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Humber College PREX-1060A Exam Syllabus Topics:

Humber College Exam 4: Invigilated Theory Sample Questions:

1. When a farm is sold, there are exemptions to the payment of harmonized sales tax (HST). In which of the following circumstances is a farmer responsible to pay HST to the Canada Revenue Agency (CRA)?

A) The farm has been used for personal use.
B) The farmer uses a smaller portion of the farm for a residence.
C) The farmer sells the farm to a relative.
D) The farm is sold to a corporation and the HST is included in the selling price.

2. 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 useful for the appraisal of property types for which sales and income data are scarce, such as industrial and special-purpose properties.
C) 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.
D) The cost approach is typically used to appraise income-generating properties.

3. 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.

4. A salesperson is helping a buyer identify their needs and property requirements to select an appropriate office property and they are discussing the office layout. Which of the following is NOTa layout consideration?

A) Storage
B) Kitchens/lunchrooms
C) Fitting rooms
D) Boardrooms, private offices, and workstations

5. A tenant has an established business with good growth potential for the foreseeable future and wants to rent a retail property for expansion. If the landlord wants to have the opportunity to boost the rent when the tenant's sales are good, which type of lease would you recommend to the landlord?

A) Percentage lease
B) Net lease
C) Gross lease
D) Triple net lease

Solutions: