Electronic Documents Act

Answer 42

Advertising is a notice or announcement in a public medium that promotes a registrant’s business, services, or real estate trades. This includes broadcast, print, electronic media, or publication on the internet including websites and social media sites.

Answer 43

1- Misleading statement 2-False statement 3-Deceptive statement 4-Inaccurate representation

Answer 44

For example, an advertisement identifying the home has “new roof shingles” could be misleading without more information. A prospective buyer may believe the shingles are new today when they could have been replaced one year earlier.

Answer 45

For example, a listing salesperson does not verify information given to them by the seller. The salesperson advertises the property generates a rental income of $5,400 per month instead of the actual rental income of $4,700 per month.

Answer 46

For example, a property is advertised as a “spacious lot” with a photograph showing the home with a large vacant property area to the rear. In reality, if the seller does not own all of the vacant property to the rear, as the property belongs to the municipality, then the advertising statement would be deceptive.

Answer 47

or example, an advertisement states “great views and only steps from the water”. The property, however, does not have water frontage, has no direct access to the water from the property, and the view is mostly blocked by a large hi-rise building.

Answer 48

The Registrar has the following options if an advertisement does not comply with the requirements under REBBA: • Order the false advertising to immediately stop • Order the registrant to retract the statement or publish a correction of equal prominence to the original advertising • Order the registrant to do both above “38(1) If the registrar believes on reasonable grounds that a registrant is making a false, misleading or deceptive statement in any advertisement, circular, pamphlet or material published by any means, the registrar may, (a) order the cessation of the use of such material; (b) order the registrant to retract the statement or publish a correction of equal prominence to the original publication; or (c) order both a cessation described in clause (a) and a retraction or correction described in clause (b).”–Act, Subsec. 38(1) “38(4) If the registrant does not appeal an order under this section or if the order or a variation of it is upheld by the Tribunal, the registrant shall, upon the request of the registrar, submit all statements in any advertisement, circular, pamphlet or material to be published by any means to the registrar for approval before publication for such period as the registrar specifies.” –Act, Subsec. 38(4)

Answer 49

1-Fairness, Honesty, and Integrity For example, a salesperson is showing his client’s home to a buyer during an open house. The buyer, who is not represented by a brokerage, asks for advice about the home’s structural condition. The salesperson advises the buyer that he is representing his seller client, but in honesty informs the buyer that many buyers seek the assistance of a property inspector to evaluate structural and related matters. The salesperson has complied with the duty to address all visitors’ questions with honesty. 2-Best Interests For example, a salesperson is speaking with their seller client about two competing offers: one obtained by the salesperson and the other by a co-operating brokerage. The seller needs advice as to which is the best offer. While the offered prices are similar, other terms in the co-operating brokerage’s offer have distinct advantages for the seller. The salesperson fully details these advantages without regard for personal interests, such as a lesser remuneration if the other brokerage’s offer is accepted. 3-Conscientious and Competent Service EX. A salesperson is showing a rural property to a client. The client enquires about the condition of the well and septic systems. The salesperson explains that he is not an expert in such areas, and that he is only able to generally describe how water potability/volume testing is conducted and discuss the basic issues relating to septic systems. The salesperson then advises the client to place an appropriate condition in any offer being presented to allow adequate time to further investigate the systems.

Answer 50

- Stop and think - Ask your broker of record or manager - Understand your advice will be relied upon - Always do things the right way - Continue to learn and be aware of changes affecting the profession - Search past discipline decisions on the RECO website

Answer 51

Material facts are subjective. What is considered a material fact to one seller or buyer may not factor into another person’s decisions regarding a real estate transaction for many different reasons, including the intended use of the property. For the purposes of the Code, the term material fact is defined. “1(1) In this Regulation, “material fact” means, with respect to the acquisition or disposition of an interest in real estate, a fact that would affect a reasonable person’s decision to acquire or dispose of the interest;” –CODE, Subsec 1(1) Disclosing material facts is an integral part of providing conscientious and competent service. The Code requires the disclosure of material facts to both clients and customers, however, the level of obligation owed by the salesperson will differ.

Answer 52

Examples of material facts of importance for a buyer may include: • Condition of the structure such as a roof leak, mechanical or electrical deficiencies, or basement water seepage • Environmental hazards such as asbestos, lead, mould, or a previous use as a grow-op • Building measurements or lot size Property taxes • Zoning • Previous, present, and potential use of the property or surrounding properties • Easements or restrictions registered on title • Renovations completed without permits or inspections • Events that have occurred on the property such as a death, suicide, or break-in Examples of material facts of importance for a seller may include: * Determining the highest and best use of the property as this impacts the value * Costs for an early discharge of the mortgage registered on the property * Costs associated with paying out a rental or rent to own contract, such as a furnace

Answer 53

The role of a salesperson requires a wide breadth of knowledge ranging from understanding the legal requirements associated with a transaction, identifying the factors that impact the value and use of a property such as zoning, and residential construction to be alert to potential issues. A salesperson will not be the expert on all matters but should be knowledgeable enough to know when to advise a seller or buyer to consult a third-party professional. This Code applies equally whether the seller or buyer is a client or a customer. ``` Examples of some third-party professionals who could offer specialized services to a seller or buyer include: • Lawyers • Property inspectors • Appraisers • Surveyors • Accountants • Engineers • Contractors ```

Answer 54

1- Identification of registrant (Section 36(1) of the Code) All advertising by a registrant, including a brokerage, broker or salesperson must clearly and prominently include the name of the registrant that is placing the advertisement. The name used in the advertisement must be the name (legal name or trade name) in which the registrant is registered with RECO. 2-Identification of individuals (Section 36(2) of the Code) If an individual broker or salesperson is identified by name, the name used must be the name in which the broker or salesperson is registered with RECO. For example, “Tom & Rita McIntyre, Sales Representatives.” 3-Identification of brokerage (Section 36(3) of the Code) Every advertisement by a broker or a salesperson must clearly and prominently identify the brokerage that employs the broker or salesperson. The brokerage name used in the advertisement must be the name in which the brokerage is registered with RECO. 4-Description of registrant (Section 36(4) of the Code) * * “36(4) A registrant who advertises shall, a) use the term “brokerage”, “real estate brokerage”, “maison de courtage” or “maison de courtage immobilier” to describe any brokerage that is referred to in the advertisement; b) use the term “broker of record”, “real estate broker of record”, “courtier responsable” or “courtier immobilier responsable” to describe any broker of record who is referred to in the advertisement; c) use the term “broker”, “real estate broker”, “courtier” or “courtier immobilier” to describe any broker who is referred to in the advertisement; and d) use the term “salesperson”, “real estate salesperson”, “sales representative”, “real estate sales representative”, “agent immobilier”, “représentant commercial” or “représentant immobilier” to describe any salesperson who is referred to in the advertisement.” 5- Confusing terms (Section 36(6) of the Code) Registrants must not use any terms to describe a registrant in an advertisement if the term could reasonably be confused with the registration status required by this section of the Code. For example, terms such as “sales agent,” “sales associate,” or “sales consultant” are not permitted

Answer 55

Allowable descriptions include: ``` Salesperson: • “Salesperson” • “Real estate salesperson” • “Sales representative” • “Real estate sales representative” • “Real estate agent” • “REALTOR®” (limited to CREA members in good standing) • “REALTOR® salesperson” (limited to CREA members in good standing) ``` Broker: • “Broker” • “Real estate broker” • “Real estate agent” • “Broker real estate agent” • “REALTOR®” (limited to CREA members in good standing) • “REALTOR® broker” (limited to CREA members in good standing) Broker of record: • “Broker of record” • “Real estate broker of record” Brokerage: • “Brokerage” • “Real estate brokerage”

Answer 56

The issues related to the services provided by a registrant generally relate to claims, promises, and statements made in advertising. Statements cannot be vague or misleading. Examples of potential problem areas related to services provided by a registrant are: • Comparative rankings (e.g., “#1 brokerage in town”) • Claims about business volume or trading activity (e.g., “Over 100 transactions last year”) • Promises of savings or rebates (e.g., “$1,000 cash back”) • Honours or awards received by the registrant (e.g., “President’s Award”)

Answer 57

Comparative claims: Ensure any advertisement that expressly, or by implication, makes a comparative claim regarding a registrant’s business performance, discloses the basis of that comparison or claim including disclosure of the details of the information used to make the claim and the source of the information Acceptable: “No other sales representative in Grovetown sells as many homes and as close to the asking price as I do. According to 2018 MLS® statistics for Grovetown Real Estate Board, no other salesperson is the representative for as many sold homes as I am. In 2018, I was the salesperson for 85 properties whereas the next closest salesperson was 78*. Further, my list to sales price ratio is 89% whereas the average for other salespeople in Grovetown Real Estate Board is 80% or less.” Potentially Misleading: “I sell more homes for more money than anyone else! I sell more homes than any other salesperson so when you list your home with me, my selling system will get you more money than another salesperson. In today’s market, selling a home fast is crucial. Otherwise, it will quickly become lost in the growing inventory of homes for sale. Getting your house sold while it’s fresh and at the peak of interest, will benefit you and your wallet.”

Answer 58

Statements regarding business volume/ trading activity Acceptable: “#1 team for units sold* in Grovetown” *based on Grovetown local listing service statistics for 2018 for the ABC Brokerage team consisting of four salespersons Potentially Misleading: “ #1 in Grovetown“

Answer 59

Promises or statements regarding remuneration or savings Section 9 of the Code also states that advertisements must not indicate or suggest, directly or indirectly, that remuneration or other fees are fixed or approved by RECO or any other government authority, real estate board or real estate association. Acceptable: “List on the local listing service for $599 (does not include remuneration for buyer/co-operating brokerage or any services except for posting on the local listing service)” Potentially Misleading: “Remuneration as low as 1%”

Answer 60

Ensure any advertisement that refers to an award or honour includes the source and date of that award or honour. Registrant advertising should not refer to an award or honour that was shared among other registrants without clearly indicating that fact. Registrant advertising should not, directly or by inference, refer to anything as an award or honour if purchased or paid for by, or on behalf of, the registrant. For example, "Chairman's Club winner" could be potentially misleading as an award, whereas "Chairman's Club 2018" is acceptable.

Answer 61

1-Claims: An advertisement that states, implies, alludes, or refers to a volume of business or trading activity cannot be ambiguous, inaccurate, or incomplete. Comparative business claims must explicitly identify the details of the information used to make the claim and the source of the information, including the relevant time period. 2. Salesperson name incorrect and not prominently displayed: All advertisements are required to clearly and prominently identify the name of the salesperson as registered with RECO. A salesperson can use a recognized short form or an anglicized version of their legal given name as approved by RECO. 3. Brokerage name is missing, incomplete, or not prominently displayed: All advertisements are required to clearly and prominently identify the registered name of the brokerage. The brokerage name must be the name in which the brokerage is registered with RECO. 4. Registrant designation is missing : All advertising that identifies a registrant must include the specific description of the registrant. A brokerage is required to include the term brokerage or real estate brokerage with their identification. A salesperson is required to include salesperson, real estate salesperson, sales representative, or real estate sales representative. 5. Combining registrants’ names and designations: Registrants with a common last name may jointly be identified when their designation is also the same (for example, “Keiko and Jordan Smith, Brokers”). Registrants with different designations (for example, salesperson and broker) may not combine their names.

Answer 62

Unprofessional conduct (Section 39 of the Code) “39 A registrant shall not, in the course of trading in real estate, engage in any act or omission that, having regard to all of the circumstances, would reasonably be regarded as disgraceful, dishonourable, unprofessional or unbecoming a registrant.” Abuse and harassment (Section 40 of the Code) his section indicates that a registrant should not abuse or harass any person in the course of trading in real estate. T his includes everyone a registrant would encounter (for example, members of the public, fellow registrants etc.) during their day-to-day activities. For example, a salesperson has an appointment to show a property and the tenant refuses access to the home. The salesperson, rather than enforcing their right to show the unit under the Residential Tenancies Act, contacts the landlord to make alternate arrangements with the tenant.

Answer 63

The de Sousa Team - The #1 Condominium Team at MdS Realty Brokerage* Maureen de Sousa, Broker, Cell: (789) 123-4568 Dean de Sousa, Broker, Cell: (789) 123-4569 maureenanddean@mdsrealty.ca

Answer 64

1-Requirements per the Statute of Frauds 2-Requirements per the Vendors and Purchasers Act 3-Requirements per the Real Estate and Business Brokers Act

Answer 65

Statute of Frauds requires that all contracts involving the transfer of ownership of real estate must be in writing. The Statute of Frauds states that no action shall be taken in the case of a sale of land or leases unless it is agreed upon in writing and signed by the parties. ***An exception to the Statute of Frauds is when a contract is verbal but parties begin to complete the contract; then, it could be enforceable.

Answer 66

Vendors and Purchasers Act deems certain information to be included in every agreement of purchase and sale. Every contract is deemed to include the following, unless otherwise stipulated: •The seller is not bound to produce any abstract of title, deed, copy of a deed, or other evidence of title except as are in the seller’s possession or control. • The buyer shall search the title at the buyer’s own expense and shall make any objections in writing within 30 days from the making of the contract. • The seller has 30 days in which to remove any objection made to the title. If the seller is unable or unwilling to remove any objection that the buyer is not willing to waive, the seller may cancel the contract and return any deposit made, but is not otherwise liable to the buyer. • Taxes, local improvements, insurance premiums, rent, and interest shall be adjusted as at the date of closing. • The conveyance (legal process of transferring of ownership from one party to another) shall be prepared by the seller and the mortgage, if any, by the buyer; the buyer shall bear the expense of registration of the transfer/deed and the seller shall bear the expense of the discharge of the mortgage, if any. • The buyer is entitled to possession or the receipt of rent and profits upon the date of closing of the transaction.

Answer 67

REBBA identifies certain requirements for the content and delivery of real estate agreements. The Code of Ethics requires that all agreements are reduced to writing at the earliest opportunity, signed by the brokerage, and submitted to the seller or buyer for signature. The Code also requires that specific content be set out in written agreements for the purpose of trading in real estate and that copies of representation agreements be immediately given to the seller or buyer.

Answer 68

Agreements signed between the brokerage and the seller or buyer, such as a representation agreement • Agreements signed between the brokerage and the seller or the buyer such as a seller or buyer customer service agreement • Agreements signed between the seller and buyer such as an agreement of purchase and sale • Agreements signed between a landlord and a tenant such as an agreement to lease

Answer 69

The parol evidence rule provides that oral evidence is inadmissible in court to vary or contradict the terms of a written contract, except in a case of fraud or mistake. - Example:The seller and buyer have signed an agreement of purchase and sale that is due to close on October 29. The seller has found a property he would like to buy and wishes to change the completion date in his agreement to November 29. A document with the proposed change is signed by the seller and presented to the buyer. The buyer does not agree to the changes made to the agreement by the seller. The completion date would remain as October 29.

Answer 70

The general rule is that only parties to a contract can enforce it or be bound by it. Only the seller and the buyer, who are parties to the contract, can be considered as privy to the contract. As such, if a breach of contract occurs, any lawsuit would likely be between the seller and the buyer. However, depending on the conduct alleged by the plaintiff, brokerages and real estate salespersons may be added as parties to any litigation.

Answer 71

• Offer and acceptance: There must be mutual agreement between the parties • Capacity of the parties: The parties entering into a contract must be legally competent (of sound mind and of legal age of majority) to make the contract • Consideration: Each party must receive something of value • Definite and clear: The subject and terms of the agreement must be stated clearly • Lawful object: The contractual arrangement must be lawful • Genuine intention: Both parties must consent to the terms of the contract

Answer 72

Common mistake: A common mistake occurs when both parties to the contract know the intention of the other, accept it, but are mistaken about an underlying fact. Mutual mistake: A mutual mistake arises when the parties misunderstand each other and are at cross-purposes, or have a contrary understanding.

Answer 73

Innocent misrepresentation: An innocent misrepresentation is a statement by one party of a fact that is wrong, but is honestly believed to be true. If the victim of the misrepresentation is induced into a contract based on such a statement, they may refuse to complete the contract, attempt to have it set aside, and attempt to recover anything paid or delivered under it. They may also defend any action brought against them under the contract, but as a general rule cannot recover damages if the misrepresentation was innocent. Fraudulent misrepresentation: A fraudulent misrepresentation has three elements: • The misrepresentation is made with the knowledge of its falsity or with reckless disregard for its truth. • The purpose must have been to induce the other party to enter a contract. • The misrepresentation must have been relied on to the other party’s prejudice. Negligent misrepresentation: If there is a contractual relationship between the parties and a misrepresentation is made without reasonable verification of its accuracy, then the person who is misled may bring a lawsuit for damages. When it is clear that the statement was made with the intention that it be relied on and that the person did rely on it, then a claim for damages may arise. This could occur in situations where the buyer has relied on a real estate salesperson, who represents the seller. Duress or undue influence: Undue influence is the improper use of one person’s power over another to induce that person into a contract. The person claiming undue influence must establish that the transaction was executed under duress. The opposing party must establish that the bargain was reasonable and fair and that no advantage was gained due to his or her position. For example, one party is knowledgeable and experienced while the other party is ill-informed and inexperienced, or a family member exerts pressure on another family member to accept an offer which is detrimental or not in their best interest. Failure to disclose: The non-disclosure of material latent defects might invalidate a contract. A latent defect is generally described as a defect that is not easily observable. The most serious of latent defects, often referred to as material latent defects, are physical defects of the property that render it dangerous or unfit for habitation. For example, if a seller is aware of a mould infestation in the attic and the basement, that defect would need to be disclosed to a buyer.

Answer 74

Void: The contract never came into existence • Voidable: The contract was originally valid but capable of being rejected by the offended parties at a later time • Illegal: The contract is not enforceable by the courts

Answer 75

Example: Void You enter into a contract with someone who does not have the mental capability to understand what they have signed. The contract is therefore void.

Answer 76

Example: Voidable A contract is signed by someone who is intoxicated. The intoxicated person is able to accept the contract as valid, or declare it void if they can prove they were so intoxicated that they did not know what they were signing.

Answer 77

Example: Illegal | A contract to create an illegal grow operation in an industrial unit.

Answer 78

A breach is a failure to fulfill or perform an obligation under a contract by one of the contracting parties. The breach of a contract may result in: • Conferring a right of legal action on the party impacted by the breach • Releasing the impacted party from further obligations to perform their side of the bargain

Answer 79

the impacted party may: • Accept the breach and treat themselves as released from further performance • Accept the breach and start an action for damages against the party who has breached • Treat the contract as still in effect, and waive the breach, or • Seek other remedies, if available

