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

2. 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) New commercial construction and redevelopment must comply with zoning bylaws.
B) Zoning bylaws specify the permitted land uses throughout a municipality.
C) Municipal zoning bylaws overrule all other laws with respect to land uses and issuance ofbuilding permits in Ontario.
D) Municipalities have zoning bylaws that divide the city into different land uses or zones.

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 parties may need to obtain a court order that clarifies how the deposit will be returned and distributed.
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 agreement may contain a clause forfeiting all of the deposit if the landlord has started work on the premises.

4. 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) Triple net lease
B) Gross lease
C) Percentage lease
D) Net lease

5. In regard to cash flow into and out of a business, which of the following is correct?

A) Sales proceeds cash flow does not affect investor decisions.
B) Operating cash flow is used when determining yield on an investment property, while sales proceeds cash flow is not used for this purpose.
C) Operating cash flow can be positive or negative.
D) Sales proceeds cash flow is used when determining yield on an investment property, while operating cash flow is not used for this purpose.

Solutions: