PREX-1060A Practice Exam Questions with Answers Exam 4: Invigilated Theory Exam Certification

An owner who rehabilitates a brownfield property can receive tax incentives.

The contaminants in brownfields contain precious metals that can be sold to earn additional income.

Brownfield properties typically have the advantage of existing infrastructure such as roads, utilities, water/sewer servicing, schools, and transit facilities.

Brownfield properties can often be purchased at well below their potential market value.

Storage

Kitchens/lunchrooms

Fitting rooms

Boardrooms, private offices, and workstations

Use a laser measuring device to take the measurements.

Recommend the services of third-party professionals to measure it.

Tell the seller the usable size is 80 percent of the rentable size.

Add a disclaimer to protect the seller from any discrepancy.

They are a good size for modern 18-hole golf courses.

They can be used for newly planned subdivisions.

They are normally less expensive than pieces of land smaller than two acres in the same neighborhood.

The developer cannot find a building lot to build a detached home.

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

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

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

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

The rent increase cannot be higher than the guideline set by the government.

The rent increase cannot be more than the Consumer Price Index (CPI).

The rent increase can be any amount.

The rent increase can be challenged by the Landlord and Tenant Board.

The landlord must address their tenants' issues in a timely manner in general but more so when the issue can result in serious and costly consequences.

All commercial leases require that tenants keep everything in and about the property, including all points of entry and exit, in good repair at all times.

Tenants are obligated to ensure they have adequate tenant insurance for their property.

Not all commercial leases require the landlord to perform repairs and maintenance.

The salesperson should attempt to identify signs of contamination on the property and recommend an appropriate third-party expert to the seller client.

The salesperson should include the information in the marketing material as it would be beneficial for an auto sales business to have a garage located nearby.

The salesperson should ask the owner of the garage for more information and what course of action they recommend to assist a future purchaser of the site.

The salesperson should ask the owner of the garage whether they have thought about selling their property at this time.

Surrounding uses

Financial health of the company

Demographics

Traffic counts

In a lease agreement, the tenant provides a list of improvements to the landlord and the landlord always pays for these improvements.

The landlord may offer a "tenant improvement allowance" which provides funds to cover thecosts of tenant improvements.

The tenant takes the premises in an "as is" condition and can complete whatever improvements they wish without landlord approval.

Unless indicated in the lease agreement, improvements attached to the leased building generally become the tenant's property upon vacating the premises.

The office building next door has an overflow parking lot.

The neighboring property includes a restaurant, a dental clinic, and a law office.

There is vacant land nearby with a small pond with discolored standing water.

There is a residential neighborhood and playground nearby.

Liens and encumbrances that are registered against the property

The property's use doesn't comply with municipal zoning bylaws

A registered right of way that blocks the buyer's intended use of the property

The seller is not entitled to transfer title to the property for some reason

Clay production is an example of light industrial use.

Light industrial use usually results in more noise and heavier traffic.

Heavy industrial use can produce more pollution than other commercial activities.

Heavy industrial use usually results in less traffic in and out of the heavy industrial zone.

Amount of advertising and publicity

Proximity to museums and historical sites

Price trend for detached homes in nearby neighborhoods

Access to raw materials used in the region

Businesses need to transport materials to and from the site.

Outgoing trucks could have difficulty if there is a lack of on-site trailer storage.

Some trucks may need to park on the property overnight.

Incoming trucks could have difficulty if there is a lack of on-site trailer storage.

Comprises a blend of old and new stores

Must be located in a small, older community

Consists of newer, free-standing buildings only

Structure size typically ranges from 100,000 to 130,000 square feet

Shareholder’s equity

Assets

Liabilities

Net operating income

Architectural drawings are source documents.

A photocopy of a source document can be used to verify information.

If changes are made to source documents, they are still valid if you have the original document.

Other types of source documents include surveys and tax records.

A surveyor’s certificate for the unit

An opinion from the seller's lawyer

A sketch of the seller’s floor layout

An opinion from the property manager

The absorption rate, net absorption rate, and rising rental rates

When tenants have lots of options because of the amount of available space at favorable rates

Low rental rates and many concessions

The number of free months given to new and renewing tenants by landlords in the office marketplace

A design-build arrangement is a sale/leaseback arrangement.

A design-build arrangement requires the buyer to acquire suitable land and construct a building themselves.

A design-build arrangement means the buyer will only buy the property if the landowner builds a building to the buyer’s specifications.

A design-build arrangement is commonly associated with a seller's market.

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

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

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

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

Replacing old tenants with new tenants that pay much higher rent

Increasing the base rent and additional rent in a slow economy

Keeping good tenants

Delaying improvements to the property to save costs

Conduct an analysis of why the transaction will not be carried out.

Pass the transaction to the broker of record so that the broker will take care of it.

Obtain the remuneration owed.

Terminate the transaction and disengage from it.

Quick turnaround time to free up capital when needed is an advantage of owning commercial real estate.

Limited equity investment while gaining leverage through financing is an advantage of owning commercial real estate.

Potential to recover capital through refinancing is an advantage of owning commercial real estate.

Potential for tax sheltering possibilities for the investor is an advantage of owning commercial real estate.

Acknowledgment

Notice of fulfillment

Mutual release

Waiver

Confirm the buyer's intended use adheres to all municipal zoning requirements

Advise the buyer to commission a Phase 3 Environmental Site Assessment in addition to their inspection

Ensure the buyer had the opportunity to fully inspect the financial statements of both the condominium and the seller’s business

Review all documentation and advise the buyer regarding the financial status of the condominium corporation, including the reserve fund

Yes, the property will be suitable if the client states they will change the zoning to allow their type and classification of business to operate at this location.

Yes, the property is suitable since the client is already in the metal fabrication business, and does not need to get any permits from the municipality prior to moving in and using the property.

Yes, the property is suitable, as the listing says the property is light industrial and multi-uses are permitted.

No, the property is not suitable, as the client's business type and classification require heavy industrial zoning.

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

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.

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.

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.

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.

The buyers should submit their concerns to the provincial warranty authority, as they are entitled to one-year warranty coverage from the occupancy date.

There is no provincial warranty coverage for commercial condominiums, but the buyers can inquire with the builder about any warranties that they may offer.

The buyers should draft a list of all their concerns and submit them to the municipality for appropriate coverage.

Every commercial property, whether an office building, an industrial property, a retail property, or land, has a single source of revenue, which is the base rent.

Shopping centres with more than 150 stores typically have only two types of rental revenues to cover all the operating expenses of the property: base rent and additional rent.

Retail commercial property owners have three types of potential rental income: base rent, additional rent, and percentage rent.

Commercial office owners have only one type of potential rental income, which is percentage rent, as the owner themselves pay for the operating expenses of the property.