Humber/Ontario Real Estate Course 4 Exam Practice

Which condition should a clause contain to address limited property rights due to a municipal bylaw?

1. A declaration that property rights are unaltered.

2. An acknowledgment of restricted rights.

3. A promise to rectify the bylaw issue.

4. An agreement to sell regardless of bylaws.

5. A warranty that rights are unrestricted.

6. An inclusion of unrestricted property rights.

The correct answer is: An acknowledgment of restricted rights.

A clause addressing limited property rights due to a municipal bylaw should include an acknowledgment of restricted rights. This is essential because municipal bylaws can impose specific restrictions on how a property can be used or developed, and it is important for all parties involved to recognize and understand these limitations clearly. By acknowledging the restricted rights, the clause serves to inform and protect both the buyer and the seller, ensuring that there are no misunderstandings or unrealistic expectations about what the property can or cannot be used for. This acknowledgment is particularly important in real estate transactions, as it helps maintain transparency and compliance with local regulations, which may affect the use, resale, or future development of the property. The other options do not appropriately address the need for clarity regarding limitations imposed by bylaws, with some suggesting unfounded guarantees about property rights that may not exist or implying that issues can be fixed without acknowledging their current status.