PREX-1060A Sample Questions Answers

Goodwill

Fixed equipment

Residence

Barns and sheds

The relative lack of liquidity

The relative lack of capital growth during the holdover period

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

The insufficiency of cash flow during the holding period

The salesperson should attempt to identify signs of contamination on the property and recommend an appropriate third-party expert to the seller client.

The salesperson should include the information in the marketing material as it would be beneficial for an auto sales business to have a garage located nearby.

The salesperson should ask the owner of the garage for more information and what course of action they recommend to assist a future purchaser of the site.

The salesperson should ask the owner of the garage whether they have thought about selling their property at this time.

The salesperson should tell their client that higher management fees charged for a building always indicates that the tenant is getting superior service and value.

The salesperson should explain that a tenant occupying a smaller rentable area in a building pays higher management fees per square foot compared to a tenant with an average or larger rentable area.

The salesperson should identify the reasons for high management fees charged for a building and determine the relative value it provides.

The salesperson should tell the tenant that the Condominium Authority of Ontario regulates management fees charged by buildings as per their size.

The buyer can use the same amendment to ask for a change of the closing date.

The buyer can still waive the condition before the expiry date if the seller refuses to sign the amendment, provided there is a waiver provision in the condition.

The salesperson should prepare the amendment with midnight, May 17 as the irrevocable time.

To play it safe, the salesperson should amend the condition with May 18 as the expiry date.

If the builder does not address this issue, the buyers can file a complaint with the provincial warranty authority for any outstanding work the builder did not complete.

The buyers should submit their concerns to the provincial warranty authority, as they are entitled to one-year warranty coverage from the occupancy date.

There is no provincial warranty coverage for commercial condominiums, but the buyers can inquire with the builder about any warranties that they may offer.

The buyers should draft a list of all their concerns and submit them to the municipality for appropriate coverage.

A key consideration a salesperson must keep in mind when handling the sale of a business is operating licenses.

Depending on the business location, there are various municipal bylaws, zoning, permits, and other rules and regulations that could impact the sale of a business.

There are various municipal bylaws that could impact the sale of a business, depending on the business activity.

If a municipal license is associated with the business and it may be transferrable to the buyer, then it is of no concern to the sales representative.

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

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

Flat roofs are designed to be flat to hold water.

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

The farm is sold to a corporation and the HST is included in the selling price.

The farm has been used for personal use.

The farmer uses a smaller portion of the farm for a residence.

The farmer sells the farm to a relative.

Ensuring inspections are being carried out as required

Contacting contractors for quotes for repairing or replacing equipment

Reviewing whether the technical components have been recently replaced or upgraded

Learning what types of equipment are in the building and having a general understanding of theirage and condition

The BOMA standards are complex.

The BOMA standards provide methods of measuring industrial buildings only.

The BOMA standards provide methods of measuring office buildings only.

The BOMA standards provide procedures to measure rentable areas only.

Storage

Kitchens/lunchrooms

Fitting rooms

Boardrooms, private offices, and workstations

The salesperson should explain that clear span refers to the amount of floor area that is clear of interference from columns and walls.

The salesperson should explain that clear span refers to the unobstructed vertical distance from the floor to the bottom of the lowest ceiling or roof component.

The salesperson should explain that clear span refers to the unobstructed vertical distance from the floor to the bottom of the highest point of the ceiling or roof component.

The salesperson should explain that clear span refers to the total amount of floor area in the space, including the space that is occupied between columns and walls.

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

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

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

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

The appraiser will research similar buildings, as commercial properties are usually bought and sold on a dollar value per square foot.

The appraiser will assess how convenient it is to access the building and whether customers would be required to walk a significant distance within the mixed-use commercial complex to find a retailer.

The appraiser will assess the layout of the complex, as it will directly establish the utility of the mixed-use building.

The appraiser will research the layout of other types of commercial buildings to establish the utility of the mixed-use building.

Use a laser measuring device to take the measurements.

Recommend the services of third-party professionals to measure it.

Tell the seller the usable size is 80 percent of the rentable size.

Add a disclaimer to protect the seller from any discrepancy.

The investor is afforded the opportunity to enhance yield.

The success of ventures often rests in the availability and suitability of financing.

Lenders will apply various financial ratios to get a solid understanding of the business's performance and the ability of the borrower to service debt.

It does not matter; mortgaging does not affect cash flow and yields.

Net lease

Percentage lease

Gross lease

Triple net lease

A stable internet connection

Sufficient lighting

A high voltage and ampere supply

A proper ventilation system

Amount of advertising and publicity

Proximity to museums and historical sites

Price trend for detached homes in nearby neighborhoods

Access to raw materials used in the region

The landlord must address their tenants' issues in a timely manner in general but more so when the issue can result in serious and costly consequences.

All commercial leases require that tenants keep everything in and about the property, including all points of entry and exit, in good repair at all times.

Tenants are obligated to ensure they have adequate tenant insurance for their property.

Not all commercial leases require the landlord to perform repairs and maintenance.

Include the current tax assessment as a schedule of the agreement.

Ensure the offer contains a clause requiring the seller and the buyer to share the property taxes to be assessed for the next three years.

Ensure the offer contains a clause allowing for compensation for adjustments to the property taxes.

Get a letter from the seller to guarantee a maximum amount of realty tax payment in the coming year.

$80,000

$60,000

$120,000

$130,000

Comprises a blend of old and new stores

Must be located in a small, older community

Consists of newer, free-standing buildings only

Structure size typically ranges from 100,000 to 130,000 square feet

Energy efficiency

Innovative elements

Sustainability

Vacancy rate

An owner who rehabilitates a brownfield property can receive tax incentives.

The contaminants in brownfields contain precious metals that can be sold to earn additional income.

Brownfield properties typically have the advantage of existing infrastructure such as roads, utilities, water/sewer servicing, schools, and transit facilities.

Brownfield properties can often be purchased at well below their potential market value.

An owner who rehabilitates a brownfield property can receive tax incentives.

The contaminants in brownfields contain precious metals that can be sold to earn additional income.

Brownfield properties typically have the advantage of existing infrastructure such as roads, utilities, water/sewer servicing, schools, and transit facilities.

Brownfield properties can often be purchased at well below their potential market value.

In a lease agreement, the tenant provides a list of improvements to the landlord and the landlord always pays for these improvements.

The landlord may offer a "tenant improvement allowance" which provides funds to cover the costs of tenant improvements.

The tenant takes the premises in an "as is" condition and can complete whatever improvements they wish without landlord approval.

Unless indicated in the lease agreement, improvements attached to the leased building generally become the tenant's property upon vacating the premises.

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

Parking may be impacted by zoning requirements.

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

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

Zoning bylaws specify the permitted land uses throughout a municipality.

Municipal zoning bylaws overrule all other laws with respect to land uses and issuance ofbuilding permits in Ontario.

New commercial construction and redevelopment must comply with zoning bylaws.

Municipalities have zoning bylaws that divide the city into different land uses or zones.

The absorption rate, net absorption rate, and rising rental rates

When tenants have lots of options because of the amount of available space at favorable rates

Low rental rates and many concessions

The number of free months given to new and renewing tenants by landlords in the office marketplace

Create a business plan

Gather, organize, and verify all pertinent information

Identify third-party professionals

Estimate time frames required for due diligence and other offer conditions

Power stations

Petroleum storage and distribution sites

Chemical manufacturers

Computer training institute