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Mastering Humber College Real Estate Course 3 Additional

Updated: Apr 13

The following outline is designed for Course Number Three in the Humber College Real Estate Sales Program, entitled "Additional Residential Transactions." This guide highlights the primary learning objectives and essential memory points necessary for exam preparation across each topic. When you encounter page references, these correspond to the specific pages in the curriculum where you can find detailed information on each learning objective.



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Humber College Real Estate Course 3 Additional
Humber College Real Estate Course 3 Additional


Humber College Real Estate Course 3 Additional Residential Real Estate Transactions

For a detailed outline of Course Number Three in the Humber College Real Estate Sales Program titled "Additional Residential Transactions," it's crucial to focus on the learning objectives and key memory points, alongside the specific page references to the curriculum for comprehensive exam preparation. Below, you will find a structured approach to understand and remember the essential topics for each section of the course. Humber College Real Estate Course 3 Additional Residential Real Estate Transactions...

Introduction to Additional Residential Transactions

  • Learning Objective: Understand the scope and importance of additional residential transactions in the real estate industry.

  • Memory Points:

  • Diverse types of residential transactions beyond basic buying and selling.

  • Key differences between standard and additional residential transactions.

  • Page References: p.1-5

Advanced Financing Options

  • Learning Objective: Gain insight into various financing methods available for residential real estate transactions.

  • Memory Points:

  • Pros and cons of different financing options.

  • Impact of financing options on buying decisions.

  • Page References: p.6-15

Condominiums and Co-operatives

  • Learning Objective: Learn the specifics of buying and selling condominiums and co-operatives, including legal and financial considerations.

  • Memory Points:

  • Distinctions between condominium ownership and co-operative shares.

  • Understanding of condominium declarations, by-laws, and reserve funds.

  • Page References: p.16-28

Rural Properties

  • Learning Objective: Explore the unique aspects of dealing with rural properties, including zoning, septic systems, and water supply.

  • Memory Points:

  • Key considerations for rural property transactions (e.g., land use, environmental concerns).

  • Importance of due diligence in rural property sales.

  • Page References: p.29-40

Investment Properties

  • Learning Objective: Understand the fundamentals of investing in residential real estate, including analysis and valuation.

  • Memory Points:

  • Techniques for evaluating residential investment opportunities.

  • Understanding cash flow, capital appreciation, and ROI.

  • Page References: p.41-55

Lease Agreements and Landlord-Tenant Legislation

  • Learning Objective: Learn the intricacies of residential lease agreements and relevant landlord-tenant laws.

  • Memory Points:

  • Essential elements of a lease agreement.

  • Rights and responsibilities of landlords and tenants.

  • Page References: p.56-65

Estate Sales and Sales Under Power of Sale

  • Learning Objective: Understand the process and legal implications of estate sales and sales under power of sale.

  • Memory Points:

  • Differences between regular sales, estate sales, and power of sale transactions.

  • Legal requirements and procedural steps for each type of sale.

  • Page References: p.66-75

Ethical and Professional Standards

  • Learning Objective: Emphasize the importance of ethics and professionalism in conducting residential transactions.

  • Memory Points:

  • Key ethical principles in real estate transactions.

  • Professional conduct expected in complex residential transactions.

  • Page References: p.76-85

Preparing for the Exam

  • Learning Objective: Provide strategies and tips for effectively preparing for the course exam.

  • Memory Points:

  • Review techniques focusing on complex transaction types.

  • Importance of understanding legal and financial nuances in additional residential transactions.

  • Page References: p.86-95

For each of these sections, it's important to closely read the referenced pages, take detailed notes, and regularly review and quiz yourself on the material to ensure retention and understanding. Practice applying the concepts through case studies or practice questions if available, focusing on real-life applications of the principles discussed. This approach will not only prepare you for the exam but also enhance your practical knowledge as a real estate professional dealing with a broad spectrum of residential transactions.

Introducing Condominiums

Condominiums are a type of property ownership where individuals own their own living unit (unit) and jointly own the communal spaces (common components) with other condo owners. A condominium company represents the collective interests of its members, and owners and residents must follow the condominium board's regulations and bylaws to protect the corporation's assets.

  • Condominium ownership types

  • Can be leased or freehold

  • Freehold standard: owners own their unit plus a share in the property's common parts, with tenants in common ownership of shared components (no units but shared components like roads and a community centre)

  • Leasehold: a condominium on a plot of land leased for 40-99 years

  • Builder might register the company before building and selling the condo units

  • Built-in rights to establish more units or shared components at a later stage of development within the same condominium organisation

  • Condominium design

  • Units and common elements: the apartment is the owner's solely owned private living area, while elevators, hallways, and gardens are examples of common components

  • Owners split the costs of common element upkeep and repairs

Condominium Law

  • The Condominium Act governs all condo organisations, regulating condominium formation, governance, and bylaws

  • Creates the Ontario Condominium Authority and the Ontario Condominium Management Regulatory Authority

  • Declarant submits a declaration and description with the Land Registry Office to create a Condominium Corp

Condominium Rules

  • The Board of Directors monitors the condominium corporation's affairs and assures compliance with the Condominium Act

  • Creates and enforces condominium regulations and bylaws

  • A condominium manager generally runs the day-to-day operations

  • Rules, bylaws, and shared facilities agreements govern the condominium

Condominium Management Licenses in Ontario

There are two types of condominium management licenses in Ontario: permits for individuals (Transitional General Licence and General Licence) and licenses for condominium management businesses.Humber College Real Estate Course 3 Additional Residential Real Estate Transactions...

Condo Manager Obligations:

  • Cannot work for more than one management business without their prior approval

  • Must carry their most current Certificate of Licensing and present it upon request

  • Must transmit, retain and store records including client files and notifications

(Page 1)

Leases and Rental Units

  • Landlord-tenant contracts are called leases, where the legal owner of the property grants another (tenant) the right to use, possess, and enjoy the property for a set term and consideration

  • Leases can be verbal, written, or inferred by a person's actions (all leases beyond 3 years must be in writing)

  • Lease contract: describes the parties' agreement in advance of drafting a formal leasing agreement

  • Lease Agreement Type: In Ontario, the Residential Tenancy Agreement (Standard Form of Lease) applies to most residential leases

Rent-Related Provisions:

  • Legal rent: the maximum a landlord may demand

  • Maximum rent increase: the greatest percentage increase a landlord may make without consent

  • Rent deposit: any rent deposit must be transferred to the final month's rent

(Page 2)

Tenant Duties and Illegal Acts

  • Tenant duties: pay rent, keep the rental tidy, repair any rental property damage, obey the lease's terms

  • Illegal Tenant Acts: cannot modify the locking mechanism on a rental unit's entrance door without the landlord's approval, cannot be without rent

Rental Unit Types

  • Single-Family Units: detached, semi-detached, and duplex; townhouses and other horizontal multiple housing units; high-rise apartment structures

  • Multi-Family Units: low-rise duplex, triplex, or fourplex; low, mid, or high-rise apartment complexes; condominiums

Primary and Secondary Dwelling Units

  • Primary residence of a property

  • Accessory Dwelling Units (ADUs): self-contained living apartments assembled over a laneway garage, basement apartments, granny flats, in-law apartments, nanny suites

Accessory Dwelling Units (ADUs) and the Law

  • Must meet all zoning, building code, and Ontario Fire Code criteria

  • Allowed in various places, others need a permission or are outlawed, so check zoning restrictions

Shared Utilities and Amenities

  • Validate any shared utility, amenity, or facility limits, usage, and costs (e.g., shared laundry, internet, electricity, gas, water, parking)

  • To be lawful, a secondary unit must meet the Ontario Building Code, Electrical Safety Code, Fire Code, and municipal zoning standards

Municipal Occupancy Standards

  • Specify the maximum number of residents per unit

  • Toronto's maximum person count: a livable room cannot accommodate more than one person per nine square meters of floor space

  • Toronto's minimum room size law: single occupancy rooms need a minimum of six square meters, minimum floor space for two or more people is four square meters, no wall less than two meters long in sleeping rooms

Landlord Termination and Tenant Termination

  • Landlord may only terminate a tenancy for legal grounds, must give written notice to vacate, and file an application with the Landlord and Tenant Board

  • Tenant may terminate lease with 28 days' notice if they fear for their own or a child's safety

Residential Tenancies Act Provisions

  • Landlord must provide the Information for New Tenants pamphlet to new renters

  • Tenant may assign their right to occupy the leased property, landlord may agree or disagree

  • Tenant may sublet their rental unit to another individual with the landlord's consent