Answer 80

``` 1-Rescission 2-Damages 3-Quantum meruit 4-Specific performance 5-Injunction ```

Answer 81

Rescission involves the revocation or cancellation of a contract, the contract is set aside by the court. Example: The buyer sues to set aside a contract because the builder has encountered financial difficulties, has begun renovation work, but is unable to finish the job.

Answer 82

Damages involve compensation for losses incurred. The most common remedy is a monetary award to compensate an injured party for a loss suffered by reason of a breach. Every breach may give rise to this remedy, the amount of damages recoverable is the value that may fairly and reasonably be considered either: • Arising naturally, (e.g., according to the usual course of events occurring from such breach of contract itself); or • As may be reasonably expected to have been in the contemplation of the parties at the time the contract was made.

Answer 83

Quantum meruit, a reasonable sum for services rendered, is a determination by the courts that directs payment to the claiming party.

Answer 84

Specific performance is an exceptional remedy. It is an order of the court directing the party in breach to carry-out a specific obligation. This is a discretionary remedy and not an absolute right. It may be awarded only where damages are not an adequate remedy, the contract is fair and just, and the injured party acts promptly and fairly in making their claim.

Answer 85

Where the broken promise was to refrain from doing something, the court may award an injunction to restrain the offending party from doing that act. More simply put, an injunction is a court order stopping a party from doing something wrongful.

Answer 86

Performance: A contract may be discharged by performance of the contract, in which case the obligations of the performing party are fulfilled and the rights of the other party are satisfied. Example: An agreement of purchase and sale closes as scheduled. The parties are both satisfied with the outcome, the contract is now at an end. Mutual agreement: A contract may be discharged or voided by mutual agreement of the parties. In effect, the parties agree that their contract no longer binds them. Example: Both the sellers and the buyers agree that they no longer wish to buy/sell the property and mutually agree to the termination of the agreement of purchase and sale. Impossibility of Performance: A contract may be discharged because of the impossibility of performance or frustration, whereby unanticipated circumstances arising after the making of the contract are held to release the parties from their obligations. Example: Parties have entered into an agreement of purchase and sale regarding a cottage. Prior to closing, the cottage burns down. The contract may simply not be fulfilled due to no fault of either party. Therefore the contract is at an end. Operation of Law: A contract may be discharged by operation of law, e.g., death of a party, bankruptcy of a party, unauthorized unilateral alteration of contractual terms. Breach:Breach or the breaking of the contract by one of the parties, results in conferring a right of legal action on the party injured by the breach.

Answer 87

The Electronic Commerce Act and its regulations govern the creation, recording, transmission, and storage of contracts electronically. The purpose of this act is to allow any legal relationship that requires paper documents to be considered legal and enforceable when in an electronic format. It provides that a legal requirement for a document to be signed or endorsed can be satisfied by electronic signature.

Answer 88

The Electronic Commerce Act permits brokerages to use an electronic signature for all agreements relating to trading, including representation agreements, agreements of purchase and sale, and agreement of lease.

Answer 89

If any party to an agreement insists on using written signatures instead of electronic signatures, a salesperson must oblige them. Electronic signatures can be used in an agreement only when all parties to an agreement consent to the use of electronic signatures. While consent can be implied, to avoid misunderstandings, it is recommended that the consent be in writing. Mortgage providers and financial institutions may also insist on paper documents with written signatures.

Answer 90

In order to use electronic signatures, as per Electronic Commerce Act, Sec. 11: (a) the electronic signature must be reliable for the purpose of identifying the person; and (b) the association of the electronic signature with the relevant electronic document must be reliable. Other requirements for a signature include: (a) the electronic signature meets the prescribed requirements, if any, as to method; and (b) the electronic signature meets the prescribed information technology standards.

Answer 91

Similar to the precautions used for written signatures, as a salesperson, where you must personally witness the signing of the documents, you need to be cautious with the use of electronic signatures. The obligations a registrant has under REBBA remain the same. For instance, if two spouses share an email account, then, as the salesperson, you would have to verify that each spouse has signed individually. Similarly, all appropriate security precautions must be completed prior to anyone signing electronically where the salesperson is not physically present.

Answer 92

* Ensure that the places where the electronic signatures have to be made by the sellers and the buyers are identified in the document beforehand. Highlight only those specific fields where the concerned party needs to sign. * Ensure that the fields of date and time are also completed along with the signature by the signing party. • Ensure that both options regarding how to accept or reject an offer presented electronically are explained to the parties beforehand. • Ensure the electronic documents are sent to the correct email address of the sellers and the buyers and include a relevant subject line in the email. • Ensure an acknowledgement of receipt is received from the concerned parties when the electronic documents are received.

Answer 93

The technology of electronic signature software provides for the following: • Authentication: The ability to confirm the signature is from the person from whom it is supposed to be. • Authorized use: The signature is permanent and tamper-proof to prevent fraudulent use of the signature.

Answer 94

Ten Principles of Privacy: 1. Accountability : An organization is responsible for personal information under its control and shall designate an individual or individuals who are accountable for the organization’s compliance with the following principles. 2. Identifying purposes: The purposes for which personal information is collected shall be identified by the organization at, or before the time, the information is collected. 3. Consent: The knowledge and consent of the individual are required for the collection, use or disclosure of personal information, except where inappropriate. 4. Limiting collection: The collection of personal information shall be limited to that which is necessary for the purposes identified by the organization. Information shall be collected by fair and lawful means. 5. Limiting use, disclosure, and retention: Personal information shall not be used or disclosed for purposes other than those for which it was collected, except with the consent of the individual or as required by law. Personal information shall be retained only as long as necessary for the fulfilment of those purposes. 6. Accuracy:Personal information shall be as accurate, complete, and up-to-date as is necessary for the purposes for which it is to be used. 7. Safeguards: Personal information shall be protected by security safeguards appropriate to the sensitivity of the information. 8. Openness: An organization shall make readily available to individuals' specific information about its policies and practices relating to the management of personal information. 9. Individual accessL: Upon request, an individual shall be informed of the existence, use, and disclosure of their personal information and shall be given access to that information. An individual shall be able to challenge the accuracy and completeness of the information and have it amended as appropriate. 10. Challenging compliance: An individual shall be able to address a challenge concerning compliance with the above principles to the designated individual or individuals accountable for the organization’s compliance.

Answer 95

1. Personal Information: Information about an identifiable individual; for example, including details easily associated with a person; for example, name, residential address. 2. Sensitive Personal Information: A subset of personal information dealing with sensitive data; for example, financial information and physical or mental condition. 3. Personal Facts: Non-identifiable facts; storage of personal facts is not regulated, provided information is anonymous. For example, the data in a demographic analysis may reveal the age-groups of people living in the neighbourhood, but the ages of individuals would not be given as a personal fact.

Answer 96

Brokerages must have a designated privacy officer to formulate and implement the policies and procedures for PIPEDA compliance. The responsibilities of a privacy officer at a brokerage are: • To implement policies and procedures for handling, retention, and destruction of personal information at the brokerage • To ensure adequate levels of security are set up to ensure safekeeping of data at the brokerage • To ensure consumers can correct or add details, as well as access the information stored by the brokerage • To include statements about the privacy provision in listing agreements, buyer representation agreements and other similar forms used by the brokerage

Answer 97

Some policies developed by brokerages to comply with PIPEDA include the following: • Preparing a brochure for clients/customers explaining about privacy legislation and how their information would be protected • Adding a sentence that the brokerage complies with privacy legislation in all the promotional materials of the brokerage

Answer 98

Brokerage principles require a salesperson to: • State the purpose of obtaining information and get consent for using the information. • Identify to consumers the intended uses of their personal information; for example, intention to include buyers’ names on a mailing list. • Collect only the information that is necessary for the uses identified. • Disclose information only for the reason it was collected. Information collected is restricted to the stated purpose, unless further consent is obtained. • Obtain the consent of the consumer for the collection and disclosure of information. Explicit written consent is the best, though the legislation does contemplate oral consent or consent expressed through conduct. The more sensitive the information, the greater the need for explicit consent. Consent may also be withdrawn. • Maintain privacy of files and records, by safeguarding physical documents in locked cabinets and password protecting electronic files. • When no longer required, then the salesperson must return the information to the client or destroy the information.

Answer 99

The Family Law Act defines a matrimonial home as “every property in which a person has an interest and that is or, if the spouses have separated, was at the time of separation ordinarily occupied by the person and his or her spouse as their family residence is their matrimonial home”. ( Both spouses have an equal right to possession of a matrimonial home) - **You need to obtain the signature of both spouses for all the legal documents, such as a listing agreement, and the agreement of purchase and sale.**

Answer 100

the term spouse includes same-sex partners and common-law partners who have cohabited continuously for a period of not less than three years If they are in a relationship of some permanence and are the natural or adoptive parents of a child, they only need to be cohabited for a period of one year. There is a fundamental difference in the legal status of family home and a matrimonial home.

Answer 101

For instance, if one common-law spouse owns the family home, they can sell or mortgage it without the other common-law spouse’s permission, whereas this is expressly prohibited in the case of the matrimonial home of a legally married couple. In a common-law relationship, in the event the family home is sold and the relationship is dissolved, the registered owner may be required to make arrangements for satisfactory accommodation of the common-law spouse and/or provide support payments. The parties should seek independent legal advice to clarify their rights relating to the sale of the family home.

Answer 102

The Planning Act gives general administrative control of the land use planning in Ontario to the Minister of Municipal Affairs and Housing, which also broadly directs overall planning in the province by way of provincial policy statements. The Act permits selected agencies to make decisions on various matters such as patterns of land use, road networks, schools, recreational facilities, and water supply.

Answer 103

1. Single-tier municipality 2. Upper-tier (in the two-tier municipality) 3. Lower-tier (in the two-tier municipality)

Answer 104

A single-tier municipality is one that assumes all municipal responsibilities set out under the Municipal Act and other provincial legislation. Some examples of single-tier municipalities are: the City of Toronto, Ottawa, Sault Ste. Marie, Thunder bay, Greater Sudbury, Timmins, Windsor, London, Chatham-Kent, etc.

Answer 105

An upper-tier municipality is one formed by two or more lower-tier municipalities. Municipal responsibilities set out under the Municipal Act and other provincial legislation are split between the upper-tier and lower-tier municipalities. Upper-tier municipalities are responsible for preparation, adoption, and revision of the Official Plan, and the process of dividing and developing land. Examples of upper-tier municipalities are counties such as the Wellington County, Grey County, Simcoe County, etc., or a regional municipality such as the Regional Municipality of York, Halton, Durham, Peel, Muskoka, Niagara, Waterloo, etc.

Answer 106

Lower-tier municipality is responsible for preparation, adoption, and revision of the Official Plan and the adoption of zoning bylaws, interim control bylaws, and other bylaws. Examples of lower-tier municipalities include the city of Cambridge, Mississauga, or the city of Brampton, the town of Richmond Hill, the town of The Blue Mountains, etc.

Answer 107

The Planning Act sets out specific provincial interests to outline what is considered to be sound planning within the province. The provincial interests include the following: * The conservation and management of ecological systems, agricultural resources, natural resources, mineral resource base, and spaces of architectural, cultural, historical, and archaeological significance * The orderly development of safe and healthy communities ensuring the accessibility for persons with disabilities to all facilities and services * The adequate provision and efficient use of communication, transportation, sewage and water services, and waste management systems * The adequate provision and distribution of educational, health, social, cultural and recreational facilities, housing, and employment opportunities * The resolution of planning conflicts involving public and private interests and the promotion of sustainable development * The promotion of built form that encourages a sense of place and provides spaces that are safe, attractive, and vibrant

Answer 108

The Minister of Municipal Affairs and Housing to issue provincial policy statements on land use planning issues of public interest, such as matters relating to municipal planning, mineral aggregate resources, flood plains, housing, and wetlands. Provincial policy statements contain major policy areas concerning the management of change, promotion of efficient, cost-effective development, and land use patterns that stimulate economic growth, while protecting the environment and public health The provincial policy statement is reviewed every five years. It includes the policies to: • Support long-term planning for alternative and renewable energy sources such as wind power • Discourage urban sprawl across Ontario by supporting intensification in appropriate areas and the efficient use of land and resources • Support the protection of Ontario's environment through enhanced policies, including stronger protection of the province's water resources • Protect the province's natural heritage resources including habitats, provincially significant wetlands on the Canadian Shield, and coastal wetlands • Promote development of affordable housing by requiring municipal targets • Respond to concerns about the loss of farmland by prohibiting retirement lots and residential infilling on prime agricultural lands • Support and protect rural areas, by allowing development that is in keeping with the unique character of rural Ontario

Answer 109

The Official Plan contains: • Goals, objectives, and policies concerning the management and direction of physical change with due regard to the effects such changes have on the social, economic, and natural environment • Details about where new housing, industry, offices, and shops will be located, what services like roads, watermains, sewers, parks, and schools will be needed and in what order, parts of the community will be developed • Description of measures and procedures to attain these objectives and a description of such measures and procedures to inform the public and obtain views regarding amendments to the plan

Answer 110

Zoning bylaws are enacted by municipalities to identify the permitted use, building structure standards (e.g., minimum setbacks and lot coverage), and other necessary regulations (e.g., signage, noise, and parking) for properties. Zones are further divided into classifications (such as residential) and sub-classifications (such as single family), each with its own detailed standard. Existing properties or new developments must comply with the zoning bylaw of the municipality. A zoning bylaw: • Implements the objectives and policies of a municipality's Official Plan • Is the legal method of managing land use and future development • Protects the community from conflicting and possibly dangerous land used

Answer 111

• Controls the use of land and states exactly: o How land may be used o Where buildings and other structures can be located o The types of buildings that are permitted and how they may be use o The lot sizes and dimensions, parking requirements, building heights, and setbacks from the street (The term setback refers to the minimum distance that a building(s) must be from the front, rear, and side boundaries of the property)

Answer 112

``` The zoning bylaw typically divides and classifies an entire municipality into a minimum of six general uses such as the following: • Residential • Commercial • Industrial • Institutional • Open space • Agricultural ``` Each class is further divided into subclasses or zones designated with appropriate symbols. For example, Residential would be symbolized as R, Agricultural would be symbolized as AG, etc. Residential (R) would further be categorized as R1, R2, R3, R4, etc., with higher numbers typically used to indicate greater density.

Answer 113

As a salesperson, you need to be able to explain to the buyers of a property that the zoning designation determines how that property can be developed. For example, two properties may be on exactly the same lot size, but will have to be developed differently if they have different zoning designations, as each designation might have different requirements for front yard, rear yard, and side yard setbacks. Typically, height restrictions and maximum lot coverage is also detailed in the zoning designation.

Answer 114

1- Sign bylaw 2-Parking bylaw 3-Noise bylaw

Answer 115

Different municipalities have different sign bylaws specifying the dimensions of an acceptable sign and often mention the permissible distance of the sign from a curb, an intersection, pedestrians, and cyclists. Some signs like “no trespassing,” “open house,” or “for sale” can be erected without obtaining a permit, whereas other signs like promotional banners require prior permit from the municipality. Some municipalities insist that real estate signage should be removed within specified number of days after the property is no longer for sale or lease.

Answer 116

Municipalities have bylaws and restrictions to govern the parking of large commercial vehicles, recreational vehicles and cars in a residential neighbourhood. Municipality may have restrictions for parking on the street or for overnight parking. Municipalities can also prohibit parking on the boulevard and the driveway apron.

Answer 117

This type of bylaw prohibits noise at any time that is likely to disturb others, typically late night and early morning. As per this type of bylaw, activities that cause a lot of noise, such as construction, are limited to the day time to minimize the disturbance to residents in the neighbourhood. Municipalities may specify decibel limits and timings for operating power equipment such as lawn mowers, chain saws, or leaf blowers

Answer 118

A Committee of Adjustment is appointed by the municipal council of a lower-tier municipality. The land division committee, appointed by a upper-tier municipality, performs similar functions at that level. In selected instances, the Ministry of Municipal Affairs and Housing may retain the right to grant consents; e.g., northern areas without municipal organization . The Committee of Adjustment has three functions: • Granting of minor variances • Providing consents to sever land • Granting consents for the continuation of a non-conforming use

Answer 119

A minor variance, for planning purposes, is generally described as a small or insignificant variation or slight modification concerning a particular property in relation to bylaws in force within a municipality.

Answer 120

A rezoning application is required when a property owner wants to use a property in a manner not permitted in the zoning bylaw, and applies to amend the zoning bylaw. The council of a municipality will only consider a zoning bylaw amendment if the proposed use is in keeping with the Official Plan.

Answer 121

Example: Minor Variance A homeowner would like to build a detached garage which will extend 6 inches into the property lot line setback. In order to receive the approval to build the garage, the homeowner would need to apply for a minor variance from the Committee of Adjustment.

Answer 122

The zoning bylaw states the minimum lot frontage required to build a single-family dwelling is 18.3m. An owner of a vacant lot with a 17.9m frontage, although zoned for the use, would normally not be issued a building permit. He/she could make application to the local Committee of Adjustment for relief from the provisions of the zoning bylaw. The decision of the committee would undoubtedly rest on whether such variance is judged to be minor in nature. The committee would typically rely on other comparable decisions and the impact on the area to arrive at a conclusion.

Answer 123

A property is zoned R1 permitting the construction of a single-family residential home. The buyer of the property is contemplating demolishing the single-family home and constructing a four-plex. Because of the significant change in the use of the property and the accompanying impact on neighbouring properties, the municipality may insist that an application for a zone change be submitted rather than a request for a minor variance.

Answer 124

The steps needed to apply for a minor variance are: 1. Pre-application consultation between the applicant and the municipal planners 2. Preliminary project review to identify the zoning bylaw requirements and prepare a list of the variances required by the proposal 3. Submit a completed application and the application fee 4. Scheduling of hearing and posting of public notice sign 5. Notice of public hearing and application details circulated to area property owners 6. Committee of Adjustment hearing and decision 7. Opportunity for a Third-Party appeal to the Local Planning Appeal Tribunal 8. Committee of Adjustment decision final and binding 9. Satisfying conditions of approval (if required)

Answer 125

The required steps to apply for rezoning or zoning bylaw amendment are: 1. Pre-application consultation between applicant and municipal planners 2. Submit complete application including relevant documents and the appropriate fee 3. Opportunity for motion for directions to Local Planning Approval Tribunal 4. Complete application decision 5. Application circulation 6. Technical response (impact of rezoning on municipal services, other government agencies, and the official plan) 7. Community consultation (members of public invited to comment on the application) 8. Preliminary Report to Community Council (if applicable) 9. Response to applicant (e.g., reviews indicate that current municipal services will not support the development proposed in the rezoning application) 10. Applicationrevisionandresubmission(e.g.,applicantrevisestheapplicationtobeconsistentwithcurrent municipal services) 11. Recirculation,consultation,furtherrevisions,finalization,andstaffreport(ifrequired) 12. PublicmeetingatCommunityCouncil(ifapplicable) 13. Councildecision 14. Opportunityforthird-partyappealtoLocalPlanningApprovalTribunal 15. Officialplanamendment(ifnecessary)/amendedzoningbylawineffect

Answer 126

Non-conforming uses or structures are considered legal because they complied with the zoning bylaws at the time they were established. Non-conforming uses or structures are considered legal because they complied with the zoning bylaws at the time they were established.

Answer 127

A mixed-use building permitting commercial on the main floor and residential on the upper floor may no longer comply with a new zoning bylaw that only permits residential uses. Although the new bylaw changed the allowable square footage for future structures, the existing building would not be impacted. The zoning for the existing property would now be classified as 'legal non-conforming' because it was deemed legal prior to the new bylaw becoming into force.

Answer 128

Some of the things that may be considered by the third-party professional or the Committee of Adjustment are as follows: • Continuous use of the property, for example, a business that has existed on the property for many years prior to the zoning change and will be continued by the new owner. • Demolition or substantial renovation of a structure, for example, any rebuilding on the site may have to comply with the new zoning bylaw however basic renovation and maintenance activities may be permitted provided the structure is not substantially altered. • Expansion of the current use, for example, a triplex being converted to a four-plex, which would require additional parking.

Answer 129

Land severance is the approved separation of a piece of land to form, typically, two to three lots, from an already existing larger piece of land and is normally called a consent. Landowners must apply for an approval and obtain a consent to sever as the indiscriminate division of land could have a long-term, negative impact on the community. 1. Consult & determine authority 2. Complete application 3. Application review 4. Decision issued 5. Appeal process (if applicable) 6. Issuing of certificate

Answer 130

The Local Planning Appeal Tribunal is an administrative tribunal that hears cases in relation to a range of municipal planning, financial, and land matters. These include issues such as Official Plans, zoning bylaws, subdivision plans, consents and minor variances, land compensations, development charges, electoral ward boundaries, municipal finances, aggregate resources, and other issues assigned by numerous Ontario statutes.

Answer 131

Local Planning Appeal Tribunal accepts first and second appeals regarding various issues. The jurisdiction for first appeals includes: • Appeals of a council decision to adopt or amend an Official Plan • Appeals of a decision by an approval authority to approve a decision adopting or amending an Official Plan • Appeals of a council decision to refuse a private amendment to an Official Plan a non- decision (not deciding within 210 days) of a private amendment application • Appeals of a council decision to refuse a private amendment to a municipal zoning bylaw or non-decision of a private amendment application • Appeals of a decision by a council to adopt a zoning bylaw or zoning bylaw amendment • Appeals of a non-decision by an approval authority • Appeals of a non-decision on a subdivision

Answer 132

The jurisdiction for second appeals includes: • Appeals on all issues that can have a first appeal • Appeals of a non-decision of a site plan application by council or requirements imposed on a site plan application by the municipality/county or by the regional metropolitan/district municipality • Appeals of a Committee of Adjustment decision to approve or refuse a minor variance application Appeals of a decision to approve or refuse a consent/severance application, conditions imposed or changed for a consent/severance application or a non-decision of a consent/severance application by an approval authority

Answer 133

Depending where the land is located, permission to sever lands usually rests with a local Land Division Committee or a Committee of Adjustment, which are appointed by the municipality or the corporation responsible for overseeing the subject land under the Planning Act. The Minister of Municipal Affairs and Housing may also appoint such committees, or grant consents in certain areas of the province.

Answer 134

When a landowner wishes to divide one property into many lots, a plan of subdivision registration is required by completing the necessary steps outlined in the Planning Act. Registration is a two-stage process: draft plan approval and final plan approval . The outline of steps for obtaining approval for subdivision are: 1. Consult before applying to determine authority 2. Submit complete application 3. Review of application by consent-granting authority 4. Decision or Draft Plan Approval 5. Notice of decision and appeal to the Local Planning Appeal Tribunal 6. Final plan approval and registration 7. Sale of the lots

Answer 135

- Ontario has more than 400 municipalities, including upper and lower tiers, governed by the Municipal Act, 2001, with one exception, Toronto. - Due to its significance, size, and subsequent responsibilities, a separate municipal statute, the City of Toronto Act, 2006, was enacted to govern the operation of the city. The *City of Toronto Act*: - Provides for the broad, permissive legislative framework for the city’s municipality and balances the interests of the province and the city - Enables Toronto’s council to better respond to the city’s needs and pass bylaws on matters ranging from health and safety to the city’s economic, social and environmental wellbeing, subject to certain limitations - Enables determination of the appropriate mechanisms for delivering municipal services, the appropriate levels of municipal spending, and use of fiscal tools to support the city’s activities - Helps to ensure that the city is accountable to the public and that the processes for making decisions are transparent

Answer 136

There are ten areas or spheres of influence over which municipal governments have authority, subject to certain limitations. These spheres encompass various powers and activities that can be carried out directly. These ten spheres of influence are: 1. Public Utilities 2. Waste Management 3. Transportation Systems (Other than Highways) 4. Highways (Public Roads) Including Parking & Traffic 5. Culture, Parks, Recreation, & Heritage 6. Drainage & Flood Control (Except Storm Sewers) 7. Structures (Including Fences and Signs) 8. Parking (Other than Highways) 9. Animal Control 10. Economic Development Services

Answer 137

``` 1-Sign bylaw 2-Fence bylaw: 3-Floodplain management bylaw: 4-Noise bylaw: 5-Building energy standards: 6-Fill bylaw 7-Sewage bylaw or solid waste bylaw: ```

Answer 138

- The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is Canada’s financial intelligence unit. - It assists in detecting, preventing and deterring **money laundering** and **terrorist financing.** - FINTRAC was established by a law, called the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its Regulations, and it functions within its scope. According to its website, FINTRAC fulfills its mandate by: • Receiving financial transaction reports and voluntary information on money laundering and terrorist financing, according with the PCMLTFA and its regulations and safeguarding personal information under its control • Ensuring compliance of reporting entities, such as real estate salespersons and brokerages, with the PCMLTFA and its regulations • Generating financial intelligence on money laundering, terrorist financing, and security threats to Canada • Researching and analyzing data from various sources on trends and patterns in money laundering and terrorist financing • Maintaining a registry of money services businesses in Canada • Enhancing public awareness and understanding of money laundering and terrorist financing

Answer 139

1-Understand your client: The first component of the Know your Client obligation is to understand your client. It is necessary to understand your client to effectively identify irregular or suspicious transactions or activities. Take steps like the following: • Ask how they found you/your brokerage. • Learn about their family. • Determine how they are connected to the community. • Find out what they do for a living. 2-Ascertain client identity Single process method: • Use a photo ID issued by a federal, provincial, or territorial government (or a foreign-issued driver’s license or passport). Credit file method: •Use a Canadian credit file that has been in existence for a minimum of three years. The credit file must be from a valid Canadian credit reporting agency, such as Equifax or TransUnion. Dual process method: Use two independent and reliable sources to confirm client identity. Name and address – Name and date of birth – Name and financial account 3-Ascertain client identity—working with foreign clients If you’re working with a foreign client (who you can’t meet in person to identify and who also doesn’t have three years of a Canadian credit file or documents issued by a Canadian government or Canadian source), have an agent/mandatary act on your behalf. Record the full name of the agent, mandatary, or entity that identified your client, the written agreement with agent, mandatary or entity, identification method used, information gathered according to the method used, date verified, and the date you referred their verification. 4- Ascertain client identity – business relationships 5-Determine third-party involvement The third component of the Know your Client obligation is to determine third-party involvement. A third party is an individual who you are not interacting directly with, but who is providing the instructions or supplying the funds for a real estate purchase. To determine if there is third-party involvement, you can: • Ask the individual you’re dealing with if they are conducting this deal on their own, or on someone else’s behalf. • Obtain the third party’s name, address, and: o If a person – date of birth and principal business. o If an entity – principal business. o If a corporation – principal business and incorporation number and place of issue. • Record the relationship between the client and the third party.

Answer 140

There are three types of reporting you are responsible for: Suspicious Transaction Reporting, Large Cash Transaction Reporting, Large Virtual Currency Transaction Reporting, and Terrorist Property Reporting.

Answer 141

The third obligation that applies directly to you as a salesperson, as the brokerage’s representative, is Recordkeeping. You are required to keep five kinds of records: client information, receipt of funds, all submitted reports, unrepresented party, and reasonable measures taken. Client information records: • Keep records for all clients—individuals, corporations, and entities • Use your branch template • Keep records for five years Receipt of funds records: • Keep records of all funds you receive (in cash or in another form) for a real estate trade • Use your branch template • Keep records for five years Records of all submitted reports (STRs, LCTRs, LVCTRs or TPRs): • Keep records of any submitted STRs, LCTRs, and LVCTRs for five years • There’s no timeframe for keeping records of submitted TPRs Unrepresented party records: • Take reasonable measures to ascertain the identity of an unrepresented party (i.e., a seller or buyer who is not working with a brokerage) and confirm the existence of any unrepresented entities • Keep a record of measures taken to determine their identity/confirm their existence, and the dates you did this • You are not required to keep client information records for an unrepresented party Records of reasonable measures taken: * Keep a record when reasonable measures were taken but unsuccessful (for example, you were unable to make a conclusive determination on an unrepresented party’s existence) * Record measures you have taken, the dates, and reasons why you were unsuccessful

Answer 142

In addition to ensuring its salespersons comply with the three obligations (Know Your Client, Reporting, and Recordkeeping), the brokerage has five additional obligations under the PCMLTFA and its Regulations. These are: • Name a compliance officer • Have written compliance policies and procedures • Provide training to everyone acting on its behalf • Complete a written risk assessment, and • Carry out a two-year program effectiveness review

Answer 143

The brokerage must appoint an individual who has the appropriate knowledge to be the Compliance Officer. It is usually the managing broker but may also be administrative staff.

Answer 144

The brokerage must have documented compliance policies and procedures that specify how the compliance program works. These policies and procedures are tailored to the brokerage’s particular situation – for example, the type of business it does, its client base, its geographical location, and so on. The policies and procedures are used to guide decisions and actions to help ensure the brokerage and salespersons meet their obligations.

Answer 145

The brokerage must provide training to everyone acting on its behalf and keep a record of all training events, attendees, minutes, and material. The training must address all obligations and include an overview, specifics, frequency, and method for each. While the training program must be documented, the delivery modes for the training can vary – for example webinar, live classroom, in writing (e.g., an email or memo) – and so on.

Answer 146

At least every two years, a program effectiveness review must be carried out by the brokerage. It needs to check for the effectiveness of the compliance program, not just its existence. It also needs to identify any gaps, so the realities of the day-to-day operations can be adjusted. Completing this review helps ensure the brokerage is up to date with new regulations, changes to business lines, new risks, and so on.

Answer 147

There is no opt-out to FINTRAC obligations, and failure to comply can lead to very serious consequences.

Answer 148

As a salesperson, you must be aware of how condominiums are created, as you will likely need to discuss condominium corporations with sellers and buyers. A condominium is legally created when both a declaration (the condominium constitution) and the description (the diagrammatic presentation of the property) are registered at the applicable Land Registry Office.

Answer 149

The declaration contains both required and optional information as set out in the *Condominium Act*. Required information includes: - Statement that the *Condominium Act* governs the corporation - Consent of registered mortgagees - Proportionate share of common elements appurtenant to each unit - Proportionate contribution of unit owners to common expenses - Corporation address for service - Common elements for designated units (exclusive use common element), if applicable - Any conditions required by approving authority

Answer 150

The description contains a series of plans, surveys, and specifications describing the property and structures, together with certificates attesting to compliance and accuracy. Documentation will vary based on the individual project and typically includes: • Plan of survey • Architectural plans and Certificate of Architect • Unit boundaries • Unit shape, dimension, and location • Structural plans (if any) and Certificate of Engineer • Certificate of Ontario Land Surveyor • All interests appurtenant to the land that is included in the property

Answer 151

The Condominium Act is legislation that regulates most aspects of a condominium’s formation, purchasing, and governance. Each condominium document has to be based on this Act. The Condominium Act is invoked by the declarant through the registration process. The declarant is the individual who holds the freehold or leasehold interest in the land on which the condominium sits. The declaration to the invocation of the Act must receive consent from the registered encumbrancers against the property, such as mortgagees and lien holders.

Answer 152

A corporation without share capital is automatically formed upon incorporation in which members are the unit owners. The declaration serves as notice of the creation of the corporation and describes the property in specific terms. The land registrar for the applicable land registry office gives the corporation a name and a sequential number. Example: Anycity, South Condominium Corporation 986, which would refer to the 986th condominium corporation registered in Anycity South.

Answer 153

The Condominium Act regulates how condominium corporations are created, owned, and governed. • The Condominium Management Services Act establishes rules that condominium managers and condominium management companies must follow. • The Protection for Owners and Purchasers of New Homes Act establishes a deposit protection and a warranty program that protects owners against many building defects. • The Protecting Condominium Owners Act protects the condominium owners. This Act is the product of the government’s comprehensive review of the existing Condominium Act, 1998 to address the growth and change in Ontario’s condominium sector over the past decades.

Answer 154

- Affordable access to quicker, accessible, and lower cost resolution of disputes primarily between corporations and owners - Self-help tools, case management, and mediation to prevent easy-to-resolve disputes from being tied up in costly and time-consuming legal proceedings - Education and awareness for condominium owners about their rights and responsibilities, and the basics of condominium living and how it differs from other freehold ownership - Education for condominium directors - A registry of all condominium corporations in Ontario, including their boards of directors and contact information - A guide for condominium buyers, setting out unit owners’ roles and responsibilities

Answer 155

Condominiums are operated by a board of directors on behalf of the unit owners. Directors are required to complete mandatory training established and conducted by the Condominium Authority of Ontario. The mandatory training requirements are as follows: - Directors appointed, elected, or re-elected on or after November 1, 2017, have to complete the training program provided by the Condominium Authority of Ontario within six months of the date of their appointment, election, or re-election. Condominiums are operated by a board of directors on behalf of the unit owners. Directors are required to complete mandatory training established and conducted by the Condominium Authority of Ontario. The mandatory training requirements are as follows: - Directors appointed, elected, or re-elected on or after November 1, 2017, have to complete the training program provided by the Condominium Authority of Ontario within six months of the date of their appointment, election, or re-election.

Answer 156

