Humber/Ontario Real Estate Course 4 Exam Practice

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Prepare for the Humber/Ontario Real Estate Course 4 Exam. Test your knowledge with quizzes and gain valuable insights into real estate concepts, regulations, and practices essential for your success in the industry.

Practice this question and more.

In an agreement for a property used for illegal activities, which statement is correct?

The agreement pre-inserts a clause asserting the property has never been used for illegal activities during the seller's occupancy.
The agreement includes a clause requiring buyer and seller initials about previous illegal use.
A clause may state the seller makes no repairs related to illegal activity, selling as-is.
Written disclosure of the current use is mandated in the Title Search clause.
The agreement should include a full repair history submitted by the seller.
The buyer must assume all risk of previous illegal use.

The correct answer is: A clause may state the seller makes no repairs related to illegal activity, selling as-is.

In the context of an agreement regarding a property that has been used for illegal activities, the inclusion of a clause that states the seller makes no repairs related to illegal activity and sells the property "as-is" is significant. This approach indicates that the seller is not liable for any issues arising from the property’s past usage and that the buyer accepts the property in its existing condition without any required improvements or alterations. This clause protects the seller from future claims or obligations regarding the conditions or legal statuses that resulted from the property being used for illicit purposes. It also informs the buyer that they are purchasing the property with full knowledge of its condition and history, and they should conduct their own due diligence regarding any concerns associated with previous illegal activities. The other potential options focus on various other aspects, such as initialing disclosures about prior illegal use, specifics about repair history, or risk assumptions. However, the correct option succinctly captures the essence of the transaction by emphasizing the seller's position of non-responsibility in relation to any existing issues arising from illegal activity, thereby providing clarity to both parties' expectations within the agreement.