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Humber College Exam 4: Invigilated Theory Sample Questions:

1. Finish the sentence: The Employment Standards Act:

A) Specifies the terms of a business partnership agreement.
B) Regulates matters involving ownership of a business.
C) Protects the rights of workers of a business that is being sold.
D) Regulates trade names.

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

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

A) The buyer assumes all assets and accepts all liabilities of the business.
B) The buyer is eligible for tax deductions and benefits by claiming capital cost allowance on depreciable property.
C) The buyer replaces the seller as the owner of the corporation.
D) 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.

4. Which of the following is a correct statement regarding a design-build arrangement in commercial real estate?

A) A design-build arrangement requires the buyer to acquire suitable land and construct a building themselves.
B) A design-build arrangement is commonly associated with a seller's market.
C) A design-build arrangement is a sale/leaseback arrangement.
D) A design-build arrangement means the buyer will only buy the property if the landowner builds a building to the buyer's specifications.

5. A salesperson has several obligations to the buyer when assisting them in the purchase of a commercial condominium unit for their own use. Which of the following is one of those obligations?

A) Review all documentation and advise the buyer regarding the financial status of the condominium corporation, including the reserve fund
B) Confirm the buyer's intended use adheres to all municipal zoning requirements
C) Ensure the buyer had the opportunity to fully inspect the financial statements of both the condominium and the seller's business
D) Advise the buyer to commission a Phase 3 Environmental Site Assessment in addition to their inspection

Solutions: