Canadian Real Estate Jurisprudence Exam
Questions With Correct Answers (Verified
Answers) Plus Rationales 2026 Q&A | Instant
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1. Which of the following best describes a fiduciary duty in real
estate practice?
A. A duty to maximize personal profit in all transactions
B. A legal obligation to act in the best interests of the client
C. A requirement to disclose only material facts when asked
D. A duty owed only to other real estate agents
Correct answer: B
Rationale: A fiduciary duty requires real estate professionals to
prioritize their client’s interests above their own, including
loyalty, obedience, confidentiality, and full disclosure.
2. In Canadian real estate law, which document typically establishes
the relationship between a broker and a seller?
A. Purchase and Sale Agreement
, B. Mortgage Commitment
C. Listing Agreement
D. Title Certificate
Correct answer: C
Rationale: A listing agreement formally creates the contractual
relationship between a seller and brokerage, defining duties,
commission terms, and authority.
3. What is the primary purpose of FINTRAC regulations in real estate
transactions?
A. To regulate property taxes
B. To prevent money laundering and terrorist financing
C. To set commission rates for agents
D. To determine property values
Correct answer: B
Rationale: FINTRAC ensures compliance with anti-money
laundering laws by requiring reporting of suspicious transactions
and large cash dealings.
4. Which of the following is considered a material latent defect?
A. A visible scratch on flooring
, B. A broken window visible during inspection
C. A hidden structural issue affecting safety
D. A paint color dispute between buyer and seller
Correct answer: C
Rationale: A material latent defect is not discoverable upon
reasonable inspection and significantly affects property value or
safety.
5. A real estate agent must disclose which of the following?
A. Only positive features of the property
B. Any known material latent defects
C. Only information requested by the buyer
D. Personal opinions about market trends
Correct answer: B
Rationale: Agents are legally obligated to disclose known
material latent defects to protect buyers and maintain ethical
standards.
6. What is dual agency in real estate?
A. One agent representing two competing buyers
B. One brokerage representing both buyer and seller in the same
, transaction
C. Two agents representing one buyer
D. Two brokerages sharing commission
Correct answer: B
Rationale: Dual agency occurs when a brokerage represents both
parties, requiring strict disclosure and consent due to conflict
risks.
7. Which governing body regulates real estate professionals in
Ontario?
A. RECO
B. FINTRAC
C. CMHC
D. CRA
Correct answer: A
Rationale: The Real Estate Council of Ontario (RECO) regulates
real estate agents and brokerages under provincial legislation.
8. What is the purpose of a trust account in real estate?
A. To store agent commissions
B. To hold client funds securely until conditions are met
Questions With Correct Answers (Verified
Answers) Plus Rationales 2026 Q&A | Instant
Download Pdf
1. Which of the following best describes a fiduciary duty in real
estate practice?
A. A duty to maximize personal profit in all transactions
B. A legal obligation to act in the best interests of the client
C. A requirement to disclose only material facts when asked
D. A duty owed only to other real estate agents
Correct answer: B
Rationale: A fiduciary duty requires real estate professionals to
prioritize their client’s interests above their own, including
loyalty, obedience, confidentiality, and full disclosure.
2. In Canadian real estate law, which document typically establishes
the relationship between a broker and a seller?
A. Purchase and Sale Agreement
, B. Mortgage Commitment
C. Listing Agreement
D. Title Certificate
Correct answer: C
Rationale: A listing agreement formally creates the contractual
relationship between a seller and brokerage, defining duties,
commission terms, and authority.
3. What is the primary purpose of FINTRAC regulations in real estate
transactions?
A. To regulate property taxes
B. To prevent money laundering and terrorist financing
C. To set commission rates for agents
D. To determine property values
Correct answer: B
Rationale: FINTRAC ensures compliance with anti-money
laundering laws by requiring reporting of suspicious transactions
and large cash dealings.
4. Which of the following is considered a material latent defect?
A. A visible scratch on flooring
, B. A broken window visible during inspection
C. A hidden structural issue affecting safety
D. A paint color dispute between buyer and seller
Correct answer: C
Rationale: A material latent defect is not discoverable upon
reasonable inspection and significantly affects property value or
safety.
5. A real estate agent must disclose which of the following?
A. Only positive features of the property
B. Any known material latent defects
C. Only information requested by the buyer
D. Personal opinions about market trends
Correct answer: B
Rationale: Agents are legally obligated to disclose known
material latent defects to protect buyers and maintain ethical
standards.
6. What is dual agency in real estate?
A. One agent representing two competing buyers
B. One brokerage representing both buyer and seller in the same
, transaction
C. Two agents representing one buyer
D. Two brokerages sharing commission
Correct answer: B
Rationale: Dual agency occurs when a brokerage represents both
parties, requiring strict disclosure and consent due to conflict
risks.
7. Which governing body regulates real estate professionals in
Ontario?
A. RECO
B. FINTRAC
C. CMHC
D. CRA
Correct answer: A
Rationale: The Real Estate Council of Ontario (RECO) regulates
real estate agents and brokerages under provincial legislation.
8. What is the purpose of a trust account in real estate?
A. To store agent commissions
B. To hold client funds securely until conditions are met
