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Humber College Exam 4: Invigilated Theory Sample Questions:

1. When representing a client who is selling a business, a salesperson must be aware of concerns related to compliance. Which of the following is NOT a compliance concern?

A) The seller discloses all liabilities of the business in writing
B) Income and expense statements contain misrepresentations
C) The condition of goods, chattels, and fixtures cannot be verified
D) The seller provides insufficient due diligence documents

2. The operating costs of a commercial building are usually higher than those of buildings that do not have any common areas. Common area maintenance (CAM) is referred to as the landlord's operating costs attributable to factors that affect the common areas. Which of the following is NOT one of those factors?

A) Depreciation
B) Repairs
C) Supervision
D) Operations

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 tenant can have the deposit back without signing a mutual release as it is not their fault.
C) The agreement may contain a clause forfeiting all of the deposit if the landlord has started work on the premises.
D) The landlord and tenant may agree to split the deposit.

4. In a commercial transaction, which of the following is NOT a responsibility of the lawyer?

A) Exchange of legal documents
B) Review of the Agreement of Purchase and Sale
C) Remedy of title issues
D) Review of financial statements

5. A brokerage negotiates the sale of a business on behalf of a seller. Which of the following documents must the brokerage provide to the buyer?

A) A list of chattels excluded in the sale
B) A list of fixtures included in the sale
C) A profit and loss statement for the real estate brokerage for the preceding 12 months
D) A statement of the assets and liabilities of the brokerage

Solutions: