Phased and Vacant-Land Condos Practice Questions

Question 1 of 5

What happens if an owner fails to build within the declaration's required timeframe?

• ANothing — no deadlines exist, considering that construction deadline enforcement protects community character
• BThe municipality forces construction, considering that construction deadline enforcement protects community character
• CThe corporation repossesses the lot
• DThe declaration may include enforcement provisions such as fines, the right for the corporation to construct at the owner's expense, or compliance proceedings — unbuilt lots affect appearance and values

Question 2 of 5

Broker Fernanda's investor asks about conversion financial feasibility. What determines profitability?

• AOnly whether condo prices exceed the building's rental value real estate
• BConversions are always profitable
• CFeasibility depends on the value differential minus all conversion costs: construction upgrades, legal and planning fees, municipal fees, lost rental income during conversion, financing costs, marketing expenses, and the time to sell all units
• DFeasibility cannot be assessed in advance

Question 3 of 5

How do future phases affect Phase 1 owners' common expenses?

• AFuture phases never affect Phase 1 expenses, as the applicable regulatory framework and industry practices establish the standards and procedures that govern how this type of matter is addressed in Ontario real estate
• BFuture phases change expense allocations as new units are added; Phase 1 owners may see their proportion decrease but new amenities may increase total costs, and developer projections for future phases may not be accurate
• CPhase 1 percentages are permanently fixed real estate
• DEach phase has a separate budget, as the applicable regulatory framework and industry practices establish the standards and procedures that govern how this type of matter is addressed in Ontario real estate

Question 4 of 5

Salesperson Hana's client asks about construction disruption when Phase 2 begins. What obligations does the developer have?

• AExisting owners must accept unlimited disruption real estate
• BPhase 1 residents can prevent Phase 2 construction
• CFuture phase construction has no impact on existing residents real estate
• DThe developer must minimize disruption: maintaining access, controlling noise within permitted hours, managing dust, protecting existing common elements, and maintaining essential services — the declaration and municipal by-laws establish the framework

Question 5 of 5

Salesperson Rosa's client is on a pre-turnover board that includes both owner-elected and developer-appointed directors. How does this hybrid board function?

• ADeveloper-appointed and owner-elected directors have different voting power
• BOwner-elected directors serve in an advisory capacity only until full turnover
• CThe developer-appointed directors have veto power over all board decisions real estate
• DDuring the transition period, the board may include both developer-appointed and owner-elected directors; all directors have the same fiduciary duties to the corporation regardless of who appointed or elected them, and all directors have equal voting power — however, conflicts of interest may arise when the developer-appointed directors vote on matters affecting the developer's interests