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Humber College Exam 4: Invigilated Theory Sample Questions:

1. A salesperson is drafting an offer and discussing with the buyer the steps required for due diligencewhen purchasing a commercial condominium unit. All of the steps below are included in due diligence, EXCEPT:

A) Identify third-party professionals
B) Create a business plan
C) Gather, organize, and verify all pertinent information
D) Estimate time frames required for due diligence and other offer conditions

2. If a property in Ontario is assessed and valued as farmland by the Municipal Property Assessment Corporation (MPAC), the farmer could receive a 75% tax reduction for municipal taxes if certain conditions are met. Which of the following describes a condition that must be met?

A) They are Canadian citizens or permanent residents of Canada.
B) They submit the appropriate application semi-annually.
C) They carry on a farming business generating a net profit of $100,000.
D) They have a valid harmonized sales tax (HST) registration number under the Excise Tax Act.

3. Finish the sentence: The Employment Standards Act:

A) Regulates matters involving ownership of a business.
B) Protects the rights of workers of a business that is being sold.
C) Regulates trade names.
D) Specifies the terms of a business partnership agreement.

4. The cost approach is one method of real estate evaluation that an appraiser may use to estimate the value of a commercial property. Which of the following is NOT an accurate statement regarding the cost approach?

A) The cost approach is useful for the appraisal of property types for which sales and income data are scarce, such as industrial and special-purpose properties.
B) The cost approach is preferred for newer construction properties, as the appraiser would not need to make a subjective estimation of the accrued depreciation of the building.
C) The cost approach is typically used to appraise income-generating properties.
D) The cost approach is preferred for older construction properties, as calculating depreciation on them is fairly straightforward.

5. A buyer client is interested in purchasing an industrial property for their manufacturing business. The buyer's salesperson informs them of the building criteria, along with the minimum requirements for clear height and clear span that would be suitable for the buyer's business. What should the salesperson explain to the buyer regarding clear span?

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

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