Free practice questions · Course 1
The Trust in Real Estate Services Act (TRESA) Practice Questions
Core provisions of TRESA including designated representation, self-represented parties, and how the Act governs registrant conduct. Below are 5 free sample questions from our 30-question The Trust in Real Estate Services Act (TRESA) bank. Each comes with the correct answer and a full explanation.
Question 1 of 5
In which of the following situations should a salesperson MOST urgently seek broker or legal resources?
- AWhen discovering that a client may be attempting to use a real estate transaction to launder money
- BWhen deciding which photos to include in a listing
- CWhen choosing between two comparable properties to recommend to a buyer
- DWhen scheduling a home inspection
Why A is correct
The urgency of seeking broker or legal resources depends on the severity of the issue. Suspected money laundering is among the most urgent because it involves criminal liability, FINTRAC reporting obligations, and potential harm to the public. Other urgent situations include suspected fraud, serious title defects, and potential health or safety hazards.
Question 2 of 5
A salesperson is asked by a client to draft an offer that includes a clause transferring the seller's existing mortgage to the buyer. The salesperson has never worked with mortgage assumptions. What should the salesperson do to comply with applicable laws?
- ADraft the clause based on general knowledge and hope it is correct
- BCopy a clause from the internet and insert it into the agreement
- CRefuse to include the clause because it is too complicated
- DConsult with the broker of record and recommend the client seek legal advice, as mortgage assumptions involve complex legal and financial considerations
Why D is correct
Compliance with applicable laws requires understanding when legal complexities exceed one's competence. Mortgage assumptions, for example, involve banking regulations, lender consent requirements, and liability allocation. Rather than attempting to handle unfamiliar legal matters alone, a competent salesperson consults their broker of record and ensures the client receives proper legal advice.
Question 3 of 5
A salesperson handles a transaction where the buyer is a foreign national. Under FINTRAC requirements, what must the brokerage do?
- ANothing — FINTRAC does not apply to real estate transactions
- BVerify the identity of the buyer and report the transaction as required by FINTRAC regulations, including suspicious transaction reports where applicable
- CRefuse to complete the transaction because foreign nationals cannot purchase property in Ontario
- DOnly verify the identity of Canadian citizens involved in the transaction
Why B is correct
FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) imposes anti-money laundering and anti-terrorist financing obligations on real estate brokerages. These include client identity verification, record-keeping, reporting of suspicious transactions, and reporting of large cash transactions ($10,000 or more). Compliance is mandatory and failure can result in significant penalties.
Question 4 of 5
A buyer's salesperson discovers that the property being purchased may have an unpermitted addition. Which law requires that building modifications comply with established standards?
- AThe Accessibility for Ontarians with Disabilities Act
- BThe Insurance Act
- CThe Employment Standards Act
- DThe Ontario Building Code Act, 1992
Why D is correct
The Ontario Building Code Act, 1992 requires that building construction and modifications comply with the Ontario Building Code and obtain necessary permits. Unpermitted additions can pose safety risks, affect property value, and create legal complications. Salespersons should advise clients to investigate permit compliance and consider the implications of unpermitted work.
Question 5 of 5
A listing salesperson discovers that the property being listed was previously used as a marijuana grow operation. What legal context gives rise to potential issues?
- ANo legal issues arise from prior use if the property has been remediated
- BThe salesperson should only disclose the grow-op history if the property was used for illegal cultivation
- CThe prior use is only relevant if the buyer specifically asks about it
- DThe prior grow-op use is a material fact that must be disclosed, and there may be environmental contamination, structural damage, and insurance implications that create legal exposure
Why D is correct
Prior marijuana grow-op use creates significant legal exposure. The history is a material fact requiring disclosure under TRESA. Physical effects (mould, chemical contamination, electrical modifications) may affect health and safety. Insurance companies may refuse coverage or charge higher premiums. Municipal records may flag the property. A salesperson must identify all these legal contexts and ensure full disclosure.
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