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Humber College Exam 4: Invigilated Theory Sample Questions:

1. 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?

A) 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.
B) Retail commercial property owners have three types of potential rental income: base rent, additional rent, and percentage rent.
C) 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.
D) 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.

2. Which of the following is NOT determined by zoning bylaws?

A) The amount of rent a building may generate
B) The types of buildings that are permitted in a location, their height, and how they may be used
C) Where buildings and other structures may be located
D) Lot dimensions and parking requirements

3. What is the best indicator of a strong office market?

A) When tenants have lots of options because of the amount of available space at favorable rates
B) The absorption rate, net absorption rate, and rising rental rates
C) The number of free months given to new and renewing tenants by landlords in the office marketplace
D) Low rental rates and many concessions

4. A salesperson is drafting an offer and discussing with the buyer the steps required for due diligencewhen purchasing a commercial condominium unit. All of the steps below are included in due diligence, EXCEPT:

A) Identify third-party professionals
B) Estimate time frames required for due diligence and other offer conditions
C) Gather, organize, and verify all pertinent information
D) Create a business plan

5. A buyer client is interested in purchasing a 30,000 sq. ft. industrial building in an industrial park. The buyer's salesperson drafts an agreement of purchase and sale that includes an environmental site assessment condition that must be met at the buyer's own expense, and to the buyer's satisfaction. Which of the following is NOT an accurate statement regarding the environmental site assessment condition?

A) The environmental site assessment condition makes the offer conditional upon the buyer determining that no limitations or restrictions affecting the continued use of the property exist.
B) The environmental site assessment condition makes the offer conditional upon the buyer determining that the property is free from hazardous conditions or substances.
C) The environmental site assessment condition makes the offer conditional upon all possible court actions regarding environmental matters being thought of and reported.
D) The environmental site assessment condition makes the offer conditional upon the seller delivering documents, records, and reports relating to environmental matters to the buyer upon request.

Solutions: