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

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Humber College PREX-1060A Exam Syllabus Topics:

Humber College Exam 4: Invigilated Theory Sample Questions:

1. A tenant is renting 4,000 square feet of space in a commercial shopping center under a net lease. The base rent is $20 per square foot per annum, and there is a percentage rent of 5% of gross sales over the base rent. The tenant has annual gross sales of $1,000,000. The annual expenses are $10 per square foot. How much annual base rent does the tenant have to pay?

A) $120,000
B) $60,000
C) $130,000
D) $80,000

2. A salesperson sells an office building using the Commercial Agreement of Purchase and Sale along with a schedule that lists all the fixtures, chattels, and rental items of the office building. After closing the real estate transaction, a dispute arises between the seller and the buyer about which chattels, fixtures, and rental items of the office building were to be included and which were to be excluded. Which of the following is NOT an accurate statement regarding the salesperson's actions related to negotiating chattels, fixtures, and rental items?

A) 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.
B) 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.
C) 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.
D) 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.

3. Land developers purchase land for commercial, industrial, and residential projects. Tracts of land larger than five acres but smaller than 10 acres may appeal to land developers for various reasons. Which of the following is one of the reasons?

A) The developer cannot find a building lot to build a detached home.
B) They are a good size for modern 18-hole golf courses.
C) They can be used for newly planned subdivisions.
D) They are normally less expensive than pieces of land smaller than two acres in the same neighborhood.

4. In regard to equipment at an industrial property that is being shown for sale, a salesperson representing a buyer should do all of the following, EXCEPT:

A) Obtain clarification as to which equipment seen during the showing will be included in the purchase price of the property.
B) Contact the seller's representative prior to the showing to gain awareness of safety and compliance requirements.
C) Ensure chattels or fixtures are not included in the sale or negotiated for in the agreement.
D) Ensure they are informed as to whether the equipment shown will be relevant for the buyer's intended use.

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

Solutions: