HUMBER REAL ESTATE - COURSE 1,
MODULE 6: INTRODUCING THE KEY
LEGISLATION & REGULATIONS
What is a contract? - Correct Answers -A legally binding agreement between two or
more persons, competent at law to enter into such agreement, for consideration or
value, to do or refrain from doing something lawful.
True or false? An oral contract for the acquisition or disposition of any interest in the
land is enforceable. - Correct Answers -False. Any contract in real estate is required to
be in writing.
When drafting a contract, what does The Statute of Frauds require? - Correct Answers
-- Must be in writing to be enforceable by law (the only exception is when a contract is
verbal but parties begin to complete the contract, then it could be enforceable)
What is the exception to a "verbal" contract? - Correct Answers -The exception with a
verbal contract is that both parties begin to complete the contract, then it could be
enforceable
A seller and a buyer make a handshake agreement that the buyer will purchase the
seller's property for $200,000 with a $5,000 deposit. The buyer gives the seller a
cheque for $5,000, which the seller cashes. Is this consider a contract? - Correct
Answers -Yes/true The buyer could later be successful in enforcing this contract even
without it being in writing
What must a contract do? - Correct Answers -An agreement must be complete and
accurately describe the subject of the agreement and the parties' intentions to be
considered enforceable.
What is the purpose of the vendors and purchasers act? - Correct Answers -This Act
specifies several rights and obligations that are incorporated into every agreement of
purchase and sale.
What are the contract requirements of The Vendors and Purchasers Act? (6
requirements) - Correct Answers -1. The seller is not bound to produce any abstract of
,title, deed, copy of a deed or other evidence of title except as are in the seller's
possession or control
2. The buyer shall search the title at the buyer's own expense and shall make any
objections in writing within 30 days from making of the contract
3. The seller has 30 days in which to remove any objection made to the title. If the seller
is unable or unwilling and the buyer doesn't waive the request, the seller may cancel the
contract and return any deposit made, but is not otherwise liable to the buyer
4. Taxes, local improvements, insurance premiums, rent and interest shall be adjusted
as at the date of closing
5. The conveyance (legal process of transferring of ownership from one party to
another) shall be prepared by the seller and the mortgage, if any, by the buyer; the
buyer pays for the registration of the transfer/deed and the seller pays for the discharge
of the mortgage
6. The buyer is entitled to possession or the receipt of rent and profits upon the date of
closing the transaction
what does REBBA stand for? - Correct Answers -Real Estate and Business Brokers
Act, 2002
What are the contract requirements of The Real Estate and Business Brokers Act
(REBBA)? - Correct Answers -1. All agreements are reduced to writing at the earliest
opportunity, signed by the brokerage and submitted to the seller or buyer for signature
2. That registrants use their best efforts to ensure that:
(i) all parties to an agreement receive a copy as soon as possible and (ii) ensure that
deposits and other related documents (i.e. notice removing conditions) be delivered in
accordance with the agreement of purchase and sale
What is a representation agreement? - Correct Answers -• Agreements signed between
the brokerage and the seller or buyer
What is a listing agreement? - Correct Answers -Agreements signed between the
brokerage and the seller or the buyer such as a seller or buyer customer service
agreement
What is an agreement of purchase and sale? - Correct Answers -Agreements signed
between the seller and buye
What is an agreement of lease? - Correct Answers -• Agreements signed between a
landlord and a tenant
, What is 'Evidence of a Contract'? - Correct Answers -Since a contract is the legal
relationship created between the parties, the contract document is the written record
and therefore a reflection of the mutual commitment agreed to by the contracting
parties. i.e. A document, such as an Agreement of Purchase and Sale, is evidence of a
contract.
What is "Evidence of a Contract" - Correct Answers -1. A contract is the legal
relationship created between the parties
2. A contract document is the written record therefore reflection of the mutual
commitment agreed to by the contracting parties.
Define the 'Parol Evidence Rule' - Correct Answers -In the determination of contractual
disputes, this rule provides that oral evidence is inadmissible in court to vary or
contradict the terms of a written contract, except in a case of fraud or mistake.
Is oral evidence admissible in court? - Correct Answers -NO. It is inadmissible. Only
exception is in a case of fraud or mistake.
TRUE. In real estate, every party to the contract must agree in writing to any terms or
additions to an agreement. Any changes to the original document need to be agreed to
by the parties and in writing in order to be enforceable. - Correct Answers -True or
false?
What is 'Privity of Contract'? - Correct Answers -The general rule that only parties to a
contract can enforce it or be bound by it.
(i.e. A salesperson signs an agreement as a witness, but because the contract is
between the buyer and seller, only they are privy to the contract.)
What are the essential elements of a contract? - Correct Answers -- Genuine intention
(Both parties must consent to the terms of the contract)
- Lawful object (The contractual arrangement must be lawful)
- Definite & clear (The subject and terms of the agreement must be stated clearly)
- Consideration (Each party must receive something of value)
- Capacity of the parties (The parties entering into a contract must be legally competent
& of sound mind and legal after of majority to make the contract)
- Offer and acceptance (There must be mutual agreement between the parties)
Who is responsible for paying Eric? (Privity of Contract) - Correct Answers -Kara hires
Bob, a contractor, to replace the wiring in her home.
Bob hires Eric, an electrician, as a sub-contractor to do the work. Kara is unhappy with
the progress and quality of the work being done by Eric.
She fires Bob and refuses to pay him.
Eric approaches Kara and demands payment for the work he has completed.
Since Kara did not directly contract Eric, she is not responsible to pay him for his
services.
BOB is responsible.
MODULE 6: INTRODUCING THE KEY
LEGISLATION & REGULATIONS
What is a contract? - Correct Answers -A legally binding agreement between two or
more persons, competent at law to enter into such agreement, for consideration or
value, to do or refrain from doing something lawful.
True or false? An oral contract for the acquisition or disposition of any interest in the
land is enforceable. - Correct Answers -False. Any contract in real estate is required to
be in writing.
When drafting a contract, what does The Statute of Frauds require? - Correct Answers
-- Must be in writing to be enforceable by law (the only exception is when a contract is
verbal but parties begin to complete the contract, then it could be enforceable)
What is the exception to a "verbal" contract? - Correct Answers -The exception with a
verbal contract is that both parties begin to complete the contract, then it could be
enforceable
A seller and a buyer make a handshake agreement that the buyer will purchase the
seller's property for $200,000 with a $5,000 deposit. The buyer gives the seller a
cheque for $5,000, which the seller cashes. Is this consider a contract? - Correct
Answers -Yes/true The buyer could later be successful in enforcing this contract even
without it being in writing
What must a contract do? - Correct Answers -An agreement must be complete and
accurately describe the subject of the agreement and the parties' intentions to be
considered enforceable.
What is the purpose of the vendors and purchasers act? - Correct Answers -This Act
specifies several rights and obligations that are incorporated into every agreement of
purchase and sale.
What are the contract requirements of The Vendors and Purchasers Act? (6
requirements) - Correct Answers -1. The seller is not bound to produce any abstract of
,title, deed, copy of a deed or other evidence of title except as are in the seller's
possession or control
2. The buyer shall search the title at the buyer's own expense and shall make any
objections in writing within 30 days from making of the contract
3. The seller has 30 days in which to remove any objection made to the title. If the seller
is unable or unwilling and the buyer doesn't waive the request, the seller may cancel the
contract and return any deposit made, but is not otherwise liable to the buyer
4. Taxes, local improvements, insurance premiums, rent and interest shall be adjusted
as at the date of closing
5. The conveyance (legal process of transferring of ownership from one party to
another) shall be prepared by the seller and the mortgage, if any, by the buyer; the
buyer pays for the registration of the transfer/deed and the seller pays for the discharge
of the mortgage
6. The buyer is entitled to possession or the receipt of rent and profits upon the date of
closing the transaction
what does REBBA stand for? - Correct Answers -Real Estate and Business Brokers
Act, 2002
What are the contract requirements of The Real Estate and Business Brokers Act
(REBBA)? - Correct Answers -1. All agreements are reduced to writing at the earliest
opportunity, signed by the brokerage and submitted to the seller or buyer for signature
2. That registrants use their best efforts to ensure that:
(i) all parties to an agreement receive a copy as soon as possible and (ii) ensure that
deposits and other related documents (i.e. notice removing conditions) be delivered in
accordance with the agreement of purchase and sale
What is a representation agreement? - Correct Answers -• Agreements signed between
the brokerage and the seller or buyer
What is a listing agreement? - Correct Answers -Agreements signed between the
brokerage and the seller or the buyer such as a seller or buyer customer service
agreement
What is an agreement of purchase and sale? - Correct Answers -Agreements signed
between the seller and buye
What is an agreement of lease? - Correct Answers -• Agreements signed between a
landlord and a tenant
, What is 'Evidence of a Contract'? - Correct Answers -Since a contract is the legal
relationship created between the parties, the contract document is the written record
and therefore a reflection of the mutual commitment agreed to by the contracting
parties. i.e. A document, such as an Agreement of Purchase and Sale, is evidence of a
contract.
What is "Evidence of a Contract" - Correct Answers -1. A contract is the legal
relationship created between the parties
2. A contract document is the written record therefore reflection of the mutual
commitment agreed to by the contracting parties.
Define the 'Parol Evidence Rule' - Correct Answers -In the determination of contractual
disputes, this rule provides that oral evidence is inadmissible in court to vary or
contradict the terms of a written contract, except in a case of fraud or mistake.
Is oral evidence admissible in court? - Correct Answers -NO. It is inadmissible. Only
exception is in a case of fraud or mistake.
TRUE. In real estate, every party to the contract must agree in writing to any terms or
additions to an agreement. Any changes to the original document need to be agreed to
by the parties and in writing in order to be enforceable. - Correct Answers -True or
false?
What is 'Privity of Contract'? - Correct Answers -The general rule that only parties to a
contract can enforce it or be bound by it.
(i.e. A salesperson signs an agreement as a witness, but because the contract is
between the buyer and seller, only they are privy to the contract.)
What are the essential elements of a contract? - Correct Answers -- Genuine intention
(Both parties must consent to the terms of the contract)
- Lawful object (The contractual arrangement must be lawful)
- Definite & clear (The subject and terms of the agreement must be stated clearly)
- Consideration (Each party must receive something of value)
- Capacity of the parties (The parties entering into a contract must be legally competent
& of sound mind and legal after of majority to make the contract)
- Offer and acceptance (There must be mutual agreement between the parties)
Who is responsible for paying Eric? (Privity of Contract) - Correct Answers -Kara hires
Bob, a contractor, to replace the wiring in her home.
Bob hires Eric, an electrician, as a sub-contractor to do the work. Kara is unhappy with
the progress and quality of the work being done by Eric.
She fires Bob and refuses to pay him.
Eric approaches Kara and demands payment for the work he has completed.
Since Kara did not directly contract Eric, she is not responsible to pay him for his
services.
BOB is responsible.
