Reference

Ontario Real Estate Glossary: Plain-English Definitions for Buying, Selling, Mortgages and Closing

Real estate in Ontario runs on vocabulary — forms with numbers, acronyms from four regulators, and words like "firm" and "irrevocable" that mean something specific. This glossary defines the terms as they are used in Toronto practice, in the sense that matters to a buyer or seller, with the Act named where the term has a legal definition.

Updated October 22, 2026 · TORE.ca editorial

1. 1.Offers, agreements and representation

   • Agreement of Purchase and Sale (APS) — the contract between buyer and seller (OREA Form 100 freehold / 101 condo). Binding once accepted within the irrevocable period.
   • Amendment (Form 120) — a signed change to an accepted APS: closing date, price, repairs.
   • Assignment — transfer of a buyer’s rights under an APS to a new buyer before closing; common in pre-construction; taxable for HST since May 7, 2022.
   • Bully offer (pre-emptive offer) — an offer submitted before a seller’s scheduled offer date to pre-empt competition. Governed by RECO Bulletin 4.3.
   • Buyer Representation Agreement (BRA, Form 300) — appoints a brokerage to represent the buyer for a term and area.
   • Chattels / fixtures — chattels are movable (appliances, furniture) and go with the seller unless listed as included; fixtures are attached (light fixtures, built-ins) and stay unless listed as excluded.
   • Client / self-represented party — under TRESA, a client is represented by a brokerage and owed fiduciary-type duties; a self-represented party is not represented and receives only information.
   • Comparative Market Analysis (CMA) — an agent’s estimate of value from recent sold comparables; not an appraisal.
   • Condition — a clause making the APS dependent on something (financing, inspection, status certificate); satisfied by a Notice of Fulfillment (Form 124) or given up by a Waiver (Form 123).
   • Counter-offer / sign-back — the seller’s amended version of the buyer’s offer, returned for acceptance within a new irrevocable.
   • Deposit — money paid by the buyer on acceptance (Toronto norm ~5%), held in the listing brokerage’s trust account, credited to the price on closing, forfeited if the buyer fails to close without cause.
   • Designated representation — TRESA’s model (since December 1, 2023): a specific agent, not the whole brokerage, represents you.
   • Escalation clause — an offer term that automatically raises the price above competing offers to a cap; often refused under the blind offer process.
   • Firm — an agreement with no outstanding conditions; both sides are bound to close.
   • Holding offers / offer date — a listing strategy of reviewing all offers on a set date, usually with a below-value list price.
   • Holdover clause — in a representation or listing agreement, a period after expiry during which commission is still owed on a buyer introduced during the term.
   • Irrevocable — the date and time until which an offer (or counter) cannot be withdrawn and may be accepted.
   • Latent / patent defect — a latent defect is hidden and not discoverable by reasonable inspection (seller must disclose if known and dangerous); a patent defect is visible (buyer beware).
   • Listing Agreement (Form 200/201) — appoints the listing brokerage; sets list price, term, commission and holdover.
   • Multiple representation — the old REBBA concept of one brokerage representing both sides; largely replaced by TRESA’s designated representation.
   • Mutual Release (Form 122) — both parties cancel the APS and direct the deposit.
   • Open offer process — the seller’s TRESA election to disclose competing offers’ terms to all bidders; the default is the blind process, where only the number of offers is disclosed.
   • OREA — Ontario Real Estate Association; publishes the standard forms.
   • RECO — Real Estate Council of Ontario; the regulator of brokerages and agents under TRESA.
   • Requisition date (title search date) — the date in the APS by which the buyer’s lawyer must raise title objections.
   • Seller Property Information Statement (SPIS, Form 220) — a voluntary seller disclosure questionnaire; not required in Ontario.
   • Sold conditional / sold firm — MLS status while conditions are outstanding / once they are satisfied or waived.
   • TRESA — Trust in Real Estate Services Act, 2002, in force December 1, 2023; replaced REBBA as the governing statute for real-estate registrants.
   • TRREB — Toronto Regional Real Estate Board; operates the MLS® system for the GTA.

2. 2.Mortgages and qualifying

   • Amortization — the total period over which the mortgage is repaid (25 or 30 years typical). Distinct from the term.
   • Appraisal — a lender-ordered valuation; the lender funds on the lower of price and appraised value.
   • Blend-and-extend — renewing early at a rate blended between the current contract and today’s rate, avoiding a penalty.
   • Bridge financing — a short-term loan covering the gap when you close on a purchase before your sale closes; requires a firm sale.
   • Closed / open mortgage — closed limits prepayment and charges a penalty to break; open can be repaid any time at a higher rate.
   • CMHC / Sagen / Canada Guaranty — the three mortgage default insurers; required under 20% down.
   • Commitment — the lender’s binding approval for a specific property, with conditions.
   • Conventional / high-ratio — 20%+ down (uninsured) / under 20% down (insured).
   • Default insurance premium — 2.80%–4.00% of the loan for insured mortgages, added to the balance; 8% Ontario PST payable in cash on closing.
   • Fixed / variable rate — locked for the term / moves with prime.
   • GDS / TDS — Gross Debt Service (housing costs ÷ gross income; 39% max insured) and Total Debt Service (all debt payments ÷ gross income; 44% max insured); many lenders use 32/40 for uninsured.
   • Insurable — 20–35% down on a home under $1.5M; the lender may insure at its own cost and offer insured pricing.
   • Interest adjustment — interest collected on closing for the days between funding and the first regular payment date.
   • Interest Rate Differential (IRD) — the fixed-rate prepayment penalty based on the gap between your rate and the lender’s current rate for the remaining term; often far larger than three months’ interest.
   • Porting — moving an existing mortgage to a new property to avoid the penalty.
   • Pre-approval — a lender’s non-binding ceiling and rate hold (90–120 days).
   • Prepayment privilege — the annual lump-sum (typically 10–20%) and payment-increase rights in a closed mortgage.
   • Prime rate — the lenders’ benchmark that variable rates are set against; moves with the Bank of Canada policy rate.
   • Refinance — replacing a mortgage before term end to change rate, amount or amortization; capped at 80% of value; always uninsured.
   • Renewal — a new term at term end; switching lenders at renewal carries no penalty.
   • Stress test (minimum qualifying rate) — qualifying at the higher of 5.25% or contract rate + 2%; OSFI B-20 for uninsured, Department of Finance for insured.
   • Term — the length of the current contract with the lender (1–10 years; 5 is standard).
   • Three months’ interest — the standard variable-rate penalty, and the cap on any penalty after five years of a term (Interest Act s.10).

3. 3.Taxes, costs and closing

   • Adjustments / statement of adjustments — the lawyer’s proration of property tax, condo fees, rents and other items to the closing date; produces the balance due on closing.
   • Anti-flipping rule — since January 1, 2023, profit on a residential property held under 365 days is business income (fully taxable) unless a listed life event applies.
   • Capital gain — profit on sale of property that is not your principal residence; 50% included in income.
   • Clearance certificate — CRA confirmation (T2062 for non-resident sellers; TX19 for estates) that tax is settled; without it the buyer or executor withholds or remains liable.
   • Closing / completion date — the day title transfers and funds change hands; a business day.
   • Disbursements — out-of-pocket costs a lawyer pays on your behalf (registration, searches, couriers).
   • Estate Administration Tax — Ontario’s probate fee: nil on the first $50,000, 1.5% above.
   • First Home Savings Account (FHSA) — $8,000/year, $40,000 lifetime, deductible in and tax-free out for a first home.
   • FINTRAC — Canada’s anti-money-laundering agency; brokerages and lawyers must verify ID and record funds under the PCMLTFA.
   • First-time buyer rebates (LTT) — up to $4,000 Ontario and $4,475 Toronto, claimed on closing.
   • Home Buyers’ Amount — a $10,000 non-refundable federal tax credit (worth $1,500) for first-time buyers.
   • Home Buyers’ Plan (HBP) — RRSP withdrawal of up to $60,000 per person for a first home, repaid over 15 years.
   • HST on new homes — 13% on new construction, usually net of rebates in the builder’s price for owner-occupiers; exempt on resale residential.
   • Land transfer tax (LTT) — Ontario’s graduated tax on purchases (0.5%–2.5%); Toronto adds the Municipal Land Transfer Tax (MLTT) at matching rates with higher tiers above $3M.
   • MPAC — Municipal Property Assessment Corporation; sets assessed values (currently on a January 1, 2016 base) for property tax.
   • Non-Resident Speculation Tax (NRST) — 25% of price on residential purchases by foreign nationals, corporations or taxable trustees, province-wide.
   • Principal residence exemption — the capital gain on your designated principal residence is tax-free; the sale must be reported (Schedule 3, T2091) since 2016.
   • Property tax — annual municipal tax = MPAC assessed value × the municipality’s total rate (0.72%–1.58% across the GTA in 2026).
   • Tarion — Ontario’s new-home warranty administrator: deposit protection and 1/2/7-year coverage.
   • Teraview — Ontario’s electronic land registration system, used by lawyers to close.
   • Title insurance — a one-time policy protecting owner and lender against title defects, fraud and some municipal issues.
   • Vacant Home Tax — Toronto’s 3% annual tax on residential units vacant more than six months; annual occupancy declaration required.

4. 4.Condominiums

   • Common elements — everything in a condominium outside the units (halls, roof, amenities); owned by all owners in common. Exclusive-use common elements (a balcony, some parking) are for one unit’s use but still common property.
   • Common expenses (maintenance fees) — the monthly share of operating costs and reserve contributions each unit pays, set by the declaration’s percentages.
   • Condominium Act, 1998 — the governing statute; the Condominium Authority of Ontario (CAO) and Condominium Authority Tribunal (CAT) administer parts of it.
   • Declaration — the condominium’s founding document: unit boundaries, common elements, cost shares; nearly impossible to amend.
   • Disclosure statement — the developer’s pre-construction package that starts the 10-day rescission period (s.73).
   • Interim occupancy — living in a new condo unit before the building registers; monthly occupancy fees are paid to the builder until final closing.
   • Reserve fund — the corporation’s savings for major repairs; a reserve fund study is required at least every three years.
   • Section 98 agreement — required when an owner alters common elements.
   • Special assessment — a one-time levy on all owners when the reserve fund cannot cover a necessary expense.
   • Status certificate — the corporation’s financial and legal snapshot for a unit (s.76; $100; 10 days).
   • Unit — the part you own, defined by the declaration (usually to the interior surfaces of the walls).

5. 5.Tenancy

   • Landlord and Tenant Board (LTB) — the tribunal that decides residential tenancy disputes; only an LTB order enforced by the Sheriff can evict.
   • N-forms — the prescribed notices under the Residential Tenancies Act: N1 rent increase (90 days), N4 non-payment (7-day termination period since September 21, 2026), N9 tenant’s notice (60 days), N11 agreement to end, N12 landlord’s own use (60 days + one month’s rent, or 120 days with no compensation since September 21, 2026).
   • Rent deposit — the only permitted deposit: one rental period, applied to the last month, earning guideline interest.
   • Rent increase guideline — the annual cap for sitting tenants in rent-controlled units (2.1% for 2026); units first occupied after November 15, 2018 are exempt.
   • Residential Tenancies Act, 2006 (RTA) — the statute governing residential landlords and tenants in Ontario.
   • Standard lease — the mandatory government form for residential tenancies since April 30, 2018.
   • Vacant possession — delivery of the property without tenants on closing.

6. 6.Property types and descriptions

   • Assignment sale, pre-construction, resale — see the pre-construction guide.
   • Detached / semi-detached / townhouse (row, freehold or condo) / link — freehold house types; a link shares a foundation or garage wall but not living space.
   • Duplex / triplex / multiplex — legally separate self-contained units in one building; "basement apartment" is a second unit that may or may not be legal.
   • Easement / right-of-way — a registered right for others to use part of your land (a shared driveway, a utility corridor).
   • Freehold / leasehold / co-op / life lease — you own the land and building / you own the building on leased land / you own shares in a corporation that owns the building / you buy the right to occupy for life.
   • Frontage / lot depth — the width of the lot at the street and its depth; the two numbers that drive land value in Toronto.
   • MLS® number — the TRREB listing identifier (e.g., C1234567; the letter is the TRREB district).
   • PIN — Property Identification Number in the Ontario land registry; condo units, parking and lockers each have their own.
   • Power of sale — a lender’s sale of a defaulted property under the mortgage, without a court order; distinct from foreclosure.
   • Survey — a surveyor’s drawing of lot boundaries and structures; often replaced by title insurance in resale transactions.
   • TRREB districts (C01, E01, W01…) — the community codes TRREB uses in place of neighbourhood names; TORE.ca neighbourhood pages map to them.
   • Zoning — the municipal by-law governing permitted uses and building envelope; relevant to additions, basement apartments and laneway/garden suites.

Definitions follow the statutes named in each entry — Trust in Real Estate Services Act, 2002; Condominium Act, 1998; Residential Tenancies Act, 2006 (as amended effective September 21, 2026); Land Transfer Tax Act; Income Tax Act; Interest Act; Estate Administration Tax Act, 1998; Assessment Act; Proceeds of Crime (Money Laundering) and Terrorist Financing Act; Ontario New Home Warranties Plan Act — and OREA standard form numbering. Figures (rebates, limits, rates) are current as of the publication date and are cross-referenced to the detailed TORE.ca guides, where sources are cited in full.