Humber Real Estate Course 3 Exam Questions: Additional Residential

Course 3: Additional Residential Real Estate Transactions is the third course in the Humber Real Estate Salesperson Program. It builds on the foundation of Course 2 by introducing property types and transaction scenarios that do not follow the standard residential playbook. Condominiums, new construction homes, rural properties, and situations involving complex offer conditions all appear here.

Students who found Course 2 manageable sometimes stumble on Course 3 because each property type comes with its own legislation, documents, and procedures. A condominium purchase involves the Condominium Act. New construction involves Tarion warranty. Rural properties involve well and septic considerations. You need to keep these distinct while also understanding when they overlap.

Key Takeaways

• Course 3 covers condominiums, new construction (Tarion warranty), rural properties, complex offer conditions, title issues, and landlord-tenant considerations under the Residential Tenancies Act.
• The exam format is identical to Courses 1 and 2: 50 MCQs, 2 hours, 75% to pass.
• Condo status certificates, Tarion warranty coverage, and the Residential Tenancies Act are the three topics that trip up the most students.
• Course 3 questions are more scenario-based than Course 1 and comparable to Course 2 in difficulty.
• ExamAce offers Course 3 practice questions aligned with the current TRESA-based curriculum.

Course 3 Topics in Detail

Condominium Transactions

Condominium purchases are structurally different from freehold transactions. Course 3 covers:

• The Condominium Act — the provincial legislation that governs condo corporations, common elements, unit boundaries, and owners' rights
• Status certificates — the critical document that reveals a condo corporation's financial health, reserve fund status, pending lawsuits, and special assessments. Buyers must understand what to look for and what red flags mean.
• Reserve fund studies — how they work, what they indicate about future maintenance costs, and when a deficient reserve fund should raise concern
• Condo fees (common expenses) — what they cover, how they are calculated, and how increases affect buyers
• Condo rules and declarations — restrictions on use, pets, rentals, and renovations that differ from freehold ownership
• Common elements and exclusive-use common elements — understanding what the buyer actually owns versus what they share

Why it trips students up: The status certificate is dense and contains financial, legal, and operational information. Exam questions often present a scenario where something in the status certificate should raise a concern, and the registrant needs to identify it.

New Construction

Buying a newly built home from a builder involves different agreements, protections, and risks than a resale purchase.

• Builder agreements — how they differ from the standard resale APS
• Tarion Warranty Corporation — Ontario's new home warranty program. Coverage includes:
• - Deposit protection (up to $100,000 in most cases)
• - One-year warranty on defects in workmanship and materials
• - Two-year warranty on specific systems (water penetration, electrical, plumbing, heating)
• - Seven-year warranty on major structural defects
• Interim occupancy — the period between when the buyer moves in and when the unit is officially registered (common in new condos). The buyer pays occupancy fees but does not yet own the unit.
• Delayed closing and compensation — what happens when the builder cannot deliver on time
• Pre-delivery inspection (PDI) — the walkthrough process before taking possession

Why it trips students up: Tarion warranty periods and coverage tiers are specific and testable. Students confuse the one-year, two-year, and seven-year warranties or mix up what each covers.

Rural Properties

Rural real estate introduces considerations that simply do not exist in urban transactions.

• Private wells — water quality testing, flow rate, and the obligation to disclose known issues
• Septic systems — types of systems, inspection requirements, and the impact of a failed septic on a transaction
• Zoning in rural areas — agricultural zoning restrictions, minimum lot sizes, and limitations on use
• Environmental considerations — contaminated soil, former agricultural use, and proximity to protected areas
• Access issues — not all rural properties have direct road access. Easements and rights-of-way become critical.
• Survey and boundary issues — rural lots are more likely to have disputed or unclear boundaries

Why it trips students up: Students from urban backgrounds often underestimate the depth of rural-specific content. Well and septic questions alone can account for several exam marks.

Complex Offer Conditions

Course 3 expands on the standard conditions covered in Course 2:

• Sale of buyer's property — drafting and managing a conditional offer that depends on the buyer selling their current home
• Financing conditions — more complex financing scenarios including private lending, vendor take-back mortgages, and financing contingencies on unusual property types
• Inspection conditions — what happens when the inspection reveals problems, and the registrant's obligations in advising the client
• Escape clauses — provisions that allow one party to continue marketing the property while conditions are outstanding

Title Issues and Title Insurance

• Common title defects — encroachments, easements that were not disclosed, liens, unpaid property taxes
• Survey issues — when a survey reveals problems that affect the transaction
• Title insurance — what it covers, what it does not cover, and when it is a substitute for a survey
• How title issues affect closing — registration delays, holdbacks, and vendor obligations

Landlord-Tenant Considerations

When a property being sold has existing tenants, the Residential Tenancies Act (RTA) adds a layer of complexity.

• Tenant rights on sale — tenants cannot be evicted simply because the property changes hands
• N12 notice — the notice a new owner must give if they intend to move into the unit themselves
• Vacant possession vs. existing tenancy — how this affects the APS and closing
• Above-guideline rent increases — what buyers need to know about inherited tenancies
• Deposit handling — how tenant deposits are handled during a sale

Key Areas That Trip Students Up

1. Condo Status Certificates

The exam expects you to read a status certificate scenario and identify problems. Common red flags include:

• A reserve fund that is significantly below the amount recommended by the reserve fund study
• Pending litigation against the condo corporation
• Special assessments that have been proposed or levied
• Insurance coverage that is inadequate or has exclusions
• Rules that conflict with the buyer's intended use (e.g., no short-term rentals)

2. Tarion Warranty Coverage

Memorize the three warranty tiers and what each covers. A common exam question provides a defect and asks which warranty period applies. For example:

• A leaky basement discovered 18 months after closing: covered under the two-year warranty (water penetration)
• A crack in the foundation wall discovered 5 years after closing: covered under the seven-year warranty (major structural defect)
• Poorly installed kitchen cabinets discovered 10 months after closing: covered under the one-year warranty (workmanship and materials)

3. Residential Tenancies Act Basics

You do not need to be an RTA expert for Course 3, but you need to understand the basics of how existing tenancies affect a real estate transaction. The most commonly tested points:

• A tenant's lease survives the sale of the property
• The new owner steps into the landlord's shoes with all existing obligations
• An N12 notice for personal use requires proper notice periods and good faith
• The buyer cannot require the seller to evict tenants before closing unless this is a condition in the APS

Sample Question

Question:

A buyer is purchasing a resale condominium. The buyer's registrant obtains the status certificate and reviews it. The status certificate reveals that the reserve fund currently holds $150,000, but the most recent reserve fund study recommended a balance of $500,000. There are no special assessments currently planned. What should the buyer's registrant advise?

A) The condo is in good financial shape because there are no special assessments planned.

B) The reserve fund shortfall is a significant concern and the buyer should factor in the possibility of a special assessment or increased condo fees in the near future.

C) The reserve fund balance is irrelevant because the condo corporation can always borrow money to cover major repairs.

D) The buyer should proceed with the purchase because reserve fund studies are only estimates and rarely accurate.

Answer: B

Explanation: A reserve fund that holds only 30% of the recommended amount is a significant red flag. Even though no special assessment has been formally planned, the shortfall makes one likely when major repairs or replacements are needed. The buyer's registrant has an obligation to highlight this concern so the buyer can make an informed decision. Dismissing the shortfall (A, C, D) would be a failure to advise the client properly. This is exactly the type of status certificate analysis question that appears on the Course 3 exam.

Study Strategies for Course 3

Organize by Property Type

Create separate study sections for condos, new construction, and rural properties. Each has its own legislation, documents, and procedures. Keeping them separate in your notes prevents confusion on the exam.

Make a Tarion Cheat Sheet

Create a one-page reference with all Tarion warranty tiers, coverage periods, deposit protection limits, and claim procedures. Review it regularly until you can recite it from memory.

Read an Actual Status Certificate

If you can access a sample status certificate (many are available online or through your course materials), read it cover to cover. The exam tests your ability to extract relevant information from this document, and familiarity with its structure helps enormously.

Review Course 2 APS Skills

Course 3 builds directly on Course 2's APS content. If you are weak on the standard APS, review that before trying to learn the variations and additional conditions introduced in Course 3.

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ExamAce is not affiliated with RECO, Humber Polytechnic, Algonquin College, Fleming College, or Career College Group. Practice questions are original content created for educational purposes.

Preparing for the Course 3 exam? ExamAce practice questions for Course 3 cover condos, new construction, rural properties, and every other topic — with detailed explanations for every answer.

Related on ExamAce

• Humber Real Estate Salesperson Program overview — full program structure and timeline
• Simulation 1 exam tips — what comes next after Course 3
• Course 3: Additional Residential practice bank — practice questions for condos, new construction, and rural properties