Humber College PREX-1060A Exam : Exam 4: Invigilated Theory Exam

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Humber College PREX-1060A Exam Syllabus Topics:

Humber College Exam 4: Invigilated Theory Sample Questions:

1. Which of the following practices maintains the stability and durability of a commercial property?

A) Increasing the base rent and additional rent in a slow economy
B) Delaying improvements to the property to save costs
C) Keeping good tenants
D) Replacing old tenants with new tenants that pay much higher rent

2. A salesperson must ensure that a buyer client is aware of all revenue sources and expenses related to the property they are interested in purchasing. Which of the following is an accurate statement regarding potential revenue sources for a commercial property?

A) Retail commercial property owners have three types of potential rental income: base rent, additional rent, and percentage rent.
B) 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.
C) 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.
D) 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.

3. A landlord and a tenant have signed an agreement to lease an office space. Prior to the transaction closing, an unforeseeable event occurs that is not the fault of either party. Which statement about the return of the tenant's deposit is NOT correct?

A) The parties may need to obtain a court order that clarifies how the deposit will be returned and distributed.
B) The tenant can have the deposit back without signing a mutual release as it is not their fault.
C) The agreement may contain a clause forfeiting all of the deposit if the landlord has started work on the premises.
D) The landlord and tenant may agree to split the deposit.

4. A seller provides you with architectural drawings of their building. Which statement is NOT correct?

A) Other types of source documents include surveys and tax records.
B) Architectural drawings are source documents.
C) A photocopy of a source document can be used to verify information.
D) If changes are made to source documents, they are still valid if you have the original document.

5. In regard to cash flow into and out of a business, which of the following is correct?

A) Sales proceeds cash flow does not affect investor decisions.
B) Operating cash flow is used when determining yield on an investment property, while sales proceeds cash flow is not used for this purpose.
C) Sales proceeds cash flow is used when determining yield on an investment property, while operating cash flow is not used for this purpose.
D) Operating cash flow can be positive or negative.

Solutions: