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Humber College PREX-1060A - Exam 4: Invigilated Theory Exam

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Total 120 questions

Which statement about an Environmental Site Assessment (ESA) is NOT correct?

A.

All new commercial properties must undergo an ESA before construction begins.

B.

An ESA is not required if the buyer is purchasing the industrial property for their own use.

C.

No stipulations exist for the third and final phase of an ESA due to its vast and complex nature.

D.

The Environmental Protection Act establishes the procedures and requirements for the first two phases of an ESA.

If a retail unit has a usable area of 3,482 sq. ft. with a conversion rate of 1.1235, what would the tenant's rentable area be?

A.

The retail tenant's rentable area would be 3,482 sq. ft.

B.

The retail tenant's rentable area would be 3,073 sq.ft.

C.

The retail tenant's rentable area would be 3,912 sq.ft.

D.

The retail tenant's rentable area would be 3,605 sq. ft.

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.

The neighboring property includes a restaurant, a dental clinic, and a law office.

C.

There is vacant land nearby with a small pond with discolored standing water.

D.

There is a residential neighborhood and playground nearby.

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.

It is not a material fact; thus, it is a formality for the buyer to get it.

C.

With other documents, it will inform the buyer of any legal issues attached to the title.

D.

It contains records pertaining to a property's financial condition.

Which of the following statements regarding heavy industrial use and light industrial use is correct?

A.

Clay production is an example of light industrial use.

B.

Light industrial use usually results in more noise and heavier traffic.

C.

Heavy industrial use can produce more pollution than other commercial activities.

D.

Heavy industrial use usually results in less traffic in and out of the heavy industrial zone.

A retail property buyer must consider the parking requirements associated with the site. All of the statements below are considerations for parking, EXCEPT:

A.

There may be minimum width and depth requirements for parking spaces.

B.

Parking may be impacted by zoning requirements.

C.

Parking may be impacted by the municipality’s parking bylaw.

D.

Required parking for persons with disabilities is usually fixed as a ratio based on the number of disabled persons in the community.

Which of the following is a risk associated with investing in commercial real estate?

A.

The relative lack of liquidity

B.

The relative lack of capital growth during the holdover period

C.

The fact that rent, leased space, and building size are fixed

D.

The insufficiency of cash flow during the holding period

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.

Repairs

B.

Supervision

C.

Operations

D.

Depreciation

Audited and unaudited statements provide the financial status of a business to potential buyers. What is the main difference between audited and unaudited financial statements?

A.

Unaudited financial statements are prepared by Chartered Professional Accountants; audited financial statements are prepared by senior Chartered Professional Accountants.

B.

Audited financial statements provide an accurate picture of the financial status of a business; unaudited financial statements may only contain partially reviewed information.

C.

Unaudited financial statements are prepared by accounting students; audited financial statements are completed by accountants who have received their professional designation.

D.

Audited financial statements comply with Generally Accepted Accounting Principles (GAAP); unaudited financial statements do not comply with GAAP.

Which of the following statements about industrial building components is correct?

A.

Bay depth is an important consideration when determining the layout of an industrial process.

B.

Loading docks are only used to off-load products or raw materials.

C.

Flat roofs are designed to be flat to hold water.

D.

Floor load refers to the weight of the building during construction.