You are the listing broker of a commercial building. It is a neighborhood shopping center with an area of 43,000 square feet. You have received a call from a real estate developer who is interested in the mall and would like to meet with you to get details and to show it around. During this meeting, this real estate developer would like to explain to you the projects he has in mind with the shopping center which is in great need of renovation.
What are you going to recommend to the client?
1 Not to share their strategies with you since you represent the seller.
2 To inform you of his strategies in writing so that you can incorporate them in the future into a promise to purchase if that is what the client wishes.
3 To sign a brokerage contract (BCP) with you, so you can advise him on the price to offer in connection with his renovation strategies.
4 Instead, come and visit another commercial building
1 Not to share their strategies with you since you represent the seller.
Garry, a real estate developer recently referred you a file for the sale of vacant commercial land. Indeed, the owner of the land was to proceed with the development of it in collaboration with Garry, but the project fell through. Thus, having already retained your services in the past, Garry has provided your information to the seller who wishes to sign a brokerage contract with you for the sale of the land. That said, Garry and you have agreed on an amount of $5,000 that you will pay Garry as a remuneration sharing, in the event of the conclusion of a transaction.
Does this agreement respect the rules to which you are bound as a commercial real estate broker?
1 No, a real estate broker can only share his remuneration with another real estate broker license holder as mentioned in the brokerage contract.
2 Yes, provided however that you complete and have the seller sign a Disclosure of remuneration sharing form before signing the brokerage contract.
3 No, a commercial real estate broker can only share his remuneration with another real estate broker or mortgage brokerage license holder.
4 Yes, provided however that you complete and have the seller sign a Disclosure of remuneration agreement form before signing the brokerage contract.
4 Yes, provided however that you complete and have the seller sign a Disclosure of remuneration sharing form before signing the brokerage contract.
Yesterday you signed a brokerage contract (BCG) for the sale of an apartment building (6-plex). No additional conditions have been inserted in the contract. You also gave the seller, Gaston Lagaffe, the double of the contract at the same time yesterday. Gaston calls you today because he had a very bad night’s sleep. Indeed, he has changed his mind and no longer wants to sell his 6-plex.
What do you answer him?
1 Clause 2 of the BCG mentions that this is an exclusive contract, so it is not possible to change your mind.
2 It is possible to terminate the contract because it has not been stipulated as non-cancellable in its clause 11.1.
3 It is possible to terminate the contract because we are within 3 days of the day Gaston received the double of the signed contract.
4 The contract can only be terminated for a serious reason; otherwise it would be detrimental to you as a broker.
2 It is possible to terminate the contract because it has not been stipulated as non-cancellable in its clause 11.1.
Your buying client is looking for a commercial space to operate a snack-bar style restaurant. You visited with this buyer an ideal space which is in fact a commercial condo located on the ground floor of a mixed building in the neighborhood sought by your client. Your client does not want to take the chance of losing the premises so wants to quickly submit a promise to purchase.
In light of your client’s needs, what will you recommend?
1 Include in the PPG a condition in clause 11.1 for the study of the declaration of co-ownership to the satisfaction of your client.
2 Include in the PPG a condition in clause 11.1 allowing the buyer to confirm with the city the possibility of opening such a business and the conditions required to obtain such a permit.
3 Include in the PPG in clause 11.1 two conditions, namely the study of the declaration of co-ownership to the satisfaction of your client and the confirmation with the city of the possibility of opening such a business and the conditions required for obtaining of such a permit.
4 Include in the PPG in clause 11.1 two conditions: the study of the declaration of co-ownership to the satisfaction of your client and the obtaining by the seller of confirmation from the city that the buyer will be able to obtain a permit for the operation of a snack bar.
2 Include in the PPG a condition in clause 11.1 allowing the buyer to confirm with the city the possibility of opening such a business and the conditions required to obtain such a permit.
Feedback:
It is the role of the broker to adequately complete the document review section in the PPG. Since the PPG already contains in its clause 9.1 the condition of the study of the declaration of co-ownership, the only condition in this case to be inserted in clause 11.1 is obtaining confirmation from the city. This confirmation must be obtained by the buyer.
Student Manual, section 3.6.3 Review of documents.
You are drafting a commercial promise to lease (PLC) with a tenant who is not represented by a broker. Giving fair treatment to this tenant since you are the landlord’s broker, you know you cannot advise this tenant. At clause 8.2 of the PLC, you ask the tenant what use he intends to make of the premises and whether he wishes to include an exclusivity clause. The tenant tells you that he intends to operate a clothing store in the premises and would like an exclusivity clause.
What is the best practice under the circumstances?
1 Indicate in clause 8.2 as use of the premises: clothing store and check the box for the exclusivity clause.
2 Indicate in clause 8.2 as use of the premises: clothing store, check the box for the exclusivity clause and write on the lines: the tenant will have the exclusivity to operate a clothing store.
3 Confirm with the buyer the type of clothing that he will be selling in the store to add this clarification to clause 8.2 and recommend that he consult a lawyer to incorporate an exclusivity clause in the lease.
4 Confirm with the buyer the type of clothing that he will be selling in the store to add this clarification to clause 8.2, check the box for the exclusivity clause and add an exclusivity clause that takes into account this precise description of the activities, duration, radius of application and the consequence if this clause is not respected.
4 Confirm with the buyer the type of clothing that he will be selling in the store to add this clarification to clause 8.2, check the box for the exclusivity clause and add an exclusivity clause that takes into account this precise description of the activities, duration, radius of application and the consequence if this clause is not respected.
Feedback:
It is the role of the real estate broker to include in the promise to lease any clause to be inserted in the future in the lease. To be complete, the exclusivity clause must foresee and describe exactly the type of activities protected. A generic or imprecise expression would be a source of dispute.
Student Manual, sections 5.3.2 Specific clauses and section 5.4 Promise to lease - commercial (PLC) clause 10.1.
Question 61/1 point
We are April 30, 2050. A few weeks ago you concluded a transaction relating to a commercial building. You were then the buyer’s broker. He calls you and mentions that following the sending of a commercial lease termination notice to one of the tenants on April 8, 2050, the tenant is now opposing the publication of his commercial lease. A little confused because this is not the information you had been working with, you go back to the land register and take note of the following dates:
Publication of the deed of sale on March 20, 2050
Publication of a lease notice by the tenant March 23, 2050
Based on this information, should you notify the FARCIQ of a potential complaint about you regarding this transaction?
1 No, since the lease was published following the sale, this publication is not opposable to your buyer client and therefore you have not committed any fault in this file.
2 Yes, the complaint of your buyer client is justified, you should have informed the buyer that the publication of a commercial lease can be made at any time and is binding on him.
3 Yes, since the commercial lease was published before the notice of termination was sent by the new buyer, this publication is binding on him and you should have notified the client.
4 No, the verification of the publication of a lease in the land register is the responsibility of the listing broker, so the complaint should be directed to himé,
1 No, since the lease was published following the sale, this publication is not opposable to your buyer client and therefore you have not committed any fault in this file.
The company 9887-6554 Québec Inc. owns a commercial building and wishes to sell it. During your preliminary checks at the Land Registry, you notice that one of the 6 tenants of the building has published his commercial lease by notice of lease.
How important is this information to the sale of this building?
1 Not very important: it is only one of the 6 tenants so you do not have to mention it anywhere.
2 Moderately important: a new buyer will then be obliged to follow a specific procedure to cancel this lease following the purchase.
3 Very important: a new buyer cannot terminate this lease and must honor its content, including any renewal option.
4 Not very important: the verification of this type of legal limitation must be done by the notary and therefore does not fall under your role as listing broker.
3 Very important: a new buyer cannot terminate this lease and must honor its content, including any renewal option.
You represent a buyer of an industrial building. The purchase price of the building is $1,125,000 plus taxes (combined rate of 14.975%). According to the extract from the property assessment roll, the assessment amount is $988,000. Naturally, you must advise the buyer about the costs associated with the purchase. To calculate the transfer duties, what will be the tax base that you will use?
$1,125,000
$988,000
$1,293,468.75
$1,135,953
$1,125,000
You want to take a brokerage contract for the sale of 8 hectares of agricultural land. The seller is a foreign investor from China. What should you consider when drafting your brokerage contract regarding the residence of the seller?
1 State in the brokerage contract that the seller is non-Canadian and obtain authorization from the CPTAQ to proceed with the sale.
2 Obtain from the seller the certificates of compliance from the two levels of government and the authorization of the CPTAQ to proceed with the sale.
3 Obtain from the seller the certificates of compliance from the two levels of government or ensure that a sufficient withhold can be made at the notary’s in their absence.
4 Ensure that a sufficient withhold can be made at the notary and obtain authorization from the CPTAQ to proceed with the sale.
3 Obtain from the seller the certificates of compliance from the two levels of government or ensure that a sufficient withhold can be made at the notary’s in their absence.
Marcel is the sole shareholder and director of Immeubles Marcel Inc., which owns an industrial building purchased in 2001. Since the company wishes to sell it, it is Marcel who is contacting you for this transaction. During the meeting, you verify Marcel’s identity using his driver’s license. He tells you that he has been married since 1968 to Monique without a marriage contract. She is available to intervene in the brokerage contract. Is Monique’s intervention required in the brokerage contract?
1 Yes, being married under the community of property regime, the intervention of the wife is required for the sale of the building since it is a common good.
2 Yes, being married under the regime of partnership of acquests, the intervention of the wife is required for the sale of a family property.
3 No, being married under the regime of separation of property, the intervention of the wife is not required for the sale of an industrial building.
4 No, the matrimonial regime has no influence on the transaction therefore the intervention of the wife is not required for the sale of this industrial building.
4 No, the matrimonial regime has no influence on the transaction therefore the intervention of the wife is not required for the sale of this industrial building.
For a transaction on a commercial building in which both the listing broker and a collaborating broker are working on their own account, and the buyer has completed a PAG, which of the following choices is false?
1 The check for a deposit on the sale price must be made to the seller since it is a deposit on the sale price.
2 The check for a deposit on the sale price can be made to the listing broker in trust.
3 The check for a deposit on the sale price can be made to the collaborating broker in trust.
4 The buyer is free to decide whether or not to issue a check for a deposit on the sale price when making the promise to purchase.
1 The check for a deposit on the sale price must be made to the seller since it is a deposit on the sale price.
Which of the following scenarios could be the subject of a complaint to the FICI?
1 A commercial real estate broker forgot to verify the actual amount of rents using commercial leases before indicating them in his Centris listing.
2 A commercial real estate broker has not correctly calculated the residential area that exceeds the commercial area of a mixed building and has entered into a CCG brokerage contract with the seller.
3 A commercial real estate broker presented his best friend’s commercial building to his buyer client by inadvertently failing to disclose his conflict of interest in writing.
4 A commercial real estate broker presented his personal commercial building to his buyer client by simply explaining that it is the only building of its kind currently available on the market knowing that this is false.
4 A commercial real estate broker presented his personal commercial building to his buyer client by simply explaining that it is the only building of its kind currently available on the market knowing that this is false.
As part of a commercial lease brokerage contract (BCC) with 1234-5678 Québec Inc., which of the following documents must be included in your brokerage contract file and submitted to your real estate agency?
Brokerage contract BCC
Proof of identity verification
Printout from the Quebec Enterprise Registrar (REQ)
Resolution of the board of directors
List of beneficial owners (organizational chart)
Index of immovable
Cadastral plan
Floor plan
1 to 8
1 to 5
6 to 8
2 to 5
1-8
Feedback:
All documents must be recorded in your brokerage contract file. See the checklist – commercial brokerage – Brokerage contract file. The broker must be able to adequately list all the documents that must be given to the agency in the context of a commercial rental.
Student Manual, section 1.6.11 Record and registers keeping .
Dominic Gratton recently passed his certification exam with the OACIQ and has just obtained his commercial real estate broker’s license. He plans on getting his residential license in a few years. Dominic is acting on his own account. He created an email address specifically for his brokerage activities dominicimmobilier@gmail.com. He wants to create a signature for his email. Among the following choices, which is an acceptable signature according to the rules of advertising to which he is bound?
1 Dominic Gratton, real estate broker.
2 Dominic Gratton, Chartered Real Estate Brokeré.
3 Dominic Gratton, commercial real estate broker.
4 Dominic Gratton, Comm. R.E. Bkr
3 Dominic Gratton, commercial real estate broker.
Julie has just obtained her commercial real estate broker’s license from the OACIQ after passing her certification exam. She is acting on her own account, here is the information related to Julie:
Name and title: Julie Carrière, commercial real estate broker
Address of her office: 123, Principale Street, Québec, Québec, J8B 9L7
Cell number: 514-897-8998
Email address: juliecarrière@immo.ca
Website: Immocareer.com
Other degree she has: Bachelor of Arts (B.A.)
Professional photo taken 2 years ago
Which of these items must appear on Julie’s business card according to the advertising rules to which she is bound?
1
1 to 5
1 to 6
1 to 7
1
Feedback:
For a business card, from a real estate broker on his own account, according to the advertising rules, the only mandatory elements are the full name and full title of the license holder. The other elements can be indicated on the professional card but are optional.
Student Manual, section 1.6.10 Advertising.
Question 161/1 point
You are the listing commercial real estate broker for an 8-unit apartment building. The day before yesterday at 6 p.m., you received a promise to purchase valid for 72 hours. Since there is only 24 hours of acceptance time left and your seller does not seem convinced that he wants to accept this promise to purchase, you contact Pascal, a collaborating broker, representing buyers who visited last week and who are still interested. You inform Pascal of the existence of the promise to purchase for the first time since receiving it, telling him that it is a good time for his clients to make an offer $5,000 higher than the one you have and are certain that your seller will accept. Among the professional actions taken, which violate the rules of ethics and professional conduct of the broker?
To have informed a collaborating broker 48 hours after receiving a promise to purchase
For having disclosed the content of a promise to purchase
Suggesting that the collaborating broker make a $5,000 higher offer
To have assured the collaborating broker that your seller would accept his offer
1 and 2
1, 3 and 4
2 and 3
1, 2, 3 and 4
1, 2, 3 and 4
Question 171/1 point
What is the definition of conflict of interest for the real estate broker?
1 When his interests conflict with those of his client.
2 When his interests are in agreement with those of his client.
3 When the interests of his client are opposed to those of the client’s spouse.
4 When his love interests conflict with those of his family.
When his interests conflict with those of his client.
1 You are a commercial real estate broker and want to submit a promise to purchase for a property for yourself. You are also bound by a brokerage purchase contract with a client who is also interested in this property. Knowing that you are in a conflict of interest what are you going to do?
2 Disclose my broker status in a notice of disclosure with my promise to purchase and continue to represent my buyer client.
3 the purchase brokerage contract, suggest that the buyer be represented by another real estate broker and disclose my broker status in a notice of disclosure with my promise to purchase.
4 Offer the buyer to continue to represent him despite the appearance of a conflict of interest for the drafting of his promise to purchase while drafting mine, without the content being identical.
Terminate the purchase brokerage contract, suggest that the buyer be represented by another real estate broker and send the seller my promise to purchase.
2 Terminate the purchase brokerage contract, suggest that the buyer be represented by another real estate broker and disclose my broker status in a notice of disclosure with my promise to purchase.
You have a buyer who is interested in an income property (See Handout A4). Using the comparables you found (Handout A1, A2 and A3) in the same area, please value the building using the Effective Gross Income Multiplier (EGIM) method. Select the answer that is closest to the value of the subject.
Here is some additional information:
Vacancy rate in the area: 3% (applies only to income generated from rents and not to rent collected from laundry nor rent collected from parking)
Rate of bad debt: 1% (applies only to income generated from rents and not to rent collected from laundry nor rent collected from parking)
Management fees are estimated at 5% of effective gross income generated from rent only (not including the revenue generated from laundry and parking)
6 825 091$
6 568 794$
6 316 149$
6 251 446$
6 316 149$.
see attached anex
You have a buyer who is interested in an income property (See Handout A4). Using the comparables you found (Handout A1, A2 and A3) in the same area, please value the building using the Net Income Multiplier (NIM) method. Select the answer that most closely matches the value of the subject.
Here is some additional information:
Vacancy rate in the area: 3% (does not apply to rent collected from laundry nor rent collected from parking)
Rate of bad debt: 1% (does not apply to rent collected from laundry nor rent collected from parking)
Management fees are estimated at 5% of effective gross income generated from rent only (not including the revenue generated from laundry and parking)
$6 280 051
$6 323 603
$6 403 850
$6 393 415
6 403 850$.
Your client is looking for a building with a good yield. You find a building for sale (see Handout A5). Your client expresses interest, but he wants to know the property’s return after one year. You suggest that you calculate the internal rate of return of this property over 1 year by calculating the return on current income, the return on future value, and return on principal (do not use the IRR function).
Here is some additional information:
Vacancy rate of the area: 4%
Rate of bad debt: 5%
Purchase price is $5,500,000.00.
The prices in the area increase on average by 3% per year for this type of building.
The mortgage represents 50% of the value of the property, with a mortgage interest rate of 6.45% over 25 years
14,45%
13,21%
12,99%
11,83%
12,99%
After visiting a commercial property, you draw up a promise to purchase. Despite the fact that you are unaware of any building inspectors, your buyer asks if you can recommend one. After informing them that you can’t recommend just one, you provide a list of several names. Which of the following is the broker’s obligation?
The broker or agency executive officer must recommend to their client wishing to purchase a property a complete inspection carried out by a professional or a building inspector who:
1 Holds a professional liability insurance against fraud, error or omission; uses a recognized inspection service agreement; performs inspections in accordance with a recognized building inspection standard of practice; provides a written report to the party using its services.
2 Holds a professional liability insurance against fault, error or omission; uses a recognized inspection service agreement; performs inspections in accordance with a recognized building inspection standard of practice; provides a written report to the party using its services.
3 Holds a professional liability insurance against faults, errors or omissions; uses a recognized inspection service agreement; performs inspections in accordance with a recognized building inspection standard of practice; submits a written report to the party using his services and who is a member of a building inspector’s association recognized by the OACIQ (e.i., AIBQ).
4 Holds a professional liability insurance against fault, error or omission; uses a recognized inspection service agreement; performs inspections in accordance with recognized building standards; provides a written report to the party using its services.
Holds a professional liability insurance against faults, errors or omissions; uses a recognized inspection service agreement; performs inspections in accordance with a recognized building inspection standard of practice; submits a written report to the party using his services and who is a member of a building inspector’s association recognized by the OACIQ (e.i., AIBQ).
To establish your client’s borrowing capacity, you pull up some data on a building consisting entirely of residential apartments in Outremont (Document A6). The date is January 2023. He is looking to maximize leverage by borrowing as much as possible. You explain the concept of a mortgage insurance. Your client then asks you to outline the maximum mortgage he would have to repay, including all CMHC-related fees.
Here is some additional information:
Rate of bad debt in the area: 1.5%
CMHC’s maximum loan-to-value ratio: 85%
Considered offering price of property: $3,200,000
The economic value of the property is assumed to be equal to the projected year-end price.
Mortgage rate: 2.70% over 25 years, for a term of 5 years.
Underwriting fees: $150 per unit
Tax on insurance premium: 9%
Other information on document A7
You will note that certain expenses are missing. In this case, you will use CMHC’s major expenditures, i.e. the expenses that must be used (regardless of those actually paid by the owner). This avoids situations where expenses are hidden or artificially low. Use these expenses.
Annual expenses, referred by the CMHC:
Salary per unit $330
Repairs and maintenance per unit $550
Management fee: 5 % of effective gross income
2 793 100$
2 655 182$
2 457 389$
2 452 018$
2 452 018$.
1 Inventory turnover ratio
A major corporation is interested in acquiring a company for which you have an excerpt of the financial statements (documents A8 and A9). Consider the following five accounting ratios:
#2 Net profit margin
#3 Working capital ratio
#4 Debt-to-equity ratio
#5 Total asset turnover ratio
Which of the following answers contain only correct statements, even if the difference between the two ratios is very small (we recommend that you set your calculator to at least 4 numbers after the decimal points.
1 2021 was the best year in comparison to 2020 for ratios #3,4, and 5.
2 Year 2021 was the best year in comparison to 2020 for ratios #1,2,3, and 5.
3 Year 2020 was the best year in comparison to 2021 for ratios #1,2,3, and 4.
4 **Year 2021 was the best year in comparison to 2020 for ratios #1,2,4, and 5
Year 2021 was the best year in comparison to 2020 for ratios #1,2,4, and 5
