Humber/Ontario Real Estate Course 4 Exam Practice

An owner of a rural 15-acre parcel wants to sell a 5-acre lot within that parcel. Which statement is correct?

1. The lot can be sold provided the municipality is notified once the sale closes.

2. The owner cannot draft an agreement because the lot does not currently exist.

3. Rural lots under six acres are exempted from the Planning Act.

4. The agreement can be conditional upon receiving planning consent.

5. The owner must first obtain approval from provincial authorities for the sale.

6. New rural lots of any size require municipal approval prior to sale.

The correct answer is: The agreement can be conditional upon receiving planning consent.

The correct statement is that the agreement can be conditional upon receiving planning consent. In many jurisdictions, including Ontario, selling a portion of a larger parcel of land often requires that the new lot complies with local zoning and planning regulations. This means that, before the sale can be finalized, the seller needs to obtain the necessary permissions from municipal planning authorities. By making the agreement conditional upon receiving this planning consent, the seller ensures that they are legally able to subdivide the land and proceed with the sale. Regarding the other statements, they reflect misunderstandings about zoning and planning laws. For instance, simply notifying the municipality after the sale closes does not fulfill the requirement for planning permission that is often necessary before determining new lot lines. Drafting an agreement for the sale of the land is possible even if the lot hasn't been officially defined yet, and exemptions related to rural lots under a certain size typically depend on local regulation rather than a blanket exemption from the Planning Act. Moreover, while recent legislation does require many new lots to receive municipal approval, it might not apply to all sizes or specifically the conditions of subdividing existing larger lots. Therefore, prior approval is often a key step which aligns with the notion of conditional agreements.