‘THE COMMERCIAL REAL ESTATE TRANSACTION Chapter 1: Office & Retail ‘Net Absorption Rate ‘* How much space is really occupied after vacancy Rate (e.g. 80%) Vacancy Rate ‘= How much unoccupied empty units in the total Area (e.g.: 20% vacancy) Building Classifications: © A= prestige, high class, high tech ‘© B= less than 20 years good location ‘© C=More than 20 years less desirable Building Core «Centre Core is (Centre component of building). Not easy acceso go out. Side Core any unit on main level Larger open space for Jaf@pP Units). Easy access to go out curtain Walls Sv «self-supporting, continuous dadding systems cqnght of elass inserted in aluminum or stainless steel Framingthermal eflency& cooing bling & bie Box 2300 saMr 12000 san (.6: Ros Rome Depot) Power Centre ‘= 32500 SMT ~ 60'000 SOMT (E.G: Best Buy, Old Navy, and Gap). Group of big box stores. Shopping Centre 37/000 SMT ~74'000 (Vaughn Mills) Typically enclosed. Range ‘« Maximum distance that a typical consumer will travel in order to acquire a specific product or service. Clustering = Consolidate shopping trip if several needed products are available at one destination e.g. Wal-Mart, Shoppers Drug Mart ‘Threshold + Population size necessary to support a specific business Page Lof 2Zoning Requirements © Commercial zoning classified as C1, C2, C3, C4 oF location specific identifiers such as LC (local commercial), Mp (mixed-use development), etc. ‘© Zoning also typically maintains minimum separations between commercial and retail areas. Investor * Low risks, high ROI, present & future value, solid tenant. Investors tend to like commercial real estate as tenants, as they are typically long term tenants (companies do not tend to move their business frequently) User ‘+ Low rent, good locations, seeking for investors to bear the expenses. Another name for “user” could be ‘owner (one who wants to buy industrial estat) or lessee (onto wants torent) Buffer Zones \v + Farm, residential, commercial, light industrial, heavyiGfsrial {Question in exam for buffer zones = What is the sequied (answer in the order?) wy? + Controlled development areas, zonedtSyaccommodate several types of industry and provide the required utilities associated with such use. It is aRother name for light industrial. ‘© One primary reason for such parks isto provide areas for industry in such a way that it does not negatively. Impact nearby residential areas. Industrial Building General Purpose - Most commonly sold, any type of use (Multi-use) ‘Special Purpose - Multipurpose, but more specific (loading docks) specialized in warehouse, or manufacturing Built for specific purpose, but could also be used for a few different purposes. Single Purpose - Only one type of use (ol refinery) unique features constructed for specific use. Hard to sel. ‘+ Awarehouse may be considered general purpose ‘© Acustom built factory with several loading docks could be considered special purpose ‘+ Anoilrefinery would be identified as single purpose Bay Depth * An unfinished area located between row of columns and the bearing wall * The measurement of the bay goes from the inside wall (tenant's side] to the exterior glass or wall. Page 2 of 92Clear Span. ‘= Span is the amount of floor area that is clear from obstruction by column and support walls. Clear Height ‘© Light industrial and warehouse facilities range between 15 and 30 feet clear height ~ floor to ceiling. Jib Cranes ‘© Has an arm attached at an angle to a rotating mast that permits 360 swiveling around that mast? Bridge cranes # Operates on a system of horizontal rails. Attached to the railing and requires column free areas to operate. Horizontal railing resembles a bridge. Gantry Cranes © Portable Bridge cranes operating on wheels can move from place to place. (Forklift) Floor Loads ‘+ Refers to the ability of a floor to support a live load, a live load generally consists of three components. © Live Load The weight arising from the assembly of persons. \v +The weight ofthe accumulation of equipment and KeGhinas © The weight of stored materials ye ves tnd wo +The weight ofthe structural member tgedpnateras bul into the structure as well as permanent Perini ¥ Levellers (connection) Provide adjustable platform between truck and the permanent docking area (dock plate}. Design Build ‘+ An owner agreeing to build a custom made building on his land to suit the needs of a tenant. ‘© Design build arrangements are commonly associated with a seller’s market when demand for and is high ‘and existing space is limited. Key word Is less space. Sale/ Lease Back + The sale of a building leased back to the former owner gives him cash flow through equity. While the buyer as an investor is assured of a long-term cash flow with option of repurchase the property following the Tease. Free up liquidity (key word). Page 3 0f 92‘Multi- Residential ‘* Multi-residential housing refers to any housing structure that has more than one dwelling unit. © More than 4 units residential are also known as commercial Residential Tenancies Residential Tenancies Act applies to residential tenancies, as well as land lease agreements and long term ‘care homes. The Act governs rent increases, evictions, living conditions, pet provisions etc. Infill Zoning Requirement ‘+ Zoning initiatives in Ontario are in place to limit urban sprawl where possible. In other words, rather than get the city too big spread out (requiring an expansion of utility services to outlying areas, planners first seek themselves whether they can make better use of existing services by increasing the density of the city. Farm Debt Mediation Act Aederel statute, defines farming as fllows: + Mevftionet il youn cop ae dune sheet ns The rising of ivestock, poultry and fr-bearing animals; Te production of eg, milk honey, maple syrup, tbactA Mer, wood from wood let and fodder erops ad +The production o ang of anyother prescribe 9 anal rar nas (sgned to ceatte poston Ippo «3 types of boards are involved in pricing deeyquota decisions: hegotetng Boards Negotiate pce for Sher wih te government Establishment rice Boards Estas re or farmers, but do not have author t in production Market Boards Adverse or fama’ os wel asthe decide wha shoutor show tbe prow the fam lad. Market boards contol amar Farm Lease There are three types of land leasing arrangements: Crop Shate lease - A portion of the crop sales stays with the landlord and remainder belongs to the tenant. For example, 1/3 of the sales may go to the landlord and the remaining 2/3 may go to the tenant. Ift says ‘other way round it isa mistake. + Cash rent lease - Tenant receives all income from the crop he sells. He pays the landlord a fixed amount of rent. ‘Flexible Cash lease - Tenant receives all income from the crops he sells. Rent that tenant pays is variable. For example, ifit is corn farm the amount of rent may increase if the value of corn increases, 2 types of distances MDS 1(Minimum Distance Separation) approval from Nutrient Management Board The minimum separation distance required between new development and existing livestock facilities or manure storage. (existing farm — new development) Page 4 of 92MDS 2 = Enforced by municipality ‘©The minimum separation distance required between new or expanding livestock or manure storage facilities and property, boundaries, houses, recreational areas and other land uses. (existing development new farm) Soil Testing. ‘+ Determines the type of fertilizer and amounts that should be used for optimum crop production. Farm Taxation ‘© Ontario farmers receive a 75% reduction on municipal taxes, providing: 1L. The farm has certain level of gross income. In other words, if a farm produces a minimum crop output, they would not qualify. 2. Must be Canadian citizen or resident. 3. Have a valid business registration 4, Submit an application for the tax reduction on an annual basis. Ecotourism ‘© Enjoying natural environment owner/ operators making green choices. + Question in exam (who deals with noise?) Ans: (Acoustic) Ing development aplication av sv chapty Sie ofa tsnee Earnouts. © Earnout is a method of financing the salt of a business predicated on actual performance. By first deducting the down payment, the balance of the purchase price of the business, suitably secured, can be based on the actual performance (productivity) of the business after the date of closing, ‘+ Additional payment of borrowed funds - The balance of purchase price is based on profitability (or sales) of the business after the sale closes. Base Period Earnout + Additional payments on the borrowed funds at the end of the year based on sale. Incremental Earnout ‘= The balance of the purchase price is based on the incremental increase in sales from year-to-year. For example, ifin the first year the sales increased from $100,000 to $120,000, the payment would be based ‘upon $20,000.{f the next year sales increased from $120,000 to $130,000, the next payment would be based upon $10,000. Cumulative Earnout © The balance of the purchase price is based on the total increase from the base year and the sales in the final year in the “measurement period”. For example, assume the base year was 2010 and the Page 5 of 92‘measurement period is from 2011 to 2015. Ifthe sales increased from $100,000 to $150,000 in 2015, the payment would be based upon a total of $50,000. ‘* One lump sum payment is made at the end of the final year of the measurement period, ‘The Bulk Sales Act ‘* Isaprovincial statute, designed to protect the trade creditors of the seller when a sale of stock in bulk is ‘occurring out of the ordinary course of the seller’s business. f the buyer does not comply with this Act, the sale of the bulk is voidable by an action started by a creditor. roca 1th yr must ded and rete x sword or ther ofthe alr credo The form mus showthe rome redo, how much they ae owed an wha es hare een eno secur Tock an oun te omcsnonnah ae pour > The secured trade creditor's claim do not exceed $2,500; or Seca caner hee bes peak coven byceor arte debtloe shamed te new ome + non thc mst ate eon ot ma Aledwah the Oeanseurt 8 The Real Estate and Business brokers Act 2002 (REBBA).\ * ‘N retort andes (ncome stetemert forthe ps ra or sinc the business was acai by the Rita tirnercenpaaestn wemcen “atone werent se, othe Uveresed ore ssh teers nthe yer wou ie icproceed wih escent the cele Form ss of ess Atiet Chapter 6: Leasing Fundamentals Assigning and subletting ‘© Assigning is something a tenant is transferring his lease terms and conditions to someone else without any further responsibilities. Subletting is when tenant is in charge while subleasing the premises to someone else by staying in charge. Continuous Use * Acontinuous use clause requires that the tenant must continually occupy the rented space during the terms. It means the tenant must maintain a substantial merchandise stock and fully staff the operation (no dark space). Page 6 of 92Guarantor vs. Indemnifier + Athird party who undertakes to be responsible for tenants obligations upon default. Interest on rent Deposits © Under the act, landlord is not required to pay interest on commercials tenant's security deposits but may have to pay interest on a last month rent. License vs. lease ‘© Alicense is a right or permission granted to an individual, while a lease is both a matter of contractual agreement and also the conveyance of an estate. Non-payment of Rent + When a tenant has failed to pay a rent, the landlord has 2 options available under the commercials, tenancies act. > Change the locks > Seize and dispose off a tenant's property. Rent increases ‘+ In Commercials Tenancy Agreement the amount of rent chafged and increases have been clearly mentioned. The landlord may not increase the rent by affhaliount at any time, > The act does not include rent increase in comes Restricted Use ew : mone tin atest iS yesh ace hrs dd tetas arama Fey rms el nt aes sendviches. ¥ Termination © Month to month - Within this agreement landlord or tenant may terminate the contract by giving him a month notice in writing with all the required details. ‘+ Fixed term - within this agreement the tenant is expected to leave the premises after the leased term expires. In case of not leaving the premises the tenants will be charged for 2 month rent for every extra month they stay. Easement: ‘+ Aright of way enjoyed by one tenement over the other tenement. itis always on the land (not on the person or the property) Dominant tenement enjoys the right, servient tenement serves the right > Aways to create an easement are 1) express grant 2) prescription 3) implication 4) statute > 3 ways to terminate an easement are 1) merge 2) release 3) ceasing of purpose Page 7 of 92__Chapter 7: Agreement to Lease - Commercial Investors seek to maximize returns through revenue generated from income property. Three concepts, directly impact the yield realized. Cash Flow ‘© Allmonies received from an investment ‘© Cash flow is received from rental income and monies received when the property is ultimately sold, Leverage ‘© Taking out a loan in the hopes that you can earn a great return on the borrowed funds that what you are paying in loan interest is called leverage. Acquiring mortgage financing to purchase a commercial property is also considered leverage. Positive leverage - Investor's return was more than what it would have been had he not used leverage. Negative leverage - Investor's return was less than what it would have been had he not used leverage. Neutral leverage - Use of leverage did not impact investor's return SOME IMPORTANT CLAUSES 41. INTENT OF LEASE: Landlord tells the tenant that the tengo Gersoaly responsible forall expenses except the landlord's mortgage payment and income tae, VAlso known as net, net, net lease 2. PREMISES: Where exactly the unit is located in hQo e g. north east corner beside the Shoppers Drug Mart). RK 2 smepursthesand atcha: Gmetrics 4. TERM: The start and end dates of acon act (commencement = starting. erination = end) 5. FLOATING START: Ifthe landlord is unable to finish the construction on time, then the closing can be postponed up to 3 years by providing the architect's report, 6. DEFERMENT OF OPENING: If the grand opening of a mall gets delayed, then the landlord is not responsible for any damage to the tenant. 7. FAILURE TO OPEN: If tenant delays the opening of a unit, the tenant is liable and pays double the rent ‘every month, Landlord can terminate the lease if the tenant fails to open after 60 days. 8, RENTALS PAYABLE: The type of rent landlord can collect from tenant. Minimum rent also known as base rent and percentage rent. 9. CONDUCT OF BUSINESS: Landlord is responsible for day to day operation of the mall. Advertise to attract, ‘more public to collect more percentage rent. In a mall if any tenant is running extra hours they have to pay extra rent, Page 8 of 9210. LESSOR’S (Landlord) COVENANT RESTRICTED USE: What the Tenant can or cannot do. For example Tenant started selling cigarettes when the contract exclusive said the cigarettes cannot be sold (breach of contract). 111. RESTRICTED USES: Exclusivity no more than 3 of a same kind limitations on what you can do what you cannot do. Example ~ you are not allowed to do certain advertisements (closing down sale not allowed). 12. DAMAGES TO PREMISES: Landlord is responsible up to 25% damage to unit. More than 25% tenant is. responsible, (Out of pocket expense). 13, SECURITY DEPOSIT: Commercial landlord can ask for security deposit but may also pay the interest on the security deposit. 14, OVER HOLDING: In commercial tenancy at the end of the term the tenant has to vacate. if not vacated then for every extra month the tenants stay they have to pay double the rent. 15, ABANDONMENT: Breach of contract if tenant is not operating the business correctly. Example - not ‘opening on time, not enough employees. In such cases, landlord has a right to seize or dispose the property or charge for penalty. 16. NO ENCUMBRANCES: Landlord wants the tno nt Soe ste them. Soin future ifthe tenant is not doing so well the landlord. ei we the unit with all equipment. (To avoid non- payment). © 17. NON COMPLETION OF PREMISES: Accontng SFE contract landlord has 3 years for construction. If construction is not complete in three years hth landlord pays fixed amount to tenant, Tenant also has 18, RENEWALS: Upon the renewal ofthe fixed term tenancy ifthe tenant wants to renew the contract Tenant ‘must give 90 days’ notice to the landlord. In which case landlord has the right to increase the Rent as much ‘as he/she would like, (Commercial Tenancy Act doesn’t cover the rent increase rules) 19. RETAIL RESTRICTIONS: Goes both ways - Landlord to tenant of tenant to landlord to start a same type of business within 3 miles. Page9 of 92QBA (Theory Basics) Q. How many months does it take a person to get discharge in case of bankruptcy? ‘A.9 months. Q. What is sandwich space? A. From the floor to drop ceiling. (Q. What is Turnkey business? ‘A. Just turnkey and get franchise started. Q. What is Quiet Enjoyment? A. Landlord must not bother the tenant. Q. What is non-conforming use? ‘A. Continuing usage of building or structure after the zoning has been changed. Q. What is legal non-conforming use? ‘A. Only legal people know it. City changed zo nzbut onl cy ffgals know it ‘s Q. What are Brownfields? \v : ‘A. Brownfields mean cleanup of contaminated soil § Q. What is zoning by-law amendment? ’ A. It is needed for rezoning and minor variance. @ppyaved by Committee of Adjustments. . Whats de lligence in dates of bug Pracice? A. Investigating of key financial, legal structure and environmental factors concerning real estate transactions. Q. What is confidentiality agreement? A. Itis the responsibility of the brokerage to keep clients information confidential Q. What is a Non-resident seller? ‘A. The income tax act sets out a procedure for the non-residents to pay a pre-calculated amount in advance after disposition. Q. What's the difference between commercial and residential? A Itis blurred by legislative consideration, Q. What is lifestyle centre? ‘A. The parking is on roadside (look for in front of the store). Tree line parking Q. What is retail ground lease? ‘A. Rental of land only including office, industrial and recreational sectors. It is usually long duration involving tenant who convents to build a structure on said land. Page 10 of 92Q. What is an easement? [A. The use/enjoyment of the property that affects the property value. Q. What is the life joint venture? [[Link] life of the joint venture is normally limited to a specific project which is undertaken as an extension of the business. 1. Explain how privity of contract applies to commercial lease assignments and subletting. With an assignment, the assignee and the landlord may have privity of contract (dependent on the ‘wording that the burden of lease is assumed by the assignee). The landlord also retains his/her privity of contract with the original tenants, unless otherwise agreed. On the other hand, if tenant sublet: premises, no privity of contract exists between the occupying sub-tenant and landlord. Instead, the landlord retains its privity of contract with the original tenant. 2. What i the difference between a development agreement and a site plan control agreement? ‘The development agreement is designed to ensure that necessary servicing and other amenities are in place for development ofa particular property while the site plan agreement establishes requirements for Actual building construction including the structure’ relationship tothe land, regardless of whether or not a development agreement isin place. %& 13. What isthe difference between a guarantor and an indeiphiier? ‘guarantor simply guarantees the obligations of ten Wherefore the tenant adjudged bankrupt, ‘then he has no further obligations and the guarantefas Kot required to pay. On the other hand, indemnity agreements normally go further and imply that ¢he\idemnifier is a covenanter pursuant to the lease and that this indemnity survives the bankruptcy re Ivency of the tenant. 4 Abington ncn tec well 5. For the depreciation of an asset, what percentage rate do most buildings qualify for on a declining basis and how does it differ in the first year of ownership? {4% but only half of the amount during the first year of purchase 6. What options does a landlord have if a tenant failed to pay the rent? 41) Change the locks of the unit and evict on the 16" day after the day the rent was due (without notification) 2) Seize and dispose of tenant's property that is contained within the unit. (No advance notice for seizure required unless stipulated in the lease. Landlords must, however, notify the tenants of the distress and sum of monies required to cure the default before proceeding to sell the seized property) Page 11 of 9210. a. 12. What kind of crane has an arm attached to an angle to a rotating mast that allows 360 degrees swiveling around that mast? Adib Crane What is an expense pass-through? When the landlord apportions costs for capital improvements to the tenants this is called expense pass- ‘through In an environmental assessment, what phase involves determining the scope of environmental problems and making recommendations for remedial action? Phase 2 Under regulation 154/03, what conditions must be met in order to receive protection from future istry of Environment orders following a site clean-up? 1) Site Assessment 2) Standards 3) Record of Site Conditions watrete rsa Meech tomsteurncntnetercanson 2) Today cash flow is better than tomorrow cash flow av 1) Proposal wy 2) Receivership Page 12 of 92Multiple Choice Questions (Theory) On the topic of planning retail development, the term “threshold” means: ‘a. Using demographics to determine there is adequate population and market demand, bb. Pre-leasing a minimum percentage of square footage for the project. Reaching the maximum lot coverage permitted by the zoning by laws. 4d. Clustering a minimum number of the same type of retailer in the project. lass C building can be described as a building that: a, Is normally located in a prestigious location. b. Is limited in size to less than 10,000 square feet. c. Typically requires extensive renovations d. Generally only has a double A (AA) rating, but is well maintained. Which ofthe following statements correctly applies to land development in rural areas? 2 Itisalot easier to obtain subdivision plan approval n rural areas, as compared to applications within cies b. Due tothe importance of food production, its not possible to obtain an official plan and zoning change from agricutural zoning to residential. ¢ © Developers can avoid the subdivision contr pro eee the Planning Act by creating and lease Communities wth ong term leases thet have 90 650 years or more 4. Interested groups that oppose subdivision development may appeal against local municipal decisions to the OMB-——(Ontario MunjeiS38Board) What demographic factors wil be most Joely analyzed to determine the appropriate mix of unit sizes and floor plans ina proposed gyelopment of a new apartment building? 2. The number of people ina housgBald as wel asthe expected number of new households in the area or region b. The number of new apartment buildings ether currently approved or under construction. €. The inventory of existing buildings in the [Link] 4. Proximity to transportation services and retail areas Under what circumstances might an investor owner of a commercial property tolerate a negative cash flow? ‘a. Where an investor believed that they could increase the return on equity by decreasing the amount of positive leverage. b. Where the negative cash flow was only occurring after annual debt servicing was taken into consideration. ‘Where an investor pays all cash for the property d. Where an investor believes that they might profit from an appreciation in the property value Page 13 of 9210. a The main purpose of the Bulk Sales Act is to: a. Ensure that buyers of a business receive the financial statements of the business. bb. Protect the suppliers of a business that sel stock to the busines . Protect the sellers of a business from creditors 4d. Enable a business to sell a large volume of product in one transaction. Landlords include a “continuous use” clause in a commercial lease because: a. Landlords want to avoid “dark spaces” in their commercial mall b. Landlords want to ensure the rent is paid ifthe tenant moves out. Landlords want to prevent an assignment of the lease. 4d. Landlords want to require the tenant to open on legal holidays. For commercial leases, which one of the fol ith respect to rentable and usable area? ‘a. Rentable area is the tenant's usable area plus the tenant's proportionate share of the common bb. Rentable area is the total gross floor area of all of the units. Usable area is the area of the tenant's unit plus the tenant’s proportionate share of the common areas. dh Rentabe areas the are within the wats of the tenanis unt wen csing commerce, what inthe mp ofthe dfeencs etneen sale and aawnt a. itis important because usable areas ener than rentable area. to listaparant encanta toate inoan the eit Ul zlteneesaatsoaun tetcna ama bicientorainec: ¢ encanto ‘Why would a Landlord include a D&ferment of Opening clause in a lease? a. Because itis a new building under construction and the Landlord wants to be able to adjust the date for opening the mall b. To accommodate a Tenant who may not complete Tenant’s Work in time. Because the Tenant may undergo bankruptcy before the commencement date for the lease. 4d. To provide for a Rent-Free period for the Tenant. Under what circumstances would a non-conforming use be legal? 2. Ifitwas constructed in accordance with and in compliance with both the Fire Code and the Building code, bb. fitwas converted to a non-conforming use after the zoning bylaw was put in place. fit was only a minor variance from the requirements of the zoning bylaws. 4d. Ifthe use of the property was established before the zoning by-law was enacted. Page 14 of 9212. 2B. 1a, 15. 16. Empire Property Corp. owns a shopping centre and has entered into a retail ground lease (land lease) for the land at the edge of the parking lot with Talbot’s Good Eats Restaurant which will be spending. $800,000 to build a restaurant. Which of the following Is a correct statement regarding the lease? ’. Leases of this type are usually for a relatively long term b. The tenant normally owns the land after the lease expires. This type of lease is usually for a one-year term renewable at the option of the landlord. 4d. For this type of development, the property must be a leasehold condominium. Buffer zones are often used in zoning to deal with the impact of one area on another. Which of the following would best describe how buffer zones are used in municipal planning? a. residential area would be placed between a light and heavy industelal area. b. Aheavy industrial area would be placed between a low and high density residential area ©. Aheavy industrial area would be placed between a commercial area and a residential area. d. Alight industrial area would be placed between a residential area and a heavy industrial area. from te statements below, select the statement hater caret onthe tpl of form and cong 1 aus the Importance of food poducton goverment ba ry sr res preven fam foley eee sor afam tan ee tole the tf of crops between eso and ese Mn Aptana ay reste ae of ere pt on theland ee ener een a oman, coer isles hove lt orn control ove the uso the tendcocr Rife ony automat nti acorn. 3 Allfour statements are correct. S Gniystatements and are goQa? Coy soma sara RS Which one of the following statement correctly describes one of the advantages to a buyer of, Investing in commercial real estate? a. Disposition costs of commissions and legal fees are comparatively low. b. Real estate offers a comparatively high liquidity given the amount of time needed to sel. Administration costs related to management and maintenance are comparatively low. d. The ability to have a limited equity investment while gaining leverage through financing, ~ “The following four statements pertain to industrial buildings. Which one of the statements is, correct? ‘a. The clear span in an industrial building refers to the amount of floor area that i free of interference from columns and support walls. b._ Pre-engineered buildings are losing popularity, given the additional costs and time needed to assemble them. ‘c Alive load, when referring to the abllty ofa floor to support weight, is defined as the weight of the structural components of the floor. d. Warehousing facilities would normally be divided into smaller compartmentalized segments to facilitate storage, Page 15 of 9217. 18. 19. 20. ‘Which of the following statements correctly applies to planning and zoning practices for mul residential development? ‘a. Multi-residential infil development is encouraged to help lessen urban sprawl. b. Municipalities normally establish zoning codes with lower numbers for high density, such as the Ri code for mult-residential Planning and zoning policies generally favour high: height limited only by the size of the lot. 4. Planning and zoning policies encourage single use projects by not permit within residential properties. ise, high density development with building \g commercial uses Farms are known to create odour, noise, dust, etc. Due to the associated problems, there is Provincial legislation that: a. Prevents residential development within 1 kilometre of farming operations. b. Protects farming operations from nuisance complaints.— Severely penalizes farm operations that disturb non-farming neighbours. d. Enables residential neighbours in proximity to farming operations to sue for injurious affection, From the choles listed below, select the correct statement based onthe tpi of sling a busines. 2 Fora business in leased promises, the lease term and ieee rleges ae key fatrs in the Valuation and saleablty ofthe business b. Thesale ofa business subjet tothe provsons¢{ Real Estate and Business Brokers At Se ae ia ieee 6: Because of the revenue steams avaiable, ie) ally easier to finance a business than atypia paarerefeniiy ‘ 4 The ntumnnge for estes o aco Oe ret tthe fl ling pec or the botnet Sestabshes nsdn Ca The owner of a business contacts You and asks you to list his restaurant for sale with your brokerage. The owner states he is not willing to show a buyer his financial statements. Which of the following statement best describes the requirements of the Real Estate and Business Broker's Act 2002 that must be complied with inthis situation? a, You tell him there is no problem, but you are required to provide the buyer with a written statement indicating the total annual gross sales. . You must inform the owner that the law requires the owner of a business to show the buyer the financial statements before the buyer views the premises. You inform the owner that, ifthe financial statements are not provided, the owner must be willing to give the buyer a sworn statement providing specific information about the business, — 4d. You tell the owner the financial statements are not required but the buyer must be given a sworn statement listing the items included in the transaction. Page 16 of 9221. 2. 23. 2a, Which of the following is a correct statement with regard to Form 510, the OREA Agreement to Lease-Commercial document? a. This form is structured so that there Is no need for a landlord to seek legal advice prior to acceptance, b. The form is used mainly for short term leases as there is no provision in the form for graduated rents. . tis designed to be used for a variety of types of lease arrangements, including gross and net leases 4d. Itis complete and detailed enough that there is no need to create the lease document. _ mane memriealaeee ite carn ‘A etail lease for a shopping centre would typically define what is meant by “Gross Sales”. Why important for a landlord to know the gross sales of a store in a shopping centre? 2a, Itis needed because gross rents are based on gross sales, bb. Itis needed in order for the landlord to be able to calculate percentage rents- It is needed in order for the landlord to be able to calculate additional rent. d._ itis needed in order for the landlord to be able to calculate the minimum annual rent payable by the tenant. Which of the following statements correctly applies to a municipal tax sale of a property? 1. For a municipal tax sale to be valid, the property must be sold through a registered real estate brokerage. The municipality may sell the property if the previous year's taxes are in arrears. ‘A mortgagee is entitled to receive notice of the tax sale and may prevent the sale by paying the ‘cancellation price 1d. The municipality cannot sell the property for more than the cancellation price on the tax arrears certificate. Page 17 of 9225. 26. 27. 28, When an investment property is sold, there is usually an allocation of the sale price between land I cost allowance purposes. Which of the following correctly applies to the land and building allocation for capital cost allowance? a. When an investment property sells, the land/building allocation is 2 negotiating issue between buyer and seller- b. When an investment property sells its the seller who determines the percentage allocation between land and building, The buyer normally wants to establish the lowest possible value for the building for future capital cost allowance calculations 4d. The allocation for capital cost allowance is based on the amount of financing involved in the sale of the property. ‘When an investor sells capital property, the increase in value since acquiring the property can be viewed by the Canada Revenue Agency (CRA) as either a capital gain or income depending on the circumstances. Which of the following statements is correct on this topic? a. The investor's regular business is not a relevant factor in determining whether the sale of a property cptal gn or neome u, Gales aloctcol byte pay Que on vse yh tage, thesale ls moreikely tbe income than capa €. Theintetions cf thenvestor are avery impoxeyeatr in determining whether the sale proceeds dre treated as income orcaptal gan” tO 4. The frequency of an investor's transacigng Welvng capital property has litle bearing on whether theses reat afin ree. Which ofthe following statement Brea with respect to non-conforming uses? 2. Permission fom the municipalts required o modiy or enlarge a legal non-conforming Us b. Lega non-conforming uses are not permite in residential zoned areas € Anon-conforming uses legal the bilng was bul after the zoning bylaw came int force 4. Alegal non-conforming use becomes legal when the property ssl On the topic of errors and omissions risk, which of the following statements is correct? 2. Seller property disclosure statements should be avoided because of the increased liability 'b. There is less risk for commercial practitioners than for residential because commercial sellers and buyers are more sophisticated and knowledgeable. ._Itis better to deal with buyers as customers rather than to disclose material facts. 4d. Non-disclosure of material fact its, as this eliminates your obligations the biggest single cause of errors and omissions claims—— Page 18 of 9229. a1, Salesperson Harper listed a convenience store and sold it toa buyer who answered an ‘advertisement in the newspaper. After the transaction closed, the buyer complained to Harper that the milk cooler was not a fixture that was included in the sale price as he was led to believe, but rather was owned by the company that supplied dairy products to the convenience store. In Harper's defence, he stated that this wasn’t his fault as this was the first time he had ever sold a business. Which of the following statements best describes Harper's conduct? ‘a. Salesperson Harper has breached his obligation of conscientious and competent service b. The buyer has no cause for complaint, since coolers are typically owned by the supplier. ¢._ Salesperson Harper has acted with average diligence and the buyer has no cause for complaint. d._ Salesperson Harper is not responsible due to the seller's duty of indemnification. sr eeeecsonatd arengcmens pay ncn owneof nd green ult ostatire crcrdnc hh tanec of specie" 1. “Sttanareoesn/budanangonent tape, vents woul normaly ony ae inetd ns etangemar Folk wee pea te dee” in “eect spree when emond for lear are ih ond exiting tie pace in “otf te dssdramapesof the Des /ouoeement to devopr tat tnd to vec ttre ona” ie ofthe aboe stoners made by Sarah geo? 3 Auarsacnentwccorat SS & Sater sere” “The conversation between Mary angidim turns to the financing of the purchase, earn outs, the offer price and pre-printed clauses in the offer. Mary makes a number of statements in this connection. ‘Which of the following statements made by Mary is correct? 1a. “Businesses are easier to finance than residential properties because of the revenue stream generated by the business.” bb. "The higher the Capitalization Rate used in the Direct Method of Capitalization for valuing a business, the higher the value of the business willbe.” c. “Sellers prefer earnout financing arrangements because the full purchase price is established before the buyer takes over operation of the business and the subsequent payments provide a revenue stream for the seller.” 1d. "The purchase price of a business can be based on an Asset Valuation rather than a Direct Capitalization Method. Assets might include the value of goodwill and a leasehold interest where the rents are below current market.” Page 19 of 9232. 33. 34. 35. 36, ‘When a real estate brokerage is involved in the sale of a business, the Real Estate and Business Brokers Act describes various statements to be given to the buyer before a binding agreement is ‘entered into. From the list of statements given below, select the statement included in the Act to be given to the buyer. ‘a. Acopy of the Franchise agreements for the business together with any training manuals, b. statement of fixtures, goods, chattels, rights and other assets that are excluded fram the sale of the business © Acopy of any or all employment contracts for the business along with schedules of working hours for the employees. 4d. Acopy of the seller's income tax records for the previous three years or since the acquisition of the business by the person disposing of it. srences between the laws for On the topic of non-payment of rent, are there many residential tenancies and commercial tenancies? Not really. The laws in Ontario are usually somewhat standardized. b. Because of the Residential Tribunal, a residential landlord has more options and can deal with problems of non-payment more quickly than a commercial landlord. c. Yes, very significant differences. A commercial landlord can change the locks and seize the tenant's, property and ths isnot allowed for residential non-payment of rent d. For residential non-payment, a landlord can sell reer ‘without notifying the tenant but In commercial tenancies, the tenant must be notif set nape ctesanetarenanne lore soe eset no anemones nS b. Alimited partnership. N The net absorption rate refers to : a, How much leasing space is being rented during specific time period? b. How much leasing space is being vacated during specific time period? The difference between the asking price and the leasing price of office space for a particular property 1d. Both (a) and (b) combined The floor ratio isa significant factor in office bul statements applies to floor area ratio? ‘a. The formula for calculating the floor area ratio is length x width (of the building) bb. The ratio must always be less than 1. ._Itis the ratio of the ground floor area of the building in relation to the size of the lot. 4d. The ratio isthe total floor area of the building in relation to the area of the lot. ling construction. Which of the follo Page 20 of 92a7. 38. 39. 40. a1 In the commercial real estate market, users and investors may have different goals. Which of the following would be characteristic of these goals? ‘2. Atenant user would be primarily interested in capital appreciation of the property. b. Investors usually want positive cash flows and capital appreciation on sale Users are looking for positive cash flow. 4d. Investors are primarily concerned with the amenities of the property. ‘Alease in which the tenant pays all expenses, maintenance, property taxes, but s not responsible for major repairs is: a. Gross lease b. Semi-gross lease Net lease d, Net Net lease commercal properties offer both advantages ¢6Bsadvantages for investors, Which fhe ‘aren satersents describes disadvantage fra buyer vesting commercial el estate? Co ean acer possblygaphen t comes te investingin commercial sat eer ansf este ffers area ack of hg gen theme required for oss © Srey ef apne foreehe erry Sooo ett li iow degreeXt personal conta ivlved In the oumership of commer property even the need for propery monogement “The Residential Tenancies Act impacts the relationship between landlord and tenant, rental {guidelines, creation and termination of tenancy, etc. for rental multi-residential properties in Ontario. From the choices listed, which one would most likely be impacted by the Residential Tenancies Act? 2. The location where the building will be constructed, bb. The types of amenities provided such as pools and fitness facilities c Consteuction materials and design. d. Rates of return and the ability to upgrade existing buildings. Page 21 of 9242, 43. 4a, 45. ‘When looking to purchase real estate from which to operate a distribution center, buyers will focus their attention on specific requirements. What would some of those requirements be? 2. Proximity to transportation corridors as well as time/distance factors and freight rates to major areas and customers, b. Population density as well as proximity to affluent neighbourhoods and the opportunity for leasebacks Distance to raw materials as well as availability and cost of skilled labour and energy to support the business processes. 4d. Advanced computer technologies, communication systems and treatment for contaminants and waste water generation. Which ofthe following would bea correct statement with respect toa sngle purpose industrial building? 2. These types of buildings are generally much in demand given ther potential for easy conversion to a wide range of ses These buildings are relatively easy to appraise given that there is typically an abundance of comparable properties from which to choose These types of bulding re tradtonlly dificult to market given thelr unique features constructed fora speci use 4, These types of buildings are built by developers as gone construction and have a wide range ofltemative uses. x jim owns propery at 4 Longshore Road op Nich he operates his warehouse dtrbution centre. Given his plans fo expanding his bins Jim has been eiscusing sale leaceback with ABC RealEstate inc. What would be one oft ypantages to Jim a a sle/leasebock rangement? 2: tgs Jim he opportanty tinea equity in theland and budingand arson coby dunt xan ote re b. fRwout provide lim with be 2opredotesin value «. Itwould fee up 2 good desl of ait for Jim in oder to ass him wth his expansion pans 4. Ives the chance tobe assured of improved longterm cash fom fom the learnt the property and ths wl et with fs plan for expnson chance of profiting from capital appreciation if the property Jan Smithson is interested in purchasing a Hardware Store listed for sale with ABC Realty Inc. The seller has a full range of audited statements and is happy to supply Jan with all the necessary formation and statements as required by REBBA 2002. Which of the following documents is ABC Realty Inc. obligated by REBBA 2002 to deliver to the buyer? i. Acopy of the budget for the upcoming financial year. ii, Aprofit and loss statement for the preceding 12 months. lil, A statement of the assets and liabilities of the business. iv. A copy ofthe previous year’s tax return for the business. a. Allfour documents. b. Only the documents in fi, and i 4 Only the documents ini, i, and ii 1. Only the documents in i, and i, Page 22 of 9246. 47. 4a. 49. 50. “The common principles under common law are very complex with respect to assignment and subletting of commercial leases. Which of the following statements is correct on this topic? ‘a. Lease clauses can require the landlord's approval for subletting but common law does not permit such a clause for assignment. b. Because of the concept of privity of contract, a landlord has no control over the assignment or subletting of a commercial lease. ‘c. Landlords typically ensure that detailed clauses are included in lease agreements that require consent of the landlord or termination of the lease in the event of assignment or subletting-—~ 4d. Landlords prefer assignment to subletting because when subletting takes place the original tenant is no longer responsible for the lease. ‘A rent-free period can be a strong incentive for a new commercial tenant. Which of the following statements Is correct with respect to this topic? 2. Itusually means the tenant won't have to pay the minimum rent but wil still have to pay any additional rent bb. Rent-free periods are set under the Commercial Tenancies Act for a minimum period of six months. Aland wil usalofera entree period ata timguhen commer rental units ren high demand. di Atenant has to earn this benefit and te rest free@poUs usually at the end ofthe lease term Ancatement Sv 2 Reson the deed of propery ging the property rom beng used fora spe purpose s », lnonimbrnc tat doesnot hy documented or descbedin the erent Pre end slehens prope ea Thesant to puchare cops, roo ravel rm the fee simple owner The unto land nner over the land of another owner fra pectic purpose rather than genera ‘Why might a salesperson choose independent contractor status over employee status? ‘a. Obtaining support and assistance from the brokerage management is a priority for the salesperson, b. The salesperson wants to minimize book-keeping duties and dealing with tax related matters so that the salesperson ean contrite on prospecting and selling. According to the Real Estate and Business Brokers Act, 2002, an independent contractor ‘salesperson more status and authority than an employee salesperson. ‘4. The salesperson would like to minimize the control and supervision exercised by the brokerage ‘Aclass “A” building refers to: a. Abuilding located in a prestige area: b. Abuilding located in a good area cc. Abuilding more than 20 years of age 4d. A building with a local, average quality tenant. Page 23 of 92si. 52. 53, 54, 55. 56. 37. {Atypical vacancy rate for a property type can be arrived at by looking at = a. The amount of unoccupied space as a percentage of total space for your property type within your city- b. The amount of unoccupied space for all property types within your city ©. The amount of space currently leased this month compared to last month, d. Is posted every month by CMHC. Zoning restrictions: a. Are the same for every municipality b. Have to be approved in a vote by local citizens c. Only apply if there is a structure built on the lands 4d. None of the above— The Ontario Building Code: a. Only deals with residential housing construction. bb. Isnot responsible for electrical standards because the Electrical Safety Authority takes care of this, & Applies to all buildings constructed in Canada. 4. Differentiates between a small and large building. Steel construction is commonly used because: a Itcan withstand high temperatures. b. Itismore flexible, especially in windy location: You can choose to use heavy steel or light d. Wood framing in a commercial building fepending on how much you can afford to spend. Ip too many trees ‘The building core refers to: \ a. The material used when a compl building is constructed b. The location of certain compontits which can be altered depending on the desired layout of the building Usually contains management offices 4. None of the above Power Centers are successful because: a. Everyone needs electricity b._ Big Box retailers are located within the same location Big Box retailers are located in others area of the city and just small independent businesses can be located here 4d. They are usually located in the downtown core, ‘A ground lease refers t a. Renting vacant land such as farm land b. Alease which is usually for 20 years and no longer c. Asite that is leased from someone other than the owner of the building which is located on that, site 4d. Arental unit located near the busy transportation routes. Page 24 of 9258. 59. 60. 61. 62, Which of the following is correct regarding a pre-engineered stee! building a. Offers many advantages including lower cost than traditional methods b. Is manufactured at a factory with all parts pre-cut to exact dimensions Has gained popularity with buyers given its relative simplicity d. Allofthe above. ‘an industrial building: a. Clear ceiling height is important b. Floor load is important ‘&_ Neither (a) and (b) d. Both (a) and (b}-—~ Which of the following statements is NOT correct: a. Floor load refers to the ability ofa floor support both live & dead loads b. Live foad typically includes people, equipment, furnishing and stored materials . Dead load refers to the weight of the structure itself d._ Live load applies to both residential and commercial structures Hard costs includes: a. Consuitngfes ssocated with constructing a bull 4QO b. are the only costs used when pricing out construe{chy a commercial building 6: nue the paverent & carbs when const eommerl bul 4. Are based on the amount of land the site cq Which of the following is correct ren Soest ais beneficial to both the buyer angt’seller asthe buyer obtain along term tenant andthe seller freesup ther equty nthe regi manta thelestion b. tswhen we sea bulling to an bVestor who then hires us o find a new tenant because the previous owner is retiring from business c. lewhen the current over sll to an investor and then becomes a tenant forthe new owner &. oth (a and When drafting an offer for a multi-residential building: fa. Allleases should be attached to the offer as a schedule or the offer should be conditional on the leases being reviewer b. The offer should contain a clause allowing the new owner to evict any tenant they do not wish to keep ‘c. The offer should be provided to the tenants so they know who the new owner will be and when they have to pay their rent to the new owner d. The offer should contain a clause stating that any rent increases due will become effective on the date the sale closes Page 25 of 92sa. 6s. 6. 67. 68. 69. With respect to agriculture and farming in Ontario, there are three basic types of Marketing Boards with different degrees of authority. Which of the following statements is true with respect to the authority of Marketing Boards? a. The government ensures that the individuals on marketing boards are consumers and not from the farming community. b. While three types of marketing boards can affect the price of a product, they have no jurisdiction over production quotas. While all three types of marketing boards are involved in negotiating prices for products, some Boards can actually set the pric 4d. The main reason for creating marketing boards is to adve and promote agricultural produets. Farmland leasing arrangements could include a. Crop share lease b. Cash rent lease c. Flexible cash lease 4. Allof the above—- Which ofthe followings NOT core: 2. Barns and slo are ot regulated under the Ontario Bung Coe The Ontario Building Code wil also work wth the tal rm Bl regulate orm bilngcnsrucon Bing emt oe ed aa mang 4. Zoning lows may tate the minimum d@O¥ between Iesoc fetes nd este development & Which of the following statements is rect? Property taxes on a farm can be reduced by 75% if a. The property is assessed and valagtias farmland, (yes under 08¢) Code of Canada to b. The owmeris a Canadian cizen permanent resident of Canada . An application is submitted when purchased and is valid for your entire ownership--— (apply every year) 4d. You have a valid farm business registration number. Which of the following is NOT correct: a. An advantage to owning commercial real estate is that itis quick and easy to sell and get your ‘money out: b. An advantage to owning commercial real estate includes higher than average returns during, economically stable periods An advantage to owning commercial real estate includes having a high degree of personal control 4. An advantage to owning commercial real estate includes tax sheltering possibilities In regard of cash flow, which of the following is correct: a. Abuilding with negative cash flow can be valuable to an investor based on the potential for significant profits when itis sold, Cash flow is found by subtracting the annual debt service from the NOI. Rising interest rates can affect a property's cash flow resulting in higher isk. 4d. Allof the above. Page 26 of 9270. n. nR. 23. 7a, 7. Which of the following is not correct regarding leverage: 2. Neutral leverage means you did not have mortgage money used for the purchase-~ Positive leverage means your equity return is greater than the overall rate of return c._ Negative leverage means the overall rate of return is higher than the equity return 4. Leverage is usually expressed as the loan to the value ratio. Which of the following is correct In order to sell a business: a. 35 years history of financial statements must be provided to the buyer bb. The Sale of Business Affidavit is completed prior to a binding agreement if no financial statements, are available- ‘The Sale of Business Affidavit is used to disclose all of the assets of a business, d. Any sub-lease does not have to be disclosed to a buyer because when the business sells, the sub ease will be cancelled. Regarding the Bulk Sales Act, Which ofthe following statements is NOT corr 4. The maximum deposit on an offer is 10% b._Applies when secured creditors have claims over $2500 and the sale of stock in bulk is outside of, the ordinary course ofthe seller's business ‘ isan ation eho be camped este flamer dose te transaction, 4, Is regulated under the Rea Estate & Business pts Act 2002 (REBBA 2002) different Act) © (Bulk Sales Act is EBA 2002 requires: MS serRtratement showing the ist of ages atures, cates rights ncuded inthe sale of business be proved to the hay@onor oa Binding agreement b. If no financial statements are avstlable, a statement disclosing this on the Agreement of Purchase & Sale must be included to protect the buyer. The sale of a Business Affidavit be signed by the seller and witnessed by the listing salesperson. 4d. None of the above-——~ Which of the following is NOT correct regarding owning a franchise: 3. Training for the owner & staff also include business techniques, marketing strategies and financial record keeping bb. Costs and ongoing fees are not usually that significan The value of the franchise may increase over the years thus providing added market value for existing franchisees d. The cost of acquiring products and services is usually less expensive due to group purchasing power (On an Agreement of Purchase & Sale-Commercial when the seller is a corporation: ‘a. The President’s Name is also included as the owner shown on Page 1 b. The owner's name is shown as John Smith d/b/a Smith Sports ‘c. Acorporate seal isthe only method of binding the seller to the agreement 4d. The word “I have the autharity to bind the corporation” may be included: Page 27 of 9276. 7. 78. 79. 80. a1. When completing the Agreement of Purchase & Sale- commercial a, The commission Trust Agreement is always signed to protect our commission. b. Adisclosure must be made in the offer if both buyer & seller are being represented by our company. ‘Spousal Consent is never involved because we are selling commercial, not a single family home 4. The Seller's Signature also authorizes the Seller's lawyer to pay directly to the Listing Brokerage the unpaid balance of the commissio ‘The Agreement to Lease: a. Sets out the material aspects of a lease which is used to create a formal lease-— b._ Is not binding. Ifa tenant changes their mind prior to the formal lease being signed, they may cancel the agreement Is the same asa license and does not convey any interest in a property to a tenant 4d. Allof the above Ifa tenant sub-lets it’s premises: a. The sub-tenant never has to be approved by the landlord b. The Landlord maintains its privity of contract with the original tenant- ‘[Link] landlord can increase the rent due to the new occypant 4. Allof the above xe ‘A commercial ease wil typically include which ofthe Yotlowing clauses 2. Continuous use no dark space) S b. The tenant may not take goods from thayelted premises unt all rents have been paid The tenant must make repairs when (ufes are removed atthe end ofthe term @. Alot the above-—- © Which of the following is NOT corr a. Ifa tenant is in arrears of the rent, the landlord must apply to the Landlord & Tenant Board for permission to evict the tenant. b. Interest on a security deposit is not a requirement under the Commercial Tenancies Act, but a lease ‘may require a landlord to do this anyways .Aguarantor on lease is responsible for any default by the lessee 4d. Ifa commercial tenant does not pay their rent, the landlord can change the locks after the 16" day the rent was due ‘APhase 1 Environmental Audit : a. Isnever required when selling a multi-residential apartment building Includes testing the soll to see if there is any contamination ©. Determines if reasons exist to believe there may be some contamination: d._Isalways done by a seller prior to listing a property for sale Page 28 of 9283. 84, Capital Gains tax is not typically charged on the sale of a principal residence if:- a. The tax payer is also the owner b. There is only one principal residence The unit is ordinarily inhabited in the year d. Allofthe above- Which of the following is correct ‘a. Acapital loss is when the expenses are more than the income for a rental unit b. The capital cost allowance is the maximum rate set under the Income Tax Act that the taxpayer can claim for depreciation c._Allassets are depreciated at the same rate which is prescribed by the Income Tax Act d. capital gain is applicable upon the sale for a property, not when purchased Which ofthe following is correct: 1. The declining balance method of calculating depreciation always uses upon 100% of available depreciation of an asset b. ‘The half price rule (50% only applies to capital assets purchased after July * of each year if you use the calendar year as your fiscal year c. Ifa capital assetis sold ata higher price than what i cerns at, the seller may be responsible for recapture— 4d. The straight line method of calculating: sere Si when the taxation year is less than 12 eed ~~ Which of the following is NOT correct * See Which of the following is correct regarding sole proprietorship? a. Areal estate brokerage operating as a sole proprietorship must include ‘inc’ or ‘Ltd.’ in the business name along with the ‘Brokerage’. “The owner of the business is solely responsible forall debts of the busines: ©. Other shareholders in the business are responsible for the debts of the business based on their proportionate share of ownership. d. Most large businesses choose to operate as a sole proprietor due to the reduced liability associated ‘with this type of ownership. Page 29 of $287. a8, 89, 90. on. 92. Why /s an investor permitted to claim capital cost allowance? a. Capital cost allowance is calculated because the properties usually increase in value. b. Capital cost is allowance is calculated because of the cast of money. Capital cost allowance takes into account that capital assets have a limited lifespan 4d. Capital cost allowance is calculated because land can depreciate in a slow market. A joint venture a. Typically involves a group of investors who share in multiple projects at one time. bb, Tends to be specific in nature with an undefined time limi c. States that any asset or lability within a Joint Venture is shared amongst the investors based on their proportionate interest in the project-—~(specific project, specific time) 4d. Allows the largest investor control over the project. ‘When working with a seller, problems may arise because: a. You did not inspect the entire property because it was cold and rainy. '. You told the seller not to disclose a previous basement leak because it had been fixed and you are only obligated to disclose current problems, You relied on the seller's information regarding zoning & taxes instead of verifying the a Metis & When working with a buyer, you cn a. Save them money by advising them that a kyfilajifg inspection is not necessary because it is only a year old and looks in reat condition, b. Save them meney by ren the Gf statements provided the sler ther han taking them tothe accountant. Workin best interests by nrg fe without any con rmltiple offer situation and theQeally want he propery, 4. None ofthe above- ions because you are working in a ‘When listing a commercial property for sal a. You do not have to ask the seller about the property condition because there is no SPIS for commercial properties b. You never have to worry about a well or septic tank because commercial properties are only Constructed where there is full municipal services. ©. You need to askif there are any first right of refusals registered in the property. 