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Humber College Exam 4: Invigilated Theory Sample Questions:

1. A salesperson discusses with a buyer the potential advantages of purchasing brownfields for redevelopment.
What is NOT an advantage for the buyer of a brownfield property?

A) Brownfield properties typically have the advantage of existing infrastructure such as roads, utilities, water/sewer servicing, schools, and transit facilities.
B) Brownfield properties can often be purchased at well below their potential market value.
C) An owner who rehabilitates a brownfield property can receive tax incentives.
D) The contaminants in brownfields contain precious metals that can be sold to earn additional income.

2. 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) $120,000
B) $60,000
C) $130,000
D) $80,000

3. 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) 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.
B) Ensure the offer contains a clause allowing for compensation for adjustments to the property taxes.
C) Include the current tax assessment as a schedule of the agreement.
D) Get a letter from the seller to guarantee a maximum amount of realty tax payment in the coming year.

4. A buyer client and their salesperson are doing a visual check of the industrial property that the buyer is planning to purchase. When they get to the rear of the property, the salesperson observes a potential source of contamination. Which of the following factors is likely the cause of concern for the salesperson?

A) The office building next door has an overflow parking lot.
B) There is a residential neighborhood and playground nearby.
C) There is vacant land nearby with a small pond with discolored standing water.
D) The neighboring property includes a restaurant, a dental clinic, and a law office.

5. If a property in Ontario is assessed and valued as farmland by the Municipal Property Assessment Corporation (MPAC), the farmer could receive a 75% tax reduction for municipal taxes if certain conditions are met. Which of the following describes a condition that must be met?

A) They submit the appropriate application semi-annually.
B) They have a valid harmonized sales tax (HST) registration number under the Excise Tax Act.
C) They carry on a farming business generating a net profit of $100,000.
D) They are Canadian citizens or permanent residents of Canada.

Solutions: