🏢 Exam 3: Additional Residential Real Estate Transactions

1. Under section 11 of the Condominium Act, 1998, how do the owners hold the common elements?

1. As joint tenants with a right of survivorship
2. As separate parcels divided among the units
3. As tenants in common with an undivided interest
4. As lessees of the corporation under a long lease

Section 11 (2) provides that “The owners are tenants in common of the common elements”, and an undivided interest in them is appurtenant to each owner’s unit. Owners are not joint tenants with a right of survivorship, and section 11 (5) provides that, except as the Act allows, the common elements shall not be partitioned or divided. The owners do not hold them as lessees of the corporation.

2. Under section 27 (1) of the Condominium Act, 1998, which body manages the affairs of the corporation?

1. The Condominium Authority Tribunal members
2. A condominium manager hired by the board
3. The board of directors of the corporation
4. The declarant who registered the declaration

Section 27 (1) states that “A board of directors shall manage the affairs of the corporation.” A condominium manager may provide management services under an agreement, but the manager does not replace the board. The Condominium Authority Tribunal resolves certain disputes and does not manage the corporation, and the declarant creates the corporation but does not manage its affairs.

3. What is the minimum number of directors on the board of a condominium corporation, unless the by-laws provide for a greater number?

1. One director
2. Three directors
3. Two directors
4. Seven directors

Section 27 (2) provides that “the board shall consist of at least three persons or such greater number as the by-laws may provide”. One or two directors is below that minimum, and seven is a number a by-law may choose but is not the minimum set by the Act.

4. Which of the following must a declaration contain under section 7 (2) of the Condominium Act, 1998?

1. The percentage each owner pays to common expenses
2. The sale price of each unit in the building
3. The date of the last reserve fund study completed
4. The names of the first directors of the corporation

Section 7 (2) (d) requires “a statement of the proportions, expressed in percentages allocated to the units, in which the owners are to contribute to the common expenses”. Section 7 (2) does not list the sale price of each unit, the date of a reserve fund study or the names of the first directors.

5. A condominium corporation has a lien for unpaid common expenses under section 85 of the Condominium Act, 1998. When does that lien expire if no certificate of lien is registered?

1. Three months after the default
2. One month after the default
3. Two months after the default
4. Fifteen days after the default

Section 85 (2) provides that “The lien expires three months after the default that gave rise to the lien occurred unless the corporation within that time registers a certificate of lien”. Fifteen days, one month and two months are not the period set by the Act.

6. Under section 93 (4) of the Condominium Act, 1998, how does the corporation collect contributions to the reserve fund?

1. By charging a fee each time an owner sells a unit
2. Through a separate annual levy approved by the municipality
3. As part of the owners’ contributions to the common expenses
4. Through voluntary donations made by the unit owners

Section 93 (4) states that “The corporation shall collect contributions to the reserve fund from the owners, as part of their contributions to the common expenses.” The Act does not call for a separate municipal levy, a fee on sales of units, or voluntary donations.

7. Under section 95 (2) of the Condominium Act, 1998, what consent is required before the board makes an expenditure out of a reserve fund?

1. The consent of a majority of the owners
2. No consent from the owners is required
3. The consent of the mortgagees of the units
4. The approval of the municipal council

Section 95 (2) provides that “The board does not require the consent of the owners to make an expenditure out of a reserve fund.” The expenditure must still serve the purpose in section 93 (2), but neither a vote of the owners, the mortgagees nor the municipal council is required.

8. Under section 56 (10) of the Condominium Act, 1998, when does a by-law made by the board become effective?

1. Once the owners vote to confirm it and a copy is registered
2. Once the board mails a copy of the by-law to the owners
3. Immediately, once the board passes the resolution to make it
4. After thirty days pass with no written objection from owners

Section 56 (10) provides that a by-law is not effective until “the owners of a majority of the units in the corporation, or such other number of owners that is prescribed, vote in favour of confirming it” and a copy is registered under section 56 (9). A board resolution, a mailing to the owners or the passing of thirty days is not enough. A rule follows a different procedure under section 58.

9. Subject to the declaration, who must maintain a unit under section 90 (1) of the Condominium Act, 1998?

1. The corporation through the board
2. The current owner of the unit
3. The previous owner of the unit
4. The declarant of the building

Section 90 (1) provides that “the corporation shall maintain the common elements and each owner shall maintain the owner’s unit”. The duty does not fall on the corporation, a previous owner or the declarant. Section 91 allows the declaration to alter this allocation, which is why the question is limited to the Act’s default rule.

10. Which of the following must a description contain under section 8 (1) of the Condominium Act, 1998?

1. A plan of survey showing the perimeter of the land
2. The proportions of the common interests of the units
3. A list of the owners and their mortgage balances
4. The by-laws proposed by the declarant for the corporation

Section 8 (1) (a) requires “a plan of survey showing the perimeter of the horizontal surface of the land and the perimeter of the buildings”. The proportions of the common interests belong in the declaration under section 7 (2) (c), and by-laws are made under section 56. Section 8 does not call for a list of owners or mortgage balances.

11. A board gives the owners notice of a new rule on April 1, 2027, and no owner requisitions a meeting under section 46. When does the rule become effective under section 58 (7) of the Condominium Act, 1998?

1. The day after the 30th day following notice
2. After the owners approve it at a general meeting
3. When a copy of it is registered against each unit
4. When the board gives the notice to the owners

Under section 58 (7), if the board does not receive a requisition within 30 days after giving notice, the rule is effective on “the day after that 30th day”. The board’s notice alone does not make the rule effective, and no owners’ meeting or registration is needed unless a requisition is received, unlike a by-law under section 56 (10).

12. Under the Condominium Act, 1998, “common elements” means:

1. The parts of a building that one owner uses
2. The space enclosed by the boundaries of a unit
3. All of the property except for the units
4. The assets owned by the board of directors

Section 1 defines “common elements” as “all the property except the units”. The space within a unit’s boundaries is the unit itself, a part used by one owner can still be a common element, and the assets of the corporation are separate from the property.

13. Which expenses are “common expenses” under section 1 of the Condominium Act, 1998?

1. The costs an owner pays to repair the inside of that owner’s unit
2. Mortgage payments and property taxes the owners pay on their own units
3. The declarant’s costs of marketing and selling the units to buyers
4. Expenses of the corporation’s duties and any named in the declaration

Section 1 defines “common expenses” as “the expenses related to the performance of the objects and duties of a corporation and all expenses specified as common expenses in this Act, in the regulations or in a declaration”. An owner’s own repair costs, personal mortgage payments and taxes, and the declarant’s sales costs are not expenses of the corporation.

14. Which person fits the definition of a “declarant” under section 1 of the Condominium Act, 1998?

1. A landowner who registers the declaration and description
2. A person who buys a unit in good faith at fair market value
3. A director who signs the declaration on behalf of the board
4. A condominium manager hired by the corporation’s board

Section 1 defines a declarant as a person who owns the estate in the land described in the description and who registers a declaration and description. The definition “does not include a purchaser in good faith of a unit who pays fair market value”. A director or a condominium manager is not the person who registers the declaration and description.

15. Which statement about the types of condominium corporations under section 6 of the Condominium Act, 1998 is INCORRECT?

1. A vacant land condominium corporation is a type of freehold corporation
2. The declaration must state whether a corporation is freehold or leasehold
3. A common elements condominium corporation does not divide land into units
4. A leasehold condominium corporation is a type of freehold corporation

Section 6 (1) divides corporations into freehold and leasehold condominium corporations, and section 6 (2) lists the freehold types: common elements, phased, vacant land and standard corporations, so a leasehold corporation is not a freehold type. The other statements are correct: vacant land corporations appear in section 6 (2), section 6 (4) (a) requires the declaration to state whether the corporation is freehold or leasehold, and under section 138 (1) a common elements corporation creates common elements but does not divide the land into units.

16. A by-law made by the board under section 56 (1) of the Condominium Act, 1998 may govern each of the following EXCEPT:

1. The proportions of the common interests of the units
2. The assessment and collection of common expense contributions
3. The borrowing of money to carry out the corporation’s duties
4. The duties and remuneration of the corporation’s employees

Section 56 (1) (g) allows by-laws “to govern the assessment and collection of contributions to the common expenses”, and clauses (e) and (d) cover borrowing and the duties of employees. The proportions of the common interests are not set by by-law: section 11 (3) says they “are those expressed in the declaration”.

17. Which of the following is NOT a proper use of a reserve fund under section 93 (2) of the Condominium Act, 1998?

1. Replacing the roof membrane of the building
2. Replacing the elevator equipment of the building
3. Major repair of the underground parking structure
4. Paying the monthly janitorial contract invoices

Section 93 (2) provides that a reserve fund “shall be used solely for the purpose of major repair and replacement of the common elements and assets of the corporation”. Routine monthly janitorial invoices are ordinary operating costs paid from the common expenses, while a roof, elevator or parking structure project is a major repair or replacement.

18. Priya owns unit 112 in a standard condominium. The declaration designates parking space P-7, part of the common elements, for her exclusive use. Who owns parking space P-7?

1. Priya, as the registered owner of the parking space
2. The board of directors, which holds title in its own name
3. The declarant, until the last unit has been sold
4. The owners, as tenants in common of the common elements

Section 7 (2) (f) lets the declaration specify “all parts of the common elements that are to be used by the owners of one or more designated units and not by all the owners”. That gives Priya the use of P-7, not ownership: section 11 (2) makes the owners tenants in common of the common elements. Neither the board nor the declarant owns P-7.

19. The board of Lakeshore Condominium Corporation No. 214 makes a rule that conflicts with the corporation’s declaration. Which statement is correct under section 58 (2) of the Condominium Act, 1998?

1. The rule prevails because rules are more specific than the declaration
2. The rule prevails because the board adopted it after the declaration
3. The rule is improper since it must be consistent with the declaration
4. The rule is valid if the owners receive notice of it from the board

Section 58 (2) provides that “The rules shall be reasonable and consistent with this Act, the declaration and the by-laws.” A rule does not override the declaration because it is newer or more specific, and giving notice under section 58 (6) does not cure an inconsistency.

20. Marcus defaulted on his common expense contribution on January 10, 2027, and the corporation never registered a certificate of lien. On what date did the lien expire under section 85 (2) of the Condominium Act, 1998?

1. March 10, 2027
2. May 10, 2027
3. April 10, 2027
4. July 10, 2027

Section 85 (2) provides that the lien expires three months after the default occurred unless a certificate of lien is registered within that time. Three months after January 10, 2027 is April 10, 2027. March 10 and May 10 are two and four months after the default, and July 10 is six months after it.

21. Greenfield Condominium Corporation registers a certificate of lien against Tom’s unit but never gives written notice of the lien to the lender holding a mortgage on that unit. What is the effect under section 86 of the Condominium Act, 1998?

1. The lien expires on the day the certificate is registered
2. The certificate of lien is void against Tom himself
3. The lender must pay Tom’s unpaid common expenses
4. The lien loses its priority over the lender’s mortgage

Section 86 (5) provides that “the lien loses its priority over an encumbrance unless the corporation gives the required notice to the encumbrancer”. The lien does not expire on registration, the lender is not made liable for the common expenses, and the certificate remains effective against the owner.

22. A condominium corporation has no municipal occupancy by-law applying to its land. Its building is designed for a maximum of four occupants in each two-bedroom unit, and the board proposes a by-law limiting those units to two occupants. What does section 57 (2) of the Condominium Act, 1998 require of the standard?

1. It may be any limit the board chooses by a resolution
2. It must be set by the owners in the declaration itself
3. It cannot be stricter than the building’s design limit
4. It must equal the number of bedrooms in each such unit

Section 57 (1) lets the board make an occupancy by-law by resolution, but section 57 (2) (b) requires standards “not more restrictive than” those in accordance with the maximum occupancy for which the building is designed. A limit of two for a unit designed for four is more restrictive. The standard is not freely chosen, not set in the declaration, and not tied to the number of bedrooms.

23. Dina hosts loud parties in her unit until 3 a.m. several nights a week, and her neighbours cannot sleep. Which provision of the Condominium Act, 1998 does her activity MOST directly contravene?

1. Section 84 (1), which requires owners to contribute to common expenses
2. Section 117 (2), which prohibits unreasonable noise that is a nuisance
3. Section 95 (2), which sets the consent for reserve fund spending
4. Section 11 (4), which bars separating a unit from its common interest

Section 117 (2) provides that no person shall carry on an activity in a unit if it results in “any unreasonable noise that is a nuisance, annoyance or disruption to an individual in a unit”. Section 84 (1) deals with contributions to the common expenses, section 95 (2) with spending from the reserve fund and section 11 (4) with keeping a unit together with its common interest, so none of them addresses noise.

24. Raj owns a unit and rents it to a tenant who ignores the corporation’s rules about the garbage chutes. Raj says the tenant alone is responsible for the breach. Under section 119 (2) of the Condominium Act, 1998, what is Raj’s duty as owner?

1. To take all reasonable steps so the occupier complies
2. To terminate the lease within thirty days of a complaint
3. To leave the matter to the tenant who occupies the unit
4. To pay the tenant’s fines to the Condominium Authority

Section 119 (2) provides that an owner “shall take all reasonable steps to ensure that an occupier of the owner’s unit” and the occupier’s invitees comply with the Act, the declaration, the by-laws and the rules. The tenant’s own breach does not remove the owner’s duty, and the section does not require a termination of the lease within a fixed time or the payment of fines.

25. A burst pipe in the common elements of a condominium created in 2021 damages the standard finishes of Elena’s unit and the premium cabinets she installed herself. The declaration is silent on repairs after damage. Who repairs what under section 89 of the Condominium Act, 1998?

1. The corporation repairs the unit and Elena’s premium cabinets
2. The corporation repairs the unit but not Elena’s upgrades
3. Elena repairs the damage inside the boundaries of her unit
4. The corporation repairs just the damaged common elements

Section 89 (1) makes the corporation responsible for repairing the units and common elements after damage, but section 89 (2) says the obligation “does not include the obligation to repair after damage improvements made to a unit”. Whether the premium cabinets are improvements is judged against a standard unit under section 89 (3), so the corporation restores the standard finishes but not Elena’s upgrades. The declaration is silent, so section 91 does not shift the repair of the unit to Elena, and the corporation’s duty is not limited to the common elements.

26. Harbour Point Condominium Corporation is created when its declaration and description are registered on September 1, 2027. When must it conduct its first reserve fund study under section 94 (4) of the Condominium Act, 1998?

1. Within three years following the registration
2. Once the first special assessment is proposed
3. Within the year following the registration
4. After the first turn-over meeting of the owners

Section 94 (4) provides that a corporation created after the section came into force “shall conduct a reserve fund study within the year following the registration of the declaration and description”. The study is not delayed for three years, and it does not depend on a special assessment or on the turn-over meeting.

27. A director of a condominium corporation approves a roof repair plan after relying in good faith on a written report from a licensed engineer. The report later proves flawed. What does section 37 (3) of the Condominium Act, 1998 provide about the director’s liability?

1. The director is liable for the engineer’s fees and the repair costs
2. The director is liable because the full board approved the plan
3. The director is liable unless the owners later ratify the plan
4. The director is not liable for a breach arising from that reliance

Section 37 (3) (b) provides that a director “shall not be found liable for a breach of a duty mentioned in subsection (1)” if the breach arises from relying in good faith on a report of an engineer or other professional. Approval by the board, the lack of a ratification by the owners, or the engineer’s fees do not create liability for that reason.

28. The declaration of Parkview Condominium Corporation, which has 160 units, states that unit 7B has a 0.80 per cent common interest and contributes 0.85 per cent of the common expenses. The corporation’s monthly common expenses total $84,000. Under section 84 (1) of the Condominium Act, 1998, what is the monthly contribution for unit 7B?

1. $71.40
2. $525
3. $714
4. $672

Section 84 (1) requires the owners to contribute to the common expenses in the proportions specified in the declaration. Unit 7B pays 0.85 per cent of $84,000, which is $714. Using the 0.80 per cent common interest gives $672, an equal split among 160 units gives $525, and $71.40 is a decimal slip.

29. A new condominium corporation has not yet conducted a first reserve fund study. Its budgeted common expenses, excluding reserve fund contributions, are $540,000 for the year. Assume no regulation specifies otherwise and that the amount specified in section 93 (6) would be $48,000. Under section 93 (5) of the Condominium Act, 1998, what is the total amount of contributions to the reserve fund?