4d. You always need to have the spouse of the owner sign all documents A confidentiality agreemer a. Allows us to place the selling price of a property on the MLS system but does not allow us to advertise the sale price b. Is signed by a buyer after a transaction closes so they cannot disclose the selling price of the property Cane signed by a listing salesperson because they may be looking at the Seller’s financial books-— 4. Is signed by a seller so that after they sell the business, they cannot reopen a similar business in competition with the buyer. Page 30 of $293. 95. 96. 97. Which of the following is NOT correct regarding HST? a. The seller is not required to collect HST on the sale of commercial property as long as certain conditions are met by the buyer ‘A multi- residential apartment building that contains 100% residential is typically not subject to HST . Abuyer who is a non-resident of Canada must pay the HST but can register under the Act and receive an input tax credit, dd. The Agreement of Purchase and Sale- Commercial requires a registrant to complete the clause regarding HST as either “included in” or “in addition to” the purchase price~ ‘According to the Agreement of Purchase & Sale-Commercial a. Abuyer can automatically terminate the agreement if a hydro easement is not disclosed b. The buyer's deposit is placed in an interest bearing trust account once it exceeds 10% of the purchase price c Actause is included on the pre-printed form advising buyers to seek independent legal, accounting and environmental advice- 4d. Alladjustments for rents ete. shall have the day of closing apportioned to the seller ich of footage MOT crac? b. Inthe eae ofa new department where the “ona Tease may notbe known due to various wanda faning arate ofa eds comment sed ce. lense contac tbe va, must vont Ge cn of the poner the ena @ Neate ue ns rms mob taatord tC Earmout, in relation to the sale steele is arn addnona fe order to tadbteraronchise agreement tothe new owner (nosed to caltet he good willvalue of business, b, . Amethod of financing which is based on actual future business performance~ d. A method of financing which is based on the earnings in the year the business is sold Which of the following statements is correct: a. fa tenant declares bankruptcy, a guarantor for the lease will not be responsible for the debt owed to the landlord. b. A commercial lease may contain a provision requiring the tenant to repair the premises when removing the trade fixtures at the end of this term. .. Commercial landlords are permitted to seize and dispose of tenant property for non-payment of rent under certain guidelines. 4d. All of the abov Page 31 0f 9298, 99. 100. 101. 102. 103. ‘When allocating the purchase price between the land and the building for tax purposes: 4. The buyer typically wants to maximize the building allocation so there is more availabe for depreciato The seller typically wants to maximize the building allocation so there is less recapture © The land/building allocation is determined under the Income Tax Act 4. ‘The seller's lawyer determines the land/building allocation Which of the following statements is correct? a. An indemnifier assumes a broader scope of liability than does a guarantor. b. An indemnifier is responsible to the landlord if a tenant becomes bankrupt while a guarantor is not responsible, . Ifa tenant defaults on the lease, a guarantor will be responsible for the default. 4d. Allof the above- Which of the following statements is correct? a. A salesperson employed by a brokerage as an Independent Contractor is required to remit both employee and employer portions of the Canada Pension Plan contributions- A brokerage must remit the HST for all Independent Contractors under their employment Employment insurance applies only to the clerical staffand never to a salesperson 4d. A brokerage is not permitted to charge an racpenge mntractor an administration fee. A A non-competiin cause: : iste des sai si b. Isony negotiated onthe sale of» prsogl vice business such sharon Must have larger rads fora vane than a unique bathroom ture store 4 sontincded wen the buyer pg edatorl Lomo the pcos pre Which of the following statements 1S correct regarding a balance sheet? 1s solely based on the balance of inventory remaining when a business is sold b. Is the same as profit & loss statement ©. Includes both assets, liabilities and equity- 4, Is only created in order to comply with REBBA’s requirements for the sale of a business ‘Which of the following statements correctly describes the purpose of the Confirmation of ‘Acceptance section of the Agreement of Purchase and Sale? a. Itis essential for the contract to be binding as it isthe seller's acceptance of the offer. It verifies when the communication of acceptance of the offer has taken place, ._Itconfirms that the signing and all required initialling of the Agreement has been completed and verifies when this was completed 4. It verifies that all parties to the Agreement understand there is a contract. Page 32 of 92104, 105. 106. 107. 108. Market analysts, in assessing the commercial office market, take into consideration a natural (equilibrium) vacancy rate. Which of the following statements is correct concerning this rate? a. Acommercial office vacancy factor above 3% will usually cause office rental rates to decrease. b. The equilibrium vacancy rate is calculated by averaging the vacancy rate for Montreal, Toronto and Vancouver. ‘The vacancy rate must be zero for the vacancy rate to be in equilibrium. d._ Itis a normal vacancy factor and it should not significantly affect rental rates-—- The involvement of municipalities and the creation and implementation of zoning restrictions are extremely important in the development of vacant land into industrial uses. ‘Which of the following statements is correct on this topic? a. Aresidential area would be used as a buffer zone between light industry and heavy industry. b. Zoning bylaws do not permit any retail activity within industrial zones. Heavy industry may be prohibited from an industrial park because of the proximity of the industrial park to residential area: 4d. The Planning Act does nat permit 2 municipality to be the developer and landowner of an industrial park Wh of he lowing statements correct egarding Bs contamination? contatners Sv «Ret son oneof ona sinke oth soundest 41 The vest majority of contaminated have already been identified and ther exitence recorded ‘There are differences between the registry system and land title system in Ontario. Based on the differences between these two systems select the correct statement from the following ‘There is no need to search title of the property in the registry system. b. Inthe land ttle system the land registrar maintains and guarantees title of the properties Title search for a period of 60 years in necessary under land title system, 4. Registry system is the newer and most efficient system than land title system. ‘There is significant difference in forms to be used in Residential Building and High-rise Building. ‘Which form is used for high-rise building? a. Form 510 ‘Agreement to Lease Commercial b. Form 500 ‘Agreement of Purchase and Sale Commercial ©. Form 100 ‘Agreement of Purchase and Sale Residential d. Form 501 ‘Agreement of Purchase and Sale Commercial Condo Page 33 of 2109, 110. a. a2. 13. On the topic of Retailing Planning/Zoning, the Commercial Real Estate Transaction textbook contains the following statement: “municipalities must... encourage a competitive, healthy retail sector and preserve existing ‘commercial resources but, at the same time, nat inhibit new retailing formats of dampen competition to the detriment of consumer choice, Planners have generally embraced higher density, mixed developments that are well located within established trading areas and readily accessible by both public transit and private vehicles.” Which of the following statements most accurately describes the message in this quotation? ._Municipal planning policies must encourage new retail development while preserving existing retail locations. b. Municipal zoning requirements are designed to separate retail use from residential areas in an effort to take advantage of the resourced dedicated to roadways and public transit. Planning policies require new retail development to take place in undeveloped suburban areas. 4d. ‘Municipalities preserve existing downtown retail locations by restricting the development of big box stores and power centers, Which of the following statements is correct with respect to easements? In the standard OREA Agreement of Purchase and Sale ~ Commercial, the standard wording states that there are no easements on the property. . Easements exist in the Registry system, but not in tha Titles. © An easement may restrict the use of a property ar eat etuce the vale ofthe property Recent changes to Land Registration in Ontarigtys Standardized the forms required to register an easement agreement. infle sale of a business and the seller is unuulling or does ‘ot want to provide the financial stateméhis to the buyer, the seller must provide a sworn statement tothe buyer. From the ighbelow, select the statement that correctly describes some of the information that must be inculle inthe sworn statement. 2. Allliabiltis ofthe business and details ofthe sellers interest inthe business premises. b. The names and socal insurance numbers of ll the employees ofthe business 6. The sellers income tax returns fr the business for the most current three year period. 4. The names and contact numbers ofall the suppliers of goods tothe business When a real estate brokerage is involv ‘What is the latest point in time that a brokerage is required by the REBBA 2002 to deliver financial statements to a buyer of a business that is listed for sale by that brokerage? a. Before the sale is finalized and the buyer takes possession. . Prior to a seller accepting an offer to purchase from a buyer. ©. Prior to the buyer and seller entering into a firm and binding agreement of purchase and sale. ~ 4d. As soon as a buyer expresses interest in purchasing the business. How Is the specific geographic location, size and boundaries of a unit within a shopping centre ‘normally identified for a tenant entering into a retail lease? @. By including the municipal address of the store. b. By attaching the shopping center's plan of subdivision, ._Byattaching a Compiled Plan to the lease. 