In Ontario, a buyer's final walk-through the day before closing reveals substantial storm damage to the house that occurred after the home inspection. The deal uses the standard OREA Agreement of Purchase and Sale. What are the buyer's options under its insurance clause?
Correct Answer
D) Terminate and recover the deposit, or close and take the insurance proceeds
The insurance clause of the standard OREA Agreement of Purchase and Sale keeps the buildings at the seller's risk until completion. If there is substantial damage, the buyer may either terminate the agreement and have all money paid returned, or take the proceeds of the seller's insurance and complete the purchase. Any other arrangement, such as a delay or price reduction, needs both parties to agree.
Why This Is the Correct Answer
This is correct because the standard OREA agreement leaves the property at the seller's risk until completion and gives the buyer, on substantial damage, a choice: terminate and recover all money paid, or take the insurance proceeds and close.
Why the Other Options Are Wrong
Deep Analysis of This Residential Trading Question
Background Knowledge for Residential Trading
Memory Technique
Exam Tip for Residential Trading
Real World Application in Residential Trading
Common Mistakes to Avoid on Residential Trading Questions
Key Terms
More Residential Trading Questions
What does a condition precedent in an offer to purchase allow the buyer to do?
What is the primary purpose of a buyer representation agreement in residential real estate transactions?
Which residential property type typically offers individual ownership of the unit plus a share in common elements?
What is the primary benefit of title insurance for residential property buyers?
In an Ontario resale offer, how long is the period for fulfilling or waiving a financing or inspection condition?
- → A buyer's lawyer requests a status certificate and pays the fee on May 1. The corporation never delivers it. After closing, the corporation claims the seller owed $3,000 in common expense arrears and demands it from the buyer, who relied on the silence. What is the effect under s. 76 of the Condominium Act, 1998?
- → A status certificate delivered to a buyer omits a $4,000 special assessment that the board levied against the unit after the current budget date to increase the reserve fund. The buyer relied on the certificate and closed. Under the Condominium Act, 1998, what is the result?
- → A seller's salesperson is estimating the buyer's costs of reviewing an Ontario condominium unit's status certificate. What is the most the corporation may charge for providing the certificate?
- → A listing salesperson expects offers next week on a resale condominium unit and knows buyers will want the status certificate. By when must the corporation give a status certificate once it is requested?
- → An investor buyer wants to know how many units in a condominium building were rented last year before making an offer. Which document must state the number of units for which the corporation received lease notices during the preceding fiscal year?
- → What is the most common type of residential property ownership in Canada?
- → A buyer reviewing a status certificate asks what the condominium's reserve fund may be spent on. Under the Condominium Act, 1998, what is the permitted purpose?
- → An established Ontario condominium corporation completed its most recent reserve fund study in 2024. Under O. Reg. 48/01, when must it complete its next reserve fund study?
- → A buyer's status certificate shows that the corporation received a new reserve fund study two months ago, and the board has not yet sent owners anything about it. What does the Condominium Act, 1998 require of the board?
- → The seller of a condominium unit got board approval and signed a registered s. 98 agreement with the corporation to install a hot tub on her exclusive-use terrace, taking on its repair and insurance costs. How does that agreement affect the buyer?
People Also Study
Real Property Law
60 questions
Contracts & Agreements
60 questions
Agency & Professional Ethics
60 questions
Mortgage & Real Estate Finance
60 questions
Related Study Resources
Helpful Resources
Previous Question
A buyer closes on a six-unit apartment building in which every unit is leased to a tenant. Under the Residential Tenancies Act, 2006, what happens to the existing tenancies on closing?
Next Question
A buyer who is not a first-time buyer purchases a single-family home in the City of Toronto for $800,000. What is the total land transfer tax payable (Ontario plus Toronto municipal)?