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Humber College Exam 4: Invigilated Theory Sample Questions:
1. The cost approach is one method of real estate evaluation that an appraiser may use to estimate the value of a commercial property. Which of the following is NOT an accurate statement regarding the cost approach?
A) The cost approach is preferred for older construction properties, as calculating depreciation on them is fairly straightforward.
B) The cost approach is preferred for newer construction properties, as the appraiser would not need to make a subjective estimation of the accrued depreciation of the building.
C) The cost approach is useful for the appraisal of property types for which sales and income data are scarce, such as industrial and special-purpose properties.
D) The cost approach is typically used to appraise income-generating properties.
2. Finish the sentence: When a commercial tenant enters an agreement to lease, the covenant to pay rent specifies that the tenant:
A) Cannot pay rent to the property manager and must pay directly to the property owner.
B) Agrees to pay additional rent for a gross lease.
C) Agrees to pay any percentage rent a landlord demands, regardless of sales revenue.
D) Cannot withhold rental payments even if the landlord does not comply with their obligations under the lease.
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 agreement may contain a clause forfeiting all of the deposit if the landlord has started work on the premises.
B) The landlord and tenant may agree to split the deposit.
C) The tenant can have the deposit back without signing a mutual release as it is not their fault.
D) The parties may need to obtain a court order that clarifies how the deposit will be returned and distributed.
4. The operating costs of a commercial building are usually higher than those of buildings that do not have any common areas. Common area maintenance (CAM) is referred to as the landlord's operating costs attributable to factors that affect the common areas. Which of the following is NOT one of those factors?
A) Depreciation
B) Operations
C) Repairs
D) Supervision
5. A buyer client is discussing zoning bylaws of the municipality in relation to an industrial development site with their salesperson. Which of the following is NOT a correct statement with respect to zoning bylaws?
A) Municipal zoning bylaws overrule all other laws with respect to land uses and issuance ofbuilding permits in Ontario.
B) Zoning bylaws specify the permitted land uses throughout a municipality.
C) Municipalities have zoning bylaws that divide the city into different land uses or zones.
D) New commercial construction and redevelopment must comply with zoning bylaws.
Solutions:
| Question # 1 Answer: A | Question # 2 Answer: D | Question # 3 Answer: C | Question # 4 Answer: A | Question # 5 Answer: A |