The failure to complete training would lead to disqualification from the role of a director. The *Condominium Authority of Ontario’s system * maintains a permanent record of when directors have completed the online Director Training Program on the “Contacts” page of the corporation’s profile. Directors (and all other people who complete the training) can access their electronic certificate of completion when logged in to the Condominium Authority of Ontario Director Training Program. This electronic certificate is considered as evidence of completion.

Answer 157

- The Condominium Act, 1998 requires that all condominiums have a reserve fund - A reserve fund is a special account with a regulated financial institution such as a bank, loan and trust corporation, or credit union. - This account must be separate from the condominium’s operating fund, and it is used to pay for **major repairs and replacements** to the condominium’s common elements as the property ages (e.g., roof, exterior of the building, exterior finishes, roads, sidewalks, electrical, heating and plumbing systems, and recreational/parking facilities).

Answer 158

1-Key Provisions of Condominium Act: A salesperson should be aware of rules impacting condominiums being marketed, as they can directly impact the buyer.A salesperson should be aware of rules impacting condominiums being marketed, as they can directly impact the buyer. 2-Board of Director duties: The board of directors can make, amend, or repeal rules that are reasonable concerning the common elements. The board must provide owners with a copy of the rules (made, amended, or repealed), the effective date and notice that they may requisition a meeting. Example: Many condominium boards have recently passed rules to prohibit the smoking or growing of cannabis anywhere in the condominium building. 3-Adequacy of reserve funds: The purpose of a reserve fund study is to ensure there are adequate funds available for the corporation to make any necessary repairs to, or replacement of, common element components. Corporations are required to undertake reserve fund studies in accordance with prescribed time limits. Adequacy of reserve funds, that are formed by contributions from all condominium owners, is determined through a performance audit. 4-Common expenses: Common expenses are the fees payable by every unit owner to satisfy the requirements of the condominium corporation budget each year. 5- Status certificate: The status certificate provides fundamental information for a buyer. A salesperson should be familiar with all aspects of the status certificate. This certificate contains information regarding the status of the individual unit and the overall operational, legal, and financial dimensions of the condominium corporation 6-Restrictions to owner alterations and additions: While the Condominium Act is quite specific regarding approval processes and required agreements, changes to balconies, privacy fences/decking, and interior renovations in older condominiums may lack such approvals. In some instances, documentation regarding ownership and ongoing repair responsibilities may be vague or non-existent. Such issues can pose problems at closing, if not addressed in advance. A salesperson may prefer to include the representation and warranty clause regarding the alterations made to the condominium in such situations, to confirm that any alterations to the unit or common elements comply with, and have consent of, the condominium corporation.

Answer 159

It is important that a condominium manager is competent in providing the relevant services; as such, the Condominium Management Services Act requires managers to be licensed and trained. The Condominium Management Regulatory Authority of Ontario is the administrative body that oversees the Condominium Management Act. The Condominium Management Regulatory Authority of Ontario is also the training and licensing authority for condominium managers.

Answer 160

The Condominium Management Regulatory Authority of Ontario issues four types of licenses, three of which are for individuals depending on their level of experience and education in condominium management. The fourth type of license is for condominium management companies

Answer 161

requirements covered by the Code of Ethics include: • Treating people fairly, honestly, and with integrity • Not engaging in acts of discrimination or harassment • Providing reasonable accommodations for people with disabilities • Providing reliable and responsive service while demonstrating knowledge, skill, and competence • Keeping accurate records • Being financially responsible

Answer 162

Once a complaint is received, the Condominium Management Regulatory Authority of Ontario may first attempt to resolve the issue between the complainant and the licensee. This could include engaging the parties in settlement discussion. If a complaint cannot be resolved the Condominium Management Regulatory Authority of Ontario may refer the matter to a discipline hearing to determine if a licensee violated the Code of Ethics. Depending on the nature of the complaint a site inspection by the CMRAO may be necessary to gather more information.

Answer 163

- If a property is primarily used for business or commercial activity, the Commercial Tenancies Act will apply. - If a property is used mainly as a residence, although there are some exceptions, it is likely a residential tenancy and the Residential Tenancies Act, 2006 will apply. Example: A property owner leases a property to a tenant to occupy as his home. The tenant is an appraiser and operates his small home business in an office in the home. The principal use of the property is residential, not commercial, therefore the *Residential Tenancies Act* would apply. Example: In some situations, as a salesperson, you will need to verify the property’s primary use. If a home-office is established and some business operations are being performed from the home premises, then the main use of the property will likely remain residential even though some business activity is taking place. However, if a building is used primarily for business activity on the main floor and as a residence on the upper floors, then the *Commercial Tenancies Act* would apply to the tenants of the main floor and the *Residential Tenancies Act, 2006,* would apply to the residents on upper floors.

Answer 164

the Residential Tenancies Act, 2006 gives residential tenants a wider range of rights than commercial tenants receive in the Commercial Tenancies Act. It is important for you, as a salesperson, to be able to correctly identify which tenancy exists in a given situation and advise the landlords and the tenants accordingly

Answer 165

Under the *Residential Tenancies Act:* - Rent is negotiated prior to occupancy with the landlord. - No charge of rent, or increase of rent, is allowed greater than the lawful rent permitted. Lawful rent for a new tenant is the first rent charged to that new tenant, subject to certain qualifications outlined in the Act, such as specific provisions relating to rent premiums and discounts.

Answer 166

commercial rents are predominately determined by the terms of the lease agreement, which may contain multiple rent formulations. Base rent (often referred to as minimum rent) is the basic rent payable by the tenant under a lease. This is different from additional rents associated with operating costs and from percentage rent.

Answer 167

The difference between the *Residential Tenancies Act* and the *Commercial Tenancies Act* on security deposit is mentioned below: - Under the *Residential Tenancies Act*, the landlord cannot demand a security deposit over and above any rent deposit requested. Any reference to a security deposit is automatically deemed to be a rent deposit for the purposes of the Act. - Security deposit under the *Commercial Tenancies Act* is negotiable.

Answer 168

Under the Residential Tenancies Act, the landlord can collect a rent deposit from a new tenant on or before the start of a new tenancy. If the tenant pays rent by the month, the deposit cannot be more than one month’s rent and if the tenant pays rent by the week, the deposit cannot be more than one week. • A salesperson should be aware of certain important requirements regarding rent deposits: o A tenant is not required to provide a landlord with postdated cheques or agree to automatic debit payments from an account, to a credit card or similar automatic withdrawal for rent payment. Any landlord stipulation to that effect in a tenancy agreement is in violation of the Act. The landlord must provide receipts relating to rents and rent deposits upon the tenant’s request.

Answer 169

Under the Commercial Tenancies Act, rent deposits and security deposits are permitted without any rules or restrictions and is up to the landlord and the tenant to negotiate. The rent deposit is considered to be the last month's rent. A security deposit is a sum of money that cannot exceed the amount of one month's rent. The tenant pays to the landlord as a guarantee that the tenant will fulfill all obligations under the lease and is held for the term of the lease. Should the tenant damage the property (normal "wear and tear" excluded) or if the Tenant has not paid rent, the landlord is entitled to recoup the debt from the security deposit. Usually the tenant must provide the landlord with the security deposit at the start of the lease term. At the end of the lease term, the tenant will receive the deposit back minus any deductions for repairs/restoration

Answer 170

The differences between the Residential Tenancies Act and the Commercial Tenancies Act on rent increase are mentioned below: Under the Residential Tenancies Act: • The landlord must give at least 90 days’ notice on an approved form for any rent increase. This includes an increase involving higher operating costs or capital expenditures. • No landlord may increase the rent by more than the guideline, except in accordance with the Act. Under the Commercial Tenancies Act: • Most commercial tenancy agreements outline in detail issues such as the amount of rent charged, and frequency of rental fee increases. The Commercial Tenancies Act does not regulate rent increases, as is the case with residential tenancies under the Residential Tenancies Act. • There are no restrictions on the rent increase.

Answer 171

Under the Residential Tenancies Act: • The Landlord and Tenant Board provides information about the Act and resolves disputes between landlords and tenants. • Upon receipt of an application, the Landlord and Tenant Board may resolve a dispute through mediation in an effort to settle the dispute. • Failing settlement, a hearing will be conducted to decide the dispute. Under the Commercial Tenancies Act, depending on the dollar amount in dispute, conflict resolution may be commenced at the Superior Court of Justice or the Small Claims Court branch of the Superior Court of Justice.

Answer 172

Under the Residential Tenancies Act: • At the end of the lease period, the lease automatically converts to a month-to-month periodic tenancy. • Termination of a tenancy agreement is only possible in accordance with the Act. A notice of termination must identify the rental unit, the date of the tenancy termination and be signed by the person giving the notice or their agent. When the landlord is the terminating party, the notice must also set out the reasons and details for the termination. • The Act outlines required notices, specifically the length of the notice period, to be used based on a range of circumstances. A notice of termination is not required if the tenant and landlord agree to terminate. • The landlord may proceed with a notice of termination either before the end of the tenancy period or at the end of the term, based on specific reasons listed in the Act. Under the Commercial Tenancies Act: • Under the Commercial Tenancies Act, the landlord or tenant may terminate a month-to-month tenancy with a minimum one-month written notice. • Fixed-term tenancy agreements specify the length or term of the lease. Under the Act, once the tenancy ends, the tenant no longer has the right to occupy the premises. If a tenant continues to occupy the rental premises after the landlord has requested that the tenant move out, that tenant may be subject to a penalty of two months’ rent for every month they remain on the premises, plus applicable costs. In addition to imposing a financial penalty, the landlord may also apply to the Ontario Superior Court of Justice to obtain an eviction order.

Module 5 & 6 Flashcards

(200 cards)