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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) 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.
C) 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.
D) Retail commercial property owners have three types of potential rental income: base rent, additional rent, and percentage rent.

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

3. A tenant has an established business with good growth potential for the foreseeable future and wants to rent a retail property for expansion. If the landlord wants to have the opportunity to boost the rent when the tenant's sales are good, which type of lease would you recommend to the landlord?

A) Net lease
B) Triple net lease
C) Percentage lease
D) Gross lease

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

5. A salesperson is helping a buyer identify their needs and property requirements to select an appropriate office property and they are discussing the office layout. Which of the following is NOTa layout consideration?

A) Fitting rooms
B) Boardrooms, private offices, and workstations
C) Storage
D) Kitchens/lunchrooms

Solutions: