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Humber College Exam 4: Invigilated Theory Sample Questions:

1. A buyer should consider the record of site condition (RSC) document when purchasing a commercial property. Which of the following statements regarding an RSC is correct?

A) It contains records pertaining to a property's financial condition.
B) It is not a material fact; thus, it is a formality for the buyer to get it.
C) Requesting an RSC is mandatory in all real estate transactions.
D) With other documents, it will inform the buyer of any legal issues attached to the title.

2. The key mechanical components of commercial buildings include heating, cooling, and electrical systems.
Which of the following tasks is NOT usually completed by the salesperson?

A) Reviewing whether the technical components have been recently replaced or upgraded.
B) Contacting contractors for quotes for repairing or replacing equipment.
C) Learning what types of equipment are in the building and having a general understanding of their age and condition.
D) Ensuring inspections are being carried out as required.

3. A lender completes a financial statement analysis and calculation on various ratios that would indicate the financial performance of the commercial building. Which of the following is NOT correct?

A) 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.
B) The investor is afforded the opportunity to enhance yield.
C) It does not matter; mortgaging does not affect cash flow and yields.
D) The success of ventures often rests in the availability and suitability of financing.

4. 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?

A) Tenants are obligated to ensure they have adequate tenant insurance for their property.
B) Not all commercial leases require the landlord to perform repairs and maintenance.
C) 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.
D) 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.

5. 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?

A) The environmental site assessment condition makes the offer conditional upon the buyer determining that the property is free from hazardous conditions or substances.
B) 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.
C) The environmental site assessment condition makes the offer conditional upon all possible court actions regarding environmental matters being thought of and reported.
D) 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.

Solutions: