PREX-1060A Humber College Exam 4: Invigilated Theory Exam exact Exam Questions

Exam 4: Invigilated Theory Exam

Last Update 7 hours ago Total Questions : 120

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Question # 11

A salesperson must ensure that a buyer client is aware of all revenue sources and expenses related to the property they are interested in purchasing. Which of the following is an accurate statement regarding potential revenue sources for a commercial property?

Every commercial property, whether an office building, an industrial property, a retail property, or land, has a single source of revenue, which is the base rent.

Shopping centres with more than 150 stores typically have only two types of rental revenues to cover all the operating expenses of the property: base rent and additional rent.

Retail commercial property owners have three types of potential rental income: base rent, additional rent, and percentage rent.

Commercial office owners have only one type of potential rental income, which is percentage rent, as the owner themselves pay for the operating expenses of the property.

Question # 12

A salesperson is representing a buyer client in the purchase of a fully tenanted mixed-use building. The agreement of purchase and sale will be in the name of a corporation owned by the buyer and several other shareholders. Which of the following statements is correct regarding the signing of this agreement of purchase and sale?

The general partner of the company must sign and date below the printed name of the limited company.

The buyer must sign and date below the printed name of the corporation.

An authorized signing officer of the company must sign and date over the words: "I have authority to bind the corporation" and below the printed registered name.

A major shareholder of the company must sign and date over their printed name.

Question # 13

Asset sale and share sale are two different ways to sell a business. Which statement describes an asset sale?

The buyer replaces the seller as the owner of the corporation.

The buyer assumes all assets and accepts all liabilities of the business.

The buyer is eligible for tax deductions and benefits by claiming capital cost allowance on depreciable property.

The seller benefits from a tax standpoint since any gain to the seller on the sale will be considered under the capital gains tax exemption.

Question # 14

A salesperson sells an office building using the Commercial Agreement of Purchase and Sale along with a schedule that lists all the fixtures, chattels, and rental items of the office building. After closing the real estate transaction, a dispute arises between the seller and the buyer about which chattels, fixtures, and rental items of the office building were to be included and which were to be excluded. Which of the following is NOT an accurate statement regarding the salesperson's actions related to negotiating chattels, fixtures, and rental items?

The salesperson should clearly list all rental items and service contracts, as these will not be included in the purchase price of the real property being purchased.

The salesperson should specifically exclude all fixtures that are not a part of the transaction since fixtures are considered a part of the property and are normally included in the purchase price.

The salesperson should clearly describe and list the fixtures and chattels in the Agreement of Purchase and Sale and mark each item as an exclusion or inclusion.

The salesperson should specifically exclude all chattels that are not a part of the transaction since chattels are considered a part of the property and are normally included in the purchase price.

Question # 15

An agreement of purchase and sale for an industrial building is accepted conditional on financing with the expiry date of May 14. On May 11, the bank informs the buyer the mortgage cannot be approved until May 17. The salesperson for the buyer then prepares an amendment to the agreement of purchase and sale for the extension of the condition. Which of the following is NOT correct?

The buyer can use the same amendment to ask for a change of the closing date.

The buyer can still waive the condition before the expiry date if the seller refuses to sign the amendment, provided there is a waiver provision in the condition.

The salesperson should prepare the amendment with midnight, May 17 as the irrevocable time.

To play it safe, the salesperson should amend the condition with May 18 as the expiry date.

Question # 16

While preparing to list a vacant retail site that allows new auto sales, the salesperson sees that there is an auto repair garage business next door with old and rusting metal storage tanks at the side of their building. Which of the following is the correct action for the salesperson to take?

The salesperson should attempt to identify signs of contamination on the property and recommend an appropriate third-party expert to the seller client.

The salesperson should include the information in the marketing material as it would be beneficial for an auto sales business to have a garage located nearby.

The salesperson should ask the owner of the garage for more information and what course of action they recommend to assist a future purchaser of the site.

The salesperson should ask the owner of the garage whether they have thought about selling their property at this time.

Question # 17

A buyer looking for an industrial property tells the salesperson that on-site trailer storage space is an important feature. What is a reason on-site trailer storage might be important for the buyer's industrial business?

Businesses need to transport materials to and from the site.

Outgoing trucks could have difficulty if there is a lack of on-site trailer storage.

Some trucks may need to park on the property overnight.

Incoming trucks could have difficulty if there is a lack of on-site trailer storage.

Question # 18

Which of the following accurately describes a landlord's commercial property insurance coverage?

A landlord's commercial property insurance policy should cover the loss of the property's equity due to a change in market conditions or to a recession.

A landlord’s commercial property insurance policy should cover the loss of the tenant’s assets and income due to business interruption as the result of a fire or flood.

A landlord’s commercial property insurance policy should cover the loss of rental income in the event of a fire, for the period the premises is vacant while repairs are made.

A landlord's commercial property insurance policy should cover the loss of the tenant's assets due to theft from their employees or third parties.

Question # 19

Utility requirements are different for retail, office, and industrial properties, and a salesperson should understand the utility needs of each client. Which of the following items is NOT required by a typical occupant of a retail space?

A stable internet connection

Sufficient lighting

A high voltage and ampere supply

A proper ventilation system

Question # 20

A salesperson is helping a buyer client to purchase a piece of vacant land to develop in the future. The salesperson recommends that the buyer consult with a third-party professional because the salesperson cannot provide the service with reasonable knowledge, skill, judgment, and competence. Which of the following is NOT a professional the salesperson would likely recommend to the buyer?

A consultant in a financial institution

A zoning specialist in the city's planning department

An appraiser with Accredited Appraiser Canadian Institute (AACI) designation

A legal consultant who specializes in evicting residential tenants