4d. By attaching a site plan to the lease Page 34 of 92114, 115, 1s. a7. ‘Whether or not the sale of a property is subject to a capital gain or will be treated as business Income can be a concern for an investor in buying and disposing of real properties. Which of the following statements is correct on this topic? a. Areal estate salesperson is more likely than a dentist to have the profits from buying and selling real estate as a capital gain, rather than be taxed as income. The frequency of similar transactions can be an important factor. The residency status of the seller is the most important factor. d. The amount of the gain is an important factor. ‘What is one of the objectives of the Brownfields Statute Law Amendment Act 2001? a. To encourage the clean-up and redevelopment of abandoned or contaminated lands and as a esult, positively affect the utilization of under-developed land, b. To reduce the ability of developers and lenders to buy and finance the development of contaminated properties while providing financial relief to municipality for the reduction in their assessment base. . To slow down the planning process and increase the number of steps in development of abandoned or contaminated land, 4d. To make municipalities, developers and lenders more accountable for allowing, buying or financing contaminated land by increasing the possibility of futuge liability as well as financial or legal risk. vou normaly sedate eaten commit yo now hve an oppo owt tan ofer va mutrantredenel tuldog yao te flowing setements str th respect to the similarities and differences between the Agreement for a single family home Cree ecapceneciteaanegmecatoenr o"there ena need tottemle the on ee vata mula apartment bullng since the tint bling omporedo +00 fon este ae ¢. Thestadar home nspeclon causes deqate r+ mutant property @. Since both te esden Form 10 the Sanv Areemens oral se for ml [Link], upon viewing a 12-plex with a representative of the listing brokerage, wants to fully review all tenancy agreements when submitting an offer. The seller has these documents but is concerned ‘about providing them before an accepted agreement and is worried whether confidentiality will be ‘maintained. Which of the following is the best approach in handling this request? a. Explain to the seller that the buyer cannot obtain such Information. b. Include a condition in the agreement allowing the buyer full access to all the seller's records. . Insert a condition detailing specific records that the buyer can access, but include a confidentiality provision in the agreement.-——- 4d. Inform the buyer that he will be buying the property ‘as is.’ Page 35 of 92118. You normally sell residential real estate, not commercial, but you now have an ‘opportunity to write up an offer on a multi-unit building. ‘Which of the following statements is true with respect to the similarities and differences between the Agreement for a single family home compared to the Agreement for a multi-unit residential property? 2. The standard home inspection clause Is adequate for a multi-unit property. b, There is no need to itemize the appliances included with a multi-unit apartment sine the tenants already have possession of them. « Since both are residential, Form 100, the Standard Agreement, is normally used for a ‘multi-unit apartment building. d. There is more likely to be confidential financial information exchanged as a requirement of a multi-unit building compared to a single family residential sal 119. Which of the following isa correct statement on the topic of commercial lease termination and ownership of trade fixtures? a. To avoid any disputes, the tenants should remove their trade fixtures before the termination date of the lease, b. An owner may not want the trade fixtures and the lease may require that the tenant not only remove the trade fixtures, but also bring the property back to its original condition: Commercial leases do not normally address the ownership of trade fixtures at the end of the lease as they are the personal property of the tenant. d. A trade fixture becomes a part of the property when attached and is always the property of the owner on termination of the lease.Case Study: (2 Parts) You are attending a meeting at your office and the broker/ manager has decided to discuss the sale of a business as the topic for the meeting. After a brief discussion, the manager asks for one of the salespeople to volunteer to explain the requirements of the Real Estate and Business Brokers Act, 2002 with respect to the documentation to be provided to the buyer. 1. Assalesperson volunteers and states the following: “Before a buyer enters into a binding Agreement of Purchase and Sale, the seller must provide the buyer with a sworn affidavit that includes: a profit and loss statement for the preceding 12 months or since the acquisition of the business by the person disposing of it, a statement of assets and liabilities of the business and a list of goods, chattels, rights, fixtures and other assets related to the business that are included in the sale.” ‘There is an error in the explanation given by the salesperson. Which of the following statements. describes this error? 1a, The buyer must receive the statements on the closing date of the transaction, not before a binding agreement is entered into. b. The financial statements provided by the seller are not included in an affidavit sworn by the seller. - ‘c. The Act also requires the buyer to receive a copy of t§4@bler’s personal income tax return. 4 The buyer must also receive a statement of goods\chatels and assets included inthe business. 2. Themanagerthen sss what cn be doe tthe fs not have adequate ancl statment or isumuingto ie them tothe buyer. ‘salesperson answers: ns >e%th stating why the financial statements will not be ‘ine seler cn provide astatement provided. The statement must igo rematin he Tobit ofthe busines, detas the lease and any subletting of premises, The buyer must sign a waiver tht waves receipt ofthe fanchl statements and the Ist of fxtures goods, chattel and assets excluded from he transaction.” There san error inthe salespersons explanation, Which ofthe folowing statements describes this erort 1. The waiver waives receipt of the nancial statements, but not waiving reel of he st of items tecluded rom the transaction b. Thebuyer must makea statement underoath to waive receipt ofthe statements, ©. The salesperson shuld advise the other salespeople never to sella Business there are no financial statements, 4 Thewalver aso waives receipt of the tems incidedin the transaction, Page 36 of 92Questions on Clauses ‘The following clause can be found in a typical ret “CONDUCT OF BUSINESS: Tenant shall, upon the commencement of the lease term and throughout the term, with adequate staff and stock of new merchandise and fixtures of first-class quality, be open for business and continuously, actively, and diligently operate and conduct its business in the whole of the premises in an up- to-date, first class, and reputable manner befitting a first-class shopping centre. Tenant shall from time to time renew, refinish or redecorate such of the improvements, fixtures, furnishings, chattels, and decorations of the premises as may be necessary to meet the foregoing standards. Tenant will conduct its business in the premises in good faith during such hours and on such days and evenings as landlord shall from time to time require (and at no other times) and in such manners as shall assure the transaction of maximum volume of business in and at the premises, provided that tenant may conduct its business during such additional hours, and /or days / or evenings as landlord may consent to , which consent is at landlord's sole discretion and may not be granted unless tenant agrees to pay to landlord all expenses incurred and relating to the common areas as aresult of such extended opening. Nothing in this paragraph shall require tenant to carry on its business during any period prohibited by any by-law or provincial statute regulating the hours when such business may be carried on” Which of the following statements is/are correct regar clause noted above? 1 The tndrs water tha te store ot gente shopping et pen ond stoners would reasonably expect the store to be open. 2. i, The landlord wants to ensure that tenants achie)@the highest level of sales volume resulting in ‘maximizing percentage rent. it, Thelondord establishes the business eben and there so provision forthe tenant to extend those hours i. The landlord stoking steps to ensirQ Phat the centre maintains the highest possible impact on it trading a. Only statements i and iv are correct. Bb. Only statements andl are correct Only statements i and it are correct 4. Al four statements are correct. Page 37 of 922. Different types of retail properties require leases with clauses that are particular to that property. The {following question in this case study all relate to typical clauses found in a retail lease. "RETAIL RESTRICTIONS: Tenant should not, directly or indirectly itself or through an affiliate or subsidiary, operate, manage, or have any interest (whether shareholder, lender, encumbrance, partner, employee, oF “otherwise) in any other business which is similar to or in competition with the business permitted under this lease hereof within a radius of three miles from any point on the perimeter of the shopping centre without the written consent of Landlord, which consent may be arbitrarily withheld provided that this retail restriction covenant shall not apply to any such business owned and operated by Tenant at the date of this lease. In the ‘event of the breach of the foregoing covenant, Landlord, in addition to any other remedy available to it, may require that the Gross Sales from and in respect of such other business be included in the computation of the Percentage Rental hereunder as though such sales had actually been made from the premises and Landlord shall have the same rights of inspection and audit with respect to the Gross Sales of any such business as it has with respect to Gross Sales pursuant to this lease. Tenant covenants that the entering into of this lease by Tenant does not offend or breach any similar retal restriction covenant by which itis bound to any other party." Which of the following statements explains the purpose of this clause? i. The landlord is trying to secure the highest possible sales achievable from any given tenant by limiting their ability to open a competing store within stated vicini ii. The competition restriction does not apply ifthe busi idy has a similar store within the stated vicinity. : iit, The landlord is not prohibiting the tenant from fif@nding a similar store within a stated vicinity of the Iv. The tenant is confirming thatthe business i» 468 subject to similar restrictions in ony other lease which it may be party to. a. Only statements iii and iv are coreg6> b. Only statements ji and iv are coftQet 4 shopping centre provided that the tenant “i firect involvement in the management. Only statements i ii and iv are correct: |. Only statements i and ill are correct Page a8 of 923. The following clause can be found in a typical retail lease. “OVERHOLDING: If Tenant continues to occupy the premises after the expiration of the term, without any further written agreement, Tenant shall be a monthly tenant at a monthly Minimum Rental equal to one-sixth of the highest annual combined Minimum Rental and Percentage Rental that were payable by Tenant during {any Rental Year of the term and otherwise on the terms and conditions herein set out with such changes as are appropriate to a monthly tenancy. This provision is not to affect Tenant's obligation to deliver up vacant possession at the expiration of the term, ‘Which of the following statements is correct regarding the clause noted above? i. The calculation of rent during the overholding period will be based on the average combined minimum ‘rent and percentage rent paid during the final year of the lease. ii, If the tenant remains in the premises after the expiration of the lease without written agreement, the ‘monthly rent is doubled. ifthe landlord accepts payment of rent from the tenant for any rental period after the expiry of the lease, this overholding clause is void. jv. Ifthe tenant stays in the premises beyond the expiration of the lease, the obligation to deliver possession remains. a. Only statements i and ivare correct b. Only statements | and ili are correct & © Only statements il and il are correct, “ 4. Only statements I, and are correct N Page 39 of 924, Monarch Properties Inc. is advertising for tenants for a proposed shopping center that is scheduled to begin construction in six months. Trendy Shoes Inc. wants to rent space in the shopping center and is prepared to sign a lease today. The following clause is included in the lease. 