The Landlord and Tenant Board

  • Explains the Residential Tenancies Act and resolves most landlord-tenant issues

  • Mediates or arbitrates disputes between landlords and renters, issues final orders

Landlord Obligations for Safety and Maintenance

  • Provide a safe living environment (adequate lighting, clear surroundings, working cameras, secure doors/windows)

  • Maintain necessary smoke alarms, CO alarms, fire safety doors, and equipment

  • Ensure electrical system condition and address hazardous building materials

REBBA Documentation Requirements

  • Disclose your interest in the property in writing as soon as possible and before any offer is made

  • Use the most recent tenancy agreement (Standard Form of Lease)

  • Ensure all advertising laws are followed to prevent prejudice

  • Confirm the landlord has received and is using the required permits

  • Ensure all documents meet legal standards, including the consent clause on rental applications

Third-Party Professional Referrals

  • Suggest at least two distinct third-party professionals to avoid the impression of personal bias

Valuation Methods

This method uses reasoning to arrive at a value estimate. The key steps are:

  • Identify comparable properties within the local market that have been rented close to the evaluation date, targeting the same tenant type, with no one pressuring or coercing the other party (Page 4)

  • Collect detailed data on each comparable property to make significant improvements and really understand them (Page 4)

  • Analyze all relevant data, including the similarities and differences between the comparable and subject properties (Page 4)

  • Adjust each comparable property in relation to the subject property (Page 4)

  • Reconcile the dates and arrive at a final value estimate (Page 4)

Operating Profit

  • Net operating income is calculated by subtracting operating expenditures, vacancy, bad debt, and property taxes from the total revenue (Page 4)

Tips for Landlords Leasing Furnished Units

  • Consider market factors, the pros and cons of furnished flats, insurance requirements, furniture quality, and funding options (Page 4)

  • Short-term rentals like seasonal ski chalets and lakeside cottages are not covered by the Residential Tenancies Act (Page 4)

  • Landlords must correctly describe the extra items and list the furnishings offered when advertising furnished rentals (Page 4)

  • Rent increases are not limited for short-term rentals, but expenses may rise; short-term rentals may be prohibited in some areas (Page 4)

  • Landlords who routinely lease out short-term units are not subject to rent increases and may adjust rates to market demand (Page 4)

  • Short-term rentals have higher costs, shorter lease terms, and different amenity requirements compared to traditional leases (Page 4)

Rights and Obligations of Salespersons in Short-Term Rental Transactions

  • Salespersons may help clients rent short-term accommodations if the company is registered with RECO, TICO, or both (Page 4)

  • Salespersons must clarify their position in the transaction and disclose any fees or remuneration (Page 4)

  • Salespersons must comply with REBBA requirements, including advertising the brokerage's registered name and disclosing fees (Page 4)

  • The Residential Tenancies Act does not apply to ultra-short-term rentals (Page 4)

Condominium Leasing

  • Condominium leasing differs from apartment leasing, as condominium buildings contain both owners and renters (Page 4)

  • Condominium corporations have rules, restrictions, and authorities that landlords and tenants must respect (Page 4-5)

  • Condominium landlords must meet all requirements and limitations before listing their property, such as minimum rental terms and restrictions on use (Page 5)

  • Salespersons can assist landlords and tenants by understanding the proportion of owner-occupied vs. tenant-occupied units, as the lack of pride in ownership may result in reduced maintenance and repair priority (Page 5)

  • Condominium corporations may control the usage of common elements, and tenants must accept and follow these rules (Page 5)

  • The Residential Tenancy Act prohibits landlords from prohibiting pets, but a condominium corporation's rules or declaration prohibiting dogs take priority (Page 5)

Condominium Management

  • Condominium managers must carry their license and present it to anyone who asks (Page 5)

  • Condominium management companies must be insured, and the types of insurance and notification requirements are specified in the Act (Page 5)

  • Annual license renewal is required for condominium managers (Page 5)

Condominium Development and Zoning Regulations

  • The Planning Act governs Ontario's land use planning, and all new condominium developments must obtain the required permissions (Page 5)

  • The Building Code Act governs the construction, renovation, and conversion of structures, and a building permit is required before construction can begin (Page 5-6)

  • Zoning violations can be appealed to the Committee of Adjustment, who may approve minor variances (Page 6)

  • Developers of new-build condos must also fulfill Tarion Warranty Corporation regulations (Page 6)

Buying to Lease

  • Investor-landlords may be ready to buy a unit in a new building based on the floor plans and immediately start leasing it out (Page 6)

  • If leasing a unit during the occupancy term, the developer may need to approve it (Page 6)

  • It is best practice for the landlord to wait until the building has been registered and the title has been transferred before leasing the unit (Page 6)

Insurance Factors

  • The Act does not require landlords to have insurance for leasing or associated situations, but landlords should consider liability, contents, and property insurance coverage (Page 6)

  • Landlords must use fully licensed and insured contractors for any renovations, and the condo corporation's board must also approve (Page 6)

Calculating Rent

  • Condominium landlords must calculate rent to cover all expenses, fixed and variable, and appreciate the necessity of establishing the proper rate from the start, as the RTA limits rent increases (Page 6)

Property Management

  • Individual unit owners who rent their condos typically hire their own condominium property managers (Page 6)

  • If the landlord is a non-resident investor, the property management must retain 25% of rent payments and send them to the CRA monthly before sending the balance to the landlord (Page 6)

Lease Agreements

  • A lease is a contract between two parties to utilize a property in return for a fee, and it must have specific components to be legally enforceable (Page 6)

  • Landlords may request personal and professional references, a credit report, and proof of work and income from prospective tenants (Page 6-7)

  • Lease agreements typically include clauses defining the parties, clauses requiring the parties' input or action, standard clauses, and additional terms (Page 7-8)

  • Amendments, conditional notices, and waivers can be used to modify a lease agreement after it has been signed (Page 8)

Condominium Ownership and Leasing

  • When an owner leases their condo unit, they become a landlord and engage in a landlord-tenant relationship governed by the Residential Tenancies Act (Page 9)

  • Owners must inform the condominium corporation within 10 days after signing or renewing a lease, providing the tenant's information (Page 9)

  • New condominium warranty requirements apply, including deposit protection, delayed occupancy compensation, and coverage for workmanship, materials, and structural issues (Page 9-10)

  • Buyers of new pre-construction condos have a 10-day refund period to cancel their purchase after receiving the fully signed APS or disclosure statement (Page 10)

Condominium Payments and Fees

This section covers the various payments and fees associated with condominium ownership, including monthly upkeep fees, maintenance costs, insurance, and the reserve fund. It explains how these fees are calculated and the importance of understanding the condominium's financial health.

  • Monthly Upkeep Fees

  • Paid by all condominium unit owners

  • Depend on the yearly budget

  • A portion goes to the reserve fund for major repairs and replacements (Page 7)

  • Maintenance Costs (Common Expenses)

  • Also known as common expenditures

  • Paid monthly from the condominium unit owners' fees

  • Used for the general maintenance and upkeep of the building and common areas (Page 7)

  • Liability Insurance

  • Protects the condominium corporation from litigation and covers damage to units and common components (Page 7)

  • Reserve Fund

  • Monies set aside for future major repairs and replacements of common elements and assets

  • Required to be established and funded as soon as the condominium corporation is registered (Page 7)

  • Reserve fund study must be conducted at least every three years by a qualified professional (Page 7)

  • If major repair costs exceed the reserve fund, the board may implement a special assessment (Page 7)

  • Calculation of Maintenance Fees

  • Based on the proportional share in the condominium complex specified in the declaration (Page 7)

  • Calculated as: Budget approved for next year x Percentage of holding title (Page 7)

  • Can also be calculated per square foot: Maintenance fee / Total acreage (Page 7)

Condominium Types and Structures

Description:

This section outlines the different types of condominium structures, including traditional condominiums, common element condominiums, vacant land condominiums, and phased condominiums. It also covers mixed-use buildings and shared facilities agreements.

  • Traditional Condominium

  • A building split into condo apartments

  • Owners have an interest in the common components (Page 7)

  • Common Element Condominium

  • No individual units, just owners' interests in common components

  • Owners share ownership and pay for common element upkeep, repair, and changes (Page 7)

  • Vacant Land Condominium

  • Allows construction and sale of units without completion of all structures

  • Developers can sell land and incorporate before building (Page 7)

  • Phased Condominium

  • Owners own their units

  • Declarant has the freedom to introduce additional units or common parts at a later stage (Page 7)

  • Allows for more creativity in development (