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Humber College Exam 4: Invigilated Theory Sample Questions:

1. A salesperson is representing a buyer client in the purchase of a fully tenanted mixed-use building. The agreement of purchase and sale will be in the name of a corporation owned by the buyer and several other shareholders. Which of the following statements is correct regarding the signing of this agreement of purchase and sale?

A) An authorized signing officer of the company must sign and date over the words: "I haveauthority to bind the corporation" and below the printed registered name.
B) A major shareholder of the company must sign and date over their printed name.
C) The general partner of the company must sign and date below the printed name of the limited company.
D) The buyer must sign and date below the printed name of the corporation.

2. Finish the sentence: When a commercial tenant enters an agreement to lease, the covenant to pay rent specifies that the tenant:

A) Agrees to pay any percentage rent a landlord demands, regardless of sales revenue.
B) Agrees to pay additional rent for a gross lease.
C) Cannot withhold rental payments even if the landlord does not comply with their obligations under the lease.
D) Cannot pay rent to the property manager and must pay directly to the property owner.

3. 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?

A) Audited financial statements comply with Generally Accepted Accounting Principles (GAAP); unaudited financial statements do not comply with GAAP.
B) Audited financial statements provide an accurate picture of the financial status of a business; unaudited financial statements may only contain partially reviewed information.
C) Unaudited financial statements are prepared by Chartered Professional Accountants; audited financial statements are prepared by senior Chartered Professional Accountants.
D) Unaudited financial statements are prepared by accounting students; audited financial statements are completed by accountants who have received their professional designation.

4. A new commercial condominium project is completed, and the buyers are given an occupancy date. On the occupancy date, a few of the buyers move into their units and begin setting up their operations. That evening, there is a severe thunderstorm. In the morning, several of the buyers start to notice roof leaks. Some of the buyers call the builder's office while others call their salespersons.Which of the following is an accurate statement regarding the building's warranty coverage?

A) There is no provincial warranty coverage for commercial condominiums, but the buyers can inquire with the builder about any warranties that they may offer.
B) The buyers should submit their concerns to the provincial warranty authority, as they are entitled to one- year warranty coverage from the occupancy date.
C) The buyers should draft a list of all their concerns and submit them to the municipality for appropriate coverage.
D) If the builder does not address this issue, the buyers can file a complaint with the provincial warranty authority for any outstanding work the builder did not complete.

5. A salesperson is negotiating a lease for a new retail tenant and reviewing the requirements and restrictions regarding the delivery of stock items. Which of the following is NOT a correct statement regarding stock delivery requirements and restrictions in a commercial lease?

A) Should a delivery truck arrive during an emergency, the property manager must be available.
B) The salesperson is responsible for addressing site access and exit in the tenant's agreement to lease.
C) The salesperson is responsible for negotiating the tenant's stock delivery window.
D) Stock delivery cannot be restricted in a commercial agreement to lease.

Solutions: