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Humber College
RESP Pre-Registration Phase
PREX-1060A
Exam 4: Invigilated Theory Exam Questions and Answers

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Questions # 1:

A buyer client is interested in purchasing a 30,000 sq. ft. industrial building in an industrial park. The buyer's salesperson drafts an agreement of purchase and sale that includes an environmental site assessment condition that must be met at the buyer's own expense, and to the buyer's satisfaction. Which of the following is NOT an accurate statement regarding the environmental site assessment condition?

Options:

The environmental site assessment condition makes the offer conditional upon all possible court actions regarding environmental matters being thought of and reported.

The environmental site assessment condition makes the offer conditional upon the buyer determining that no limitations or restrictions affecting the continued use of the property exist.

The environmental site assessment condition makes the offer conditional upon the seller delivering documents, records, and reports relating to environmental matters to the buyer upon request.

The environmental site assessment condition makes the offer conditional upon the buyer determining that the property is free from hazardous conditions or substances.

Answer

Questions # 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?

Options:

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.

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.

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.

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.

Answer

Questions # 3:

All of the following aspects of a commercial property may affect its eligibility for Leadership in Energy and Environmental Design (LEED) certification, EXCEPT:

Options:

Energy efficiency

Innovative elements

Sustainability

Vacancy rate

Answer

Questions # 4:

Utility requirements are different for retail, office, and industrial properties, and a salesperson should understand the utility needs of each client. Which of the following items is NOT required bya typical occupant of a retail space?

Options:

A stable internet connection

Sufficient lighting

A high voltage and ampere supply

A proper ventilation system

Answer

Questions # 5:

Salespersons are required to verify, wherever they can, information provided by landlords, such as zoning details and permitted uses. A salesperson is helping a major landlord to lease out a big retail mall that involves complex matters. Which of the following does NOT need third-party professional advice?

Options:

The total area measurements

The maximum floor load of every unit

The number of sprinklers required in every unit

The total remuneration payable for a 20-year lease

Answer

Questions # 6:

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?

Options:

Acknowledgment

Notice of fulfillment

Mutual release

Waiver

Answer

Questions # 7:

Audited and unaudited statements provide the financial status of a business to potential buyers. What is the main difference between audited and unaudited financial statements?

Options:

Unaudited financial statements are prepared by Chartered Professional Accountants; audited financial statements are prepared by senior Chartered Professional Accountants.

Audited financial statements provide an accurate picture of the financial status of a business; unaudited financial statements may only contain partially reviewed information.

Unaudited financial statements are prepared by accounting students; audited financial statements are completed by accountants who have received their professional designation.

Audited financial statements comply with Generally Accepted Accounting Principles (GAAP); unaudited financial statements do not comply with GAAP.

Answer

Questions # 8:

A salesperson is preparing to list an industrial building and wants to assess the availability and size of utilities, as these factors may prohibit a change in use for the potential buyer. Which of the following is correct?

Options:

If the information on the building's utilities is not available, the salesperson can determine it by finding out the specifications of the utilities of the neighbors.

If the information on the subject building’s utilities is available, then a potential buyer will not put a condition in the offer.

The salesperson should conduct a visual inspection of the building to determine the specifications of the utilities.

The seller may have up-to-date documentation about the utilities but, in some situations, a third-party professional assessment is still needed.

Answer

Questions # 9:

A salesperson is drafting an offer and discussing with the buyer the steps required for due diligencewhen purchasing a commercial condominium unit. All of the steps below are included in due diligence, EXCEPT:

Options:

Create a business plan

Gather, organize, and verify all pertinent information

Identify third-party professionals

Estimate time frames required for due diligence and other offer conditions

Answer

Questions # 10:

Both the landlord and the tenant have responsibilities in the management of their relationship as per the commercial lease agreement. Which of the following is NOT an accurate statement regarding the roles and responsibilities of landlords and tenants as per the Commercial Agreement to Lease?

Options:

The landlord must address their tenants' issues in a timely manner in general but more so when the issue can result in serious and costly consequences.

All commercial leases require that tenants keep everything in and about the property, including all points of entry and exit, in good repair at all times.

Tenants are obligated to ensure they have adequate tenant insurance for their property.

Not all commercial leases require the landlord to perform repairs and maintenance.

Answer

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