Humber College PREX-1060A Exam 4: Invigilated Theory Exam Exam Practice Test

An ESA is intended to determine if a property has been contaminated or is facing any environmental threats.

Every new commercial property must undergo an ESA prior to construction.

ESAs are regulated under the Canadian Environmental Protection Act.

Local building departments use ESAs as the basis for changes to municipal zoning bylaws.

Net lease

Percentage lease

Gross lease

Triple net lease

Zoning bylaws specify the permitted land uses throughout a municipality.

Municipal zoning bylaws overrule all other laws with respect to land uses and issuance of building permits in Ontario.

New commercial construction and redevelopment must comply with zoning bylaws.

Municipalities have zoning bylaws that divide the city into different land uses or zones.

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.

Verify if there are any non-competition provisions that need to be satisfied as set out in thecondominium rules or bylaws.

Ensure there is parking and repair space available for commercial trucks.

Confirm that the contract of the condominium property management company has been renewed for at least 10 years.

Obtain the existing status certificate from the brokerage to verify all restrictions, including shared premises with other businesses in the commercial condominium.

Energy efficiency

Innovative elements

Sustainability

Vacancy rate

$80,000

$60,000

$120,000

$130,000

The appraiser will research similar buildings, as commercial properties are usually bought and sold on a dollar value per square foot.

The appraiser will assess how convenient it is to access the building and whether customers would be required to walk a significant distance within the mixed-use commercial complex to find a retailer.

The appraiser will assess the layout of the complex, as it will directly establish the utility of the mixed-use building.

The appraiser will research the layout of other types of commercial buildings to establish the utility of the mixed-use building.

The options for late payments are the same for every lender.

Each lender has their own method for dealing with late payments.

There are no penalties for late payments in a commercial mortgage.

Penalties for late payments will be added to the monthly rent.

Agrees to pay additional rent for a gross lease.

Cannot withhold rental payments even if the landlord does not comply with their obligations under the lease.

Agrees to pay any percentage rent a landlord demands, regardless of sales revenue.

Cannot pay rent to the property manager and must pay directly to the property owner.

The tenant's signage must be approved by the municipality and the landlord, and all associated costs shall be paid by the landlord.

The tenant's signage is considered a trade fixture and shall remain the tenant's property.

The tenant's signage shall be immediately removed at the end of their lease term(s) at the tenant’s expense.

The tenant's signage, from approvals to installation and ongoing maintenance, shall be at thetenant's own expense.

The Board can order farmers to cease practices that cause disturbances if they are not considered to be normal farm practices.

The Board can conduct hearings that are heard by a minimum of five board members.

The Board can order farmers to modify practices for consistency with normal farm practices.

The Board can dismiss complaints if the disturbances are the result of normal farm practices.

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 haveauthority to bind the corporation" and below the printed registered name.

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

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.

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.

Confirm the buyer's intended use adheres to all municipal zoning requirements

Advise the buyer to commission a Phase 3 Environmental Site Assessment in addition to their inspection

Ensure the buyer had the opportunity to fully inspect the financial statements of both the condominium and the seller’s business

Review all documentation and advise the buyer regarding the financial status of the condominium corporation, including the reserve fund

A designated appraiser will use all factual sales data to determine the value of the current highest and best use of the property.

The estimate of value is related to how a typical buyer, with a reasonable knowledge of the market and property, wants to use the property.

The land developer can identify the use of the property that is anticipated to produce the highest overall return so the appraiser can complete the appraisal.

A property's highest and best use is the use that, at the time the building was built, was most likely to produce the greatest net return.

Quick turnaround time to free up capital when needed is an advantage of owning commercial real estate.

Limited equity investment while gaining leverage through financing is an advantage of owning commercial real estate.

Potential to recover capital through refinancing is an advantage of owning commercial real estate.

Potential for tax sheltering possibilities for the investor is an advantage of owning commercial real estate.

The retail tenant's rentable area would be 3,482 sq. ft.

The retail tenant's rentable area would be 3,073 sq.ft.

The retail tenant's rentable area would be 3,912 sq.ft.

The retail tenant's rentable area would be 3,605 sq. ft.

