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Humber College PREX-1060A Exam Syllabus Topics:

Humber College Exam 4: Invigilated Theory Sample Questions:

1. 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) Zoning bylaws specify the permitted land uses throughout a municipality.
B) New commercial construction and redevelopment must comply with zoning bylaws.
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.

2. A tenant receives the keys to their new retail space. When the tenant opens the door, they see evidence of a small fire on the walls near the electrical panel. Which of the following is an appropriate recommendation the salesperson could provide to the new tenant?

A) Repair the damage and deduct the cost from the rent.
B) Terminate the lease and start looking for a new space.
C) Meet with the property manager, review the lease, and determine a course of action.
D) Contact a lawyer and immediately start a legal action for damages.

3. 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 newer construction properties, as the appraiser would not need to make a subjective estimation of the accrued depreciation of the building.
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 older construction properties, as calculating depreciation on them is fairly straightforward.
D) The cost approach is typically used to appraise income-generating properties.

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

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

5. A buyer client has hired a commercial appraiser to assess the market value of a fully tenanted commercial complex. The complex is mixed-use with retail on the main level and offices on the second and third levels. It is an older property with unique characteristics. Which of the following is NOT a correct statement regarding how the appraiser will determine the value of the property?

A) The appraiser will research similar buildings, as commercial properties are usually bought and sold on a dollar value per square foot.
B) The appraiser will research the layout of other types of commercial buildings to establish the utility of the mixed-use building.
C) 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.
D) The appraiser will assess the layout of the complex, as it will directly establish the utility of the mixed- use building.

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