These notes summarize what Exam 2 of the RECO Real Estate Salesperson Program assesses: Course 2, Residential Real Estate Transactions. They are original, independent practice notes, not documents of RECO or of any course provider. Legal points are based on the texts in force on January 1, 2027. Land transfer tax rates can change: those shown were read on November 4, 2026. Construction and pricing points are standard program notions.
1. For a particular trade in real estate, which description fits a self-represented party?
Section 1 (5) of the General Regulation prescribes one criterion for a self-represented party: with respect to a trade in real estate, the party is not a client. A person who signed a buyer representation agreement, or who is served under a designated representation agreement, is a client. RECO Bulletin 2.4 adds that a prospective client, or a consumer asking general questions about the market, is not a self-represented party.
2. According to the RECO Information Guide described in section 13 of the General Regulation, which of the following is NOT a way in which a person may interact with a registrant?
Section 13 (2) of the General Regulation says the Guide must indicate that a person may interact with a registrant as a client under a representation agreement or as a self-represented party. A client of a designated representative is still a client under a representation agreement. The customer relationship existed under the former REBBA rules and no longer exists under TRESA, so a brokerage cannot offer it.
3. Under section 1 of the General Regulation, what does a person receive from the brokerage as its client under a designated representation agreement?
Section 1 (1) of the General Regulation defines a client of a brokerage under a designated representation agreement as a person who “receives services, but not representation, from the brokerage”. The representation comes from the designated representative, to the exclusion of the brokerage and its other salespersons. Representation by the brokerage itself belongs to a brokerage representation agreement.
4. Who must prepare the RECO Information Guide and publish it on the administrative authority’s website?
Section 13 (1) of the General Regulation provides that “The registrar shall prepare an information guide” and publish it on the administrative authority’s website. The Ontario Real Estate Association is a trade association and the Licence Appeal Tribunal hears appeals; neither prepares the Guide. A broker of record does not prepare it either, although registrants must give it to consumers.
5. Which item must the RECO Information Guide include under section 13 (2) of the General Regulation?
Section 13 (2) 15 of the General Regulation requires the Guide to explain how to file a complaint about the conduct of a broker or salesperson with the brokerage that employs the registrant and with the administrative authority. The Guide gives guidance on permitted and prohibited remuneration arrangements but sets no rates, and section 23 (3) of the General Regulation forbids a registrant to indicate that remuneration is fixed or approved by the administrative authority (see also RECO Bulletin 2.3). The Guide does not list brokerages or contain a form of agreement of purchase and sale.
6. Priya Nair, a salesperson with Harbour Point Realty Inc., emails a prospective buyer, Samuel Okafor, a link to the RECO Information Guide and starts booking showings without discussing it with him. Has Priya met section 13 of the General Regulation?
Section 13 (3) of the General Regulation allows a registrant to provide a copy of the Guide or a link to it, so the link was acceptable and a paper copy is not required. However, section 13 (4) requires a broker or salesperson to explain the contents of the Guide before providing services or assistance, and Priya began booking showings without doing so. The explanation is not left to the buyer to request.
7. Before a brokerage with a seller client assists a self-represented buyer, which of the following must it give the buyer under section 13.1 of the General Regulation?
Section 13.1 (1) of the General Regulation lists what the brokerage must provide before assisting a self-represented party: a disclosure that it provides services to a client in the trade, a disclosure that it or a designated representative represents that client, an explanation of the risks, a description of the permitted assistance and a recommendation to seek independent professional advice. An opinion on price or a market analysis is advice that section 10 of the Code of Ethics forbids toward a self-represented party, and the seller’s confidential information is protected by section 12 of the Code.
8. A brokerage has explained the Information and Disclosure to Self-represented Party form to a self-represented buyer. What must it do next under section 13.1 (3) of the General Regulation?
Section 13.1 (3) of the General Regulation requires the brokerage to explain the information, make best efforts to obtain a written acknowledgement from the self-represented party that it was received and, if the party makes the acknowledgement, give the party a copy of it. The duty is one of best efforts, so a signed form is not a condition of dealing with the party, and the section does not call for a countersignature by the broker of record or a filing with the registrar.
9. Marcus Lee, a self-represented buyer, asks Dana Whitfield, the seller’s salesperson, how much he should offer for the home. Which response is consistent with section 10 of the Code of Ethics?
