Your client, Ms. Gagné, wants to sell her semi-commercial building. Based on your evaluation, she has agreed to list it at $925,000. You explain that the building is subject to GST and QST (current combined rate: 14.975%) because the ground floor is used for commercial purposes and occupies 55% of the building’s surface area.
How much should you enter in section 4.1 (see image below) as the asking price?
**4. PRICE AND TERMS OF SALE (PLUS TAXES, IF APPLICABLE)
4.1 The asking sale price is: dollars ($ ).
Under the Real Estate Brokerage Act, we must always include the municipal assessment in this section.
$804,522.72
$1,063,518.75
$925,000
$925,000
Question 2
Among the following, identify the obligations of a buyer of a commercial immovable.
- Sign the deed of sale.
- Pay the surveyor’s fees for the certificate of location.
- Pay the agreed price for the building.
- Pay the costs of the deed of sale.
- Pay the fees for discharging the existing mortgage on the immovable.
1, 4 and 5
2, 3 and 5
1, 2, 4 and 5
1, 3 and 4
1, 3 and 4
Question 3
The inspection period, provided for in the promise to purchase (PPG), begins:
Upon acknowledgement of receipt of the PPG
Upon acceptance of the PPG
On the date on which confirmation that the other party has signed the acknowledgement of receipt is received.
Upon signing of the PPG
Upon acceptance of the PPG
Question 4
Katerina and Éric have hired you as a real estate broker to sell their eight-unit condo. After just two days on the market, you have already received a promise to purchase for the full price. The price clause on the promise to purchase states that the buyers will make a downpayment and require mortgage financing. You submit this promise to purchase to your clients. They only have one question, about the choice of the notary. They were under the impression that they would choose the notary who would perform the transaction.
What do you tell your clients?
The buyer chooses the notary because the buyer is paying the full sales price with their new mortgage financing and downpayment.
Your clients choose the notary because the buyer needs new mortgage financing, which means they will not be paying the full sales price.
Your clients choose the notary because they are paying the notary’s fees for the sales transaction.
The buyer chooses the notary because the buyer pays the notary’s fees for the sale.
The buyer chooses the notary because the buyer is paying the full sales price with their new mortgage financing and downpayment.
Question 5
The buyer has drafted a promise to purchase (PPG) conditional on inspection of the building. Once the inspection is complete, the buyer receives the written report. Following the recommendations of the building inspector, the buyer would like to take a closer look at an issue.
What must the seller and the buyer do under the circumstances?
Send the seller a notice along with the inspection report.
Fill out an Amendments form (AM) to add this condition for obtaining further appraisal with a separate deadline.
Make a counter-proposal (CP) to add the condition of obtaining a more in-depth appraisal with a separate deadline.
Fill out a Notice and Follow-up on Fulfilment of Conditions form, indicating that the inspection condition is met and adding the condition of further appraisal.
Fill out an Amendments form (AM) to add this condition for obtaining further appraisal with a separate deadline.
Question 6
The deadline for the new hypothecary loan, calculated with the deadline stipulated in clause 6.2 of a promise to purchase (PPG), is March 16, 20XX.
On March 19, 20XX, the buyer provides the seller with an unconditional letter of approval for the loan. The seller informs their broker that they do not want to sell the immovable to the buyer because the buyer failed to meet the aforementioned deadline.
What is the status of this transaction?
The PPG is null and void and the buyer can sue the financial institution for failure to meet the deadline.
The PPG is still in effect.
The PPG is null and void but you are still entitled to your
The PPG is null and void as it was submitted three days after March 16, 20XX.
The PPG is still in effect.
Question 7
Who could the Act respecting the acquisition of farm land by non-residents apply to as a potential buyer of agricultural land?
A potential buyer who resides in Quebec and is a farmer.
A potential buyer who resides in Quebec but is not a farmer.
A potential buyer of agricultural land regardless of where they reside.
A potential buyer who resides in Ontario.
A potential buyer who resides in Ontario.
Question 8
You realize shortly after signing a brokerage contract for an immovable (BCG) that you neglected to include an expiry date.
Is your contract still valid?
Yes, for 365 days
Yes, for 30 days
Yes, for 90 days
No
Yes, for 30 days
Question 9
Childhood friends Marie, Alex and Michelle bought an eight-unit condo together a few years ago. Each live in one of the condo’s units, and the other five units are rented out. Marie is single and has never been married or in a civil union. She contacts you to put her portion of the eight-unit condo up for sale. While consulting the land register, you confirm the title of ownership but you see no indivision agreement.
What do you need to obtain before signing the brokerage contract to protect the real estate transaction?
A written waiver of the right of withdrawal from Michelle and Alex.
A written undertaking from Marie to obtain a written waiver of the right of withdrawal from Michelle and Alex.
A written undertaking from Marie to obtain a written waiver of the pre-emptive right from Michelle and Alex.
A written waiver of the pre-emptive right from Michelle and Alex.
A written waiver of the right of withdrawal from Michelle and Alex.
question 10
After the inspection, the buyer and seller agree on a price reduction due to major problems detected.
Best practice is to use the Notice and Follow-up on Fulfilment of Conditions form and draft the clause agreed in section AV5, and have the document signed by both parties.
True
False
False
Key takeaway to remember:
✔ Conditions fulfilled or not → Notice and Follow-up
✔ Any change to price or terms → Amendment / Annex
Question 11
The buyer submits a promise to purchase an immovable. A certificate of location already exists for the property but is nine years old. The buyer requests that another certificate of location be produced. Once received, this new certificate of location contains an identical plan and no changes were made to the measurements and other details, apart from the cadastre number which was changed from “4409-1 Cadastre de la paroisse de Québec” to “1148041 Cadastre du Québec”.
Who has to pay for this new certificate of location?
The buyer.
The seller.
The seller.
Question 12
A promise to purchase is drafted by the buyer on April 1 at 3 p.m. and accepted by the seller on April 2 at 8 p.m. A period of 15 days is indicated in section 6.2 of the promise to purchase (PPG).
***6.2 UNDERTAKING – The BUYER undertakes to supply to the SELLER, within 15 days following acceptance of this promise to purchase, a copy of the undertaking by a hypothecary lender to grant the BUYER a loan in the amount set out in clause 6.1 or higher. Receipt of such an undertaking within that period shall have the effect of fully satisfying the conditions set out in clause 6.1.
*
Determine the last day (date) and time the buyer can submit a copy of a mortgage lender’s commitment to provide the loan in order to fulfill this condition without jeopardizing its purchase.
April 15 at 8 p.m.
April 17 at 11:59 p.m.
April 15 at 11:59 p.m.
April 17 at 8 p.m.
April 17 at 11:59 p.m.
Question 13
A buyer signs and submits a promise to purchase on a commercial building subject to the following conditions: price offered $850,000, nothing in clauses 11.5 (Inclusions) and 11.6 (Exclusions).
The seller submits a counter-proposal increasing the price to $860,000 and stating the following: 11.5 (Inclusions): non-connected Surveillepro alarm system and 15 Samdong surveillance cameras
When the buyer receives this counter-proposal, they prepare their own counter proposal with only the following item: 11.6 (Exclusions): 15 Samdong surveillance cameras
The seller accepts that last counter-proposal.
What final terms did they agree to (pricing, inclusions and exclusions)?
$850,000, Inclusions: nothing, Exclusions: nothing
$860,000, Inclusions: non-connected Surveillepro alarm system, Exclusions: 15 Samdong surveillance cameras
$860,000, Inclusions: nothing, Exclusions: 15 Samdong surveillance cameras
$850,000, Inclusions: nothing, Exclusions: 15 Samdong surveillance cameras
$850,000, Inclusions: nothing, Exclusions: 15 Samdong surveillance cameras.
Question 14
Armando, an Italian citizen, wants to sell a 14-unit rental property in Quebec that he bought a few years ago. He has been managing this 14-unit condo from Italy for the past few years. Because he is ready to sell, Armando will be returning to Montréal for a few days and would like to sign a brokerage contract with you. Armando has already sent you all the relevant documents concerning the 14-unit condo but does not have the provincial or federal certificates of conformity.
What do you need to explain to Armando?
Armando should have obtained the certificates of conformity when he took ownership of the 14- plex condo, so he has to find them or have new copies issued before he can sign a brokerage contract, thereby enabling you to finalize your analysis of the building’s financial information.
Even if your analysis shows that the building’s financial information is satisfactory, you cannot sign a brokerage contract until Armando provides you with the certificates of conformity because they are the buyer’s only protection.
You can sign the brokerage contract because certificates of conformity are optional protection for the seller and only in connection with their future tax returns; thus, it is not a financial consideration that you need to factor into your analysis of the building.
If your analysis shows that the building’s financial information is satisfactory, you can sign the brokerage contract even if the certificates of conformity do not arrive in time for the sale, because the notary will withhold the funds required to protect the buyer at the time of the sales transaction.
If your analysis shows that the building’s financial information is satisfactory, you can sign the brokerage contract even if the certificates of conformity do not arrive in time for the sale, because the notary will withhold the funds required to protect the buyer at the time of the sales transaction.
Question 15
Your client John is looking for a commercial condominium. John is an entrepreneur who wants to own his premises rather than rent. He is a music entrepreneur and plans to open a music instrument store where customers can play the various instruments right in the store to try them out.
When John finds his dream commercial condo, which section of the declaration of co-ownership will you need to read with your client to validate that it will be possible to play music in the condo during the regular business hours?
The record of divisions.
The constituting act of co-ownership.
The destination of the building.
The building by-laws.
The building by-laws.
Question 16
You are representing a buyer who is looking for a local shopping centre. You think you have found the perfect immovable, which is for sale by the owner without a real estate broker. The immovable includes a large commercial area that represent 70% of the immovable’s total surface area and is occupied by a hardware store and three small premises each occupying 10% of the immovable’s surface area and leased by an organic cleaning products retailer, a hairdresser and a dairy bar. After contacting the seller to obtain more information, you present everything to your buyer, who wishes to submit a promise to purchase.
Name and explain two (2) due diligence checks that you will recommend to your purchasing client to carry out concerning the income and expenses of the immovable and the impact on the drafting of the promise to purchase (PPG).
One-line memory hook
“Verify leases + verify expenses = conditional PPG or no deal.”
_______
French exam version (ultra-clean)
Vérifier les baux et les revenus locatifs (montants, durée, renouvellements, paiements) ; PPG conditionnelle à l’approbation des baux et revenus.
Analyser les dépenses d’exploitation (taxes, assurances, entretien) afin de confirmer le revenu net ; PPG conditionnelle à l’approbation des états de revenus et dépenses.
_______
1. Verify the leases and rental income
I’d recommend that your client review all the leases for the four tenants — especially the hardware store, which occupies most of the space. The goal is to confirm the rent amounts, lease terms, renewal dates, and whether tenants are up to date with payments.
-In the promise to purchase, you’d include a condition that the offer is subject to verifying and approving all leases and rental income within a set period. This protects the buyer if something in the leases doesn’t match what the seller represented.
- Review the expenses and net income of the property
Your client should also get the property’s financial statements — things like property taxes, insurance, maintenance, and any shared expenses paid by tenants. This helps confirm the real operating costs and net income of the property.
-In the promise to purchase, include a condition to review and approve the income and expense statements. If the numbers don’t make sense, your client can renegotiate or withdraw.
Question 175/5 points
A childhood friend wants to sign a brokerage contract with you for the sale of their six-unit condo. Here are the measurements and dimensions of the immovable you will need to sell:
- Main floor: 30 ft x 30 ft
- 2nd floor: 30 ft x 30 ft
- 3rd floor: 30 ft x 30 ft
- Property: 100 ft x 70 ft
- Living area: 2,700 square feet.
What values must be entered in the fields (1) DIMENSIONS and (2) AREA of section 3 of the brokerage contract for the sale of an immovable (PPG)?
**3. SUMMARY DESCRIPTION OF THE IMMOVABLE
3.1 The immovable, with building erected, if applicable, is designated as follows:
Number – Street – Apartment or Suite – City – Province – Postal Code
Cadastre description of immovable or private portion
(of parking space, if applicable)
(of storage space, if applicable)
Dimensions: ☐ m ☐ ft
Area: ☐ m² ☐ ft²
They represent the lot (property), not the building.
DIMENSIONS = lot dimensions
AREA = lot area
Example: 100 ft × 70 ft = 7,000 sq ft
Question 18
A buyer you represent wishes to draft a promise to purchase (PPG) on a ten-unit condo that they wish to purchase for investment purposes. All of the units are currently rented and the tenants do not intend to move out. The seller, through their real estate broker, indicated on the description of the immovable that no visit to the units will be made without an accepted promise to purchase.
Based on this information, how will you fill in clause 7.1 of the promise to purchase (see image below) and explain why?
**7. DECLARATIONS AND OBLIGATIONS OF THE BUYER
7.1 Subject to clause 8.1 and unless stipulated otherwise in clause 12.1, the BUYER has visited the IMMOVABLE, on , and declares that he is satisfied therewith.
Clause 7.1:
The BUYER has not visited the immovable since all units are rented and occupied.
Reason:
Visits are not allowed before an accepted PPG, so the buyer cannot declare satisfaction; protection is provided by the inspection condition (clause 8.1).
Clause 7.1 should read:
“The BUYER has not visited the immovable since all the units are rented and occupied. The BUYER’s satisfaction is conditional upon an inspection following the acceptance of the promise to purchase.”
Explanation:
Because all units are occupied and the seller does not permit visits before an accepted offer, the buyer cannot visit beforehand. Therefore, clause 7.1 must state that no visit was made and that satisfaction will depend on an inspection after acceptance. This ensures the promise to purchase accurately reflects the situation and protects the buyer’s right to inspect later.
Question 19
You are almost ready to sign a brokerage contract for the sale of an immovable (PPG) with a seller. Your selling client’s commercial building is located in Old Québec and is classified as a heritage building. This information is confirmed by the certificate of location and the land register.
Explain the conditions and process for selling this building.
Because the immovable is classified as a heritage building under the Cultural Heritage Act, the sale is subject to special conditions. The seller must notify the Minister of Culture and Communications of any accepted promise to purchase. The Government of Québec has a right of pre-emption and may purchase the immovable under the same conditions as the buyer. The transaction may proceed only after the government waives its right or the 60-day delay expires. These conditions must be clearly stated in the brokerage contract and the promise to purchase.
Since the building is classified as a heritage immovable under the Cultural Heritage Act, the seller must obtain authorization from the Minister of Culture and Communications before selling it. The Government of Québec also has a pre-emptive right to purchase the property under the same conditions as any buyer. The seller must notify the Minister of the accepted promise to purchase and wait for the government’s response or the expiry of the 60-day delay before the sale can proceed. These conditions must be included in the brokerage contract and the promise to purchase.
Question 20
Jerry owns two (2) residential rental properties that he manages himself. One of the immovables consists of six (6) apartments, while the other has nine (9). The two immovables are located side-by-side and share a common parking lot available to the tenants. Jerry would like to sell the six (6) unit immovable only and is ready to sign a brokerage contract with you.
Explain to Jerry what you consider is necessary to sell this immovable and why.
Before signing the brokerage contract, I must verify at the land register and the certificate of location whether the six-unit building has its own cadastral lot. Since both buildings share a common parking lot, they may be on the same lot. If so, the land must be subdivided or servitudes must be created so the six-unit immovable can be sold legally and independently.
