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Humber College Exam 4: Invigilated Theory Sample Questions:

1. Finish the sentence: When a commercial tenant enters an agreement to lease, the covenant to pay rent specifies that the tenant:

A) Cannot withhold rental payments even if the landlord does not comply with their obligations under the lease.
B) Agrees to pay any percentage rent a landlord demands, regardless of sales revenue.
C) Agrees to pay additional rent for a gross lease.
D) Cannot pay rent to the property manager and must pay directly to the property owner.

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

A) Parking may be impacted by zoning requirements.
B) Required parking for persons with disabilities is usually fixed as a ratio based on the number of disabled persons in the community.
C) Parking may be impacted by the municipality's parking bylaw.
D) There may be minimum width and depth requirements for parking spaces.

3. A buyer has just been approved for a commercial mortgage to purchase a retail strip plaza. They meet with their salesperson to review the mortgage documents. The buyer expresses concern about possible late payments. Which of the following is an accurate statement about provisions in the commercial mortgage documents regarding late payments?

A) Penalties for late payments will be added to the monthly rent.
B) Each lender has their own method for dealing with late payments.
C) There are no penalties for late payments in a commercial mortgage.
D) The options for late payments are the same for every lender.

4. A seller provides you with architectural drawings of their building. Which statement is NOT correct?

A) If changes are made to source documents, they are still valid if you have the original document.
B) A photocopy of a source document can be used to verify information.
C) Architectural drawings are source documents.
D) Other types of source documents include surveys and tax records.

5. A tenant is interested in leasing a property; however, the tenant would like to make improvements to the property. Which of the following statements about tenant improvements is correct?

A) The landlord may offer a "tenant improvement allowance" which provides funds to cover thecosts of tenant improvements.
B) In a lease agreement, the tenant provides a list of improvements to the landlord and the landlord always pays for these improvements.
C) The tenant takes the premises in an "as is" condition and can complete whatever improvements they wish without landlord approval.
D) Unless indicated in the lease agreement, improvements attached to the leased building generally become the tenant's property upon vacating the premises.

Solutions: