Real Estate Question Pack - Questions and Answers

Real Estate

1. Dario is a subcontractor on a commercial office project that substantially completed construction in June 2023. He last performed work on August 15, 2023, but received no further payments from the general contractor. On October 5, 2023, Dario registers a claim for lien and serves the owner. The owner claims the lien is expired because the certificate of substantial performance was published on July 25, 2023, and no further work was required after that. Dario insists his work was remedial and extended the limitation period.

Is Dario’s lien claim preserved within the applicable time period under the Construction Act?

A) The lien is valid because it was registered within 60 days of the last date Dario performed any work.

B) The lien expired because it was not preserved within 60 days of the published certificate.

C) Any remedial or warranty work automatically resets the lien preservation period.

D) The lien is valid only if the project was not substantially performed when Dario completed his last work.

Correct Answer: B

Explanation: Once a certificate of substantial performance is published, the 60-day lien preservation clock begins for work done up to that date. Even if a subcontractor continues minor remedial work, their lien rights for earlier work may still expire unless preserved within 60 days of publication.

 

2. A vendor under an agreement of purchase and sale refuses to correct a title defect, despite it being a simple fix. The defect involves a misdescription of the PIN number, creating ambiguity. The purchaser, lacking the ability to correct the issue, refuses to close and alleges anticipatory breach. The vendor insists that the defect is minor and does not justify termination. The purchaser argues that the vendor had the power to resolve the issue easily but failed to do so.

Can the purchaser refuse to close based on the vendor’s failure to correct the title defect?

A) Yes, the purchaser may rescind the contract because the defect remains unresolved.

B) No, the vendor is not obligated to correct title issues not explicitly mentioned in the agreement.

C) No, the purchaser cannot refuse to close based on a minor title defect that does not materially impact the transaction.

D) Yes, the defect constitutes a fundamental breach, allowing the purchaser to sue for damages.

Correct Answer: C

Explanation: If the vendor could have easily corrected the title defect but refused, their inaction may support the purchaser’s argument for refusing to close. Courts generally expect parties to act in good faith, and neglecting a simple fix can be seen as unreasonable. However, whether the purchaser can legally terminate depends on the severity of the defect. If the issue is substantial and affects ownership or legal rights, the purchaser may have grounds to rescind the contract. But if the defect is minor and does not materially impact the transaction, the purchaser may still be required to close.

 

3. Fatima is acting for a buyer and receives a zoning compliance letter three days after the requisition deadline. The letter reveals that the property is subject to a zoning work order requiring the removal of a non-compliant shed in the backyard. The seller never disclosed the order, and the agreement of purchase and sale includes the standard provision that the property will comply with municipal requirements. The seller’s lawyer argues that the requisition deadline has passed, and that Fatima’s client must proceed. Her client is unwilling to accept the work order and insists it must be addressed.

Can this issue still be raised?

A) The buyer must close with the work order, as it was not raised before the deadline.

B) This is a contract requisition that may be raised if the issue was unknown prior to the requisition date.

C) The issue is now waived and may only be addressed through post-closing litigation.

D) Since it's not a registered title issue, the buyer must assume the obligation to remove the shed.

Correct Answer: B

Explanation: Contract requisitions, including those relating to municipal compliance and work orders, must be raised before the requisition deadline only if they were known or discoverable by that date. However, if the issue becomes known after the deadline but before closing, it may still be raised, because it relates to a representation in the APS. The buyer is entitled to insist on compliance with the seller’s obligations under the contract.

 

4. Alicia is purchasing a large wooded lot near a provincial park. The listing notes a private hydro line crosses the back of the property. On visiting the site, Alicia observes old poles and wires, but the title search discloses no registered easement. Alicia’s lawyer sends an inquiry to Hydro One and receives confirmation that an unregistered hydro easement dating from 1987 exists. Alicia wants the line removed after closing. Her lawyer investigates whether Hydro One still has a legal right to access the land.

What legal interest, if any, does Hydro One retain in the property?

A) Hydro One lost its interest when the easement was not registered before land conversion.

B) Hydro One continues to hold enforceable rights despite the lack of registration.

C) Hydro One’s interest lapsed after 20 years without enforcement or renewal.

D) Hydro One’s rights are voidable if Alicia objects in writing prior to closing.

Correct Answer: B

Explanation: Under s. 46 of the Electricity Act, 1998, Hydro One retains unregistered easements acquired prior to October 30, 1998. The easement remains enforceable unless released or extinguished, and the property owner must respect it even if it is not registered on title.

 

5. Eli and his partner rent a unit in a six-plex under a monthly tenancy agreement. Following a domestic incident, Eli’s partner is arrested and released on bail with a no-contact order. Eli serves a 28-day notice to terminate the tenancy under s. 47.1 of the Residential Tenancies Act, enclosing a copy of the court order as required. The landlord suspects Eli is fabricating the situation to break the lease and contacts the Landlord and Tenant Board (LTB) to dispute the notice.

How should the LTB respond to the landlord’s attempt to contest the notice?

A) The landlord is entitled to present evidence disputing the allegations before the LTB.

B) The notice is ineffective unless both tenants sign or agree to terminate.

C) The LTB must accept the tenant’s notice and is not permitted to inquire into the allegations.

D) Eli remains liable for rent until the end of the lease term despite the court order.

Correct Answer: C

Explanation: Section 47.3(6) of the Residential Tenancies Act expressly prohibits the Landlord and Tenant Board from inquiring into the truth of a tenant’s allegations where a properly completed Tenant’s Statement About Sexual or Domestic Violence and Abuse is submitted. Once valid documentation is provided, a tenant may unilaterally terminate the tenancy with 28 days’ notice, and the landlord has no right to dispute the allegations or prevent the termination.

 

6. Melissa is acting for a client who is purchasing a parcel of land described as “Part of Lot 3, Concession 2, Township of Lanark.” The seller acquired the land in 1979 and still owns the adjacent parcel described as “Part of Lot 4, Concession 2.” Melissa conducts her abutting land search and finds no evidence of a Planning Act consent for the original transfer in 1979. The lands are not part of a registered plan of subdivision. The seller insists that the lands were historically separate and that the Planning Act should not apply retroactively. Melissa is concerned that the client may be acquiring defective title.

Does the 1979 transfer create a potential Planning Act issue?

A) No, because the Planning Act only governs land divisions within registered plans, and rural parcels outside such plans are not subject to s. 50 restrictions.

B) Yes, the 1979 transaction likely contravened s. 50(3), and unless an exception now applies, the purchaser may be acquiring void title.

C) No, because historical parcel separation prior to the seller’s acquisition is sufficient to establish legal severance under the “no abutting lands” rule.

D) No, any Planning Act breach that occurred more than 20 years ago is deemed cured by the passage of time.

Correct Answer: B

Explanation: Section 50(3) of the Planning Act prohibits severances where an owner retains abutting land. Since the land was not within a registered plan and no consent was obtained, and the 1979 transfer occurred after the Act applied province-wide, the original severance may be void. Historical separation is irrelevant under the current Act.

 

7. Lisa and Raj own a property that qualifies as a matrimonial home. Lisa is the sole mortgagor and titleholder. After Lisa defaulted on the mortgage, the lender issued a notice of sale addressed only to Lisa. Raj, who resides in the home, was not named or served with the notice. The mortgage proceeds to sale, and a buyer purchases the home under power of sale. Raj files an application challenging the validity of the proceedings, claiming his possessory rights under the Family Law Act were violated. The lender argues that Raj was not on title and therefore not entitled to notice.

Can Raj challenge the validity of the power of sale based on his status as a non-title spouse?

A) Raj is not entitled to notice since he is not a registered owner.

B) Raj can remain in possession, but the sale to the buyer remains valid.

C) The sale is invalid because Raj’s statutory rights were not respected.

D) Raj can only challenge the sale if he proves financial contribution.

Correct Answer: C

Explanation: Under s. 19(1) and s. 22 of the Family Law Act, a non-titled spouse has possessory and redemption rights. Failure to serve such a spouse may invalidate the power of sale and give rise to equitable relief, especially where the spouse resides in the matrimonial home.

 

8. Elaine is purchasing a waterfront cottage property in an unorganized township. The property fronts directly on a large lake, and Elaine assumes she will own the shoreline and be able to build a dock and boathouse. Her lawyer obtains a survey that shows a 66-foot-wide unopened shore road allowance between the cottage and the water's edge. A title search confirms that the road allowance has not been closed or transferred to any private owner. Elaine is disappointed to learn she cannot exclude the public from walking along the beach. She insists that the area is part of her lot because the listing advertised “private shoreline.” The seller refuses to adjust the price.

What should Elaine's lawyer advise regarding her rights?

A) Elaine may acquire the shore road allowance after closing without obtaining municipal approval.

B) Elaine retains riparian rights and may build structures even with the road allowance in place.

C) Elaine does not own the shoreline and cannot prevent public access unless the road allowance is closed and transferred to her by the municipality.

D) Elaine may rely on title insurance to enforce her expectation of private shoreline ownership.

Correct Answer: C

Explanation: Where an unopened shore road allowance exists, the municipality remains the riparian owner. The purchaser cannot exclude public access to the shoreline unless the allowance is formally closed and transferred, which requires municipal approval. The presence of the allowance eliminates private ownership of the beach.

 

9. A contractor finishes work on a leasehold improvement for a tenant in a retail plaza. The lease was entered into in 2017 and the construction contract was signed in 2020. The contractor did not notify the landlord prior to beginning work. The tenant subsequently defaults and vacates the premises. The contractor now wants to lien the landlord’s interest in the freehold.

Can the contractor lien the landlord’s freehold interest in this scenario?

A) The lien only attaches to the tenant’s leasehold interest.

B) The contractor may lien the landlord’s interest because notice was presumed.

C) The landlord is liable for the full improvement cost.

D) The lien is void because leasehold improvements cannot be liened.

Correct Answer: A

Explanation: Under the new CA regime, landlords are not automatically liable for tenant improvements unless certain statutory triggers are met. For contracts entered into after December 6, 2018, there is no longer a requirement for the contractor to provide notice, but the lien only attaches to the leasehold interest unless the landlord has made payments toward the improvement.

 

10. Lucia is purchasing a new freehold home that is not eligible for warranty coverage under the Ontario New Home Warranties Plan Act (ONHWPA) because it is built on more than 40% pre-existing foundation. The builder is not registered with the HCRA, and no Tarion enrolment exists for the property. The builder insists the home is “as-is” and refuses to provide any warranties beyond the basic agreement. Lucia’s lawyer reviews the OREA resale form and a short Schedule A with minimal protections.

What contractual protection should Lucia’s lawyer prioritize given the lack of ONHWPA and Tarion coverage?

A) Include a full schedule of private contractual warranties and covenants to cover deficiencies.

B) Proceed with closing and advise Lucia to obtain home insurance.

C) Rely on the implied warranty of habitability under the common law.

D) Advise Lucia to proceed only if she obtains post-closing possession prior to payment.

Correct Answer: A

Explanation: Where a new home is not covered under the ONHWPA, the buyer must rely on contractual protections. The lawyer must negotiate detailed warranties and covenants and advise the client of the increased legal risk due to the builder’s unregistered status and lack of statutory warranty coverage.

 

11. Vanessa is representing a client who is purchasing a large rural parcel that was previously under the registry system. Upon conducting her title search, she discovers that the property carries the designation “Land Titles Conversion Qualified” (LTCQ). The client intends to build a multi-unit rental dwelling on the land, and Vanessa is asked whether the parcel guarantees compliance with the Planning Act and is free from historical boundary issues. She explains that the LTCQ designation was assigned during automation and differs from traditional Land Titles Absolute in key respects. Vanessa advises that some guarantees exist, but that Planning Act compliance is only assured up to the conversion date. She also warns about possible claims for adverse possession and unregistered interests.

How should Vanessa’s client understand the legal implications of the LTCQ status?

A) The title is fully guaranteed under the Land Titles Act, including protection from historical claims of adverse possession and boundary misdescription.

B) Planning Act compliance is guaranteed only for severances or conveyances registered after the parcel was administratively converted to land titles.

C) The parcel remains subject to pre-conversion defects such as adverse possession and boundary uncertainty.

D) Once an LTCQ parcel has remained unchallenged for 60 days post-conversion, the title is upgraded to absolute without further legal risk.

Correct Answer: C

Explanation: An LTCQ parcel includes limited guarantees that apply only up to the date of conversion. Adverse possession, misdescription, and certain unregistered leases remain possible due to the administrative nature of the conversion process, which does not involve notice to affected parties.

 

12. Anita is reviewing a 1995 survey for a detached property in the registry system. The seller provides a signed declaration that no additions, fences, or structures have been built since the survey date. Anita notices a hot tub and pergola on site, both unmentioned in the survey or declaration. Her client asks whether this old survey and declaration are enough to satisfy the lender’s mortgage conditions. Anita sees that the lender permits title insurance in lieu of a current survey. The client prefers not to pay for a new survey but wants to ensure full protection. Anita needs to decide how best to proceed.

What should Anita do to properly advise her client regarding the outdated survey and visible changes?

A) Accept the seller’s declaration as sufficient since the unrecorded structures are relatively minor and unlikely to cause title issues.

B) Advise the client in writing, qualify the title opinion based on limitations of the 1995 survey, and recommend title insurance.

C) Submit the 1995 survey to the local municipality for confirmation that no zoning or building by-law violations exist.

D) Rely on the seller’s declaration and proceed with an unqualified opinion of title, as title insurance will address any concerns.

Correct Answer: B

Explanation: Old surveys may be used with caution, especially when supplemented by a declaration and title insurance. However, the lawyer must obtain written client instructions, qualify the title opinion, and advise of limitations to relying on outdated surveys.

 

13. David receives a new survey for a rural property his client is purchasing. The survey shows that a section of the septic tank extends into a utility easement granted to the local hydro company. David contacts the utility and is told that the encroachment is tolerated but may need to be removed in future development. The seller refuses to offer a price reduction and the client still wants to proceed. David considers how best to protect the client’s interest.

What should David do to ensure the client is properly protected regarding the encroachment?

A) Register a caution on title to alert future purchasers of the utility’s rights and preserve notice of the encroachment risk.

B) Proceed with closing as scheduled and advise the client to negotiate directly with the utility after completion of the transaction.

C) Rely on the utility’s verbal assurance, as encroachments that are informally tolerated are rarely enforced without further development.

D) Recommend obtaining a written encroachment agreement or, at minimum, formal consent from the utility to secure the client’s position.

Correct Answer: D

Explanation: Encroachments on easements pose real legal and practical risks. Even if currently tolerated, they may be removed without compensation in the future. The solicitor should seek written consent or an encroachment agreement to protect the client.

 

14. Samantha rents a basement apartment in a house where the landlord occupies the upper level. As part of the rental arrangement, Samantha shares the kitchen and bathroom with the landlord. Following a disagreement over maintenance and an alleged illegal rent increase, Samantha files an application with the Landlord and Tenant Board (LTB) seeking remedies under the Residential Tenancies Act. The landlord argues that the Act does not apply because of their shared living arrangement.

How should the LTB respond to Samantha’s application?

A) The landlord must comply with the RTA because Samantha is a rent-paying occupant.

B) Samantha’s occupancy is exempt from the RTA because she shares kitchen and bathroom facilities with the landlord.

C) The landlord must first apply under the Land Titles Act to formalize the exemption.

D) Shared occupancy exemptions apply only between roommates, not landlord-tenant relationships.

Correct Answer: B

Explanation: Under s. 5(i) of the Residential Tenancies Act, 2006, the Act does not apply to premises in which the occupant shares a kitchen or bathroom with the owner or the owner’s immediate family. Because Samantha shares both with the landlord, she is not protected by the RTA and cannot seek remedies from the Landlord and Tenant Board.

 

15. Joel is reviewing a parcel register for a detached home in the land titles system. He notices a right-of-way easement registered in 1994 with a term limited to 20 years. It expired in 2014 but remains listed as an active instrument on the title. Joel’s client is concerned that a future buyer might be confused by the outdated encumbrance and wants it removed. The seller’s lawyer claims that since the easement is no longer enforceable, no action is required. Joel is unsure whether this issue qualifies as a valid requisition, and if so, what kind of requisition it would be. The agreement of purchase and sale follows the OREA standard form, and the requisition deadline is still a few days away.

Can Joel requisition its removal?

A) No, the easement expired by its terms and is of no further legal consequence, so there is no obligation to delete it from the parcel register.

B) No, since the easement has not been exercised in recent years, it no longer presents any functional or legal barrier to closing.

C) Yes, this is a conveyancing requisition and may be made before the deadline to ensure the seller clears the title of expired but registered encumbrances.

D) No, under the OREA form, the buyer accepts title subject to minor encumbrances, and removal of historical entries is not a condition of closing.

Correct Answer: C

Explanation: A registered easement that has expired by its terms but remains on title may still be requisitioned for deletion, as it creates a cloud on title. This is a conveyancing requisition, not a title defect per se, because it relates to the seller’s ability to register an application to delete the instrument and deliver clear title. The buyer has a right to require removal before closing.

 

16. Thomas is a purchaser under an agreement conditional on financing. The agreement states that the purchaser may waive the condition in writing within seven days, failing which the agreement will terminate. Thomas made no effort to apply for financing during the seven-day period. On the eighth day, the vendor purports to terminate the agreement and refuses to return the deposit. Thomas insists that the agreement should continue because he was still interested in proceeding.

How should the legal effect of the unwaived condition be assessed?

A) The agreement automatically terminated when the condition was not waived within the time limit.

B) The purchaser may still waive the condition unilaterally within a reasonable time.

C) The vendor must provide notice before the agreement terminates.

D) The vendor cannot terminate unless Thomas acted in bad faith.

Correct Answer: A

Explanation: Where a condition includes a deadline for waiver or satisfaction and the condition is not waived within that time, the agreement terminates automatically per its own terms. No further action by the vendor is required.

 

17. Jennifer is handling a conveyance involving lands that meet only at a single point. Her client owns Parcel X and wishes to sell it while retaining Parcel Y, which touches Parcel X only at a corner. Both parcels are located on a concession and are not within a registered plan of subdivision. Jennifer is unsure whether the Planning Act will be contravened by the transaction. She reviews s. 50(3)(b) and associated case law for guidance.

How should Jennifer interpret the status of the parcels under the Planning Act?

A) Parcels that meet only at a single point do not “abut” within the meaning of s. 50(3)(b), so the transaction may fall under the “no abutting lands” exception.

B) Any two parcels that are contiguous, including at a single point, are deemed abutting under s. 50(3), and therefore consent is required before conveyance.

C) Since each parcel is described using a separate reference plan, the Planning Act does not apply to the proposed transfer.

D) The introduction of Bill 276 amended the Planning Act to deem any parcels with physical contact, including point contact, as abutting for severance purposes.

Correct Answer: A

Explanation: The courts have interpreted “abutting” to mean sharing a boundary. Where two parcels touch only at a single point, they are not considered to abut under the Planning Act. As a result, the “no abutting lands” exception may apply.

 

18. Miriam is acting for a first-time homebuyer purchasing a newly built residential property. The client asks whether she needs a land survey since the title insurer does not require one. Miriam chooses not to obtain a survey or perform a zoning search, believing title insurance makes these steps unnecessary. Six months after closing, the city issues an order requiring the buyer to relocate the garage, which encroaches on the neighbouring lot by two feet. The client is upset and wants to know whether title insurance will cover the issue and whether the lawyer is responsible.

What is the most appropriate assessment of Miriam’s conduct and the buyer’s potential remedies?

A) Title insurance may cover the cost, but Miriam may be liable for not advising about the value of a survey.

B) Title insurance will cover the loss, and Miriam is not liable for any resulting damages because the insurer assumed that risk.

C) The city is responsible because it failed to detect and act upon the encroachment earlier, despite having the authority to do so.

D) The buyer cannot recover because encroachments are categorically excluded from coverage under standard title insurance policies.

Correct Answer: A

Explanation: While title insurance may cover encroachments, lawyers still have a duty to consider whether a survey or zoning search is warranted, regardless of the insurer’s position. Failing to recommend such due diligence, particularly in a new build context, can expose the lawyer to liability. The availability of insurance coverage does not eliminate this professional obligation.

 

19. Reza is acting for a developer who intends to consolidate three adjoining parcels into a single lot for a new condominium project. One of the parcels is designated LTCQ, while the other two are Land Titles Absolute. When preparing the application, Reza advises that the consolidation cannot proceed unless all parcels have the same title status. He recommends submitting an application for absolute title under the Land Titles Act to upgrade the LTCQ parcel to LT Plus. This process will involve preparing a current survey, identifying any potential possessory interests, and serving notice on affected parties. The client is reluctant due to the cost and delay.

How should Reza advise his client with respect to the LTCQ parcel?

A) A condominium declaration can override minor discrepancies in title classification and allow consolidation to proceed without further steps.

B) With discretionary approval from the Director of Titles, parcels may be consolidated despite differences in underlying registration status.

C) The LTCQ parcel is treated as functionally equivalent to Land Titles Absolute and may be consolidated without upgrading.

D) The LTCQ parcel must first be upgraded to LT Plus through an application for absolute title before consolidation can proceed.

Correct Answer: D

Explanation: Parcels must have consistent title status for consolidation under Ontario land registration rules. LTCQ parcels must be upgraded to LT Plus through an application for absolute title, which removes possessory qualifiers and ensures compatibility.

 

20. Jacob is acting for a developer planning to acquire fee simple title to reserve land adjacent to a provincial highway. The land is owned by the federal Crown for the benefit of a band. The developer believes it can purchase the land directly from the band after negotiating a surrender. Jacob examines the Indian Act to determine the correct procedure.

Which of the following must occur before the land can be sold?

A) The band must pass a bylaw and register the sale in the Reserve Land Register.

B) The Crown must first designate the land and lease it to the developer.

C) The developer must acquire the land from the Department of Indigenous Services Canada.

D) The band must surrender the land to the Crown and receive Governor in Council approval.

Correct Answer: D

Explanation: Under s. 37 and 39 of the Indian Act, reserve land cannot be sold unless it is first surrendered to the Crown and the surrender is assented to by a majority of band electors and approved by the Governor in Council. The band cannot transfer title directly to the developer.

 

21. Angela is purchasing a resale condominium unit in a downtown Toronto building. The agreement lists the dwelling unit and locker unit but makes no reference to the parking unit, which the real estate agent assured Angela was included. After receiving the status certificate, Angela’s lawyer notices that the parking unit has its own legal description and PIN, separate from the dwelling unit. A review of the vendor’s transfer documents reveals that the parking unit was acquired one year after the dwelling unit, and there is no mention of it in the seller’s title documents. The seller refuses to amend the agreement to include the parking unit and insists that the deal was only for the dwelling and locker. Angela wants to ensure she acquires all three.

What is the appropriate step for Angela’s lawyer to take to secure title to the parking unit?

A) Register a caution to preserve a possible interest in the parking unit.

B) Close based on the vendor’s statutory declaration about the parking space.

C) Get a side letter from the vendor confirming Angela can use the space.

D) Amend the agreement to include the parking unit’s legal description.

Correct Answer: D

Explanation: If the parking unit is a separate legal unit with its own PIN, it must be included explicitly in the agreement of purchase and sale. Without a proper amendment, title will not pass to Angela. A side letter or declaration is insufficient to transfer legal title.

 

22. A conveyancer working for a law firm is conducting a title search under the land titles system. The parcel is Land Titles Absolute, and the client is purchasing a detached residential home. The conveyancer provides the lawyer with a PIN printout showing all active instruments. However, the conveyancer does not review the underlying registered subdivision plan referenced in the legal description. The solicitor proceeds with closing. After closing, the client discovers that a portion of the backyard lies within a one-foot reserve retained by the municipality and inaccessible without a municipal by-law.

Which title search step should have been performed to identify this issue?

A) A full POLARIS mapping report should have been ordered to supplement the PIN and highlight municipal ownership overlays.

B) The land titles register should have been examined back to the root deed to ensure there were no latent encumbrances on access rights.

C) A comprehensive zoning and by-law compliance search would have disclosed the existence of restricted reserve lands and permitted uses.

D) The subdivision plan should have been reviewed to assess one-foot reserves and access restrictions.

Correct Answer: D

Explanation: Even under the land titles system, the solicitor must review reference and subdivision plans referred to in the PIN to verify access, lot boundaries, and one-foot reserves. These details are not evident from the PIN printout alone and require examining underlying instruments.

 

23. Farrah leases a unit in a ten-unit apartment complex in Toronto. Three months into the tenancy, her landlord enters the unit without notice to check the smoke alarms. A week later, the landlord enters again, citing maintenance, but again provides no notice. Farrah files an application with the LTB, arguing her right to privacy has been violated. The landlord insists that entry was permissible under his obligation to maintain the premises. Farrah claims no emergencies were present and that she never consented.

How should the LTB assess the landlord’s conduct under the Residential Tenancies Act?

A) The landlord’s conduct is lawful if done for safety reasons, even without notice.

B) Entry without 24-hour written notice violates the tenant’s rights unless an emergency exists or consent is obtained.

C) Landlords are permitted to enter once per month for inspection purposes without providing notice.

D) Maintenance-related entry is exempt from notice requirements if the landlord acts within regular business hours.

Correct Answer: B

Explanation: Section 27 of the RTA permits entry only with 24 hours' written notice specifying the reason and time, unless there is an emergency or contemporaneous consent from the tenant. The landlord’s actions were improper in the absence of either.

 

24. James is purchasing a new freehold home from a builder that is part of a large subdivision development. The vendor is not the registered owner of the land but has contracted with the landowner to deliver title to buyers. James’s agreement of purchase and sale contains a clause stating that the registered owner will execute the Transfer at closing and be absolved of all liability. James’s lawyer confirms the vendor is registered with the HCRA and the home is enrolled with Tarion. However, no documentation from the landowner confirming its obligation to convey title is included. James expresses concern about whether the vendor will be able to close.

What should James’s lawyer do to confirm the vendor can convey title?

A) Rely on the vendor’s HCRA and Tarion registration as assurance that title will be conveyed properly.

B) Request an undertaking from the vendor confirming that the registered owner will sign the Transfer at closing.

C) Obtain written consent from the registered owner confirming its obligation to transfer title to James at the vendor’s direction.

D) File a caution and initiate litigation to compel the landowner’s participation in the closing.

Correct Answer: C

Explanation: Where the vendor is not the registered owner of the land, the buyer’s lawyer must ensure the vendor has legal authority to deliver title. Written confirmation from the registered owner acknowledging its obligation to transfer title is essential to prevent anticipatory breach and to ensure the vendor can complete the transaction.

 

25. Katrina agrees to purchase a single-family home for $950,000 and submits an irrevocable offer through the standard OREA form. The offer includes a $25,000 deposit to be delivered within 24 hours. The seller does not sign the offer by the deadline, and Katrina assumes the deal is dead. However, her deposit cheque is delivered and cashed by the brokerage the next day. Later that week, the seller signs and returns the offer with no changes. Katrina refuses to proceed, insisting the offer expired. The seller demands specific performance or forfeiture of the deposit.

How should the enforceability of the agreement be assessed?

A) The offer was no longer open for acceptance after the irrevocability period expired, so the seller’s late acceptance did not create a binding contract.

B) Katrina’s delivery and the brokerage’s negotiation of the deposit created sufficient mutual assent to form a contract.

C) Because Katrina did not revoke the offer in writing, it remained capable of acceptance when the seller signed.

D) The seller can enforce the agreement under equitable estoppel due to Katrina’s conduct in tendering the deposit after the deadline.

Correct Answer: A

Explanation: An offer that is stated to be irrevocable is not binding unless accepted within the stated time. Delivery of the deposit does not create a binding agreement in the absence of timely acceptance. Since the seller accepted after the deadline, no contract was formed.

 

26. Ben is reviewing a registry parcel as part of a resale home transaction. He discovers that a deed was registered in 1974, transferring title from “John E. Smith” to “J. Edward Smith.” Subsequent transfers maintain the use of initials rather than full names. Ben is concerned about the continuity of names in the chain of title. He prepares a requisition letter asking the seller’s lawyer to prove the identity of the parties across instruments, particularly from 1974 to 1982. The seller’s lawyer responds that the Registry Act does not require proof beyond the 40-year search period.

Is the continuity of names sufficient for good title under the Registry Act?

A) No, because any name discrepancy must be explained through affidavits or declarations, even if it arises outside the 40-year search window.

B) No, because the buyer is entitled to demand formal statutory declarations confirming the identity of each party dating back to the earliest recorded instrument.

C) Yes, as long as the 40-year chain shows reasonable consistency in names and no irregularities appear within that period.

D) No, and the transaction should be closed under protest until all discrepancies are reconciled.

Correct Answer: C

Explanation: Reasonable continuity of names within the 40-year title search period is sufficient, provided the documents contain no irregularities or gaps. Slight differences such as initials or abbreviations are not fatal if the overall chain is consistent and unbroken.

 

27. Lukas is acting for a purchaser of a backlot property in a cottage area. The seller provides a legal description showing a right of way over a long private road leading to a public highway. Lukas conducts a title search and finds no reference to the right of way in the parcel register or adjoining titles. The road appears well-used, but no association maintains it and no formal documentation of the right exists. The seller insists they have always used the road and that access has never been an issue. Lukas contacts the title insurer who requires confirmation of legal access before insuring over.

What is the best course of action for Lukas?

A) Advise the client to close and rely on title insurance for access.

B) Request a letter from the neighbours confirming access use.

C) Register a caution against the road property and close without further concern.

D) Confirm whether a prescriptive right of way crystallized prior to LTCQ conversion.

Correct Answer: D

Explanation: In LTCQ properties, only prescriptive rights that crystallized prior to the date of conversion may continue to exist. Lukas must confirm whether the access road qualifies under s. 31 of the Real Property Limitations Act before closing. If no such right can be confirmed, the client risks being landlocked.

 

28. Emily is acting for a client purchasing a single-family home in Toronto. When reviewing the agreement of purchase and sale, she notes that it is silent on outstanding municipal charges. Emily orders a tax certificate from the City, which confirms arrears of realty taxes and penalties totaling $3,148. The seller’s lawyer insists the vendor will pay the arrears after closing using the proceeds, but refuses to adjust the statement of adjustments. Emily’s client is uneasy and asks whether she has options to secure payment. Emily recalls that taxes are a statutory lien that can survive closing and take priority over the client’s registered mortgage.

How should Emily protect her client’s interest in this situation?

A) Proceed to close on the basis of the vendor’s oral assurance, as realty tax arrears are routinely settled from closing funds after title transfer.

B) Permit the closing to proceed with arrears unpaid and have the purchaser accept post-closing responsibility, subject to later reimbursement by the seller.

C) Require the vendor to pay the arrears before closing or permit registration of a lien to ensure priority against future sale proceeds.

D) Requisition a credit on the statement of adjustments or deduct the amount from closing proceeds with appropriate undertakings.

Correct Answer: D

Explanation: Taxes are a lien on the land under s. 349(3) of the Municipal Act, 2001, and take priority over registered encumbrances. The purchaser’s lawyer must protect the client’s interests by either adjusting the arrears or deducting the sum from the balance due on closing, supported by an undertaking.

 

29. On January 10, 2024, Stephanie agreed to purchase a commercial property in Ontario, financing the acquisition through a $900,000 loan from First Summit Bank. The parties entered into a commitment letter referencing standard charge terms (Filing No. 203310), and Stephanie’s solicitor registered a Form 2 charge under the Land Titles Act using Teraview. The loan provided for blended monthly payments with interest calculated monthly not in advance. However, the charge failed to include the equivalent annual interest rate. Six months later, Stephanie defaults and argues that the interest provision is unenforceable. The lender claims full recovery.

Which of the following is most accurate regarding the enforceability of the interest clause?

A) The interest clause is fully enforceable because it complied with the Interest Act’s general disclosure requirement.

B) The interest clause is void because it failed to state the interest rate in half-yearly or yearly terms.

C) The clause is enforceable because blended payments inherently imply an annual calculation.

D) The clause is void only if the borrower can prove they were unaware of the calculation method.

Correct Answer: B

Explanation: Under s. 6 of the federal Interest Act, where a mortgage provides for blended payments and interest is calculated monthly, the equivalent interest rate calculated yearly or half-yearly must be stated. Failure to do so renders the interest clause unenforceable.

 

30. Jasmine is preparing for closing and reviews the utility accounts associated with the property. The seller has provided undertakings for hydro and gas, but not for water arrears. Jasmine sends a letter to the utility authority and receives confirmation that the water account is $987 in arrears. She confirms with the municipality that water arrears may be transferred to the tax roll and collects this information prior to closing. However, the vendor insists on simply closing with an undertaking and no adjustment.

What is the most appropriate step Jasmine should take to protect her client?

A) Proceed with closing based on the vendor's written undertaking and pursue reimbursement if the arrears are not paid afterward.

B) Demand a credit on closing or deduct the arrears from closing funds, since the amount is enforceable as a lien against the property.

C) Accept the vendor’s position, as utility accounts are typically considered separate from property-related obligations unless otherwise stated.

D) Complete the transaction with title insurance in place and advise the purchaser to file a claim for the arrears if needed.

Correct Answer: B

Explanation: When water arrears can form a lien, the solicitor must protect the purchaser by deducting or adjusting for the amount on closing. An undertaking may not be sufficient, especially where the charge can survive and affect the buyer post-closing.

 

31. A commercial tenant wishes to assign its lease to a third party as part of a sale of business. The lease includes a clause requiring the landlord’s consent to any assignment, “which shall not be unreasonably withheld.” The landlord refuses consent without providing reasons. The tenant challenges the refusal and continues negotiations with the purchaser.

What is the appropriate legal remedy available to the tenant?

A) The landlord may withhold consent arbitrarily under common law.

B) The landlord’s refusal may be reasonable if based on valid business concerns, even if those concerns are not initially disclosed.

C) The tenant may apply for a declaration that the refusal is unreasonable.

D) The landlord’s refusal is final and unreviewable once delivered.

Correct Answer: C

Explanation: Where a lease requires consent not to be unreasonably withheld, the landlord’s decision is subject to judicial review. The tenant may apply for declaratory relief to compel consent if the refusal lacks valid reasons or is commercially unjustifiable.

 

32. Katrina owns a home with her husband that qualifies as a matrimonial home under the Family Law Act. She decides to refinance and grant a charge over the home in her sole name to NewLeaf Mortgage Inc. The charge is registered electronically by her solicitor, who submits the instrument using her credentials. Her spouse does not sign or consent to the transaction. Katrina later defaults and NewLeaf initiates enforcement.

What is the primary risk to the enforceability of the charge?

A) The electronic signature process may be challenged if the lender failed to comply with authentication and commissioning rules under land registration protocols.

B) The charge is unenforceable if the annual interest rate exceeds the 60% criminal interest threshold set out in the Criminal Code.

C) The absence of a witness renders the charge defective under the Land Registration Reform Act, making the instrument invalid.

D) The charge is valid, but the lender’s enforcement rights may be subject to the spouse’s possessory rights.

Correct Answer: D

Explanation: Where the property is a matrimonial home, and the non-title spouse does not consent under s. 21 of the Family Law Act, the charge remains valid but is subject to the spouse’s possessory rights. Enforcement may be delayed or restricted unless consent was obtained.

 

33. Brandon, a real estate investor, entered into a mortgage secured by his fee simple interest in a mixed-use property in Toronto. The charge included Dye & Durham’s standard charge terms and also a schedule providing that all future fixtures would be captured by the mortgage. Six months later, Brandon installed custom commercial-grade refrigeration units. A supplier who retained a security interest under the PPSA filed a financing statement shortly afterward. Upon Brandon’s insolvency, both the lender and supplier asserted claims.

What is the likely legal result regarding the priority of interests in the refrigeration units?

A) The supplier has priority because its PPSA interest was registered before the lender gave notice.

B) The lender’s charge prevails because the refrigeration units became fixtures after the mortgage was registered.

C) The supplier retains priority because its PPSA interest attached before the goods became fixtures.

D) The lender has priority only if it included a general security agreement for chattels.

Correct Answer: C

Explanation: Under s. 34(1)(a) of the PPSA, a security interest in goods that attached before the goods became fixtures prevails over the interest of a subsequent real property charge, even if the goods become fixtures afterward.

 

34. Mara is acting for a national retail tenant negotiating a lease in a large urban mall. The offer to lease includes a “no lease, no keys” clause, stipulating that no possession will be granted until the final lease is signed. However, Mara’s client has already paid the deposit and begun hiring contractors to plan interior construction. The landlord is delaying delivery of its standard lease form. The agreement does not specify a final deadline for lease execution. The client now wants to compel possession and move forward.

What is the legal consequence of the “no lease, no keys” clause in this leasing scenario?

A) The landlord must permit possession because a deposit was paid.

B) The preliminary agreement is binding as a lease under the Commercial Tenancies Act.

C) The tenant cannot compel possession until the lease is executed.

D) The tenant may take possession based on part performance.

Correct Answer: C

Explanation: Where a “no lease, no keys” clause is included, courts will typically enforce it. Possession cannot be compelled absent a signed lease, even where a deposit was paid or planning work has commenced. The landlord's refusal to grant possession is consistent with the agreed terms.

 

35. Nathan is acting for the buyer of a property in a small municipality. He sends a letter enquiry to the tax department requesting confirmation of outstanding water and sewer charges. The response reveals unpaid arrears of $540, and further notes that these arrears may be added to the tax roll. Nathan advises the vendor’s lawyer of the arrears and receives a signed undertaking to pay them, but no amount is adjusted on closing. After closing, the buyer receives a tax bill including the $540 in arrears, with additional interest.

What is the best advice Nathan could have given his client before closing?

A) Deduct the arrears from the closing funds or require an escrow arrangement.

B) Proceed with closing as scheduled and notify the title insurer of the arrears in the event coverage may be available post-closing.

C) Ignore the arrears since the vendor provided an undertaking.

D) Allow the transaction to close and advise the buyer to pursue recovery from the vendor through small claims court if the arrears are not paid.

Correct Answer: A

Explanation: Under s. 398(2) of the Municipal Act, unpaid water/sewer charges may be added to the tax roll and treated as taxes. A solicitor should deduct known arrears from the purchase price to ensure the buyer does not inherit the liability, even if a vendor’s undertaking is received.

 

36. Carlos executed a mortgage for a commercial building using the prescribed Form 2, relying solely on the implied covenants under s. 7 of the LRRA. The charge did not reference any standard charge terms. After defaulting, the chargee attempts to enforce a clause requiring Carlos to pay a three-month interest bonus upon default. Carlos refuses, claiming he never agreed to such a term.

How should the enforceability of the bonus interest clause be assessed?

A) The clause is not enforceable because it must either be expressly set out in the charge or incorporated by reference to standard charge terms.

B) The LRRA implies a broad range of commercial terms, including default charges, under s. 7 unless expressly excluded by the parties.

C) The lender may enforce the clause because bonus interest is a standard industry practice in commercial financing.

D) A clause awarding bonus interest may be enforced through equitable principles or under provisions of the Mortgages Act in the absence of express terms.

Correct Answer: A

Explanation: The deemed covenants under s. 7 of the LRRA do not include bonus interest provisions. To be enforceable, such a clause must be expressly included in a schedule or incorporated through standard charge terms.

 

37. Fatima, a real estate solicitor, is preparing to close a residential purchase in Mississauga. The property includes chattels such as a washer, dryer, and built-in microwave. The agreement of purchase and sale lists the chattels, but the vendor objects to including a bill of sale on closing. Fatima’s client insists that he wants documented proof that the chattels are being transferred free of encumbrances. The vendor’s solicitor argues that the Bills of Sale Act has been repealed and the chattels form part of the sale. The closing is scheduled to proceed via electronic registration under the standard DRA. Fatima must decide how to address her client’s concerns.

What step should Fatima take to properly address her client’s concern about the chattels?

A) Accept the vendor’s explanation that the chattels are included by default and advise the client that further documentation is unnecessary.

B) Submit a law statement confirming compliance with legal obligations and rely on the vendor’s undertakings about unencumbered ownership of chattels.

C) Request that a bill of sale be included as part of the purchaser’s closing documentation to confirm clear title and transfer of the listed chattels.

D) Advise the client to follow up post-closing with a request for a separate written warranty regarding chattel ownership and condition.

Correct Answer: C

Explanation: Although the Bills of Sale Act was repealed, it is still best practice for purchasers to request a bill of sale to confirm transfer of chattels and that they are free from liens or claims. This is especially important where the agreement of purchase and sale lists specific chattels.

 

38. Daryl is reviewing the results of a title search performed by a junior conveyancer on a registry property. The conveyancer provided copies of deeds, transfers, and charges from 1984 onward and noted that the earliest conveyance dated March 12, 1985, would serve as the root of title. Daryl notices that a power of sale deed from a private lender is included, dated July 14, 1993. No supporting documentation regarding the notice, default, or statutory compliance was provided. The client is concerned whether the sale was valid.

What is the most prudent step Daryl should take in reviewing this transaction?

A) Obtain a current survey or reference plan to ensure the legal description in the 1993 deed aligns with the boundaries used in more recent transfers.

B) Rely on the registration of the power of sale deed as sufficient evidence of its validity under the Registry Act framework.

C) Confirm that the power of sale complied with the Mortgages Act and was conducted with proper notice.

D) Conduct an execution search on the name of the original mortgagee to ensure there are no outstanding writs or judgments that might affect priority.

Correct Answer: C

Explanation: In registry title, statutory sales like powers of sale must be checked for compliance with legislation, including notice and timing. Registration alone does not validate a defective power of sale, and supporting documentation should be reviewed where applicable.

 

39. Lucia purchases a newly built condo unit from a declarant. At interim closing, she signs an occupancy agreement and begins making monthly occupancy payments. After final closing, she discovers that the actual common expenses are 28% higher than those projected in the original disclosure budget. The developer did not deliver any updated disclosure statement outlining these increases prior to final closing. Lucia now wishes to seek remedies under the Condominium Act.

What remedy is available to Lucia under the Condominium Act?

A) Lucia may claim damages for the declarant’s failure to disclose material budget changes.

B) Lucia is barred from bringing a claim because the transaction has already closed and title has passed.

C) Lucia must pursue the matter through Tarion under the new home warranty regime, as the Condominium Act does not govern common expense disputes.

D) Lucia may rescind the agreement by filing a statutory notice with the Tribunal.

Correct Answer: A

Explanation: Under s. 74(12) as amended by Bill 106, a buyer may claim damages if the declarant fails to deliver a revised disclosure statement prior to final closing where material changes, like significant increases in common expenses, have occurred. Rescission is not available post-closing, but damages are.

 

40. Tyler enters into an agreement to purchase a fourplex, with the seller promising that all units are occupied by month-to-month tenants. The agreement includes standard provisions and no additional warranties. Just before closing, Tyler learns that two of the tenants have fixed-term leases expiring in 18 months. Tyler wants to convert the units to Airbnb and now cannot. He refuses to close and demands the return of his deposit, alleging that the seller misrepresented a material fact.

Can Tyler rely on the seller’s statement about month-to-month tenancies to avoid closing?

A) Yes, because the existence of fixed-term leases materially altered the buyer’s intended use of the property.

B) No, because tenancy terms were not set out as a contractual representation or condition in the agreement.

C) Yes, since a buyer is entitled to assume vacant possession unless otherwise disclosed by the seller.

D) No, unless the seller actively concealed the true tenancy status with the intent to mislead.

Correct Answer: B

Explanation: In the absence of an express condition or representation regarding tenancy terms, the buyer bears the burden of due diligence. Month-to-month versus fixed-term tenancy distinctions should be clarified by the buyer before signing.

 

41. Aida is acting for a buyer of a property located in the registry system. Her title search reveals a transfer in 1991 from “William E. Harris” and another in 2006 from “William Edward Harris,” with no connecting documentation between the two names. The seller’s lawyer insists they are the same person, but provides no statutory declaration or supporting evidence. Aida’s client is concerned that this break may affect the marketability of title, especially since the client intends to refinance soon after closing. The agreement of purchase and sale follows the OREA standard form and sets the requisition deadline for five days before closing. Aida realizes that the deadline passed yesterday but believes this issue may still be addressed. She recalls from her real estate training that not all requisitions are bound by that deadline. She must now decide whether she can raise this issue and on what legal basis.

What should Aida do about the name discrepancy?

A) Treat the discrepancy as a minor clerical variation that does not impair the vendor’s ability to convey title and allow the deal to proceed unchallenged.

B) Defer any action until after closing, as any defect in the chain of title will likely be covered under the lender’s and purchaser’s title insurance policies.

C) Accept the seller’s explanation that the names refer to the same person and forgo making a requisition since the deadline has already passed.

D) Raise the issue as a root of title requisition, which may be made at any time up to the closing date due to its impact on marketable title.

Correct Answer: D

Explanation: Requisitions relating to root of title, such as a break in the chain of ownership or uncertainty about the identity of a prior owner, are not governed by the requisition deadline set out in paragraph 8 of the APS. These may be raised up to the date of completion because they go to the seller’s fundamental ability to convey good title, and if unresolved, may justify refusal to close without breach.

 

42. Isabelle is acting for a seller who owns two adjacent properties on a concession lot, Part A and Part B. She learns that Part A was conveyed to the seller in 1980 and Part B was added by transfer in 1991. Now, the seller wishes to sell Part A and retain Part B. Isabelle advises that this transaction may contravene s. 50(3) unless an exception applies. The seller notes that both parts are described by reference plans and claims the lands are distinguishable for legal purposes.

How should Isabelle advise the seller in light of the Planning Act?

A) The use of separate reference plans creates legal separation, meaning the properties are not considered abutting under the Planning Act.

B) Since the seller acquired the two parcels at different times, they should not be treated as merged for conveyancing restrictions.

C) The lands are only treated as merged for taxation, and this does not affect the seller’s ability to deal with them independently.

D) If abutting lands are held in common ownership, they are considered merged for Planning Act purposes, and the seller must rely on an exception or obtain consent before proceeding.

Correct Answer: D

Explanation: Under s. 50(3), abutting lands owned in common merge for the purpose of the Act, even if acquired at different times or described by separate reference plans. A sale of one part while retaining the other is prohibited unless an applicable exception or consent exists.

 

43. Sonia’s client is purchasing a property with two siblings as co-owners. The seller’s lawyer provides a draft transfer with their names but no mention of how they intend to hold title. Sonia confirms that her clients want to take title as joint tenants to benefit from survivorship. She reviews the Conveyancing and Law of Property Act and notes the consequences of failing to designate a form of tenancy. Sonia is still within the requisition deadline and considers whether to raise this issue as a formal request or simply accept the default.

What should Sonia do?

A) The omission creates a presumption of joint tenancy and does not need to be addressed.

B) The buyers may file a correction after closing if needed.

C) The default is tenancy in common, so the manner of holding must be specified before closing.

D) The land registrar will automatically default to the joint tenancy if co-owners are family.

Correct Answer: C

Explanation: Under s. 13(1) of the Conveyancing and Law of Property Act, if no express designation is made, the buyers are deemed to take title as tenants in common, not as joint tenants. If the clients intend joint tenancy, the buyer’s solicitor must requisition that the transfer be engrossed accordingly, or the title will not reflect survivorship rights.

 

44. Graham owns two properties: Lot 1 and Lot 2 on a registered plan of subdivision. Each lot has a house constructed on it, and Graham wishes to sell the east half of Lot 1 separately. He does not own any other land on the block. The land is within a registered plan of subdivision, and the legal description reads “East ½ of Lot 1, Plan 53M-104.” Graham has not applied for a consent, and no exempting by-law is registered. He argues that because he is dealing with land within an RPS, the Planning Act does not apply.

What is the correct legal advice regarding the proposed sale?

A) Graham can proceed with the sale of part of Lot 1 without consent because the Planning Act restrictions are intended to prevent unauthorized severances of entire lots, not parts of them.

B) The transaction is likely valid since Graham owns no other abutting land and the property lies within a registered plan, satisfying the isolation rule.

C) Graham must sell the whole of Lot 1, not just the eastern portion, if he wishes to avoid triggering Planning Act requirements.

D) Graham is prohibited from conveying part of a lot within an RPS unless an exception under s. 50(5), such as a consent or a s. 50(7) by-law, applies.

Correct Answer: D

Explanation: Under s. 50(5), dealing with a part of a lot or block on a registered plan of subdivision is prohibited unless an exception applies. Graham is not selling a whole lot or block, and without a s. 50(7) by-law or consent, the transaction is void.

 

45. Kevin reviews a survey showing a fence encroaching about one foot onto the neighbouring property. The seller has used the area as part of the yard for years but has no documentation of ownership. Kevin’s client asks whether this encroachment creates a possessory interest and whether it affects title. The seller refuses to move the fence or acknowledge any title defect. Kevin needs to advise whether the situation should be disclosed to the lender.

What must Kevin tell the client regarding the encroachment and its implications for title and disclosure?

A) He must disclose the encroachment and advise that it does not create ownership unless adverse possession is established.

B) He may disregard the encroachment since the neighbour has never complained or objected to the use of the land.

C) He must requisition removal of the fence or formal registration of a boundary adjustment to prevent title concerns post-closing.

D) He may presume ownership has transferred based on long-term occupation and treat the fence line as the legal boundary.

Correct Answer: A

Explanation: Occupation alone is not sufficient to prove adverse possession. The solicitor must advise of the encroachment, warn of the lack of possessory title, and notify the lender if the issue could affect value or marketability.

 

46. Maya is representing a vendor selling a commercial property with a known environmental issue. A Phase I ESA was conducted and revealed the possible presence of contaminants requiring further investigation. Maya drafts the agreement to sell the property “as is, where is” and includes a release clause for environmental liability. The purchaser accepts but later sues for failing to disclose that a Phase II was previously recommended. Maya’s client insists the clause protects them.

Which of the following is true?

A) The release clause immunizes the vendor from all environmental liability.

B) The vendor had a duty to disclose the Phase II recommendation.

C) Environmental defects are always excluded from liability if an “as is” clause is included.

D) The purchaser’s only remedy is to void the agreement.

Correct Answer: B

Explanation: Even with “as is” and release clauses, vendors may be liable for misrepresentation or concealment of material facts. Failing to disclose a known Phase II recommendation may render the vendor liable despite broad disclaimers.

 

47. Kendra is a lawyer acting for a purchaser acquiring title to a commercial building. During the final title search, she discovers a preserved but not perfected construction lien registered by a subcontractor for unpaid HVAC work. The closing is in 15 days. The vendor refuses to discharge the lien, claiming it’s a frivolous claim. Kendra is concerned about her client taking title with this lien still on record.

What step should Kendra take to ensure her client acquires title free of the construction lien?

A) Accept title as is and advise the client to negotiate directly with the lien claimant.

B) Hold back funds equal to 50% of the lien amount from the purchase price.

C) Ignore the lien because it has not been perfected yet.

D) Require that the vendor vacate the lien by court order or bond before closing.

Correct Answer: D

Explanation: A purchaser should not close with an active lien registered on title. The proper remedy is to require the vendor to vacate the lien by posting security and obtaining a court order. This ensures the purchaser takes title free of encumbrances.

 

48. Maya is closing a purchase in a subdivision where the survey shows a one-foot municipal reserve between the lot and the public street. She confirms with the municipality that no by-law has been passed dedicating the reserve as a public highway. The seller says no one has ever been denied access and that this is a non-issue. Maya must decide whether this access gap should be treated as a title issue before closing.

How should Maya assess the legal access situation to ensure no title defect exists?

A) She may treat the driveway as evidence of access and assume that legal access exists unless there has been active enforcement by the municipality.

B) The lot’s inclusion in a registered subdivision plan indicates planning approval, so no separate access inquiry is necessary.

C) Lack of legal access via a public highway may constitute a defect in title requiring requisition or resolution.

D) Long-standing, uninterrupted physical use is enough to conclude that the buyer will continue to have lawful access to the public road.

Correct Answer: C

Explanation: Physical access is not equivalent to legal access. A one-foot reserve blocks legal access unless formally dedicated by by-law. This must be requisitioned or addressed to avoid a title defect.

 

49. Carla’s office is handling a mortgage refinance and is using Teraview to register the new charge. Carla’s assistant prepares the document and signs it for release after Carla signs it for completeness. Carla had made a law statement confirming Planning Act compliance. Later, it’s discovered that a recent severance of the property was not finalized with the municipality, and the transaction contravenes s. 50 of the Planning Act. Carla is unsure whether she will be held accountable given that she relied on the client’s representation. The lender now wants to unwind the transaction and seek recourse for losses.

Is Carla professionally responsible for the inaccurate Planning Act law statement?

A) No, because Carla relied in good faith on her client’s representation, and a lawyer is not required to independently verify municipal approvals in all cases.

B) Yes, because lawyers who sign law statements are personally responsible for their accuracy, even when relying on others or delegating release.

C) No, since Carla did not personally complete the electronic registration and the document was released by her assistant, who bears responsibility under the registration system.

D) Yes, because a contravention of the Planning Act automatically renders the charge void, and liability for resulting losses rests with whichever party handled the registration process.

Correct Answer: B

Explanation: Only lawyers may sign documents requiring law statements for completeness. Responsibility for the truth of the statement lies with the signing lawyer, regardless of who releases the document. Reliance on client advice must be documented and reasonable.

 

50. Evan is acting for a corporate purchaser acquiring a retail plaza that includes a mix of net and gross leases. The vendor provided a rent roll and copies of the leases, but many are unsigned or lack renewal terms. Evan’s client wants to rely on the vendor’s representations about the lease terms. Evan recommends obtaining estoppel certificates from all major tenants, but the vendor says only a few tenants are cooperative. The agreement of purchase and sale is silent on the consequences of failing to obtain estoppel certificates. The client asks if they can insist on terminating the deal if the certificates are not produced.

What is the purchaser’s legal entitlement if the estoppel certificates are not delivered before closing?

A) The purchaser may terminate based on common law frustration if estoppels are unavailable.

B) The vendor must certify missing estoppels and the purchaser is bound to close.

C) The purchaser has no automatic right to terminate unless the agreement so provides.

D) The purchaser can demand an abatement of the purchase price.

Correct Answer: C

Explanation: Unless the agreement of purchase and sale explicitly makes closing conditional on obtaining satisfactory estoppel certificates, the purchaser cannot terminate unilaterally. The vendor may provide a statutory declaration in lieu, but without express contractual rights, the purchaser cannot refuse to close based on the lack of tenant cooperation.

 

51. Evan is a solicitor acting for a mortgagee who wishes to exercise a power of sale after the borrower defaulted on monthly payments. The mortgage does not contain an express power of sale clause. Evan advises the lender to rely on Part II of the Mortgages Act, noting that more than three months have passed since the default. He prepares a notice of sale that provides 37 days’ notice, which is served on the mortgagor and all known subsequent encumbrancers. The mortgagor argues that the notice does not meet the minimum statutory requirement. Evan insists that the time provided exceeds the standard 35-day period and should suffice.

What is the required notice period where a mortgage does not contain an express power of sale clause?

A) The notice is valid because it exceeds the general 35-day minimum commonly applied under most private mortgage agreements.

B) The notice is invalid because a minimum of 45 days’ written notice is required where the mortgage lacks a contractual power of sale.

C) The mortgagee must initiate a judicial sale process in Superior Court if the mortgage is silent on power of sale rights.

D) The notice becomes effective only if the mortgagee simultaneously tenders a quit claim deed to the mortgagor.

Correct Answer: B

Explanation: Where there is no contractual power of sale, the mortgagee must rely on Part II of the Mortgages Act, which requires a minimum of three months’ default and at least 45 days’ notice in writing before the sale (s. 24 and s. 26). Evan's 37-day notice is therefore insufficient.

 

52. Sanjay is acting for a purchaser of a commercial property in Kitchener. Upon opening the Teraview docket, he performs a title search and notices a prior conveyance from ten years ago involving a dissolved corporation. He raises this issue in a requisition letter and prepares a closing agenda that includes obtaining the corporation’s articles of dissolution and proof of signing authority at the time of conveyance. The vendor’s solicitor is unresponsive to the requisition and fails to provide either historical title confirmation or an indemnity. With the closing date approaching, Sanjay’s client instructs him to proceed. The agreement of purchase and sale does not contain any provision requiring the vendor to clear up corporate title issues post-closing. Sanjay is unsure whether he can proceed without jeopardizing his client’s interest.

How should Sanjay proceed to best protect his client’s legal interests?

A) Proceed with registration and advise the client post-closing to obtain title insurance.

B) Register the Transfer with a law statement affirming the vendor’s capacity based on best efforts.

C) Refuse to close until the vendor satisfies the requisition or the client assumes the risk in writing.

D) Request a statutory declaration from the vendor’s solicitor confirming historical compliance.

Correct Answer: C

Explanation: A solicitor cannot register a Transfer where there is a material title defect unless the issue is resolved or the client has explicitly authorized closing with knowledge of the risk. Without an appropriate waiver or indemnity from the vendor, Sanjay must document the client’s written instructions to proceed and advise of the legal consequences.

 

53. Stephanie agrees to buy a resale home for $1,300,000 and provides a $65,000 deposit payable upon acceptance. The seller accepts the offer, but Stephanie never delivers the deposit. She later claims she misunderstood the timing requirements and backs out of the deal. The seller relists and sells for $1,200,000, then sues Stephanie for the $100,000 difference. Stephanie argues there was no binding agreement because she never delivered the deposit.

Does Stephanie’s failure to deliver the deposit prevent the formation of a binding agreement?

A) No, because the agreement became binding upon acceptance, and the deposit’s non-payment is a breach rather than a bar to contract formation.

B) Yes, because where a deposit is expressly required upon acceptance and never paid, courts may conclude that mutual intent to be bound was lacking.

C) Possibly, if the seller failed to take timely steps to relist the property and thereby failed to mitigate the full extent of the loss claimed.

D) Yes, because under the terms of most OREA standard form agreements, failure to deliver the deposit may be construed as rendering the offer unenforceable.

Correct Answer: A

Explanation: A deposit is evidence of good faith but not essential to contract formation. The agreement was accepted and binding, and the buyer’s failure to pay the deposit constitutes breach. The seller may recover damages, including loss on resale.

 

54. Priya is acting for a vendor who is selling a multi-unit residential building with five tenants. The agreement of purchase and sale is silent on estoppel certificates. The purchaser’s lawyer has now requested, one week before closing, that the vendor produce estoppel certificates signed by all tenants. The vendor refuses, saying she does not want to involve tenants in the transaction. Priya considers delivering a statutory declaration confirming that the tenancies are in good standing and that no rent arrears exist.

How should Priya assess the purchaser’s late-stage demand for tenant estoppel certificates?

A) The vendor must obtain estoppel certificates from each tenant upon request to satisfy common law disclosure obligations.

B) A statutory declaration from the vendor is sufficient where the agreement does not expressly require estoppel certificates.

C) The vendor is required under the Commercial Tenancies Act to involve tenants and confirm the rental terms in writing.

D) The vendor may terminate all existing leases at the purchaser’s request if done before closing and with reasonable notice.

Correct Answer: B

Explanation: Unless the agreement of purchase and sale expressly requires estoppel certificates, the purchaser cannot insist on them. A vendor’s statutory declaration is acceptable practice and provides adequate assurance where tenant involvement is not contractually required.

55. A purchaser is buying a property from the estate of a deceased who died more than three years ago. The estate trustee did not sell or transfer the property within that period, nor was a caution registered. The property has now vested automatically in the beneficiaries under the Estates Administration Act. The purchaser’s lawyer is reviewing the proposed transfer by the estate trustee and has concerns about title.

What is the appropriate legal approach to completing this transaction under the Estates Administration Act?

A) The estate trustee may still complete the transaction if they swear a statutory declaration confirming intent to sell.

B) The transfer must be made by the beneficiaries, as legal title has vested in the.

C) The court is required to issue a vesting order before the sale can proceed.

D) The estate trustee can register a caution now to retroactively preserve their authority to convey title.

Correct Answer: B

Explanation: Under s. 9 of the Estates Administration Act, if a property is not sold or dealt with and no caution is registered within three years of death, legal title vests automatically in the beneficiaries. The estate trustee loses the authority to transfer the property, and the beneficiaries must execute the transfer unless a new caution is registered in accordance with limited exceptions under s. 11.

 

56. Caleb purchases a property that was transferred to him under the Land Titles system. Three years later, he receives notice that an adjoining owner has fenced and used a portion of the land continuously for 30 years and now claims adverse possession. Caleb is confused, believing that the land titles system guarantees indefeasible title. His lawyer advises that under s. 51 of the Land Titles Act, the conversion to land titles can cut off such claims, but only under certain conditions. They review the parcel and confirm that it is a Land Titles Absolute Plus (LT Plus) parcel with no remaining qualifiers. Caleb wants to know whether the claim can succeed.

Can the adjoining owner succeed in claiming adverse possession?

A) Possibly, if the claimant can demonstrate continuous possession predating the conversion and was not notified of the change in title status.

B) Yes, because possessory claims are still recognized in equity regardless of registration status under the Land Titles system.

C) No, because once a parcel is upgraded to LT Plus, adverse possession claims are barred by statute.

D) Only where a possessory interest was protected by a caution or notice filed prior to the conversion will such claims remain enforceable.

Correct Answer: C

Explanation: LT Plus parcels provide the highest level of title security, eliminating the possibility of new adverse possession claims. Once a parcel is upgraded and qualifiers are removed, possessory claims are barred by operation of s. 51 of the Land Titles Act.

 

57. Owen, an out-of-town buyer, signs an agreement of purchase and sale for a duplex property. The listing describes the home as “legal non-conforming two-family dwelling,” but the agreement contains no specific representation about zoning. After closing, Owen receives a notice from the municipality indicating that the second unit is unauthorized and must be removed. Owen claims misrepresentation and seeks damages from the seller. The seller argues that he simply repeated what the listing agent had told him when he bought the property five years ago.

Is Owen entitled to damages based on the seller’s statements about zoning compliance?

A) Yes, because the listing description constituted a warranty that the second unit was legally permitted.

B) No, unless the agreement of purchase and sale contains an express term regarding the property’s legal use.

C) Yes, if the seller failed to confirm the accuracy of the listing before completing the sale.

D) No, because any zoning claim must be brought against the municipality as the zoning authority.

Correct Answer: B

Explanation: Courts generally hold that buyers cannot rely on MLS listings or pre-contractual statements unless incorporated into the agreement. In the absence of contractual representations or a zoning condition, the buyer assumes the risk of non-conforming use.

 

58. David is acting for a purchaser who wants to rely solely on a lender’s title insurance policy to satisfy the lender’s requirements. The buyer refuses to pay for a separate owner’s policy, and David agrees, telling the client that the lender’s policy will indirectly protect their interest. The deal closes, and a year later, a neighbour successfully claims a right-of-way that devalues the property. The buyer has no coverage and threatens to sue David.

What best reflects David’s potential liability for failing to advise the purchaser about title insurance?

A) David is not liable because the lender’s policy protects the mortgage security and, indirectly, the property as a whole in the event of a title defect.

B) David may be liable for failing to advise that lender’s policies do not protect buyers directly.

C) David is protected if the buyer refused title insurance in writing.

D) David cannot be liable unless the right-of-way was registered.

Correct Answer: B

Explanation: Lender’s title insurance policies protect only the lender’s interest and do not provide indemnity to the buyer. Lawyers must advise clients about the limited nature of such policies and the benefits of an owner’s policy. Failing to do so exposes the lawyer to liability if the client suffers an uncovered loss.

 

59. Isabelle is acting for a purchaser acquiring a parcel of registry land in rural Ontario. The agreement of purchase and sale is dated March 1, 2025, and the property is not part of a registered plan of subdivision. Isabelle instructs her conveyancer to begin a full 40-year title search. Upon reviewing the abstract pages, the conveyancer identifies a freehold conveyance registered on May 5, 1988, and treats it as the root of title. However, during her review, Isabelle notes an unregistered easement agreement executed in 1986 but never referenced in any later documents. The easement is not within the title search period, but the client wants to know whether it might affect title.

Does the 1986 unregistered easement affect the purchaser’s title?

A) No, because it falls outside the 40-year title search period and was not preserved by registration.

B) Yes, because even unregistered instruments within a 50-year period may raise equitable concerns that could cloud title and require disclosure.

C) No, it is beyond the relevant period and therefore irrelevant.

D) Yes, because unregistered easements may still override later instruments if the purchaser had actual or constructive notice of them.

Correct Answer: A

Explanation: Under s. 112(1) of the Registry Act, a purchaser is not required to show good title beyond the 40-year search period, and rights under prior instruments generally expire unless preserved by registration. The 1986 easement is outside the 40-year window and not preserved by notice, so it need not be investigated or disclosed.

 

60. Alex purchases a cottage property covered by a standard residential title insurance policy. The property was built ten years ago, but the city later discovers that no final occupancy permit was issued and the septic system lacks approval. The buyer receives an order to vacate and incurs $18,000 in remedial costs. The title insurance policy does not list the septic or permit issue in its exceptions. Alex files a claim, but the insurer denies it, stating the risks were known before closing due to a home inspection report.

What advice should Alex’s lawyer have given regarding disclosure and coverage risk?

A) The buyer was responsible for disclosing the inspection report to the insurer.

B) The insurer’s denial may be challenged only if the lawyer explicitly confirmed in writing that all known defects were covered and unlisted in Schedule B.

C) The title insurance policy covers any issue arising after closing regardless of pre-closing knowledge.

D) The seller must compensate the buyer for failing to disclose.

Correct Answer: A

Explanation: Title insurance policies exclude coverage for known risks if they were not disclosed to the insurer before closing. Where the lawyer becomes aware of such risks, that knowledge is attributed to the client. The lawyer must disclose the known issues to the insurer or clearly advise the client that the claim could be denied due to non-disclosure.

 

61. Noah is acting for a purchaser in a transaction involving a property in the City of Toronto. The purchase price is $1.8 million for a detached residential property. Noah calculates the land transfer tax (LTT) and Municipal Land Transfer Tax (MLTT) and advises his client that the total closing costs will include approximately $30,000 in combined taxes. The purchaser is a first-time homebuyer and expects a full rebate. Noah determines that the purchaser’s spouse, who is taking title jointly, previously owned a home in British Columbia. The client insists that the full rebate still applies because he has never owned property.

How should Noah proceed in advising the client about the land transfer tax rebate eligibility?

A) Claim the full first-time homebuyer rebate because one spouse qualifies.

B) Claim only a partial rebate proportionate to the qualifying spouse’s interest.

C) Claim the full rebate and submit a supplementary explanation.

D) Refuse to submit the LTT/MLTT forms until the client removes the spouse from title.

Correct Answer: B

Explanation: The first-time homebuyer rebate is only available to the extent of the interest held by qualifying individuals. If one spouse has previously owned a home, the rebate is proportionally reduced. The lawyer must ensure accurate declarations are made to the Ministry of Finance and cannot submit false claims.

 

62. Clara's client is buying a condominium townhouse unit. The seller has converted the attic into a third-floor living space without informing the condominium corporation. Clara reviews the description and notes that the vertical boundary of the unit ends at the second-floor ceiling. There is no record of a s. 98 agreement authorizing modification of the common elements. The buyer believes the attic is part of the unit and intends to use it as a bedroom.

How should Clara advise her client regarding the attic space?

A) Advise the buyer to proceed, relying on title insurance to resolve any future disputes.

B) Request that the seller provide a statutory declaration confirming historical use of the attic.

C) Contact the condominium property manager to determine whether other similar conversions have been tolerated.

D) Recommend rescinding the transaction unless the attic is brought into compliance or the agreement amended.

Correct Answer: D

Explanation: The attic is part of the common elements unless a valid s. 98 agreement permits its use. Unauthorized encroachments into common elements can result in legal liability and enforcement by the corporation. The transaction should not proceed unless the issue is resolved or clearly accepted by the buyer with full legal advice.

 

63. Leo is reviewing a draft office lease on behalf of a professional tenant in a mixed-use tower. The draft includes provisions requiring the tenant to pay for HVAC service, security, common area maintenance, and elevator repair. The lease also provides for a “gross-up” of expenses based on full occupancy. The tenant asks why they must pay more when the building is only 60% leased.

What is the legal purpose of including a gross-up clause in a commercial lease with variable occupancy?

A) Gross-up is intended to penalize tenants in under-occupied buildings.

B) Gross-up clauses are unlawful under the Commercial Tenancies Act.

C) Gross-up allows landlords to recover profit margins lost due to vacancy.

D) Gross-up clauses ensure that tenants pay a fair share based on normalized operating costs.

Correct Answer: D

Explanation: Gross-up clauses are lawful and widely used in commercial leases to ensure fairness where fixed costs must be incurred regardless of occupancy. They prevent disproportionately low contributions from tenants in under-leased buildings by simulating full occupancy when calculating shared costs.

 

64. Matthew owns a four-unit residential building in Ottawa. He enters into a fixed one-year lease with Jasmine, which includes a clause requiring her to pay a $300 “administration fee” upon signing. The lease also prohibits pets and states that rent is due on the first of each month with no exceptions. Jasmine signs the lease and moves in with her cat. When she later challenges the fee and pet clause, Matthew insists that she agreed to the terms and that they are legally binding. Jasmine withholds the next month’s rent and files an application with the Landlord and Tenant Board (LTB). Matthew threatens eviction.

How should the Landlord and Tenant Board apply the Residential Tenancies Act to this dispute?

A) Jasmine is obligated to pay the administration fee because it was included in the lease and agreed to voluntarily at the outset of the tenancy.

B) The no-pet clause is valid and enforceable due to the fixed-term nature of the agreement and the tenant’s prior knowledge of the condition.

C) The administration fee is likely prohibited as illegal key money, and the no-pet clause is void.

D) Withholding rent in response to a disputed term constitutes anticipatory breach, allowing the landlord to proceed with eviction proceedings.

Correct Answer: C

Explanation: Under s. 134(1)(a) of the Residential Tenancies Act, a landlord may not require payment of any fee or amount beyond permitted rent and deposits. The administration fee is likely to be categorized as illegal key money, and the pet prohibition is void under s. 14 of the Act.

 

65. Jessica is a purchaser seeking specific performance of an agreement of purchase and sale for a lakefront property. On the closing date, the vendor failed to attend, and Jessica did not tender. She instead demanded the return of her deposit and later commenced an action for specific performance. The vendor moves to strike the claim, alleging that Jessica’s failure to tender precludes her from seeking specific performance.

How should the court assess Jessica’s failure to tender in light of her claim for specific performance?

A) The claim will be struck because tender is always required.

B) Specific performance may still be granted if tender would have been futile.

C) Jessica must elect between a claim for the deposit or specific performance.

D) The deposit demand amounts to waiver of the right to sue.

Correct Answer: B

Explanation: Tender is generally required, but it may be excused where it would have been futile, such as when the vendor has clearly repudiated the agreement. Courts will look at the surrounding conduct to determine if the purchaser remained ready, willing, and able.

 

66. Marta, a private lender, holds a first mortgage over a duplex in Brampton. After the mortgagor defaulted on property tax payments, Marta issued a notice of sale under the mortgage’s power of sale clause. She waited 15 days after the default before sending the notice and scheduled the sale for 25 days later. The mortgagor, who received the notice, claims that the timeline is insufficient and that the sale is premature. Marta counters that since the mortgage contained express power of sale terms, she complied with all requirements. The mortgage in question does not mention property taxes as an event of default. A buyer who was unaware of this dispute is now under contract to purchase the property. The mortgagor is considering seeking an injunction to stop the sale.

How will the timing of the notice of sale affect the validity of the power of sale proceeding?

A) The mortgagor cannot stop the sale because notice was given after default.

B) The sale is invalid because 35 days must elapse after notice of sale before the sale.

C) The buyer will obtain good title if they are bona fide, even if the notice was invalid.

D) The notice is valid if the mortgage is silent on non-payment of taxes as a default.

Correct Answer: B

Explanation: Under s. 32 of the Mortgages Act, a sale under power of sale cannot occur until at least 35 days after notice is given, and the default must have continued for at least 15 days prior to the notice. A premature sale would be invalid regardless of buyer knowledge.

 

67. Martin is purchasing a newly constructed home and receives a draft agreement of purchase and sale from the builder. The agreement contains no mention of the builder’s HCRA licence or Tarion enrolment number. When asked, the builder states the numbers will be provided “closer to closing.” Martin is unsure whether to sign, and his lawyer is reviewing the agreement.

What protective measure should Martin’s lawyer take before allowing him to sign the agreement?

A) Proceed with signing; the builder’s credentials can be confirmed during the pre-closing period.

B) Include a condition precedent requiring proof of HCRA registration and Tarion enrolment within a defined period.

C) Recommend terminating negotiations and immediately filing a regulatory complaint with the HCRA, given the lack of transparency.

D) Accept the builder’s assurance and rely on post-closing remedies through Tarion in the event warranty issues arise.

Correct Answer: B

Explanation: It is illegal for a builder to enter into an agreement of purchase and sale without being registered with the HCRA and enrolling the home with Tarion. The buyer’s lawyer should include a condition precedent requiring proof of registration and enrolment to protect the buyer and ensure eligibility for warranty coverage and government rebates.

 

68. Zahra is the estate trustee for her late father’s estate. His professionally drafted trust will includes an express power of sale but also contains a specific gift of the family cottage to Zahra’s sister. The cottage is the estate’s most valuable asset and is needed to pay significant debts. Zahra wishes to sell the cottage despite the specific gift. Her sister refuses to consent, insisting that the gift is binding. Zahra believes the express power of sale overrides the gift and allows her to sell.

What is Zahra permitted to do with the cottage?

A) The power of sale allows Zahra to sell any property, including specifically gifted ones.

B) Zahra cannot sell the property unless the beneficiary consents or the debts justify it.

C) The specific gift nullifies the power of sale for that asset.

D) Zahra may sell the property but must pay compensation to her sister afterward.

Correct Answer: B

Explanation: An estate trustee may not sell real property specifically gifted in a will unless there are insufficient assets to pay the estate’s debts or the beneficiary consents. An express power of sale does not override a specific devise unless the sale is necessary to satisfy liabilities.

 

69. Alan is representing the estate trustee of a deceased person who died owning a matrimonial home in joint tenancy with his mother. The surviving spouse was not a joint tenant. The mother now claims sole ownership under the right of survivorship. The spouse, however, asserts a claim to the home. Alan is asked whether the property passed to the mother automatically upon death or whether the deceased's estate retained a share.

How should Alan advise the estate trustee regarding the legal effect of the joint tenancy under Ontario’s Family Law Act?

A) The mother is entitled to full ownership under survivorship because the title was registered in joint tenancy at the time of death.

B) The surviving spouse is automatically entitled to inherit the deceased’s entire share of the matrimonial home.

C) The joint tenancy is deemed severed by law, and the mother and estate now hold the property as tenants in common.

D) The estate trustee will need to bring an application for directions to resolve the competing claims.

Correct Answer: C

Explanation: Under s. 26(1) of the Family Law Act, a joint tenancy involving a matrimonial home between a deceased and a non-spouse is deemed severed upon death. The result is a tenancy in common, with the deceased’s share forming part of the estate and subject to the surviving spouse’s rights. 

 

70. Jonathan owns a strip plaza encumbered by two mortgages. The first mortgagee initiates power of sale proceedings due to default and properly serves notice to Jonathan and the second mortgagee. A tenant in the plaza who signed a five-year lease after the first mortgage was registered receives no notice and is not consulted during the process. After the sale closes, the purchaser demands that the tenant vacate immediately. The tenant seeks a declaration that the lease is binding. The mortgagee argues that because the lease was post-mortgage and unregistered, it is extinguished.

Is the tenant entitled to remain in possession following the sale under power of sale?

A) No, the lease is subordinate and may be extinguished by the mortgagee unless the tenant has a non-disturbance agreement.

B) Yes, the lease survives because the tenant was not served with a notice of sale and was not given an opportunity to assert their interest.

C) No, the lease does not survive because its term exceeds three years and was never registered on title.

D) Yes, the lease becomes binding on the purchaser if they intend to continue renting to the tenant, regardless of its origin.

Correct Answer: A

Explanation: A lease granted after the mortgage and without the mortgagee’s consent is subordinate. The mortgagee may terminate it during power of sale unless protected by a non-disturbance or similar agreement. Lack of notice alone does not preserve the lease.

 

71. Priya is acting for a buyer purchasing a detached home. The tax certificate reveals an annual local improvement charge of $1,200 for road resurfacing, payable in equal annual installments over ten years. The seller’s lawyer refuses to pay the entire balance and proposes a per diem adjustment instead. The agreement of purchase and sale is silent on how the improvement charge is to be apportioned. Priya must decide whether to insist on full payment or accept the proposed adjustment.

What is the appropriate way for Priya to advise her client regarding the improvement charge?

A) The purchaser will be responsible for all future payments unless the agreement expressly assigns liability to the seller at closing.

B) The seller is required to pay the entire balance of the local improvement charge as it arises from work completed prior to closing.

C) In the absence of agreement, local improvement charges are typically adjusted on a per diem basis between the parties.

D) Priya must accept the seller’s proposal and proceed with closing, as these charges are routine and rarely negotiated in full.

Correct Answer: C

Explanation: Local improvement charges may be spread over time and, unless otherwise agreed, should be adjusted between vendor and purchaser on a per diem basis reflecting the ownership period. If the charge applies to both periods, the cost is shared accordingly.

 

72. Kiran is acting for the estate trustee of a deceased who died intestate, owning a parcel of real property in Toronto. The land was administratively converted from the registry system and is now registered with a “Land Titles Conversion Qualified” (LTCQ) title. The estate trustee does not wish to apply for a certificate of appointment due to the associated probate fees. The estate’s only asset is the real property, which has not been dealt with since the conversion. Kiran considers registering a transmission application under the “first dealing” exception to vest the land in the estate trustee without obtaining probate. The estate intends to sell the property to a third party once the transmission is complete.

How should Kiran proceed with transferring title without probate?

A) The estate trustee must apply for a certificate of appointment before registering a transmission application.

B) The first dealing exception cannot be used where the estate’s value exceeds $50,000.

C) The first dealing exception applies, and a transmission application may be registered without probate if properly supported.

D) Title cannot be transferred without first vesting it in the beneficiaries.

Correct Answer: C

Explanation: Under s. 14(3) of the Electronic Registration Regulation, if a property was administratively converted to land titles with an LTCQ qualifier and no dealings have occurred since, an estate trustee may register a transmission application without a certificate of appointment. This is known as the “first dealing” exception and avoids the need for probate, even where the estate value exceeds $50,000.

 

73. Jason is purchasing a unit in a condominium that contains 200 residential units and 150 parking units. His agreement includes the unit and one parking space. When reviewing the declaration, Jason’s lawyer learns that the parking spaces are general common elements assigned by the board. The parking space number provided by the agent does not match any exclusive-use designation. Jason is concerned that he may not retain the same parking spot after closing.

What should Jason’s lawyer advise him regarding the parking space issue?

A) That Jason should close and trust the board’s practice of informal assignments.

B) That Jason should insist on an amendment to the declaration to reflect the exclusive use.

C) Jason’s lawyer should advise him that the board may reassign parking spaces and that no permanent right exists.

D) Jason’s lawyer should register a licence agreement for the space on title.

Correct Answer: C

Explanation: If parking spaces are general common elements and not exclusive-use or separate units, they can be reassigned at the discretion of the board. The buyer has no enforceable right to retain a specific space unless the declaration states otherwise.

 

74. Rita is acting for a purchaser who raised a requisition regarding a restrictive covenant listed on title. The vendor responded that the covenant was unenforceable and declined to take any further steps. Rita advised her client that the response was inadequate and recommended not proceeding with closing. The vendor’s lawyer warned that failure to close would be treated as a breach of contract. Rita considered bringing an application under the Vendors and Purchasers Act but realized that the closing date would arrive before the court could hear the matter. The transaction did not close, and the vendor commenced a claim for damages.

What is the legal consequence if the court later finds the requisition was without merit?

A) The purchaser is excused if the requisition was raised in good faith.

B) The court may retroactively extend the closing date under the VPA.

C) The purchaser is in breach of contract for failing to close based on an invalid requisition.

D) The purchaser is protected if the requisition concerned a registered title issue.

Correct Answer: C

Explanation: Under Ontario law, if a purchaser refuses to close based on a requisition that is ultimately found to be invalid, the purchaser is in breach of contract. An application under the Vendors and Purchasers Act does not automatically extend the closing date, and the risk remains with the party raising the requisition. The fact that a requisition was raised in good faith does not excuse non-performance if the court later finds it unjustified.

 

75. Tamara is advising a client who wishes to lease commercial land located on a First Nation reserve for a seasonal marina. The land is currently unoccupied and has not been designated. The client is not a member of the First Nation, and the band council has expressed informal interest in supporting the business. Tamara reviews the Indian Act and discovers that there is no existing lease or designation, and the band has not passed any bylaws under the First Nations Land Management Act. The client suggests that a private agreement with the band chief will be sufficient.

What should Tamara advise her client?

A) The lease is valid if the band council consents in writing.

B) The lease is void unless authorized under the Indian Act or through a proper designation.

C) A band chief may authorize temporary leases without federal involvement.

D) Private agreements are enforceable if registered in the Reserve Land Register.

Correct Answer: B

Explanation: Under s. 28(2) of the Indian Act, leases to non-members on reserve land require either a designation of the land (for long-term leases) or a written permit issued by the Minister (for short-term use). Without one of these mechanisms, a lease to a non-member is void, even if supported by the band council.

 

76. Olivia is acting for a vendor who has an institutional mortgage that will not be discharged before closing. The mortgagee requires full payment before releasing the discharge and will only provide it 30 days after receiving funds. The agreement of purchase and sale is silent on whether the purchaser will accept an undertaking in place of a discharge. Olivia proposes to give a solicitor’s personal undertaking to obtain and register the discharge after closing. The purchaser’s solicitor objects, stating that this arrangement was not agreed to in the contract. Olivia’s client is concerned that the transaction may fail.

Is the purchaser obligated to accept the post-closing undertaking?

A) Yes, because undertakings related to institutional mortgage discharges are standard and must be accepted unless the purchaser provides a valid objection.

B) Yes, the vendor may close the transaction in escrow and unilaterally register the discharge within a reasonable time after receiving full payment.

C) No, a solicitor’s undertaking is a personal obligation that binds only the lawyer or law firm, not the vendor or purchaser directly.

D) No, the purchaser may refuse to accept a discharge undertaking unless the agreement of purchase and sale explicitly permits post-closing discharge.

Correct Answer: D

Explanation: According to the Law Society guidelines and practice advisories, a purchaser is not obligated to accept an undertaking to discharge a mortgage post-closing unless the agreement of purchase and sale specifically allows it. Solicitor undertakings for discharge should not be used as substitutes without the purchaser’s consent.

Case 1

Everest Realty Inc. is acting for a developer in the sale of a newly constructed condominium unit in Toronto to Mr. and Mrs. Sharma. The Sharmas signed an Agreement of Purchase and Sale (APS) in 2022 and paid a deposit of $80,000. Their agreement included a Tarion addendum, disclosure documents, and a clause permitting adjustments for utility meter installations and reserve fund contributions. Shortly before closing, the Sharmas’ lawyer raised concerns about a lien registered under the Construction Act by a subcontractor claiming unpaid work on the HVAC system. The developer insists the lien is stale and will be vacated on closing. The Sharmas also noticed that the unit number listed in the APS does not match the one shown on the condominium plan registered with the Land Registry Office. In response, Everest Realty argues that the discrepancy is a clerical error and not material. Meanwhile, the Sharmas inquire about their right to cancel the agreement and receive a refund of their deposit due to the lien and registration error. Their lawyer advises caution and seeks clarification on title issues before waiving requisitions.

 

Questions 77 to 80 refer to Case 1

77. How should the discrepancy in unit numbering be addressed before closing?

A) The developer may correct the APS post-closing, provided no prejudice is shown.

B) The discrepancy is not actionable unless it affects common element boundaries.

C) The vendor must amend the APS or provide clarification to ensure consistency.

D) The buyer cannot object to registration errors after signing the APS.

Correct Answer: C

Explanation: A discrepancy between the unit number in the APS and the registered condominium plan must be resolved before closing to ensure marketable title. The unit description in the agreement must match the legal unit description in the registry. Any error should be corrected by amendment or written clarification to avoid confusion about what property is being conveyed.

78. How should the parties proceed to ensure the transaction can close despite the outstanding construction lien?

A) The buyer should insist on full discharge of the lien before closing, regardless of its age or amount.

B) The buyer may close if the vendor undertakes to defend the lien post-closing.

C) The vendor may vacate the lien by paying security into court.

D) The buyer must apply to court to determine whether the lien is valid before accepting title.

Correct Answer: C

Explanation: Under the Construction Act, a vendor may vacate a lien by posting security into court, which permits the transfer of title while preserving the lien claimant’s rights. This mechanism protects the buyer’s interest in clean title without requiring litigation before closing.

79. Which aspect of the new home APS gives the Sharmas the least basis for cancellation?

A) The existence of registered liens arising during the course of construction.

B) Tarion adjustments and fees disclosed in the agreement.

C) Material misrepresentation in the disclosure documents.

D) A latent defect in the HVAC system that was not previously disclosed.

Correct Answer: B

Explanation: The Tarion addendum and disclosure documents typically alert purchasers to various adjustments, including development levies, utility charges, and reserve contributions. These are standard provisions in builder agreements and do not usually justify rescission unless misrepresented or undisclosed.

80. Which of the following searches is required to confirm that the legal description in the APS matches the registered title prior to closing?

A) A writ of execution search under the vendor’s name.

B) A municipal tax certificate showing arrears or compliance.

C) A letter from the developer’s lawyer about construction completion.

D) A parcel register and plan search.

Correct Answer: D

Explanation: A title search using the parcel register and registered condominium plan is essential for verifying the legal description, unit boundaries, and ownership. This ensures that the correct property is conveyed and alerts the buyer to potential title issues, including mismatched unit numbers or improper registrations.