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Real Estate Course 1 > Module 6 > Flashcards

Module 6 Flashcards

1
Q

Statute of Frauds

A

Certain contracts (including real estate contracts) must be in writing to be enforceable by law.
Doesn’t require any particular form be used for the written contract.
EXEMPTION: when a contract is verbal but parties begin to complete the contract (then it can be enforceable)

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2
Q

Vendors and Purchasers Act

A

Several rights and obligations that are incorporated into every agreement:
1. seller isn’t bound to produce title deed or other evidence of title except as are in the seller’s possession or control
2. buyer shall search the title at buyer’s expense
3. seller has 30 days to remove any objection made to the title - if seller is unable or unwilling, seller may cancel contract and return deposit
4. taxes, local improvements, insurance premiums, rent and interest shall be adjusted as at the date of closing
5. conveyance shall be prepared by the seller and the mortgage by the buyer
6. buyer is entitles to possession of the receipt of rent and profits upon closing date

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3
Q

Representation agreement

A

signed between brokerage and seller/buyer

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4
Q

seller or buyer customer service agreement

A

signed between brokerage and seller or buyer

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5
Q

agreement of purchase and sale

A

signed between seller and buyer

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6
Q

lease

A

signed between landlord and tenant

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7
Q

Parol Evidence Rule

A

Oral evidence is inadmissible in court to vary or contradict the terms of a written contract, except in a cause of fraud or mistake.
aka - you cannot say someone said something that contradicts the written contract and have it hold up in court.

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8
Q

Privity of Contract

A

Only parties to a contract can enforce it or be bound by it. If you’re just witnessing the contract, and aren’t actually party to the contract, you aren’t involved in enforcing it.
Eg. a brokerage can sue the seller for real estate remuneration, but the salesperson cannot individually (they need the consent of the brokerage, as the agreement is between the brokerage and the seller).

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9
Q

6 elements for a contract to be enforceable

A
  1. offer and acceptance (remain open for reasonable time, accepted within timeframe, communicated to offeree. If accepted, must be unconditional, communicated to offeror in the same manner made by offeror (e.g. email), and occur before specific time limit).
  2. capacity of the parties (can’t be minor (18), mentally impaired, intoxicated) Non est factum - need to know what is being signed - can’t sign something if you don’t know what it is.
  3. consideration (each party gets something of value - buyer gets house, seller gets money. 3 parts - value, lawful, and future or current consideration (not past consideration))
  4. definite and clear (terms stated clearly)
  5. lawful object (must be lawful arrangement - cannot buy property with embezzled money)
  6. genuine intention (both parties consent to terms genuinely, no duress or undue influence)
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10
Q

Under seal

A

When a contract has no exchange of value (e.g. a buyer making their offer open until a certain time), it’s still considered enforceable if signed under seal

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11
Q

lack of genuine intention: common mistake

A

both parties of the contract know the intention of the other, accept it, but are mistaken about an underlying fact.

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12
Q

lack of genuine intention: mutual mistake

A

parties misunderstand each other and are at cross-purposes/have contrary understanding

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13
Q

lack of genuine intention: unilateral mistake

A

one party is mistaken about a fundamental aspect of the contract (buyer believes the property is 1 acre, buyer knows that it’s not but says nothing - buyer proceeds with purchase based on mistaken fact).

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14
Q

lack of genuine intention: innocent misrepresentation

A

a statement by one party of fact that is wrong, but honestly believed to be true.

Cannot recover damages if it’s an innocent misrepresentation. Not fraudulent or negligent.

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15
Q

lack of genuine intention: fraudulent misrepresentation

A

3 elements
- misrepresentation is made with the knowledge of its falsity
- purpose is to induce other party to enter contract
- misrepresentation relied on to the other party’s prejudice

Deceived party may resist enforcement of contract and seek damages.

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16
Q

lack of genuine intention: negligent misrepresentation

A

If there’s a contractual relationship between parties and a misrepresentation is made without reasonable verification, the person who was misled may bring a lawsuit (may include damages). This can occur when a buyer has relied on a real estate salesperson who reps the seller.

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17
Q

Void contract

A

Contract never came into effect - no force. The agreement doesn’t exist. No one can enforce it.

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18
Q

Voidable contract

A

It is enforceable, and valid until rendered void.
E.g. signed by someone who is intoxicated - intoxicated person is able to accept the contract as valid, or declare it void if they can prove their were so intoxicated they didn’t know what they were signing.

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19
Q

Illegal contract

A

not enforceable in court.

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20
Q

Breach of contract

A

failure to fulfill or perform an obligation under contract by one of the contracting parties.

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21
Q

fundamental breach

A

The breach goes to the root of the contract.
impacted party can:
- accept breach, release themselves
- accept breach, seek damages
- treat contract as still in effect

If breach doesn’t go to root, might still be able to sue for damages but contract is still in effect (not discharged).

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22
Q

remedies for a breach of contract: rescission

A

cancel the contract

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23
Q

remedies for a breach of contract: damages

A

compensation for losses incurred.
every breach may give rise to this remedy (must prove amount of loss)

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24
Q

remedies for a breach of contract: quantum meruit

A

reasonable sum for services rendered
Implies work has already been done that needs to be paid for

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25
Q

remedies for a breach of contract: specific performance

A

court orders the breaching party to carry out a specific obligation
awarded only where damages are not an adequate remedy, the contract is fair and just, and the injured party acts promptly and fairly.

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26
Q

remedies for a breach of contract: injunction

A

court ordered restraint
stops the offending party from doing something

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27
Q

5 methods to terminate a contract

A
  1. performance: obligations fulfilled, parties are satisfied
  2. mutual agreement (both parties must agree)
  3. impossibility of performance (unanticipated circumstances arise, impossibility of performance)
  4. operation of law (death, bankruptcy, unilateral alteration of contract)
  5. breach
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28
Q

Electronic Commerce Act

A

All real estate agreements can be made using electronic signature.
If any party wants written instead of electronic signature, must be written.

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29
Q

Electronic signature software (2 factors)

A

Authentication - ability to confirm the signature is legit
Authorized use - signature is permanent and tamper-proof

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30
Q

PIPEDA types of info (x3)

A

Personal info - info about an identifiable individual
Sensitive personal info - subset of personal info dealing with sensitive data
Personal facts - non-identifiable facts (storage not regulated)

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31
Q

Family Law Act

A

Recognizes the concept of equal partnership in marriage relationships with regards to the matrimonial home

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32
Q

Matrimonial home

A

Every property in which a person has an interest and that is or was at the time of separation ordinarily occupied by the person and his/her spouse as their family residence.

Both spouses have equal rights.
The spouse has the right to be notified of any proceedings by a third-party that could affect that possessory right. Can’t sell house without spouse’s consent.

Can have more than one matrimonial home (e.g. cottage and house) - but can designate only one as matrimonial if they want to.

If the owner sells the matrimonial home, the non-owner needs to provide spousal consent.

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33
Q

Matrimonial property

A

Any family asset not considered to be the matrimonial home with exceptions such as inheritances and insurance settlements.

Do not need consent of non-titled spouse for matrimonial property (e.g. if owner spouse wants to sell house that is matrimonial property - e.g. investment property).

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34
Q

Common-law spouse

A

Partners who have cohabitated for at least 3 years OR 1 year if they have a child together (natural or adoptive).

However - they don’t have a matrimonial home. They have a family home, which if it’s owned by one of the spouses, they can sell it without consent of their non-titled spouse.

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35
Q

the Planning Act

A

Gives administrative control of the land use planning in Ontario to the Minister of Municipal Affairs and Housing.

Promotes sustainable economic development.

It establishes parameters for the development of an Official Plan

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36
Q

Single-tier municipality

A

Assumes all municipal responsibilities set out under the Municipal Act.
e.g. City of Toronto, Ottawa, Thunder Bay, Windsor, London.

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37
Q

Upper-tier (in two-tier municipality)

A

Formed by one or more lower-tier municipalities.
Responsibilities split between upper and lower.
Upper = region, county, or district.
Responsible for prep, adoption, and revision of the Official Plan.
E.g. Muskoka, Simcoe County, Durham, Peel, Niagara, Waterloo

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38
Q

Lower-tier (in two-tier municipality)

A

Responsible for prep, adoption, and revision of the Official Plan and bylaws.
e.g. Cambridge, Mississauga, Brampton, etc.

39
Q

How often is the provincial policy statement reviewed?

A

Every 5 years

40
Q

The Official Plan

A

contains goals, objectives, and policies concerning the management and direction of physical change with regards for social, economic and environment

details where new housing/industry will be location, as well as services

measures and procedures to attain these objectives

41
Q

What’s the purpose of the Official Plan

A

It’s a framework for future decision making

42
Q

Who approves the Official Plan

A

The Ministry of Municipal Affairs and Housing. The regional government may approval local Official Plans.

43
Q

How often is the plan updated

A

Local councils are required to update the Official Plan not less than 10 years from the date the plan came into effect if it’s a new comprehensive plan. If the Plan is not being replaced in its entirety, should be updated at least every 5 years.

44
Q

How is the Official Plan implemented?

A

Zoning bylaws

45
Q

General uses that a zoning bylaw divides the municipality into (6)

A

Residential
Commercial
Industrial
Institutional
Open space
Agricultural

46
Q

Committee of Adjustment

A

Grant minor variances
Provide consents to sever land
Grant consents for the continuation of a non-confirming use

47
Q

Minor variance

A

small or insignificant change concerning a property in relation to bylaws.
Variance must be consistent with general intent and purpose of applicable bylaws
Up to discretion of Committee of Adjustment
If someone wants to appeal the Committee of Adjustment’s decision, they appeal to the Local Planning Appeal Tribunal.

48
Q

Legal non-confirming structure

A

A structure that lawfully existed prior to the current zoning bylaw (e.g. a commercial space was built and operated lowfully, then the zoning changed to no longer allow commercial spaces in the area. Since it existed lawfully before the zoning change, it’s a legal non-conforming structure).

Non-conforming right is lost of the non-confirming use is discontinued (need to know municipality’s guidelines on acceptable cessation period).

49
Q

Land severances (consents)

A

If a land owner is looking to sever property into two or three parcels.
Requires consent of local municipality.

50
Q

Subdivision plan

A

If someone is looking to divide land into many parcels.

51
Q

Who grants land consents?

A

Land Division Committee (usually for plan of subdivision) or Committee of Adjustment (usually for small consents).

52
Q

6 steps of land severance

A
  1. consult and determine authority
  2. complete application (if authority deems incomplete, the applicant can disagree and appeal to Local Planning Apppeal Tribunal)
  3. application review - does the request conform with Official Plan, comply with local zoning bylaws, suitable for land, protection from flooding.
  4. decision issues - made within 90 day review window after all required info is received.
  5. appeal process if applicable - appeal made by applicant or public. Appeal Tribunal will dismiss or hold hearing.
  6. issue certificate - deed for newly created lot stamped with consent of municipality and registered at applicable Land Registry Office.
53
Q

Time period to satisfy conditions of severance (if granted with conditions)

A

1 year

54
Q

How many stages are there in registering a subdivion

A

2 (draft plan approval and final plan approval)

55
Q

Subdivision: Draft Plan Approval (5 steps)

A
  1. consult and determine authority
  2. prepare draft plan - includes boudnaries, highways, adjacent subdivisions/property the applicant has an interest, use, natural and artificial features, soil considitions, municipal services, nature
  3. submit application to municipality - 180 day timeframe from completed application received to decision (step 5)
  4. approval authority provides notices and hold public meetings
  5. decision and notice of decision (draft plan approval) - decides to approve with conditions or refuse it
56
Q

Subdivision: Final Plan Approval (3 steps)

A
  1. if not happy with refusal of request, appeal can be files with Local Planning Appeal Tribunal
  2. if draft plan approved, applicant fulfills all conditions. Then approval authority issues final approval (if conditions are met). Can now tender for registration.
  3. Under Land Titles Act, new plan parcel register is created. Prepared by land surveyor. Plan is registered in land registry office.
57
Q

Local Planning Appeal Tribunal

A

independent administrative tribunal responsible for hearing appeals on a variety of contentious municipal matters.

Members (lawyers, architects, planners) are appointed by Lieutenant Governor.

Hears cases on Official Plan, zoning bylaws, subdivision plans, consents and minor variances, etc.

58
Q

Local Planning Appeal Tribunal - first appeals

A
  • decisions to adopt/ament Official Plan
  • decision to refue a private amendment to a municipal zoning bylaw
  • decision by a council to adopt zoning bylaw/amendment
  • non-decision by approval authority
  • non-decision on a subdivision
59
Q

Local Planning Appeals Tribunal second appeals

A
  • all issues that can have a first appeal
  • non-decision of a site plan application by council
  • Committee of Adjustment decision to approval/refuse minor variance
  • decision to approve/refuse consent/land severance application, conditions, or non decision by approval authority
60
Q

City of Toronto Act

A

Created because Toronto is so big - everything else in Ontario is governed by the Municipal Act.

61
Q

Municipalities’ Sphere of Influence (10)

A

public utilities
waste management
transportation systems (other than highways)
highways
culture, parks, rec, heritage
structures
parking
animal control
economic development services

62
Q

Municipal bylaws

A

Sign bylaw
Fence bylaw
Floodplain management bylaw
Noice bylaw
Building energy standards
Fill bylaw
Sewage bylaw or solid waste bylaw

63
Q

FINTRAC

A

Financial Transactions and Reports Analysis Centre of Canada
Canada’s financial intelligence unit

64
Q

PCMLTFA (Proceeds or Crime (Money Laundering) and Terrorist Financing Act

A

This is the law that established FINTRAC.

65
Q

PCMLTFA obligations (x3)

A
  1. Know your client (understand client, identity, and determine 3rd-party involvement)
  2. reporting obligation
  3. recordkeeping obligation
66
Q

STR - suspicious transaction reporting

A

Just need reasonable grounds.
File STR for any type of real estate transaction, atempted or completed
Submit to FINTRAC through brokerage Compliance Officer
failure to comply : $2m, 5 years jail
if you disclose a STR was made or contents - 2 years jail

67
Q

LCTR (large cash transaction reporting)

A

Receieve 10k in cash in single transation, or across more than one transaction within 24 hours.
must report with 15 days of transacation
failure to comply: 500k, 1m for subsequent offences

68
Q

LVCTR - large virtual currency transaction reporting

A

over 10k in single transaction/across multiple in 24 hrs
must report within 5 days of transacation to FINTRAC through brokerage Compliance Officer
failure to comply: 500k, 1m for subsequent offences

69
Q

TPR - terrorist property reporting

A

Know/believe property is owned/controlled by/behalf terrorist group.
Report to RCMP or CSIS, submit TPR to FINTRAC ASAP. Also submit STR if there is a real estate transaction.

70
Q

5 types of record

A
  1. client information records (5 years)
  2. receipt of funds records (5 years)
  3. all submitted reports (STRs, LCTRs, LVCTRs - 5 years, TPR - indefinitely)
  4. unrepresented party records (not required)
  5. records of reasonable measures taken
  • failure to comply: 500k, 5 years jail
71
Q

5 additional brokerage obligations under PCMLTFA

A
  1. name a complicance officer
  2. have written compliance policies and procedures
  3. provide training
  4. complete a written risk assessment
  5. carry out a two-year effectiveness review
72
Q

Types of penalties for not complying with FINTRAC

A
  1. Penalties for non-compliance
  2. Administrative monetary penalties (AMPs) - minor = 1 - 1k, serious = 1 - 100k, very sesious = 1 - 100k, 500k for corporation.
73
Q

2 factors to legally create a condominium

A
  1. declaration of condominium
  2. description of condominium
74
Q

Declaration for creation of the condominium

A

Contains both required and optional information set out in the Condominium Act

75
Q

Description for creation of the condominium

A

Contains series of plans, surveys, and specifications describing the property and structures, togther with certificates attesting to compliance and accuracy.
Includes plan of survey (visual description, no written report) + certificate of Ontario Land Surveyor.

76
Q

Invoking the Condominium Act

A

Each condo document has to be based on the Act, the Condo Act is invoked by the declaration through the registration process.
Declarant is the person who holds the freehold/leasehold interest in the land on which the condo sits.

77
Q

Forming and naming of a condo corporation.

A

Members = unit owners.
Land registrat gives the corporation a name and sequential number.

78
Q

Residential Condominium Conversion Project

A

Converting industrial structures into residential condos.
These spaces are eligible for Provincial Warranty (only if it was previously not a residential property - converting to a condo from existing residential building is not eligible).

79
Q

Condominium Act

A

Regulates how condo corporations are created, owned, and governed

80
Q

Condo Management Services Act

A

Establishes rule that condo managers and mangagement companies must follow

81
Q

Protection for Owners and Purchasers of New Homes Act

A

Establishes deposit protection and warranty program

82
Q

Protecting Condominium Owners Act

A

Protects condo owners.
Created 2 authorities - Condominium Authority of Ontatio and Condominium Management Regulatory Authority of Ontatio

83
Q

Condominium Authority of Ontario - general purpose

A
  • resolution of disputes
  • education and awareness for owners and directors
  • guides
84
Q

Condominium Authority of Ontario (CAO) - training

A

Mandatory training for directors.
- need to complete within 6 months of their appointment/election - no substitute courses.
- don’t need to take it if have already taken it within last 7 years.
- directors elected to the pre-turnover board (controlled by developer) are exempt. Once turnover meeting has happened, have 6 months to complete training.

No training = disqualified.

85
Q

Condominium Reserve Fun

A

Special account, seperate from operating fund. Used for major repairds/replacements of common elements.

Portion of common expense fees is deposited for reserve.

86
Q

When is a special assessment needed (reserve fund)

A

If costs exceed amount in reserve. Charged on top of regular fees, board can order without approval of unit owners.

Initial reserve fun stady needs to be done within 1st year of incorporation, follow up studies required every 3 years after.

87
Q

Who makes, amends, and repeals bylaws of a condo

A

The board of directors.
Concerning common elements.
Not effective until approed by the owners at a requisition meeting within 30 days (if no meeting requisitioned, rules become effective).

88
Q

When are bylaws of a condo effective

A

When the owners of the majority of units vote in favour

89
Q

When are registered bylaws made be the declarant valid until

A

Until replaced

90
Q

Common expenses

A

fees payable by every unit owner.
if you don’t pay, can result in lien being registered against owner’s unit

91
Q

Status certificate

A

Provides fundamental info for a buyer.
Corporation is required to give each person one within 10 days to anyone who requests the doc, fee can’t exceed $100.

92
Q

Condominium Management Regulatory Authority of Ontario

A

Deals with disputes between condo manager and tenant.
Aim of this authority is to build trust in condo management services and protect interest of condo communities.
Also deal with licensing and training of condo manager.

93
Q

How to differentiate between commercial and residential tenancy

A

What’s the principal use of the property (e.g. for working or living).

Real Estate Course 1 (7 decks)

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