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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) The buyers should submit their concerns to the provincial warranty authority, as they are entitled to one- year warranty coverage from the occupancy date.
B) The buyers should draft a list of all their concerns and submit them to the municipality for appropriate coverage.
C) 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.
D) There is no provincial warranty coverage for commercial condominiums, but the buyers can inquire with the builder about any warranties that they may offer.

2. A land developer is interested in purchasing a piece of vacant land. Which of the following statements about evaluating the highest and best use of the real property is correct?

A) The estimate of value is related to how a typical buyer, with a reasonable knowledge of the market and property, wants to use the property.
B) The land developer can identify the use of the property that is anticipated to produce the highest overall return so the appraiser can complete the appraisal.
C) A property's highest and best use is the use that, at the time the building was built, was most likely to produce the greatest net return.
D) A designated appraiser will use all factual sales data to determine the value of the current highest and best use of the property.

3. In a commercial transaction, which of the following is NOT a responsibility of the lawyer?

A) Review of financial statements
B) Exchange of legal documents
C) Remedy of title issues
D) Review of the Agreement of Purchase and Sale

4. 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 discuss latent defects known to the seller of the office building with the seller and disclose them to a buyer.
B) 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.
C) 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.
D) The salesperson should discuss patent defects known to the seller of the office building with the seller and disclose them to a buyer.

5. 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) 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.
B) A major shareholder of the company must sign and date over their printed name.
C) The buyer must sign and date below the printed name of the corporation.
D) The general partner of the company must sign and date below the printed name of the limited company.

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