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Humber College Exam 4: Invigilated Theory Sample Questions:

1. A salesperson includes a well-drafted condition in an agreement of purchase and sale for their buyer client to arrange a new first mortgage for an industrial property. The buyer later changes their mind and does not want to borrow money for the purchase. What should the buyer's salesperson use to remove the condition?

A) Mutual release
B) Waiver
C) Notice of fulfillment
D) Acknowledgment

2. A developer has completed the construction of a new commercial condominium project that is readyfor occupancy by the buyers. The condominium should be registered within approximately six months. Which of the following accurately describes a responsibility of the developer?

A) The developer will be responsible for much of the day-to-day management of the condominium corporation's affairs after the turnover meeting.
B) The developer will be responsible for overseeing the business affairs of the condominium corporation after the turnover meeting.
C) The developer will be responsible for calling a general meeting within 21 days to appoint a new board of directors.
D) The developer will be responsible for registering the declaration and description and creating the plan and vision for the property.

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

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

5. 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

Solutions: