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

2. A salesperson representing a client who is selling an office property has received some documents from the seller and is trying to organize them. Which of the following documents is NOT needed by the salesperson or seller when selling the property?

A) Income verification documents
B) Environmental site assessments
C) Telephone bills
D) Private mortgage form

3. Which of the following is a risk associated with investing in commercial real estate?

A) The relative lack of capital growth during the holdover period
B) The fact that rent, leased space, and building size are fixed
C) The relative lack of liquidity
D) The insufficiency of cash flow during the holding period

4. A salesperson is assisting both the tenant and the landlord in a commercial property rentaltransaction. Which of the following statements about calculating the remuneration for this transaction is correct?

A) Salespersons are prohibited from indicating directly that remuneration is fixed by any association but can indicate it indirectly.
B) Remuneration can be an agreed amount or a percentage of the rental price, but not a combination of both.
C) Remuneration can be calculated based on the difference between the listing price and the actual rental price.
D) 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.

5. A buyer wants to purchase an industrial property for its international logistics and distribution center.
Currently, the building is used by a local courier company with small delivery trucks and vans. When drafting an offer to purchase this property, which of the following should be added regarding this change of use?

A) A clause to check the condition of the trucks and vans
B) A clause to ensure the truck parking spaces and turning radius are sufficient
C) A clause to test the quality of the underground water source
D) A clause to obtain the necessary mortgage amount

Solutions: