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Humber College Exam 4: Invigilated Theory Sample Questions:

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

2. A salesperson is searching for properties on behalf of their retail buyer client for their designer eyewear and optical store. The buyer discusses their storage and product display needs with the salesperson. Which of the following is NOT a factor the buyer should consider regarding the product display and storage space of potential properties?

A) The salesperson should advise the buyer to consider their business's predicted monthly inventory.
B) The salesperson should advise the buyer to consider the space they will need to allot for storage versus customer-facing product.
C) The salesperson should advise the buyer to consider the size of their products.
D) The salesperson should advise the buyer to consider the price of their products.

3. 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?

A) 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.
B) 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.
C) 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.
D) 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.

4. When representing a client who is selling a business, a salesperson must be aware of concerns related to compliance. Which of the following is NOT a compliance concern?

A) The seller provides insufficient due diligence documents
B) The condition of goods, chattels, and fixtures cannot be verified
C) Income and expense statements contain misrepresentations
D) The seller discloses all liabilities of the business in writing

5. Which of the following is a risk associated with investing in commercial real estate?

A) The fact that rent, leased space, and building size are fixed
B) The insufficiency of cash flow during the holding period
C) The relative lack of capital growth during the holdover period
D) The relative lack of liquidity

Solutions: