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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. A salesperson negotiates the purchase of a retail property for their client, who plans to open a new store at this location. The client asks the salesperson how many parking spots the property will be required to have to meet the zoning requirements. The salesperson replies that the municipality has zoning requirements that set the minimum parking ratio. How will the municipality calculate the parking ratio?

A) The municipality will take the number of available parking spaces and divide it by the projected number of monthly visitors.
B) The municipality will take the number of available parking spaces and divide it by the property's net leasable area.
C) The municipality will take the property's gross leasable area and divide it by the number of available parking spaces.
D) The municipality will take the number of available parking spaces and divide it by the property's gross leasable area.

3. A buyer is purchasing a farm and all the animals are included in the sale price. The buyer is worried the animals could become infected with disease prior to closing, so the salesperson inserts a clause in the agreement of purchase and sale to address that issue. Which of the following should NOT be included in the clause to protect the buyer?

A) State that the seller will continue the day-to-day farm operations until closing.
B) State that the buyer is assuming all animals on an "as is" basis.
C) A condition requiring a check-up of each animal by a predetermined veterinarian during due diligence.
D) The number of animals based on type, gender, and health; if the number is not the same at closing, the price will be adjusted.

4. A buyer has just been approved for a commercial mortgage to purchase a retail strip plaza. They meet with their salesperson to review the mortgage documents. The buyer expresses concern about possible late payments. Which of the following is an accurate statement about provisions in the commercial mortgage documents regarding late payments?

A) The options for late payments are the same for every lender.
B) Each lender has their own method for dealing with late payments.
C) Penalties for late payments will be added to the monthly rent.
D) There are no penalties for late payments in a commercial mortgage.

5. The operating costs of a commercial building are usually higher than those of buildings that do not have any common areas. Common area maintenance (CAM) is referred to as the landlord's operating costs attributable to factors that affect the common areas. Which of the following is NOT one of those factors?

A) Supervision
B) Repairs
C) Depreciation
D) Operations

Solutions: