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Humber College Exam 4: Invigilated Theory Sample Questions:

1. 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) 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.
C) The buyers should submit their concerns to the provincial warranty authority, as they are entitled to one- year warranty coverage from the occupancy date.
D) The buyers should draft a list of all their concerns and submit them to the municipality for appropriate coverage.

2. Which of the following is a correct statement regarding a design-build arrangement in commercial real estate?

A) A design-build arrangement is commonly associated with a seller's market.
B) A design-build arrangement is a sale/leaseback arrangement.
C) A design-build arrangement means the buyer will only buy the property if the landowner builds a building to the buyer's specifications.
D) A design-build arrangement requires the buyer to acquire suitable land and construct a building themselves.

3. There are three primary items that require attention when countering an offer from a seller. Which of the following items does NOT need to be checked?

A) The purchase price
B) The irrevocability clause
C) The balance due clause
D) The date of the agreement of purchase and sale

4. The operating costs of a commercial building are usually higher than those of buildings that do not have any common areas. Common area maintenance (CAM) is referred to as the landlord's operating costs attributable to factors that affect the common areas. Which of the following is NOT one of those factors?

A) Depreciation
B) Repairs
C) Operations
D) Supervision

5. In regard to Environmental Site Assessments (ESAs), which of the following is NOT accurate?

A) An ESA is intended to determine if a property has been contaminated or is facing any environmental threats.
B) Every new commercial property must undergo an ESA prior to construction.
C) Local building departments use ESAs as the basis for changes to municipal zoning bylaws.
D) ESAs are regulated under the Canadian Environmental Protection Act.

Solutions: