Key points for Exam 1 of the RECO Real Estate Salesperson Program, which assesses Course 1: Real Estate Essentials. These are original, independent practice notes; they are not RECO documents or the materials of any course provider. Legal rules are based on the texts in force on January 1, 2027; property concepts are standard program notions.
1. Under section 4 of TRESA, an individual who wishes to trade in real estate as a salesperson must be registered as a salesperson of which entity?
Section 4 (1) (c) of TRESA prohibits trading in real estate as a salesperson “unless he or she is registered as a salesperson of a brokerage”. A salesperson is therefore always tied to a brokerage. A local board, a provincial association such as OREA and a national association such as CREA are trade associations and do not register salespersons.
2. Before applying for registration as a salesperson for the first time, an applicant must successfully complete the educational courses designated by whom?
Section 1 (1) of Ontario Regulation 579/05 requires an applicant who has not previously been registered as a salesperson to “successfully complete all the educational courses that are designated by the registrar”. The Minister, the Tribunal defined in section 1 of TRESA and the applicant’s future brokerage do not designate those courses.
3. Which organization is the regulator that administers TRESA and its regulations as the designated administrative authority?
Section 1 of TRESA refers to the “administrative authority” designated under the Safety and Consumer Statutes Administration Act, 1996 to administer the Act, and that regulator is the Real Estate Council of Ontario (RECO). OREA, CREA and local boards are trade associations with no regulatory power over registrants under TRESA.
4. Subject to the regulations, from whom may a salesperson accept remuneration for trading in real estate?
Section 31 (2) of TRESA provides that, except if the regulations provide otherwise, no salesperson “shall accept any remuneration for trading in real estate from any person except the brokerage which employs” the salesperson. A client, a buyer, a seller or another registrant cannot pay the salesperson directly; the brokerage pays its salesperson.
5. An individual who was previously registered as a salesperson has not been registered at any time in the 24 months before applying again. What must the individual do before making the application?
Section 6 (1) of Ontario Regulation 579/05 states that for a break of 24 months, the continuing education rule in section 4 “does not apply” and that the applicant “shall, before making the application, successfully complete the educational courses that the registrar designates”. A local board exam or a further 24 months under a broker is not required by this section.
6. Which of the following is classified as personal property rather than real property?
Real property is land, what is permanently attached to it, and interests in land. A fee simple interest and an easement are interests in land, and a permanently installed furnace is a fixture that forms part of the real property. A freestanding umbrella can be moved without damage to the land or building, so it is a chattel, which is personal property.
7. A person performed services in connection with a trade in real estate but was neither registered nor exempt at that time. What does section 9 of TRESA provide if that person sues for payment?
Section 9 of TRESA bars an action for remuneration for services in connection with a trade unless the person was registered or exempt when rendering the services, and adds that “the court may stay any such action upon motion”. The section does not provide for a reduced fee, approval by the registrar or an added penalty.
8. A salesperson ceases to be employed by a brokerage. To whom must the salesperson immediately return their certificate of registration?
Section 9 (7) of the General Regulation provides that when a broker or salesperson “ceases to be employed by a brokerage”, the broker or salesperson “shall immediately return their certificate of registration to the registrar”. The brokerage must also return to the registrar any such certificate in its possession. A board and the Tribunal receive nothing under this section.
9. Under section 1 of TRESA, which description fits a “salesperson” who trades in real estate?
Section 1 (1) of TRESA defines “salesperson” as “an individual who has the prescribed qualifications to be registered as a salesperson under this Act and who is employed by a brokerage to trade in real estate”. An organization that trades for others is a brokerage, an OREA employee is not a salesperson, and a client receives services.
10. Which of the following is a “registrant” as TRESA defines that term?
Section 1 (1) of TRESA defines “registrant” as “a brokerage that is registered under this Act or a broker or salesperson who is registered under this Act”. Board membership, signing a representation agreement and working as an unregistered assistant do not make a person a registrant.
11. Which of the following BEST matches the definition of a “brokerage” in TRESA?
Section 1 (1) of TRESA defines “brokerage” as a corporation, partnership, sole proprietor, association or other entity that trades in real estate “on behalf of others and for compensation or reward or the expectation of such”. An individual employed to trade is a broker or salesperson, an association that merely sets rules for its members does not trade for others, and a seller is a party to the trade rather than a brokerage.
12. Which statement about the definition of “trade” in section 1 of TRESA is correct?
Section 1 (1) of TRESA says “trade” includes a transaction in real estate “by sale, purchase, agreement for purchase and sale, exchange, option, lease, rental or otherwise”. It also covers “any offer or attempt to list real estate” and “any act, advertisement, conduct or negotiation” done in furtherance of the transaction.
13. Section 1 of TRESA states that “real estate” includes which of the following?
Section 1 (1) of TRESA provides that “real estate” “includes leasehold interests and businesses, whether with or without premises”, together with fixtures, stock-in-trade and goods connected with the operation of a business. Household furniture, a homeowner’s car and boat, and a tenant’s personal chattels are personal property that is not connected with a business, so the definition does not bring them in. A pending amendment that is not yet in force keeps leasehold interests and businesses in the list.
14. Tomas Reyes, a salesperson employed by Granite Hill Realty Inc., closes a sale for his client. The grateful client offers to write Tomas a personal cheque for $3,000 as a thank-you for his work on the trade. What should Tomas do?
Section 31 (2) of TRESA provides that, except if the regulations provide otherwise, no salesperson may accept remuneration for trading in real estate from any person except the brokerage that employs the salesperson. A written confirmation, a report to the registrar or notice to the broker of record does not make a direct payment from the client permissible.
15. Elena Petrov is a salesperson employed by Northgate Realty Ltd. Her friend Marcus Webb is a broker at Pinecrest Homes Inc. Marcus asks Elena to host an open house for a Pinecrest listing and to receive visitors’ offers on Pinecrest’s behalf. What is the correct response?
Section 31 (1) of TRESA states that “No broker or salesperson shall trade in real estate on behalf of any brokerage other than the brokerage which employs the broker or salesperson.” Supervision by Marcus or the visitors’ status does not change this, and TRESA does not require two salespersons at an open house.
16. Amara Okafor successfully completed all the courses designated for first-time salesperson applicants on March 3, 2027. She has never been registered and plans to file her application for registration on May 20, 2028. What must she do before making the application?
Section 1 (2) of Ontario Regulation 579/05 applies when an applicant “does not make the application within 12 months after the last educational course was successfully completed”, and she must then repeat and again complete all the courses. May 20, 2028 is more than 12 months after March 3, 2027. Section 4 continuing education and a brokerage’s approval do not replace the repeat.
17. Priya Nair lists her house for sale. The listing includes the kitchen’s built-in dishwasher, which is plumbed and wired into the cabinetry, and the freestanding dining table. Which statement is correct?
A fixture is an item attached to the land or building so that it becomes part of the real property, as the plumbed and wired dishwasher is. A freestanding table can be moved without damage and remains a chattel, which is personal property. Neither answer that treats the two items alike matches their different attachment.
18. Which of the following is NOT a role of the Real Estate Council of Ontario (RECO)?
RECO is the regulator that administers TRESA (section 1), handles registration (Part IV) and deals with complaints and discipline (Part V). Advocating for the business interests of members is done by trade associations such as OREA and CREA, which have no regulatory power under TRESA.
19. Which of the following persons is NOT exempt from registration under section 5 (1) of TRESA when trading in real estate?
Section 5 (1) of TRESA, subject to prescribed conditions, exempts “an executor or trustee selling under the terms of a will”, an auctioneer acting as part of the auctioneer’s duties, and a solicitor providing legal services whose trade is incidental to them. A person who lists another person’s home for a fee makes “any offer or attempt to list real estate” under section 1 and must be registered under section 4.
20. Maria Santos owns her house in Kingston in fee simple. Which statement BEST describes the interest she holds?
Fee simple is the largest estate in land that a person can own; it is not limited to a term or to the owner's lifetime, and the owner may sell it or leave it by will. Occupation for a fixed term describes a leasehold, occupation until death describes a life estate, and passing to a co-owner on death describes survivorship in a joint tenancy.
21. Edwin Clarke's will gives his sister the right to live on a farm near Guelph until her death, after which the farm passes to his niece. What interest does the sister hold in the farm?
A life estate gives a person the right to hold and use the land for the length of a life, here the sister's; the interest then passes to the person named in the will. A fee simple has no such end point, a leasehold is a right of possession for a fixed term under a lease, and a joint tenancy is a form of co-ownership with a right of survivorship, which is not what the will creates.
22. Which feature is characteristic of a joint tenancy rather than a tenancy in common?
In a joint tenancy the interest of a deceased owner passes to the surviving owner or owners (right of survivorship), so it cannot be left by will. Tenants in common may hold unequal shares and may leave their share by will, and neither form of co-ownership limits an owner to a defined part of the land. Under section 13 of the Conveyancing and Law of Property Act, co-owners are presumed to be tenants in common unless the document shows an intention to take as joint tenants.
23. Which of the following BEST states the test in section 18 (1) of the Family Law Act for a property to be a matrimonial home?
Section 18 (1) of the Family Law Act makes a property a matrimonial home when a person has an interest in it and it is “ordinarily occupied by the person and his or her spouse as their family residence”. Designation is a separate, optional step under section 20 and is not part of the section 18 test, so neither answer built on a designation states it, and ownership by both spouses is not required. A residence that the spouses do not ordinarily occupy as their family residence does not meet the test.
24. Under the Planning Act, which body has the authority to pass a zoning by-law that regulates the height and use of buildings in a municipality?
Section 34 (1) of the Planning Act states that “Zoning by-laws may be passed by the councils of local municipalities”, and paragraphs 2 and 4 cover the use, height and size of buildings. A committee of adjustment does not pass zoning by-laws, RECO regulates registrants under TRESA, and the Ontario Real Estate Association is a trade association with no power over land use.
25. Lakeshore Land Brokerage Ltd. lists a vacant lot that measures 2.5 acres. Use 1 acre = 43,560 square feet. What is the area of the lot, in square feet?
Area = 2.5 acres x 43,560 square feet per acre = 108,900 square feet. Dividing the factor by 2.5 gives 17,424, and the figures of 10,890 and 1,089,000 each result from a decimal-place slip of one position.
26. A rural parcel listed by Northfield Realty Inc. measures 12 hectares. Use 1 hectare = 2.47 acres. The seller asks $18,000 per acre. What is the asking price of the parcel?
Convert first: 12 hectares x 2.47 = 29.64 acres, and 29.64 acres x $18,000 = $533,520. Dividing the hectares by 2.47 instead of multiplying gives $87,449, multiplying the hectares directly by $18,000 skips the conversion ($216,000), and shifting the decimal in the factor (24.7) gives $5,335,200.
27. Sana Malik and Tomas Reyes, who are friends, buy a lot in Barrie. The transfer names both of them as owners and says nothing about survivorship. How do they hold title?
Section 13 (1) of the Conveyancing and Law of Property Act provides that such persons “took or take as tenants in common and not as joint tenants” unless an intention to take as joint tenants appears on the face of the document. Buying at the same time or paying for the lot does not create a joint tenancy, and tenancy in severalty means a single owner, not co-owners of one lot.
28. Priya Nair is the sole registered owner of a house in Hamilton that she and her husband, Ravi, have occupied as their family residence since 2019. No designation has been registered. Priya agrees to sell the house. What is required for the sale to comply with the Family Law Act?
The house is a matrimonial home under section 18 even though only Priya is on title and nothing was designated. Under section 21 (1) of the Family Law Act, a spouse may not dispose of it unless “the other spouse joins in the instrument or consents to the transaction”, or another listed exception applies. Registering a designation is not a precondition to the sale, and no notice to a brokerage is part of the section.
29. Under section 21 (1) of the Family Law Act, which of the following does NOT permit a spouse to dispose of or encumber an interest in a matrimonial home?
Section 21 (1) lists consent or joining in the instrument, a release of rights in a separation agreement, a court order, and a registered designation of another property by both spouses. Being the only owner on title is not on the list, because a matrimonial home is protected even when just one spouse holds the interest.
30. Which statement about designating a matrimonial home under the Family Law Act is correct?
Section 20 (1) provides that “One or both spouses may designate property owned by one or both of them as a matrimonial home”, in the form prescribed by the regulations, and section 20 (3) allows registration in the proper land registry office. RECO has no role in the process, and section 20 (6) ends a designation only on cancellation, divorce, a court order or the death of a spouse, not after a set period.
31. A four-unit rental building was lawfully used as such when the municipality passed a zoning by-law that permits only single-detached dwellings in the area. What is the general effect of the by-law on the existing use?
Section 34 (9) of the Planning Act provides that a zoning by-law does not apply to prevent a use for a purpose the by-law prohibits if the building “was lawfully used for such purpose on the day of the passing of the by-law”, so long as it continues to be used for that purpose. This is a legal non-conforming use. The section sets no conversion deadline, RECO has no role, and a sale does not by itself end the use.
32. In 1962 a restrictive covenant was registered against a lot in Ottawa, restricting its sale to persons of a certain ancestry. What is the legal effect of that covenant under the Conveyancing and Law of Property Act?
Section 22 of the Conveyancing and Law of Property Act provides that every covenant made after March 24, 1950 that restricts the sale, ownership, occupation or use of land because of race, creed, colour, nationality, ancestry or place of origin is void and of no effect. No court discharge is needed, the covenant is not valid against the first purchaser, and the agreement of neighbours cannot validate it.
33. Hana Okafor and her brother Eric own a house in London, Ontario as joint tenants. Hana's husband, Luc, is not on title, and the house is Hana and Luc's matrimonial home. Hana dies. What is the effect on the joint tenancy under section 26 of the Family Law Act?
Section 26 (1) provides that when a spouse dies owning a matrimonial home as a joint tenant with a third person and not with the other spouse, “the joint tenancy shall be deemed to have been severed immediately before the time of death”. Survivorship therefore does not give Eric the whole property, and the section gives Luc no ownership or life estate. Under section 26 (2) Luc may keep possession rent free for sixty days.
34. Marc and Julie Tremblay, who are married, buy a cottage property in Muskoka. The transfer names them as buyers but does not say how they take title. How do they hold title?
Section 13 (2) of the Conveyancing and Law of Property Act states that the tenancy in common presumption applies even though one of the persons is the spouse of another. There is no presumption of joint tenancy for spouses, matrimonial home status under the Family Law Act does not decide how title is held, and no declaration is needed to create a tenancy in common.
35. Greg Almeida has openly used a strip of his neighbour's land as a driveway for many years without permission. The neighbour's land was already registered under the Land Titles Act when Greg's use began. Greg claims he now owns the strip by adverse possession. Is his claim valid?
Section 51 (1) of the Land Titles Act provides that no title to land registered under that Act that is adverse to the registered owner may be acquired “by any length of possession or by prescription”. The owner's knowledge, Greg's payment of taxes and registration of a notice do not change this. Adverse possession can still arise for land in the Registry system, but not for land that was already under Land Titles when the possession began.
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