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Humber College Exam 4: Invigilated Theory Sample Questions:

1. There are different requirements under REBBA and other legislation that affect the sale of a business. Which of the following is NOT correct?

A) There are various municipal bylaws that could impact the sale of a business, depending on the business activity.
B) 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.
C) A key consideration a salesperson must keep in mind when handling the sale of a business is operating licenses.
D) 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.

2. Finish the sentence: The Employment Standards Act:

A) Regulates trade names.
B) Protects the rights of workers of a business that is being sold.
C) Regulates matters involving ownership of a business.
D) Specifies the terms of a business partnership agreement.

3. A salesperson, who is representing a tenant, has completed a comparative market analysis (CMA) of the management fees charged, assessed on a square footage basis, at the different office buildings that their client is interested in leasing. The management fees vary across the comparable office buildings, and the tenant is interested to know why there is a difference. Which of the following is an accurate statement the salesperson can make about the difference in management fees between the buildings?

A) The salesperson should tell the tenant that the Condominium Authority of Ontario regulates management fees charged by buildings as per their size.
B) 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.
C) The salesperson should identify the reasons for high management fees charged for a building and determine the relative value it provides.
D) 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.

4. A salesperson includes a well-drafted condition in an agreement of purchase and sale for their buyer client to arrange a new first mortgage for an industrial property. The buyer later changes their mind and does not want to borrow money for the purchase. What should the buyer's salesperson use to remove the condition?

A) Waiver
B) Notice of fulfillment
C) Acknowledgment
D) Mutual release

5. When a farm is sold, there are exemptions to the payment of harmonized sales tax (HST). In which of the following circumstances is a farmer responsible to pay HST to the Canada Revenue Agency (CRA)?

A) The farmer sells the farm to a relative.
B) The farmer uses a smaller portion of the farm for a residence.
C) The farm is sold to a corporation and the HST is included in the selling price.
D) The farm has been used for personal use.

Solutions: