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PREX-1060A Questions Prepare with Learning Information
NEW QUESTION # 13
A salesperson is assisting both the tenant and the landlord in a commercial property rentaltransaction. Which of the following statements about calculating the remuneration for this transaction is correct?
- A. Remuneration can be an agreed amount or a percentage of the rental price, but not a combination of both.
- B. Remuneration can be calculated based on the difference between the listing price and the actual rental price.
- C. Salespersons are prohibited from indicating directly that remuneration is fixed by any association but can indicate it indirectly.
- D. The tenant may be required to pay the deficiency between the contracted amount in the tenant representation agreement and the amount actually paid by the landlord.
Answer: D
NEW QUESTION # 14
Sometimes, transactions do not close. When a transaction won't be completed, what should a salesperson try to do as soon as possible?
- A. Obtain the remuneration owed.
- B. Terminate the transaction and disengage from it.
- C. Conduct an analysis of why the transaction will not be carried out.
- D. Pass the transaction to the broker of record so that the broker will take care of it.
Answer: C
NEW QUESTION # 15
Many industrial users install one or more cranes on their properties to move heavy items. Which type of industrial crane has an arm attached at an angle to a rotating mast that permits 360-degree swiveling around that mast?
- A. Jib crane
- B. Bridge crane
- C. Overhead crane
- D. Gantry crane
Answer: A
NEW QUESTION # 16
Which of the following statements regarding heavy industrial use and light industrial use is correct?
- A. Heavy industrial use can produce more pollution than other commercial activities.
- B. Clay production is an example of light industrial use.
- C. Light industrial use usually results in more noise and heavier traffic.
- D. Heavy industrial use usually results in less traffic in and out of the heavy industrial zone.
Answer: A
NEW QUESTION # 17
The balance sheet of a business helps investors understand its stability and assess financial risk. A balance sheet includes details about all of the following, EXCEPT:
- A. Assets
- B. Net operating income
- C. Shareholder's equity
- D. Liabilities
Answer: B
NEW QUESTION # 18
A salesperson and their commercial seller client are discussing and preparing to list the seller's office building. The topic of defects comes up and the seller wants to know what the salesperson will have to disclose. Which of the following is an accurate statement regarding the disclosure of defects?
- A. The salesperson should not disclose latent defects that are known to the seller as they could affect the seller's ability to obtain a high price for the property.
- B. The salesperson should discuss patent defects known to the seller of the office building with the seller and disclose them to a buyer.
- C. The salesperson should not disclose material latent defects that are known to the seller that could reduce the price or the marketability of the property.
- D. The salesperson should discuss latent defects known to the seller of the office building with the seller and disclose them to a buyer.
Answer: D
NEW QUESTION # 19
In a commercial transaction, which of the following is NOT a responsibility of the lawyer?
- A. Remedy of title issues
- B. Review of financial statements
- C. Exchange of legal documents
- D. Review of the Agreement of Purchase and Sale
Answer: B
NEW QUESTION # 20
Finish the sentence: When a commercial tenant enters an agreement to lease, the covenant to pay rent specifies that the tenant:
- A. Agrees to pay additional rent for a gross lease.
- B. Agrees to pay any percentage rent a landlord demands, regardless of sales revenue.
- C. Cannot withhold rental payments even if the landlord does not comply with their obligations under the lease.
- D. Cannot pay rent to the property manager and must pay directly to the property owner.
Answer: C
NEW QUESTION # 21
A salesperson is representing a tenant client who is opening a new pet food store in a local strip plaza. The salesperson meets with their tenant to discuss display signage and review the guidelines in their commercial lease agreement. Which statement is NOT accurate regarding the commercial lease agreement's signage clause?
- A. The tenant's signage must be approved by the municipality and the landlord, and all associated costs shall be paid by the landlord.
- B. The tenant's signage shall be immediately removed at the end of their lease term(s) at the tenant's expense.
- C. The tenant's signage, from approvals to installation and ongoing maintenance, shall be at thetenant's own expense.
- D. The tenant's signage is considered a trade fixture and shall remain the tenant's property.
Answer: A
NEW QUESTION # 22
An office building is being sold. The agreement of purchase and sale includes multiple conditions that protect the buyer. Each condition has a different expiry date, and they will be fulfilled and completed at different times. The conditions do not have waiver provisions. In this situation, all conditions can be removed by:
- A. Serving one waiver
- B. Serving separate notices of fulfillment
- C. Serving one notice of fulfillment
- D. Serving separate waivers
Answer: B
NEW QUESTION # 23
A salesperson is representing a buyer client in the purchase of a fully tenanted mixed-use building. The agreement of purchase and sale will be in the name of a corporation owned by the buyer and several other shareholders. Which of the following statements is correct regarding the signing of this agreement of purchase and sale?
- A. The buyer must sign and date below the printed name of the corporation.
- B. The general partner of the company must sign and date below the printed name of the limited company.
- C. A major shareholder of the company must sign and date over their printed name.
- D. An authorized signing officer of the company must sign and date over the words: "I haveauthority to bind the corporation" and below the printed registered name.
Answer: D
NEW QUESTION # 24
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 zoning specialist in the city's planning department
- B. An appraiser with Accredited Appraiser Canadian Institute (AACI) designation
- C. A legal consultant who specializes in evicting residential tenants
- D. A consultant in a financial institution
Answer: C
NEW QUESTION # 25
When calculating the total purchase price of farmland with improvements on it, which of the following items is NOT included?
- A. Goodwill
- B. Barns and sheds
- C. Residence
- D. Fixed equipment
Answer: A
NEW QUESTION # 26
Different clauses can be used for each transaction to address the unique needs of buyers and sellers. Which of the following may be used in an agreement of purchase and sale to buy a commercial property?
- A. A clause for the buyer to have the right to negotiate for specialized restaurant equipment that is not included in the property purchase price
- B. A clause to confirm the remuneration payable to the brokerages will be as stated in the seller representation agreement
- C. A clause for the seller to disclose all information verbally without providing supporting documents to verify that information; documents to be provided on closing
- D. A clause for the buyer to review the leases only after all conditions have been waived and accepted
Answer: A
NEW QUESTION # 27
Which of the following is a reason why an owner might consider redeveloping an industrial property?
- A. The cost of relocating is low.
- B. A similar building can be bought at a low price.
- C. A redevelopment will seriously disrupt the current operation.
- D. The existing building no longer provides the highest and best use of the site.
Answer: D
NEW QUESTION # 28
A salesperson negotiates the purchase of a retail property for their client, who plans to open a new store at this location. The client asks the salesperson how many parking spots the property will be required to have to meet the zoning requirements. The salesperson replies that the municipality has zoning requirements that set the minimum parking ratio. How will the municipality calculate the parking ratio?
- A. The municipality will take the number of available parking spaces and divide it by the property's gross leasable area.
- B. The municipality will take the number of available parking spaces and divide it by the projected number of monthly visitors.
- C. The municipality will take the number of available parking spaces and divide it by the property's net leasable area.
- D. The municipality will take the property's gross leasable area and divide it by the number of available parking spaces.
Answer: D
NEW QUESTION # 29
A buyer should consider the record of site condition (RSC) document when purchasing a commercial property. Which of the following statements regarding an RSC is correct?
- A. Requesting an RSC is mandatory in all real estate transactions.
- B. With other documents, it will inform the buyer of any legal issues attached to the title.
- C. It contains records pertaining to a property's financial condition.
- D. It is not a material fact; thus, it is a formality for the buyer to get it.
Answer: B
NEW QUESTION # 30
Which of the following is NOT relevant information a salesperson must verify when representing a landlord who is planning to lease their industrial property?
- A. The salesperson must verify whether the tenant's intended use for the industrial property is permitted under the zoning bylaw.
- B. The salesperson must verify the zoning information for the industrial property.
- C. The salesperson must verify the rates and terms of lease for the property.
- D. The salesperson must verify the previous tenant's lease rates and terms.
Answer: D
NEW QUESTION # 31
A retail property buyer must consider the parking requirements associated with the site. All of the statements below are considerations for parking, EXCEPT:
- A. Parking may be impacted by zoning requirements.
- B. Required parking for persons with disabilities is usually fixed as a ratio based on the number of disabled persons in the community.
- C. Parking may be impacted by the municipality's parking bylaw.
- D. There may be minimum width and depth requirements for parking spaces.
Answer: B
NEW QUESTION # 32
When discussing economic considerations, interest rates, government policies, and infrastructure specific to industrial properties, why are investors attracted to industrial properties?
- A. Higher mortgage interest rates will provide a better return on investment.
- B. Good transportation and distribution corridors do not matter to industrial investors and their tenants.
- C. Industrial properties have a number of large, credit-worthy tenants and long-term leases.
- D. Industrial properties have a lower capital gains tax at disposition.
Answer: C
NEW QUESTION # 33
Which of the following statements about economic development offices is NOT correct?
- A. Economic development offices can provide you with real property information regarding tax assessments and how to appeal your real estate taxes.
- B. Economic development offices provide background information on local, provincial, and federal research and development incentives.
- C. Economic development offices have important resources for those seeking suitable commercial sites for business operations.
- D. Economic development offices can help guide development applications through municipal processes and streamline the approvals process for companies unfamiliar with regulatory requirements.
Answer: A
NEW QUESTION # 34
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