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Humber College Exam 4: Invigilated Theory Sample Questions:

1. A salesperson and their commercial seller client are discussing and preparing to list the seller's office building. The topic of defects comes up and the seller wants to know what the salesperson will have to disclose. Which of the following is an accurate statement regarding the disclosure of defects?

A) The salesperson should discuss latent defects known to the seller of the office building with the seller and disclose them to a buyer.
B) 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.
C) 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.
D) The salesperson should discuss patent defects known to the seller of the office building with the seller and disclose them to a buyer.

2. A buyer client is discussing zoning bylaws of the municipality in relation to an industrial development site with their salesperson. Which of the following is NOT a correct statement with respect to zoning bylaws?

A) Municipal zoning bylaws overrule all other laws with respect to land uses and issuance ofbuilding permits in Ontario.
B) New commercial construction and redevelopment must comply with zoning bylaws.
C) Municipalities have zoning bylaws that divide the city into different land uses or zones.
D) Zoning bylaws specify the permitted land uses throughout a municipality.

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

4. A salesperson is representing a tenant client who is opening a new pet food store in a local strip plaza. The salesperson meets with their tenant to discuss display signage and review the guidelines in their commercial lease agreement. Which statement is NOT accurate regarding the commercial lease agreement's signage clause?

A) The tenant's signage shall be immediately removed at the end of their lease term(s) at the tenant's expense.
B) The tenant's signage must be approved by the municipality and the landlord, and all associated costs shall be paid by the landlord.
C) The tenant's signage, from approvals to installation and ongoing maintenance, shall be at thetenant's own expense.
D) The tenant's signage is considered a trade fixture and shall remain the tenant's property.

5. What is the best indicator of a strong office market?

A) Low rental rates and many concessions
B) The number of free months given to new and renewing tenants by landlords in the office marketplace
C) The absorption rate, net absorption rate, and rising rental rates
D) When tenants have lots of options because of the amount of available space at favorable rates

Solutions: