PREX-1060A Exam 4: Invigilated Theory Exam Questions and Answers

The types of buildings that are permitted in a location, their height, and how they may be used

Lot dimensions and parking requirements

The amount of rent a building may generate

Where buildings and other structures may be located

The tenant's signage must be approved by the municipality and the landlord, and all associated costs shall be paid by the landlord.

The tenant's signage is considered a trade fixture and shall remain the tenant's property.

The tenant's signage shall be immediately removed at the end of their lease term(s) at the tenant’s expense.

The tenant's signage, from approvals to installation and ongoing maintenance, shall be at the tenant's own expense.

The salesperson should not disclose latent defects that are known to the seller as they could affect the seller's ability to obtain a high price for the property.

The salesperson should discuss patent defects known to the seller of the office building with the seller and disclose them to a buyer.

The salesperson should not disclose material latent defects that are known to the seller that could reduce the price or the marketability of the property.

The salesperson should discuss latent defects known to the seller of the office building with the seller and disclose them to a buyer.

The salesperson should tell their client that higher management fees charged for a building always indicates that the tenant is getting superior service and value.

The salesperson should explain that a tenant occupying a smaller rentable area in a building pays higher management fees per square foot compared to a tenant with an average or larger rentable area.

The salesperson should identify the reasons for high management fees charged for a building and determine the relative value it provides.

The salesperson should tell the tenant that the Condominium Authority of Ontario regulates management fees charged by buildings as per their size.

Gantry crane

Jib crane

Bridge crane

Overhead crane

The farm is sold to a corporation and the HST is included in the selling price.

The farm has been used for personal use.

The farmer uses a smaller portion of the farm for a residence.

The farmer sells the farm to a relative.

The salesperson should attempt to identify signs of contamination on the property and recommend an appropriate third-party expert to the seller client.

The salesperson should include the information in the marketing material as it would be beneficial for an auto sales business to have a garage located nearby.

The salesperson should ask the owner of the garage for more information and what course of action they recommend to assist a future purchaser of the site.

The salesperson should ask the owner of the garage whether they have thought about selling their property at this time.

A design-build arrangement is a sale/leaseback arrangement.

A design-build arrangement requires the buyer to acquire suitable land and construct a building themselves.

A design-build arrangement means the buyer will only buy the property if the landowner builds a building to the buyer’s specifications.

A design-build arrangement is commonly associated with a seller's market.

Power stations

Petroleum storage and distribution sites

Chemical manufacturers

Computer training institute

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.

Net lease

Percentage lease

Gross lease

Triple net lease

Amount of advertising and publicity

Proximity to museums and historical sites

Price trend for detached homes in nearby neighborhoods

Access to raw materials used in the region

The salesperson should explain that clear span refers to the amount of floor area that is clear of interference from columns and walls.

The salesperson should explain that clear span refers to the unobstructed vertical distance from the floor to the bottom of the lowest ceiling or roof component.

The salesperson should explain that clear span refers to the unobstructed vertical distance from the floor to the bottom of the highest point of the ceiling or roof component.

The salesperson should explain that clear span refers to the total amount of floor area in the space, including the space that is occupied between columns and walls.

The date of the agreement of purchase and sale

The balance due clause

The irrevocability clause

The purchase price

A clause to obtain the necessary mortgage amount

A clause to test the quality of the underground water source

A clause to check the condition of the trucks and vans

A clause to ensure the truck parking spaces and turning radius are sufficient

Agrees to pay additional rent for a gross lease.

Cannot withhold rental payments even if the landlord does not comply with their obligations under the lease.

Agrees to pay any percentage rent a landlord demands, regardless of sales revenue.

Cannot pay rent to the property manager and must pay directly to the property owner.

Use the R/U factor to calculate the figures

Use a laser measuring tool to take the measurements and use the R/U factor to calculate the figures

Recommend that the landlord obtain the professional services of a measuring company to obtain the figures

Use a laser measuring tool to take the measurements

A landlord's commercial property insurance policy should cover the loss of the property's equity due to a change in market conditions or to a recession.

A landlord’s commercial property insurance policy should cover the loss of the tenant’s assets and income due to business interruption as the result of a fire or flood.

A landlord’s commercial property insurance policy should cover the loss of rental income in the event of a fire, for the period the premises is vacant while repairs are made.

A landlord's commercial property insurance policy should cover the loss of the tenant's assets due to theft from their employees or third parties.

The cost of relocating is low.

A similar building can be bought at a low price.

The existing building no longer provides the highest and best use of the site.

A redevelopment will seriously disrupt the current operation.

Is there any easement on the property?

Is the ownership of the building a corporation or a partnership?

What is the construction cost of the building?

Is inventory included in the sale of this business?

Repairs

Supervision

Operations

Depreciation

There may be minimum width and depth requirements for parking spaces.

Parking may be impacted by zoning requirements.

Parking may be impacted by the municipality’s parking bylaw.

Required parking for persons with disabilities is usually fixed as a ratio based on the number of disabled persons in the community.

The municipality will take the number of available parking spaces and divide it by the property’s gross leasable area.

The municipality will take the number of available parking spaces and divide it by the projected number of monthly visitors.

The municipality will take the number of available parking spaces and divide it by the property’s net leasable area.

The municipality will take the property’s gross leasable area and divide it by the number of available parking spaces.

$80,000

$60,000

$120,000

$130,000

Economic development offices can provide you with real property information regarding tax assessments and how to appeal your real estate taxes.

Economic development offices provide background information on local, provincial, and federal research and development incentives.

Economic development offices have important resources for those seeking suitable commercial sites for business operations.

Economic development offices can help guide development applications through municipal processes and streamline the approvals process for companies unfamiliar with regulatory requirements.

The investor is afforded the opportunity to enhance yield.

The success of ventures often rests in the availability and suitability of financing.

Lenders will apply various financial ratios to get a solid understanding of the business's performance and the ability of the borrower to service debt.

It does not matter; mortgaging does not affect cash flow and yields.

Change the completion date by using a waiver.

Change the completion date by using a notice of fulfillment.

Change the completion date by using an amendment to the agreement of purchase and sale.

A change is not necessary because the damage is out of the control of the buyer or the seller.

Bay depth is an important consideration when determining the layout of an industrial process.

Loading docks are only used to off-load products or raw materials.

Flat roofs are designed to be flat to hold water.

Floor load refers to the weight of the building during construction.

The condition of goods, chattels, and fixtures cannot be verified

Income and expense statements contain misrepresentations

The seller provides insufficient due diligence documents

The seller discloses all liabilities of the business in writing

Shareholder’s equity

Assets

Liabilities

Net operating income

A description of the premises

The names of all the tenant's suppliers

The commencement date of the lease

The names of all parties to the lease

The number of animals based on type, gender, and health; if the number is not the same at closing, the price will be adjusted.

A condition requiring a check-up of each animal by a predetermined veterinarian during due diligence.

State that the buyer is assuming all animals on an "as is" basis.

State that the seller will continue the day-to-day farm operations until closing.

Ensuring inspections are being carried out as required

Contacting contractors for quotes for repairing or replacing equipment

Reviewing whether the technical components have been recently replaced or upgraded

Learning what types of equipment are in the building and having a general understanding of their age and condition