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PREX-1060A Humber College Exam 4: Invigilated Theory Exam Free Practice Exam Questions (2025 Updated)

Prepare effectively for your Humber College PREX-1060A Exam 4: Invigilated Theory Exam certification with our extensive collection of free, high-quality practice questions. Each question is designed to mirror the actual exam format and objectives, complete with comprehensive answers and detailed explanations. Our materials are regularly updated for 2025, ensuring you have the most current resources to build confidence and succeed on your first attempt.

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Total 120 questions

The key mechanical components of commercial buildings include heating, cooling, and electrical systems. Which of the following tasks is NOT usually completed by the salesperson?

A.

Ensuring inspections are being carried out as required.

B.

Contacting contractors for quotes for repairing or replacing equipment.

C.

Reviewing whether the technical components have been recently replaced or upgraded.

D.

Learning what types of equipment are in the building and having a general understanding of their age and condition.

A first-time investor is looking to purchase a commercial property and asks their salesperson about the gains they can hope to achieve from this type of asset. What should the salesperson explain to their client regarding the purchase of commercial properties as a source of capital growth?

A.

The salesperson should explain that to achieve capital growth, the client should be a long-term investor.

B.

The salesperson should explain that a better return on investment will be achieved with rising interest rates.

C.

The salesperson should explain that making a commercial property investment is an easy and smooth process that provides good short-term gains.

D.

The salesperson should explain that the client should always consider being a short-term investor.

A salesperson is assisting the buyer of a retail condominium with the due diligence process. What is a leading practice they should recommend to the buyer?

A.

Verify if there are any non-competition provisions that need to be satisfied as set out in thecondominium rules or bylaws.

B.

Ensure there is parking and repair space available for commercial trucks.

C.

Confirm that the contract of the condominium property management company has been renewed for at least 10 years.

D.

Obtain the existing status certificate from the brokerage to verify all restrictions, including shared premises with other businesses in the commercial condominium.

A salesperson is drafting an agreement to lease a retail property for a tenant client who is looking to open a women's apparel store. Which of the following would NOT be included in the agreement to lease?

A.

A description of the premises

B.

The names of all the tenant's suppliers

C.

The commencement date of the lease

D.

The names of all parties to the lease

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 list all rental items and service contracts, as these will not be included in the purchase price of the real property being purchased.

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 clearly describe and list the fixtures and chattels in the Agreement of Purchase and Sale and mark each item as an exclusion or inclusion.

D.

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.

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.

ESAs are regulated under the Canadian Environmental Protection Act.

D.

Local building departments use ESAs as the basis for changes to municipal zoning bylaws.

When a property assessment of a new commercial property has not been completed prior to its resale, what should a salesperson do to protect the buyer?

A.

Include the current tax assessment as a schedule of the agreement.

B.

Ensure the offer contains a clause requiring the seller and the buyer to share the property taxes to be assessed for the next three years.

C.

Ensure the offer contains a clause allowing for compensation for adjustments to the property taxes.

D.

Get a letter from the seller to guarantee a maximum amount of realty tax payment in the coming year.

A salesperson is helping a buyer client to purchase a piece of vacant land to develop in the future. The salesperson recommends that the buyer consult with a third-party professional because the salesperson cannot provide the service with reasonable knowledge, skill, judgment, and competence. Which of the following is NOT a professional the salesperson would likely recommend to the buyer?

A.

A consultant in a financial institution

B.

A zoning specialist in the city's planning department

C.

An appraiser with Accredited Appraiser Canadian Institute (AACI) designation

D.

A legal consultant who specializes in evicting residential tenants

A tenant is renting 4,000 square feet of space in a commercial shopping center under a net lease. The base rent is $20 per square foot per annum, and there is a percentage rent of 5% of gross sales over the base rent. The tenant has annual gross sales of $1,000,000. The annual expenses are $10 per square foot. How much annual base rent does the tenant have to pay?

A.

$80,000

B.

$60,000

C.

$120,000

D.

$130,000

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 amount of floor area that is clear of interference from 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 lowest 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 highest point of the ceiling or roof component.

D.

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.

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 date of the agreement of purchase and sale

B.

The balance due clause

C.

The irrevocability clause

D.

The purchase price

There are different requirements under REBBA and other legislation that affect the sale of a business. Which of the following is NOT correct?

A.

A key consideration a salesperson must keep in mind when handling the sale of a business is operating licenses.

B.

Depending on the business location, there are various municipal bylaws, zoning, permits, and other rules and regulations that could impact the sale of a business.

C.

There are various municipal bylaws that could impact the sale of a business, depending on the business activity.

D.

If a municipal license is associated with the business and it may be transferrable to the buyer, then it is of no concern to the sales representative.

A salesperson is helping a buyer identify their needs and property requirements to select an appropriate office property and they are discussing the office layout. Which of the following is NOTa layout consideration?

A.

Storage

B.

Kitchens/lunchrooms

C.

Fitting rooms

D.

Boardrooms, private offices, and workstations

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.

The salesperson is responsible for negotiating the tenant's stock delivery window.

B.

Should a delivery truck arrive during an emergency, the property manager must be available.

C.

Stock delivery cannot be restricted in a commercial agreement to lease.

D.

The salesperson is responsible for addressing site access and exit in the tenant's agreement to lease.

A salesperson is representing a seller of a pet food store and is preparing the marketing materials. Which of the following is a document the salesperson is required to provide to prospective buyersof the business?

A.

A list of customers who have purchased products in the last 60 months or since the business was acquired.

B.

A statement of the expenses for the business for the past year or since the business was acquired.

C.

A list of equipment, chattels, and fixtures that are included with the business.

D.

An income statement for the past 12 months or since the business was acquired.

In regard to the adjusted book value/asset valuation method of valuing a business, which of the following is correct?

A.

A company’s adjusted book value should be equal to the actual market value of the business.

B.

The adjusted book value method should not be used when the sale of a business is being implemented or is under consideration.

C.

A company’s adjusted book value is entirely unrelated to its net worth.

D.

The adjusted book value method takes goodwill into account when establishing the value of a business.

Established under the Farming and Food Production Protection Act, the Normal Farm PracticesBoard is composed of members appointed by the Minister of Agriculture, Food and Rural Affairs. Which statement is NOT accurate with regard to the Normal Farm Practices Board?

A.

The Board can order farmers to cease practices that cause disturbances if they are not considered to be normal farm practices.

B.

The Board can conduct hearings that are heard by a minimum of five board members.

C.

The Board can order farmers to modify practices for consistency with normal farm practices.

D.

The Board can dismiss complaints if the disturbances are the result of normal farm practices.

There are different requirements under REBBA and other legislation that affect the sale of a business. Which of the following is NOT correct?

A.

A key consideration a salesperson must keep in mind when handling the sale of a business is operating licenses.

B.

Depending on the business location, there are various municipal bylaws, zoning, permits, and other rules and regulations that could impact the sale of a business.

C.

There are various municipal bylaws that could impact the sale of a business, depending on the business activity.

D.

If a municipal license is associated with the business and it may be transferrable to the buyer, then it is of no concern to the sales representative.

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 preferred for newer construction properties, as the appraiser would not need to make a subjective estimation of the accrued depreciation of the building.

B.

The cost approach is typically used to appraise income-generating properties.

C.

The cost approach is preferred for older construction properties, as calculating depreciation on them is fairly straightforward.

D.

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.

A developer has completed the construction of a new commercial condominium project that is readyfor occupancy by the buyers. The condominium should be registered within approximately six months. Which of the following accurately describes a responsibility of the developer?

A.

The developer will be responsible for calling a general meeting within 21 days to appoint a new board of directors.

B.

The developer will be responsible for registering the declaration and description and creating the plan and vision for the property.

C.

The developer will be responsible for much of the day-to-day management of the condominium corporation's affairs after the turnover meeting.

D.

The developer will be responsible for overseeing the business affairs of the condominium corporation after the turnover meeting.

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Total 120 questions
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