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Humber College Exam 4: Invigilated Theory Sample Questions:

1. A salesperson includes a well-drafted condition in an agreement of purchase and sale for their buyer client to arrange a new first mortgage for an industrial property. The buyer later changes their mind and does not want to borrow money for the purchase. What should the buyer's salesperson use to remove the condition?

A) Waiver
B) Notice of fulfillment
C) Acknowledgment
D) Mutual release

2. A buyer client is interested in purchasing a 30,000 sq. ft. industrial building in an industrial park. The buyer's salesperson drafts an agreement of purchase and sale that includes an environmental site assessment condition that must be met at the buyer's own expense, and to the buyer's satisfaction. Which of the following is NOT an accurate statement regarding the environmental site assessment condition?

A) The environmental site assessment condition makes the offer conditional upon the buyer determining that the property is free from hazardous conditions or substances.
B) The environmental site assessment condition makes the offer conditional upon the buyer determining that no limitations or restrictions affecting the continued use of the property exist.
C) The environmental site assessment condition makes the offer conditional upon the seller delivering documents, records, and reports relating to environmental matters to the buyer upon request.
D) The environmental site assessment condition makes the offer conditional upon all possible court actions regarding environmental matters being thought of and reported.

3. Which of the following is a characteristic of main street retail?

A) Consists of newer, free-standing buildings only
B) Comprises a blend of old and new stores
C) Structure size typically ranges from 100,000 to 130,000 square feet
D) Must be located in a small, older community

4. Asset sale and share sale are two different ways to sell a business. Which statement describes an asset sale?

A) The seller benefits from a tax standpoint since any gain to the seller on the sale will be considered under the capital gains tax exemption.
B) The buyer is eligible for tax deductions and benefits by claiming capital cost allowance on depreciable property.
C) The buyer replaces the seller as the owner of the corporation.
D) The buyer assumes all assets and accepts all liabilities of the business.

5. In regard to equipment at an industrial property that is being shown for sale, a salesperson representing a buyer should do all of the following, EXCEPT:

A) Obtain clarification as to which equipment seen during the showing will be included in the purchase price of the property.
B) Ensure chattels or fixtures are not included in the sale or negotiated for in the agreement.
C) Ensure they are informed as to whether the equipment shown will be relevant for the buyer's intended use.
D) Contact the seller's representative prior to the showing to gain awareness of safety and compliance requirements.

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