Section 10 of the Code of Ethics provides that a registrant shall not, in respect of a trade in real estate, provide services, opinions or advice to a self-represented party, or encourage that party to rely on the registrant’s knowledge, skill or judgment. Dana must therefore decline to give price advice and should recommend independent advice. Revealing the seller’s lowest acceptable price would also breach section 12 of the Code, which protects a client’s confidential information.
10. Which statement about a registrant’s dealings with a self-represented party is INCORRECT?
Section 10 of the Code of Ethics forbids a registrant to provide services, opinions or advice to a self-represented party, so advice on the terms of an offer is not permitted. Assistance is allowed only as a service to, or incidental to a service to, the registrant’s client, without encouraging the other person to rely on the registrant’s skill or judgment (section 1 (6) of the General Regulation). A self-represented party is free to enter a representation agreement with a brokerage at any point (RECO Bulletin 2.4).
11. Jordan Patel, a salesperson with Cedar Grove Realty Inc., has no agreement with Elena Ruiz. At Elena’s request, he advises her on a counter-offer and negotiates with the seller’s salesperson on her behalf. What is the likely result?
Section 1 of the General Regulation defines a representation agreement as a written, oral or implied agreement between a brokerage and a person. Giving advice and negotiating for a person creates an implied agreement even if nothing is signed (RECO Bulletin 2.7), and it binds the brokerage, because a representation agreement is always between a brokerage and a person, not between a person and an agent. Elena is therefore a client, not a self-represented party.
12. Under section 1 of the General Regulation, which description of a representation agreement is correct?
Section 1 (1) of the General Regulation defines a representation agreement as a “written, oral or implied agreement between a brokerage and a person” under which the person receives services from the brokerage and representation from the brokerage or a designated representative. The agreement is with the brokerage, not with an individual salesperson. It need not be written to exist, and no approval by the registrar is part of the definition.
13. What is a brokerage prohibited from doing under section 13.3.1 of the General Regulation?
Section 13.3.1 of the General Regulation states that a brokerage shall not enter into an agreement with a buyer or seller for the purposes of trading in real estate if the agreement does not include the provision of representation. The representation may come from the brokerage or from a designated representative. Remuneration as a percentage of the sale price is allowed by section 36 (1) of TRESA, and putting an oral agreement in writing and naming the designated representative are duties under sections 13.5, 13.6 and 13.4 of the General Regulation.
14. Under section 13.4 of the General Regulation, how must the expiry date of a written representation agreement be displayed?
Section 13.4 (1) of the General Regulation requires that the expiry date be displayed prominently on the first page of the agreement and that the buyer or seller initial the agreement next to the expiry date. The initials of the broker of record are not what the section calls for, and placing the date on the last page or in a schedule does not meet the requirement.
15. Which of the following is NOT required content of a written seller representation agreement under section 13.4 (1) of the General Regulation?
Section 13.4 (1) 1 of the General Regulation requires the agreement to set out the effective and expiry dates, the method for determining remuneration, the circumstances in which it may change, the method of paying it, the services to be provided and any termination terms. The list price is not among the required items, so it need not appear in the agreement.
16. Pinewood Realty Ltd. and a seller sign a seller representation agreement that takes effect on March 1, 2027, and runs for 90 days. Counting March 1 as day 0, day 90 is the last day of the term and is the expiry date. What expiry date must the agreement show?
Counting March 1 as day 0, day 30 is March 31, day 60 is April 30 and day 90 is May 30, 2027. Counting March 1 as day 1 gives May 29, taking the day after day 90 as the expiry date gives May 31, and treating the term as three calendar months gives June 1. Section 13.4 (1) of the General Regulation requires the agreement to state the date it takes effect and the date it expires, and section 13.4 (2) requires only one expiry date.
17. Helen Cho orally agrees by telephone to list her house with Maple Ridge Realty Ltd., and nothing is written. Her salesperson, Tomas Reid, plans to start marketing the house. What must the brokerage do under section 13.5 of the General Regulation?
Section 13.5 (1) of the General Regulation requires a brokerage whose seller representation agreement is not in writing to reduce it to writing as soon as possible after entering it and before any buyer makes an offer, have it signed on behalf of the brokerage and provide it to the seller for signature. Waiting for an offer is too late, and the section does not allow the brokerage to leave the oral listing unwritten. The duty rests on the brokerage, not on the seller’s lawyer.
18. A brokerage and a seller sign a written listing agreement. When must the brokerage give the seller a copy under section 13.7 of the General Regulation?
Section 13.7 of the General Regulation requires a brokerage that enters a written agreement in connection with a trade in real estate to ensure that each of the other persons “is immediately given a copy of the agreement”. The copy is not delayed until the first showing or the first offer, and it does not depend on a written request from the seller.
19. Lakeshore Brokerage Ltd. lists a home. The seller representation agreement says the seller pays the brokerage 2.5% of the sale price for its services and, separately, offers to pay 1.5% of the sale price to the buyer’s brokerage. The home sells for $800,000 to a client of another brokerage, which accepts that offer. Ignoring taxes, what is the total remuneration the seller pays?
The seller pays 2.5% to the listing brokerage and 1.5% to the buyer’s brokerage, a total of 4% of $800,000, which is $32,000. Counting only the buyer’s brokerage amount gives $12,000, treating the 1.5% as a portion of the listing brokerage’s 2.5% gives $20,000, and applying 2.5% to both brokerages gives $40,000. Section 13.4 (1) of the General Regulation requires a seller’s agreement to set out how both amounts are determined, and RECO Bulletin 2.3 says they should be stated separately.
20. Which description matches a designated representation agreement under section 2 of the General Regulation?
Section 2 (1) of the General Regulation defines a designated representation agreement as one under which the brokerage provides services to the client and designates one or more brokers or salespersons to represent the client to the exclusion of the brokerage and the other brokers and salespersons employed by it. Where the brokerage and the brokers and salespersons it employs represent the client, the agreement is a brokerage representation agreement.
21. Noor Hassan is the designated representative for seller Greg Tan. A colleague at the same brokerage, who has a buyer interested in Greg’s home, asks Noor for the lowest price Greg will accept. What must Noor do?
Section 22.0.5 of the General Regulation requires every designated representative to protect the confidential information of each client, including by not disclosing it to any other broker or salesperson employed by the same brokerage, unless the client authorizes the disclosure or the law requires it. Working for the same brokerage, approval by the broker of record or the arrival of a written offer creates no exception. Section 22.0.4 places a parallel duty on the brokerage.
22. Meridian Realty Inc. has a seller client under a designated representation agreement with Alex Rowe and a buyer client under one with Beth Cole. The buyer wants the seller’s home. Is the consent under section 22.0.1 of the General Regulation required?
Section 22.0.1 (1) of the General Regulation prohibits a designated representative from representing more than one client in the same trade without disclosure and written consent. Alex represents only the seller and Beth only the buyer, and under designated representation agreements the brokerage does not represent either client, so no multiple representation arises (RECO Bulletin 3.2). The brokerage still gives services to both clients and must disclose that fact under section 22.0.3 to any other buyer who makes a written offer.
23. Under section 22 (1) of the General Regulation, what must each client do before a brokerage may represent both the seller and the buyer in the same trade?
Section 22 (1) of the General Regulation prohibits a brokerage from representing more than one client in the same trade unless it discloses the information in subsection (2) to each client and prospective client, and each of them, after receiving the disclosure, consents in writing. Oral consent, a waiver of duties or a lower rate of remuneration does not meet that test.
24. Cedar Brokerage Ltd. has a seller client, Raymond Dube. Tara Singh, who wants to buy Raymond’s home, asks to sign a buyer representation agreement with the same brokerage. When must the brokerage give both of them the multiple representation disclosure?
Section 22 (1) of the General Regulation requires the disclosure to each client and prospective client, and written consent after that disclosure, before the brokerage represents more than one client in the same trade. Because entering the agreement with Tara would immediately result in multiple representation, RECO Bulletin 3.2 says the disclosure and consent must come before the brokerage enters the agreement, and notes that a disclosure made when an offer is submitted is almost always too late.
25. A seller representation agreement with Harbourfront Realty Inc. sets the brokerage’s remuneration at 5% of the first $200,000 of the sale price and 2.5% of the balance. The property sells for $650,000. Ignoring taxes, what remuneration does the seller owe the brokerage?
5% of the first $200,000 is $10,000, and 2.5% of the balance of $450,000 is $11,250, for a total of $21,250. Applying 2.5% to the whole price gives $16,250, swapping the two rates between the tiers gives $27,500, and applying 5% to the whole price gives $32,500. Section 36 (2) of TRESA allows a percentage to be expressed as a series of percentages that decrease at specified amounts as the sale price increases (see also RECO Bulletin 2.3).
26. Layla Ahmed, a salesperson, is asked by Thomas Greer to help him buy a condominium unit owned by Layla’s brother. Which step does section 13 of the Code of Ethics require before she continues to act?
Section 13 of the Code of Ethics bars a registrant from providing services where the registrant’s interests conflict or may conflict with a client’s interests unless the registrant has disclosed the relationship, advised the client to seek independent professional advice, taken reasonable steps to ensure the client understands the conflict and obtained the client’s written consent. A disclosure made after an offer is accepted comes too late, and approval by the brokerage or a report to the registrar cannot replace the client’s own consent.
27. Which body has the power under section 45 of the Planning Act to authorize a minor variance from the provisions of a zoning by-law?
Section 45 (1) of the Planning Act gives the committee of adjustment, on the application of the owner or a person authorized in writing by the owner, the power to authorize a minor variance from a by-law passed under section 34. The council passes and amends the zoning by-law under section 34 but does not decide variance applications under section 45, and neither the land registrar nor RECO has any role in zoning.
28. Under section 32 of the Mortgages Act, a lender may not make a sale under a power of sale until at least how long after the notice of exercising the power of sale has been given?
Section 32 of the Mortgages Act provides that the sale shall not be made for at least thirty-five days after the notice has been given. Fifteen days is the period the default must continue before notice may be given, not the wait after notice. Twenty-five and forty-five days are not periods set by the section.
29. A registrant learns that a mortgage broker will pay the registrant a referral fee if a client uses that broker. Under section 23.1 of the General Regulation, when must the registrant disclose the financial benefit to the client?
Section 23.1 (1) of the General Regulation requires disclosure “As soon as possible after a registrant knows or ought to know” of the financial benefit. Waiting until closing, waiting for the client to ask, or counting 30 days from receipt of the fee does not meet that requirement.
30. Under section 11 of the Code of Ethics, when must a registrant advise a person to obtain services from another person?
Section 11 (1) of the Code of Ethics requires the registrant to advise a person to obtain services elsewhere if the registrant cannot provide them with reasonable knowledge, skill, judgment and competence, or is not authorized by law to provide them. Working with a lender, the absence of a signed representation agreement or the lack of a fee does not trigger the duty, which applies to any person. Section 11 (2) adds that the registrant shall not discourage the person from seeking that service.
31. Under section 2 of the Land Transfer Tax Act, when must land transfer tax be paid on a conveyance of land in Ontario?
Section 2 (1) of the Land Transfer Tax Act requires the tax to be paid when the conveyance is tendered for registration or before it is tendered. Signing the agreement, a 30-day period after closing and the date of first occupancy are not the times the Act sets for payment.
32. Under section 9.2 of the Land Transfer Tax Act, what is the maximum refund of land transfer tax for an eligible purchaser of a first home when the conveyance occurs on or after January 1, 2017?
Section 9.2 (2.1) (b) of the Land Transfer Tax Act sets the maximum refund at $4,000 for a conveyance on or after January 1, 2017 (amount in the text in force on January 1, 2027). The $2,000 maximum applied to a conveyance before January 1, 2017; $1,000 and $8,000 are not amounts set by the section.
33. To qualify for a refund of land transfer tax under section 9.2 of the Land Transfer Tax Act, the purchaser must occupy the home as a principal residence no later than how long after the date of the conveyance?
Section 9.2 (2) (b) of the Land Transfer Tax Act requires the purchaser to occupy the home as a principal residence no later than nine months after the date of the conveyance. Six and twelve months are not the period set by the Act; eighteen months is the time allowed to apply for the refund under section 9.2 (5), not the occupancy period.
34. Before the committee of adjustment may authorize a minor variance under section 45 of the Planning Act, which condition must the committee be satisfied of?
Section 45 (1) of the Planning Act allows a variance only if, in the opinion of the committee, the general intent and purpose of the by-law and of the official plan, if any, are maintained. The Act does not require written consent from every neighbour, a fixed percentage limit or prior council approval.
35. Which statement about a zoning by-law passed under section 34 of the Planning Act is correct?
Section 34 (1) of the Planning Act allows the council of a local municipality to pass a zoning by-law regulating the height, bulk, location and size of buildings. The committee of adjustment does not pass by-laws; it deals with minor variances under section 45. Land transfer tax is set by the Land Transfer Tax Act, and the Land Registrar does not enact by-laws.
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