1. $5,400
2. $54,000
3. $48,000
4. $540,000

Section 93 (5) sets the total contribution at the greater of the amount specified in subsection (6) and 10 per cent of the budgeted common expense contributions exclusive of the reserve fund. Ten per cent of $540,000 is $54,000, which is greater than $48,000. Taking the subsection (6) figure gives $48,000, applying 1 per cent instead of 10 per cent gives $5,400, and $540,000 is the whole budget rather than 10 per cent of it.

30. Harbour View Condominium Corporation receives a reserve fund study on March 12, 2027. What is the last day by which the board must review it and propose a funding plan under section 94 (8) of the Condominium Act, 1998?

1. June 10, 2027
2. July 10, 2027
3. July 12, 2027
4. August 9, 2027

Section 94 (8) requires the board, “Within 120 days of receiving a reserve fund study”, to review it and propose a plan. Counting 120 days from March 12, 2027 gives July 10, 2027. Ninety days gives June 10, four calendar months gives July 12, and 150 days gives August 9.

31. A buyer’s salesperson explains the timeline for a resale condominium purchase. After a condominium corporation receives a request for a status certificate and payment of its fee, within what period must it give the certificate?

1. Within 3 days
2. Within 5 days
3. Within 10 days
4. Within 15 days

Section 76 (3) of the Condominium Act, 1998 provides that the corporation “shall give the status certificate within 10 days after receiving a request for it and payment of the fee charged by the corporation for it”. Three, five and fifteen days are not the period set by the Act.

32. Which description of a status certificate is correct?

1. The corporation’s statement of a unit’s expenses, reserve fund and legal matters
2. The declarant’s summary of a proposed condominium, given to a buyer of a new unit
3. The lender’s confirmation of the mortgage balance and any payment arrears on a unit
4. The municipality’s statement of the realty taxes owing and any tax arrears on a unit

Section 76 (1) of the Condominium Act, 1998 requires the corporation to give “a status certificate with respect to a unit in the corporation, in the prescribed form”, with statements on common expenses, assessments, the reserve fund, legal actions and more. The declarant’s summary of a proposed condominium is the disclosure statement under section 72; lenders and municipalities issue their own statements, not a status certificate.

33. Under Ontario Regulation 48/01 made under the Condominium Act, 1998, what is the maximum fee that a corporation may charge for providing a status certificate, including all material that must be in it?

1. $75, inclusive of applicable taxes
2. $150, inclusive of applicable taxes
3. $100, before adding applicable taxes
4. $100, inclusive of applicable taxes

Section 18 (4) of Ontario Regulation 48/01 provides that the fee for providing a status certificate, including all required material, “shall not exceed $100, inclusive of all applicable taxes”. Taxes are therefore not added on top of the $100, and $75 and $150 are not the cap set by the regulation. $100 per the regulation text read on November 4, 2026; confirm the amount in force before relying on it.

34. A buyer relies on a status certificate that a condominium corporation gave for a resale unit. What is the legal effect of the certificate on the corporation?

1. It binds the corporation to the information that it contains
2. It is a rough estimate that the corporation may correct after closing
3. It requires the buyer to complete the purchase of the unit on closing
4. It binds the directors personally, but not the corporation itself

Section 76 (6) of the Condominium Act, 1998 states that “The status certificate binds the corporation, as of the date it is given or deemed to have been given”, as against a purchaser or mortgagee who relies on it. It is not a mere estimate, it creates no duty for the buyer to close, and the corporation, not the directors personally, is bound.

35. Renée Gauthier asks Lakeview Condominium Corporation No. 214 for a status certificate on a unit she wants to buy and pays the fee. The corporation does not give the certificate within the required time. Which statement BEST describes the result?

1. Renée may rescind her agreement of purchase and sale within 10 days of the deadline
2. The corporation must refund the fee, and the request for the certificate lapses
3. The corporation is deemed to certify no default, no increase and no assessment
4. The corporation is deemed to have stated that its reserve fund is fully adequate

Section 76 (5) of the Condominium Act, 1998 provides that a corporation that does not give a status certificate in time “shall be deemed to have given a certificate on the day immediately after the required time has expired” stating that there has been no default in common expenses, no declared increase in common expenses and no reserve fund assessment. The Act creates no rescission right or lapse of the request, and the deemed statements say nothing about the adequacy of the reserve fund.