100% Canadian Created
Reference
Ontario Real Estate Glossary
Plain-English definitions of the terms tested on the Humber pre-registration courses, the broker program, and continuing education. Each entry links to the course where the topic is covered and the practice questions to drill it.
A
Agency Relationships
The legal and ethical structure governing how a real estate registrant represents a client. Under Ontario's TRESA, agency takes specific forms — seller representation, buyer representation, multiple representation, and designated representation — each with distinct fiduciary duties.
Agreement of Purchase and Sale
The legally binding contract under which a buyer and seller agree to a real estate transaction in Ontario, capturing price, deposit, conditions, irrevocability, and closing terms. The standard residential APS is OREA Form 100.
C
Cap Rate
Capitalization rate — the ratio of a commercial property's annual net operating income to its purchase price. Cap rates are how investors compare income properties and benchmark expected returns.
Caveat Emptor
Latin for 'let the buyer beware': the common-law principle that a buyer of real estate is responsible for inspecting and confirming the property's condition, subject to the seller's narrow duty to disclose latent defects.
Chattels vs Fixtures
Chattels are movable items of personal property (fridge, washer, dryer, microwave) that do not stay with the property unless specifically included in the Agreement of Purchase and Sale. Fixtures are items attached to the land or building that stay with the property by default unless specifically excluded.
Closing Costs (Ontario)
The fees, taxes, and adjustments a buyer pays on top of the purchase price when an Ontario real estate transaction completes. Typically 1.5% to 4% of the price, comprising land transfer tax, legal fees, title insurance, adjustments, and disbursements.
Common Elements (Condo)
The shared portions of an Ontario condominium property (hallways, lobbies, elevators, structural components, mechanical systems, amenities, and grounds) owned collectively by all unit owners as tenants in common, governed under the Condominium Act, 1998.
Conditional Offer
An Agreement of Purchase and Sale that includes one or more conditions (financing, inspection, status certificate review) that must be fulfilled or waived within a stated period before the offer becomes binding. The buyer can walk away if a condition fails, with deposit returned.
Condo Status Certificate
The same disclosure package as an Ontario status certificate. Long-tail variant of the term. See the canonical /glossary/status-certificate for full coverage.
CREA
The Canadian Real Estate Association: the national trade association that owns the Realtor® trademark, operates Realtor.ca, and represents real estate boards across Canada. CREA is not a regulator.
D
Debt Service Ratio
A lender's calculation of how much of a borrower's gross income goes to housing costs (GDS) and total debt obligations (TDS). Canadian lenders use these ratios to qualify mortgage applicants.
Designated Representation
A TRESA-era arrangement in which an Ontario brokerage assigns specific registrants to represent specific clients, allowing one brokerage to represent both the buyer and seller in a transaction without the brokerage itself being in multiple representation. Each designated registrant owes their assigned client full client-level duties.
E
Easement
A non-possessory right granted to one party to use a portion of another party's land for a specific purpose, registered on title and binding on future owners.
Encroachment
An unauthorized intrusion by one property onto a neighbouring property: a fence, deck, eaves, driveway, or structure that crosses a registered boundary line.
Errors and Omissions Insurance
Mandatory professional liability insurance carried by every Ontario real estate brokerage and registrant under TRESA, covering claims arising from negligent acts, errors, or omissions in the course of practice. Provided through RECO's insurance program.
L
Land Transfer Tax (Ontario)
A provincial tax payable by the buyer on the closing of any Ontario real estate purchase, calculated as a marginal rate on the purchase price. Toronto purchases also pay a separate Municipal Land Transfer Tax with similar brackets.
Latent Defects
Hidden defects in a property that are not discoverable on a reasonable inspection but that the seller knows or ought to know about. Sellers have a duty to disclose latent defects that make the property dangerous or unfit for habitation, and the duty overrides the default caveat-emptor rule.
M
Minor Variance
A small permitted deviation from a municipality's zoning by-law, granted by the local Committee of Adjustment under section 45 of the Ontario Planning Act. Allows a property owner to vary specific zoning requirements (setbacks, height, lot coverage) without amending the by-law itself.
Misrepresentation
A false statement of material fact that induces a party to enter into a real estate contract. Under Ontario law, misrepresentation can be innocent, negligent, or fraudulent — and each type carries different remedies.
Mortgage Types
The categories of residential mortgage available in Ontario — fixed vs variable rate, open vs closed, conventional vs high-ratio, and specialized products like HELOCs and reverse mortgages. Each carries different risk and flexibility profiles.
Multiple Representation
When one Ontario brokerage represents more than one party in the same transaction, most commonly the buyer and seller. Permitted under TRESA only with informed written acknowledgment from every represented party. Often called 'double ending'.
P
Patent Defects
Visible flaws in a property that a reasonably prudent buyer would discover on a normal inspection: cracked tiles, peeling paint, broken windows, sagging gutters. Sellers do not have a duty to disclose patent defects under Ontario's caveat emptor rule, though they cannot actively conceal them.
Personal Real Estate Corporation
A Personal Real Estate Corporation (PREC) is a single-shareholder corporation through which an Ontario real estate registrant can receive commission income, available since October 2020. The PREC structure allows access to the small-business corporate tax rate and limited income-splitting through non-voting family shareholders.
PREC Ontario
Personal Real Estate Corporation in Ontario: a single-shareholder corporation through which a registered salesperson or broker can receive commission income. Long-tail variant of personal-real-estate-corporation; see the canonical entry for full coverage.
R
REBBA
The Real Estate and Business Brokers Act, 2002: the predecessor legislation that regulated Ontario real estate trading from 2006 until December 1, 2023, when it was renamed and replaced in full effect by the Trust in Real Estate Services Act (TRESA).
REBBA 2002
The Real Estate and Business Brokers Act, 2002: Ontario's predecessor real estate legislation, in force from 2006 until renamed to TRESA on December 1, 2023. Long-tail variant; see /glossary/rebba for the full historical context.
RECO
The Real Estate Council of Ontario: the provincial regulator that administers the Trust in Real Estate Services Act, registers brokerages and registrants, runs the discipline process, and operates the mandatory insurance program.
Reserve Fund (Condo)
A mandatory savings account every Ontario condominium corporation must maintain to pay for major repairs and replacements of common elements. Funded by a portion of monthly common-element fees and governed by section 93 of the Condominium Act, 1998.
Right of First Refusal
A contractual clause giving a specific party (often a tenant, family member, or condo neighbour) the right to match any bona fide third-party offer to purchase a property before the owner can sell to that third party. Triggered when a bona fide offer is received.
T
Tarion Warranty
Mandatory new-home builder warranty coverage in Ontario, regulated by the Tarion Warranty Corporation under the Ontario New Home Warranties Plan Act.
Title Insurance (Ontario)
A one-time premium insurance policy that protects an Ontario property owner and their lender against losses arising from defects in the title, undisclosed encumbrances, fraud, and certain off-title issues. Standard coverage is roughly $300-500 for a typical residential purchase.
TRESA
The Trust in Real Estate Services Act, 2002: Ontario's consumer protection legislation governing real estate trading. Came fully into force April 1, 2023, replacing the Real Estate and Business Brokers Act (REBBA).
W
What is RECO?
RECO is the Real Estate Council of Ontario, the provincial regulator that administers TRESA, registers brokerages and registrants, and runs the discipline process. Long-tail variant. See /glossary/reco for the full definition.
What is TRESA?
TRESA is the Trust in Real Estate Services Act, 2002: Ontario's consumer-protection legislation governing real estate trading, in full force since December 1, 2023. Long-tail variant of /glossary/tresa.