Power stations

Petroleum storage and distribution sites

Chemical manufacturers

Computer training institute

The landlord must address their tenants' issues in a timely manner in general but more so when the issue can result in serious and costly consequences.

All commercial leases require that tenants keep everything in and about the property, including all points of entry and exit, in good repair at all times.

Tenants are obligated to ensure they have adequate tenant insurance for their property.

Not all commercial leases require the landlord to perform repairs and maintenance.

They carry on a farming business generating a net profit of $100,000.

They have a valid harmonized sales tax (HST) registration number under the Excise Tax Act.

They are Canadian citizens or permanent residents of Canada.

They submit the appropriate application semi-annually.

The salesperson is responsible for negotiating the tenant's stock delivery window.

Should a delivery truck arrive during an emergency, the property manager must be available.

Stock delivery cannot be restricted in a commercial agreement to lease.

The salesperson is responsible for addressing site access and exit in the tenant's agreement to lease.

In a lease agreement, the tenant provides a list of improvements to the landlord and the landlord always pays for these improvements.

The landlord may offer a "tenant improvement allowance" which provides funds to cover thecosts of tenant improvements.

The tenant takes the premises in an "as is" condition and can complete whatever improvements they wish without landlord approval.

Unless indicated in the lease agreement, improvements attached to the leased building generally become the tenant's property upon vacating the premises.

Liens and encumbrances that are registered against the property

The property's use doesn't comply with municipal zoning bylaws

A registered right of way that blocks the buyer's intended use of the property

The seller is not entitled to transfer title to the property for some reason

Architectural drawings are source documents.

A photocopy of a source document can be used to verify information.

If changes are made to source documents, they are still valid if you have the original document.

Other types of source documents include surveys and tax records.

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.

The tenant may be required to pay the deficiency between the contracted amount in the tenant representation agreement and the amount actually paid by the landlord.

Salespersons are prohibited from indicating directly that remuneration is fixed by any association but can indicate it indirectly.

Remuneration can be calculated based on the difference between the listing price and the actual rental price.

Remuneration can be an agreed amount or a percentage of the rental price, but not a combination of both.

A surveyor’s certificate for the unit

An opinion from the seller's lawyer

A sketch of the seller’s floor layout

An opinion from the property manager

Include the current tax assessment as a schedule of the agreement.

Ensure the offer contains a clause requiring the seller and the buyer to share the property taxes to be assessed for the next three years.

Ensure the offer contains a clause allowing for compensation for adjustments to the property taxes.

Get a letter from the seller to guarantee a maximum amount of realty tax payment in the coming year.

Comprises a blend of old and new stores

Must be located in a small, older community

Consists of newer, free-standing buildings only

Structure size typically ranges from 100,000 to 130,000 square feet

Use the R/U factor to calculate the figures

Use a laser measuring tool to take the measurements and use the R/U factor to calculate the figures

Recommend that the landlord obtain the professional services of a measuring company to obtain the figures

Use a laser measuring tool to take the measurements

Use a laser measuring device to take the measurements.

Recommend the services of third-party professionals to measure it.

Tell the seller the usable size is 80 percent of the rentable size.

Add a disclaimer to protect the seller from any discrepancy.

All new commercial properties must undergo an ESA before construction begins.

An ESA is not required if the buyer is purchasing the industrial property for their own use.

No stipulations exist for the third and final phase of an ESA due to its vast and complex nature.

The Environmental Protection Act establishes the procedures and requirements for the first two phases of an ESA.

The salesperson should not disclose latent defects that are known to the seller as they could affect the seller's ability to obtain a high price for the property.

The salesperson should discuss patent defects known to the seller of the office building with the seller and disclose them to a buyer.

The salesperson should not disclose material latent defects that are known to the seller that could reduce the price or the marketability of the property.

The salesperson should discuss latent defects known to the seller of the office building with the seller and disclose them to a buyer.

A key consideration a salesperson must keep in mind when handling the sale of a business is operating licenses.

Depending on the business location, there are various municipal bylaws, zoning, permits, and other rules and regulations that could impact the sale of a business.

There are various municipal bylaws that could impact the sale of a business, depending on the business activity.

If a municipal license is associated with the business and it may be transferrable to the buyer, then it is of no concern to the sales representative.