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Humber College Exam 4: Invigilated Theory Sample Questions:

1. Which of the following practices maintains the stability and durability of a commercial property?

A) Keeping good tenants
B) Delaying improvements to the property to save costs
C) Increasing the base rent and additional rent in a slow economy
D) Replacing old tenants with new tenants that pay much higher rent

2. Issues that occurred prior to the closing of a transaction may be uncovered by title and non-title searches during due diligence. Which of the following is a non-title search concern?

A) The property's use doesn't comply with municipal zoning bylaws
B) Liens and encumbrances that are registered against the property
C) A registered right of way that blocks the buyer's intended use of the property
D) The seller is not entitled to transfer title to the property for some reason

3. If a property in Ontario is assessed and valued as farmland by the Municipal Property Assessment Corporation (MPAC), the farmer could receive a 75% tax reduction for municipal taxes if certain conditions are met. Which of the following describes a condition that must be met?

A) They carry on a farming business generating a net profit of $100,000.
B) They submit the appropriate application semi-annually.
C) They are Canadian citizens or permanent residents of Canada.
D) They have a valid harmonized sales tax (HST) registration number under the Excise Tax Act.

4. Different clauses can be used for each transaction to address the unique needs of buyers and sellers. Which of the following may be used in an agreement of purchase and sale to buy a commercial property?

A) A clause for the buyer to have the right to negotiate for specialized restaurant equipment that is not included in the property purchase price
B) A clause for the seller to disclose all information verbally without providing supporting documents to verify that information; documents to be provided on closing
C) A clause to confirm the remuneration payable to the brokerages will be as stated in the seller representation agreement
D) A clause for the buyer to review the leases only after all conditions have been waived and accepted

5. 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) Gather, organize, and verify all pertinent information
C) Estimate time frames required for due diligence and other offer conditions
D) Create a business plan

Solutions: