Humber/Ontario Real Estate Course 1 Exam Practice

Which restraint tool commonly used in real estate transactions allows for the application of direct pressure to a part of the property?

1. Encroachment

2. Easement

3. Lien

4. Restrictive covenant

The correct answer is: Restrictive covenant

The correct choice is a restrictive covenant. This tool is a legally binding statement placed in a property deed to limit how the property can be used or what can be done on it. By setting certain parameters, it directly influences how the property is managed, thus applying "direct pressure" on property owners to comply with the stipulated terms. In contrast, encroachments involve instances where a structure or improvement improperly extends onto a neighboring property, which doesn't exert intentional control over use. Easements allow others to use a part of the property for specific purposes, such as utility access, but they do not impose direct usage restrictions on the property owner. Meanwhile, a lien is an interest in the property typically associated with unpaid debts and serves as a claim rather than a proactive restraint on property use.