Real Estate Flashcards
Minor Variance Example
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.
Authority of a Municipality
The municipal level of governance is the third level of governance in Canada, after federal and provincial.
Federal government - oversees airport facilities/lands, oceans/fisheries, lands adjacent to Great Lakes, federal canal systems and may also be involved in provincial planning
Provincial government - responsible for overseeing all land use planning within their provincial boundaries. The most direct land control is at the provincial or municipal level.
Municipalities provide the most local form of government and infrastructure to a community
A common elements condominium (CEC):
Consists only of common elements such as roads, parking lots, common green space, or a community garden
There are no units, rather owners enjoy the common elements and pay a maintenance fee for the repair, maintenance, and replacement of any common element. Each owner in a CEC has the ownership interest in their own property and an undivided interest in the common elements of the CEC. The owner’s property is “tied” to the CEC that is referred to as a Parcel of Tied Land (“POTL
R Plans
R Plans are required for:
Severance of an existing parcel of land – the reference plan is for description purposes only as a formal consent for land severance is required.
First application (first registration) under the Land titles act.
When the land registrar determines that the title is too vague or complex, an r plan would be requested for clarity.
A land lease:
A lease involving the leasing of the land only. It gives the exclusive right to use the land for the time the lease is active. Terms vary but commonly range from 20 to 99 years. Land leases can be granted by both private sources and by the Crown. Land leases offer the opportunity for consumers to own a home without the added cost of the land.
Plan of Survey:
Plan of Survey:
Visual depiction of the property, but does not contain a written report and lacks certain certificates required by the registry or land titles act that would appear on a Surveyors real property report.As a result, it could not be registered at the land registration office.Useful to a homeowner to establish property boundaries & perhaps use it for such things as securing a building permit.
Right-to-Use Interest
In a right to use interest, a buyer purchases the right to use a unit but does not have an ownership interest in the property. The buyer does not receive a title deed, the contract only gives the right to use for a specific time period. Typically, the right to use will expire after a stated number of years and then revert back to the owner of the property.Consumers have certain rights under the Consumer Protection Act, 2002 when acquiring an interest in a timeshare.
Ontario New Home Warranties Plan Act:
Ontario New Home Warranties Plan Act:
Governs most new home construction, outlines warrant coverage for new homes and condo’s in ON.
Every builder or vendor selling new homes must warrant that it is constructed efficiently, free from defects, in accordance to Ontario Building Code.Provisions regarding buyer’s deposit, delayed closing, substitution of finishes during construction.
The Tarion Warranty Corporation is a not-for-profit corp that administers the Act on behalf of the provincial government; they ensure homeowners receive the warranty coverage; are responsible for ensuring building standards met.Total coverage capped at $300,000; max of $15,000 to warrantied damage involving env. Harmful substances; septic system claims max of $25,000; Condo common elements for $50,000 times number of units to max of $2.5 million; total coverage for condo projects (units + common elements) capped at $50 million.
Restrictive Covenant:
Uniform properties
Restrictive Covenant:
(Negative Convent refereed)
1. Use restrictions 2. Lease Restrictions
3. Maintenance Requirements
4. Uniform look in neighbourhood
5. Fence height
Type of contractual arrangement that places restrictions on what the owner of the land can do with their property.Legally binding written into the deed of property and registered on title.Run with the land; therefore a new buyer must honour restrictions.Must be negative and reasonable in nature.
Examples: Architectural guidelines that require the property be kept a certain colour.Parking restrictions.Signs on property.Fence height and location.Single family resident.
Expropriation
the action by the state or an authority of taking property from its owner for public use or benefit. "the decree provided for the expropriation of church land and buildings
Expropriation:
Expropriation involves the acquisition of private property by the government for the public’s best interest and use with fair compensation to the owner. This is done by the government exercising the right of eminent domain. There is a process in place to permit a landowner to object to the expropriation and/or the amount of compensation being offered.
Escheat
Better have a will or government takes
Escheat
The reversion of property to the government or some kind of government agency in the event that a property owner dies, leaving no will and having no legally qualified heir to whom the property may pass.
A real estate brokerage is authorized under REBBA to trade in real estate. As a salesperson, you are employed by the brokerage and as such, are an extension of the brokerage. This results in all agreements with a seller or a buyer being those of the brokerage and not yours, as a salesperson.
A brokerage typically offers two levels of service to sellers and buyers:
A brokerage typically offers two levels of service to sellers and buyers:
*Representation – refers to the relationship when the party is a client
*Providing services – refers to the relationship when the party is a customer
The following four sections contain information on types of relationships that a brokerage and a seller or a buyer could have.
Representation
The term representation implies an agency relationship has been established between two parties. An agency relationship places both regulatory (REBBA) and fiduciary obligations on the brokerage. Fiduciary obligations generally require the brokerage to be loyal, not disclose confidential information, and promote and protect the seller or the buyer’s best interests.
In real estate, the brokerage is the agent, not the individual salesperson.
Providing services
A brokerage can provide services to a seller or a buyer rather than represent the party. Providing services does not place the same level of obligations on the brokerage as when representation has been established. A brokerage must treat the party with fairness, honesty, and integrity, and ensure any information provided is accurate. No fiduciary obligations are owed when providing services, such as loyalty, confidentiality, or promoting their best interests.
Real Property
Real Property: Property is viewed as either real or personal. Real property includes both the tangible aspects
- The real estate (that being the land and improvements) and
- The intangible (the rights). In many transactions, the property rights being conveyed are commonly referred to as the “bundle of rights”. This is the right to possess, use, enjoy, and sell the real estate.
Rights associated with real property are key to the value of the property. For example, an appraiser will identify what rights are being analyzed when estimating value, especially when the rights are less than the bundle of rights.
Zoning bylaws are enacted by municipalities to identify permitted use, building structure standards and regulations (signage, noise etc).
Zones are further divided into classifications (such as residential ) and sub -classifications (such as single family).
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
Zoning bylaws are enacted by municipalities to identify permitted use, building structure standards and regulations (signage, noise etc).
Zones are further divided into classifications (such as residential ) and sub -classifications (such as single family).
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
- Provincial interest include
- How land may be used- Where buildings and other structures can be located
- The types of buildings that are permitted and how they may be used
- Lot sizes and dimensions, parking requirements, building heights, etc.
Divides municipality into general sizes uses: * Residential* Commercial* Industrial* Institutional* Open space* Agriculture
- Acceptance of the offer by the offeree must be communicated to the party making the offer (offeror).
- Offer & Acceptance: No mutual agreement = no contract
Contract formed when offer made by one party is accepted by the other
An offer:
- Must be complete and definite in terms
- Must remain open for acceptance for a reasonable period of time.
- Must be communicated to the offeree.
- Must be made to one or more persons or corporations, or to the public in general.
- May be revoked or withdrawn prior to acceptance, subject to certain limitations.
- Acceptance must be unconditional. Any change to the offer would be a counter offer.
- Acceptance of the offer by the offeree must be communicated to the party making the offer (offeror).
- Acceptance must occur before specified time limitation placed by the offering party(s).
- Acceptance may be in the same manner used by the offeror.
The communication of acceptance must be done in accordance with the terms of the agreement, which typically provide for notice to be given by personal delivery, fax, or email. Where electronic communication is permitted, the communication is deemed to be received when transmitted electronically to the email address and/or fax numbers provided. Follow-up is a leading practice to confirm receipt of the document.
- Capacity of the Parties offer & Acceptance:
Must be of legal capacity to enter into the contract at the time when the contract is made.No legal capacity = no contract
Adverse Possession: “Squatters rights”
without the consent of the owner but with the owners knowledge.
Adverse Possession: “Squatters rights”
occurs when an individual who is not the owner takes possession of the property, without the consent of the owner.Possible, under adverse possession, if certain conditions exist, for their occupier of land to extinguish the title of the owner and claim legal ownership of that land.
Must be be visible, exclusive, continuous for a period without the consent of the owner but with the owners knowledge.
In Ontario min time is 10 years.No title claims by adverse possession can occur under the land titles, which is a system of land registration in Ontario.
Profit-à-Prendre:
Profit-à-Prendre: “right of taking” Interest in land that gives a person the right to enter another’s property based on a written agreement and take something from it such as crops, materials, fish or timber
Government Limitations on Property Ownership There are many rights and limitations that come with property ownership. The government also imposes limitations over property ownership. These government-legislated limitations to property ownership fall into four different categories.
1.Expropriation
2. Right to Regulate
3.Right to Levy Taxes
4. Escheat
Government Limitations on Property Ownership There are many rights and limitations that come with property ownership. The government also imposes limitations over property ownership. These government-legislated limitations to property ownership fall into four different categories.
Expropriation: Expropriation involves the acquisition of private property by the government for the public’s best interest and use with fair compensation to the owner. This is done by the government exercising the right of eminent domain. There is a process in place to permit a landowner to object to the expropriation and/or the amount of compensation being offered.
Right to Regulate: Right to regulate is the right of government to regulate property for the promotion of public safety, health, morals, and general welfare. It is also referred to as police power. Zoning bylaws, building codes, traffic, and sanitary regulations are also based on this right to regulate. Various federal and provincial statutes impact land ownership, such as land planning.
Right to Levy Taxes: Right to levy taxes is the right of the government to levy taxes on property. An example of these is real property tax, which funds the operating budget of the municipality to provide services to the people in that municipality. Another example would be the land transfer tax, which is paid on the purchase price of the property.
Escheat
The reversion of property to the government or some kind of government agency in the event that a property owner dies, leaving no will and having no legally qualified heir to whom the property may pass.
3 types of Real Estate Markets: Balanced, Buyers & Sellers Balanced market:
3 types of Real Estate Markets: Balanced, Buyers & Sellers Balanced market:
Supply is equal to Demand Typical listing periods for properties to sell. Middle ground of listing time. Buyers salesperson; review listings each day, expect appointment to show can be obtained in a day or two without worrying itll be taken
Buyers market: More Supply than Demand More listings, listing periods extended; fewer buyers, possible falling prices, buyers taking their time to decide because there are a lot more options.Longer listing periods & less showings per listing.
Sellers Market: More Demand than Supply More buyers and more offers and bidding wars increases prices, Properties sell fast. Buyers act quickly if fear of missing out.Once listed a buyer must be available to review property and seller will be prepared to review offers.
Types of Real Estate and Career Opportunities:
Listing brokerage (working with seller) + Co-operating brokerage (working with buyer)
Residential resale: extensive work with sellers/buyers, handling emotional issues, irregular work hours.
New home sales: Little involvement with showings, listings; qualifying buyers and closing sale.Residential condominium: Various rules, more factors affecting transaction do with the condominium corporation. Condominium or maintenance fees charge, status certificate and financial stability of the condo corporation.
Rural, recreational, agricultural sales: Wells and septic systems knowledge required. Cottages, waterfront locations, unique regulations.
Commercial: Retail, office, industrial & investment properties. Math, calculations related to ROI (return of investment) More knowledgeable buyers. More business orientated than enjoyment and emotional for residential.
Leasing and Commercial Properties: Tenants involved can bring much more due diligence needed.
For a residential transaction there could be several weeks or months after the agreement has been signed until the brokerage is paid commission earned on the completion date.
For a Commercial transaction is could be several months or years between the listing being live, having an accepted offer and the transaction completed.
As a salesperson managing your finances by creating budget based on potential earnings, keep track of expenditures, find advice to claim expenses & keep separate business and personal expense accounts.
CREA’s Role: Each of the three levels of organized real estate play an important role in the real estate industry.
CREA’s Role: Each of the three levels of organized real estate play an important role in the real estate industry.
CREA is located in Ottawa, operates at the national/federal level, and is often referred to as the voice of Canadian real estate. For this reason, you will start your closer examination by focusing on this organization first.
CREA’s mission statement outlines its primary purpose to represent and promote the interests of the members, enhance members’ professionalism and ability to succeed, and advocate policies that ensure real estate property rights and ownership.
CREA has responsibility for national and international representation of the industry, various codes including (most notably REALTOR® and MLS®), MLS® has grown steadily since its inception in the 1950s. MLS® is best described as a system for the orderly cooperating and dissemination of listing information to members.
CREA sets out various requirements to boards concerning how MLS® is to be administered (for example, type of listing information needed and required notification to the board when properties are sold)
CREA also operates the Realtor.ca website providing consumer access to selected property information for both residential and commercial property listings. This website is not an MLS® system but instead is an advertising vehicle provided by
REALTORS® across Canada to help market properties. Consumers need to contact a REALTOR® for complete details about properties listed on this site
OREA’s Role: OREA represents more than 70,000 brokers and salespersons who are members of the province’s real estate boards.
OREA’s Role: OREA represents more than 70,000 brokers and salespersons who are members of the province’s real estate boards.
The association’s many functions include maintaining a strong lobbying voice for REALTORS®, offering savings programs, and informing members of real estate news. OREA continually strives to improve the image of REALTORS® by enhancing educational and professional standards.
The association also handles ethics and arbitration appeals involving board members, develops, publishes, and provides downloadable standard forms and clauses, and supports educational and charitable causes through the Ontario REALTORS Care® Foundation.
Every real estate professional who joins an Ontario real estate board automatically becomes a member of OREA and CREA.
Three Principles of the Land Title System
Three Principles of the Land Title System:
Mirror Principle: The register of title is a mirror that accurately and completely reflects, beyond all argument, the current facts that are material to a persons title.
Curtain Principle: The register is the sole source of information for proposed buyers, who need not and indeed must not concern themselves with trusts and equities that lie behind this curtain of information.
Insurance Principle:
Mirror principle is deemed to give the absolute correct reflection of title but, if through human error a flaw appears anyone who suffers loss must be put in the same position, so far as money can do, that they would have been in had the reflection been a true one
RECO Misson
Real Estate Council of Ontario
RECO Mission statement: To promote a safe and informed real estate market for consumers in Ontario through effective and innovative regulation of the services offered by those who trade in real estate.
©2019 Real Estate Council of Ontario
*Enforcing standards required to obtain and maintain registration as a brokerage, broker, or salesperson
*Establishing education standards for registration, post-registration, broker, and mandatory continuing education courses
*Conducting inspections of brokerages to ensure compliance with REBBA and to educate brokers of record
*Addressing inquiries, concerns, and complaints about the conduct of registrants and taking appropriate action
*Establishing and administering insurance requirements, which includes consumer deposit protection
*Being the source of consumer protection education and information for sellers and buyers involved in real estate transactions
Real estate typically refers solely to the tangible aspects of a property.
Real Estate:
Real estate typically refers solely to the tangible aspects of a property. Tangible means the aspect can be touched, and includes the land and the building(s) upon it. The term “improvements” is also used to refer to any structure or other permanent addition, such as a deck, a shed, or a fence.
Real Property:
Real Property: Property is viewed as either real or personal. Real property includes both the tangible aspects
- The real estate (that being the land and improvements) and
- The intangible (the rights). In many transactions, the property rights being conveyed are commonly referred to as the “bundle of rights”. This is the right to possess, use, enjoy, and sell the real estate.
Rights associated with real property are key to the value of the property. For example, an appraiser will identify what rights are being analyzed when estimating value, especially when the rights are less than the bundle
Local Real Estate Boards:
At the local level, real estate boards act as industry representatives for a local area or region.
Local Real Estate Boards: At the local level, real estate boards act as industry representatives for a local area or region.
Through dues paid to their local real estate board, a salesperson becomes a member of CREA and OREA and is entitled to call themselves a REALTOR®. Local services are provided to board members, such as access to the Multiple Listing Service (MLS®) system, as well as local market information and data report
Personal Property: Personal property is movable and is referred to as consumer goods. Examples include appliances, furniture, light fixtures, and drapes
Personal Property:
Personal property is movable and is referred to as consumer goods. Examples include appliances, furniture, light fixtures, and drapes
The difference between real property and personal property is important. Generally, all property, except the land and the improvements, is considered to be personal property. As a salesperson, personal property can become part of the negotiations between a seller and a buyer. It is important to understand the legal obligations relating to personal property. These obligations are detailed under the topics of Fixtures and Chattels on the Agreement of Purchase and Sale
POLARIS: is an acronym for Province of Ontario Land Registration and Information System.
POLARIS registers property under a parcel basis in much the same fashion as a land titles system.
POLARIS: is an acronym for Province of Ontario Land Registration and Information System. This automated land registration system operates based on title index (description of property ownership) and property mapping (surveys and plans) databases.
POLARIS registers property under a parcel basis in much the same fashion as a land titles system.
The guarantee of title normally associated with land titles does not accompany this parcelization process. By centralizing data electronically, search times are reduced, manual abstracting is eliminated (given direct input of data through online terminals), and access is provided to remotely search records as well as mapping information
Permits the user to find property by “individual parcel” – referenced by a property identification number or pin, by individual name, or by street address within the title index.
Property mapping allows the geographic pinpointing of a described property.Activities concerning the automation of records under POLARIS are being carried out coincident with the land titles conversion project, enabling the gradual move to full electronic facilities throughout the province
Parol Evidence Rule:
adjective: parol
given or expressed orally. "the parol evidence"
Parol Evidence Rule:
The parol evidence rule provides that oral evidence is (not allowed) inadmissible ) in court to vary or contradict the terms of a written contract, except in a case of fraud or mistake.There are exceptions, but a general rule when drafting contract documents (agreements) is that every term, warranty, condition, or representation on which one or the other of the parties intends to rely should be incorporated into the written document
In real estate, every party to the contract must agree in writing to any terms or additions to an agreement. Any changes to the original document need to be agreed to by the parties and in writing in order to be enforceable
Land Titles Assurance Fund
Entiled to compensation under the Land Title Assurance Fund
If a property owner falls victim to fraud involving tile to their property? What may happen?
Land Titles Assurance Fund: States that persons deprived of ownership through selected errors or fraud are entitled to compensation, provided such compensation cannot be obtained from other sources.
Designed to provide financial compensation for persons wrongfully deprived of land or some interest therein, due to the land being brought under this act, or by reason of some other person being registered as owner through fraught, misdescription, omission, or error.
The original owner has lost an interest in land, cannot recover that interest, and has suffered loss as a consequence of fraud. An owner’s success in dealing with the assurance fund would depend on specific circumstances, such as exhausting all other avenues of compensation before filing a claim with the land titles assurance fund
Land Titles System - Modern, new and electronic
Land Registry System - older and historical paper
Land Title System - is electronic record keeping it more modern and efficient
Land Registry System - is historical paper record keeping(older and less efficient)
Land Registry System - dating back to 1795
Will eventually be faded out the land registry system