3(a) TERM: Tenant shall have and hold the premises for and during the term of this lease (herein called the Term’) which shall commence on the third anniversary of the signing of this lease, provided that the date on which the Term commences shall be accelerated to the date on which occurs the earlier of i. The opening of Tenant to the public of its business in the premises, and ji, The date on which the later of the following two events has occurred. ‘A. Landlord's Architect has certified in writing that the landlords work has been substantially completed (except for landlord’s work which has been delayed, hindered, or prevented by tenant or by non- ‘completion of tenant's work) or B. The rent free period referred to in paragraph 4 (b) hereof has expired and the term shall be for a period of. ‘years, plus the part of a month, if any, from the date of the commencement of the term as 50 determined, to and including the last day of the month in which the term commences, b. Tiscowseslvesthe problm of ease for water: not yet constructed and the ieee eee aie eee frac Scare 5. A typical retail lease contains the following clause that makes reference to continuous use of the premises by the tenant: “Tenant shall, upon the commencement of the lease term and throughout the term, with adequate staff and stock of new merchandise and fixtures of first-class quality, be open for business and continuously, actively, ‘and diligently operate and conduct its business in the whole of the premises in an up-to-date, first class, and reputable manner befitting a first-class shopping centre.” ‘Why would a retail landlord require the tenant to agree to continuous use by the tenant? 3. The landlord wants to ensure the rent is paid ifthe tenant moves out. b. The landlord wants to set out the guidelines for the tenant to sub-let the premises. The landlord wants to give the tenant the right to terminate the lease on one month’s notice if the tenant discontinues operations 4. The landlord does not want dark space in the mall that may result in less customer traffi Page a0 of 926. Different types of properties require leases with clauses that are particular to that property. ‘The following clause can be found in a typical retail lease. "NO ENCUMBRANCES. Tenant shall not sell, transfer, assign, pledge, mortgage or in any way encumber any or all of its fixtures or equipment used in the operation of its business on the premises without the prior written ‘approval of Landlord, but this shall not prevent Tenant, to the extent usual and reasonable in the conduct of business, from leasing or creating conditional sales contracts or mortgages to secure part of the purchase: price of Tenant's removable trade fixtures or furnishings or creating security upon its stock-in-trade, provided that the foregoing shall in no way prejudice or affect the priority of Landlord's rights or the obligations of Tenant with respect to such fixtures or furnishings of stock-in-trade under all other terms of this lease and with respect to the Personal Property Security Act and all laws relating to bankruptcy. Tenant shall not mortgage or otherwise encumber its interest in this lease or sublease thereof.” tase onto informaton which ofthe following statements correc regarding the above clause? 1 ineneven of dja of tent poyments bythe trot he lndrd wants oma site ht ony tres Crequon sane byte loner sot ejector cee ‘hetero epeing otto pledge th alu of tesco secu for anyfrm of fieancg. Those etn tonsfersomnertin of al frturesondeumet one prs ete ander |. Under he wording of th cc, the tenet mst ott wen pov of teen to purse weet RS a. Onlystatements land i are correct av b. OnysttemertsLiendiorecaret a’ Only statements and iv ae correct Sv 4. nivsttementshtandvarecored¢ SS {an inducement to the tenant. This is giydr‘th the ‘Expense Stop’ clause. Which of the following correctly describes the purpose of such a claus® jh the least a. The landlord wants to ensure that the tenant does not spend more than a specified amount on improvements. bb. The landlord wants to ensure that there is a minimum amount the tenant must spend on improvements so as to maintain uniform standard of fixtures in the mall. The landlord wants to ensure that the tenant does not remove the fixtures or other improvements at the end of the lease. 4d. The landlord wants to ensure that the amount of his concessions for tenant improvements does not exceed a certain amount: 7. tna landlord standard orm of ease, theja Nahas included sme concssons related to expenses as Page a1 of 928. What does the clause Restricted Uses signify? 114(e) RESTRICTED USES: “Tenant shall not operate, cause or permit to be operated on or from the premises any of the following: “a public or private auction sale, the sale of used or second “hand goods; any bulk; liquidation, ‘going out of business “or bankruptcy sale, the sale of war surplus articles, insurance salvage stock fire sale stock or fire damaged stock ,a pawnshop, a mail order or catalogue business ,a warehouse or factory outlet, any operat in which tenant makes a practice of or at any time engages in fraudulent or deceptive advertising or selling, procedures any special sale or sale other than such as are incidental to the normal routine of tenants business ‘with its regular customer ,or any activity not in keeping the character of the shopping center Without limiting the generality of the foregoing ,tenant shall not use and shall not suffer or permit all or any part of the premise to be used for the purpose of a generality supermarket or other self-service establishment or the purpose of selling beer or liquor ,as defined in the ‘Liquor Control Act’ or in connection with a store commonly known as a variety store or jug milk store or as a chartered bank to trust company or any other institution providing financial service to the public or as a drug store ,or for any of the following purpose.” n Which of the following statements are correct regarding the clause noted above? |. Auction sales are permitted provided that the merchandise being auctioned does not include beer and liquor. 1 adn is cee tent ping monn ere re ener fo he toons i, The landlord has predetermined that certain types odds re unsuitable forte image ofthe plaza i Meter bcompton feta wit te toon inept Ritourtetemensarcoret NG Only statements land itare correct. Only statements | and il are coreg Only statements ii and iv are col Page 42 of 929. There is another clause in standard lease with the heading ‘Deferment of Opening’ “Notwithstanding the foregoing, the tenant agrees to co-operate in everyday endeavor of Landlord to achieve an official joint opening of the Shopping Centre (the Official Opening). If the premises are ready to be opened to the public for business prior to the opening of the official opening as established by the Landlord, the Tenant shall, at the Landlord's option and request defer its opening for business until such Official Opening, in which event the Term of the Lease shall not commence until the day of such Official Opening, on which day Tenant shall open its business in the Premises to the public and the term shall commence. Landlord shall have no liability to Tenant for requiring the Tenant to delay its opening until the Official Opening.” Why would the landlord require this type of cause in a commercial lease? 1. The landlord wants to ensure that the tenant adheres to an official opening date set by the landlord. i. The clause states that ifthe landlord fails to adhere to the official opening date, the landlord may be held Table to the tenant. Iii, The clause makes it clear that the tenant has no liability if he does not open the business on the offical ‘opening date. |v. The landlord specifies that if he defers the official opening date, he will not be liable for any such delay. The clouse states that even ifthe official opening date is deferred by the landlord, the lease shall ‘commence on the date agreed. Statements i and ii are correct, ‘Statements i and iv are correct: & Ky Scns tlanibrsccomea an’ Snemenshinannacemee s ye Page 43 of 9210. Jackie gives Arthur the following clause from an office building lease, asks him to read it and provide her ‘with an interpretation of the meaning of the clause. 6.03: ABATEMENT: It is agreed between the Landlord and the Tenant that: (i) in the event of damage to the Leased Premises or to the Building or other portions affecting access or services essential to the Leased Premises, and if the damage is such that the Leased Premises or any substantial part thereof is rendered not reasonably capable of use and occupancy by the Tenant for the purposes of its business for any period of time in excess of 10 days, then (W) unless the damage was caused by the fault or negligence of the Tenant or its employees, invitees, or others under its control, from and after the date of occurrence of the damage and until the Leased Premises are again reasonably capable of use and occupancy as aforesaid, rent (but no other payments required to be made by the Tenant hereunder) shall abate from time to time in proportion to the area of the Leased Premises not reasonably capable of such use and occupancy. Pee oe ter tek ect ies one nls kt Le ee ne melt toe tate lvoe rh or ae * ae ar es tpi tate ete iy he Tena oy ofts ong Tint manuiectenumsiee unio: Which ofthe statements made by Arthur are eprtQ® Only start is crret wy Oa sateen andr re neg Page 44 of 92111. ABC Bakery Products Inc. has a lease with Southgate Developments Limited, the landlords of Southgate Regional Shopping Centre, and has provided the landlord with a $10,000 security deposit subject to the following lease provision: SECURITY DEPOSIT: “The security deposit is to be held without interest a security for the performance by ‘Tenant of all obligations imposed under this Lease. If Tenant has faithfully performed such obligations, Landlord shall, within 60 days after the termination of this Lease, return the security Deposit without interest to Tenant. If Tenant fails to perform such obligations, Landlord shall be entitled to apply such Security Deposit or any portion thereof is so applied by the Landlord, Tenant shall, on demand of Landlord, remit to Landlord a sum of sufficient to restore such Security Deposit to its original balance. Landlord shall have the right to ‘transfer to any purchaser or transferee of Landiord’s interest in the premises or in the Lease any amounts held by Landlord and Landlord shall thereupon be relieved from any further liability to Tenant with respect thereto” Based on these provisions, identify the correct statement from the following: 2. ABC Bakery Products Inc will be paid the full amount ofthe security deposit at the end of the lease. b. ABC Bakery Products Inc. has the landlord’s guarantee that the security deposit will be held in trust by the landlord for the duration of the lease. Ifthe landlord takes 5,500 from the security deposit during the currency of the lease due to damage, the tenant must pay a further $5,500 to the landlord, ianded by that landlord 4. When the landlord sells the property, the tenant imag {an additional security deposit to the new owner. RY 12. Following Use of Premises clause is included ni agreement ina shopping pla and the Tenant will not use thepremises or any part thereof for any other business or purpose”. “14 (b) Use ofthe Premises: Tenant shal ghee solely for the purpose of conducting the business of ‘What is the purpose of putting this clause? ‘a. Each and every tenant operates within a defined store type ——~ b. Landlord can change the type of use any time Such restrictions are against the law. 4. Lawyers will decide such matters Page 45 of $24 Scenarios ‘Scenario 1: Agreement of P&S is being prepared by Agent Offer is stil in office No Signatures Irrevocability should be buyer ‘Scenario 2: Agreement of P&S prepared and presented to seller Offer should have Buyers signatures only Irrevocabilty should be Buyer Scenario 3: Agreement of P&S Accepted by Seller (Offer should have Buyer and Sellers signatures and initials Irrevocability should be Buyer Confirmation of acceptance should be signed by seller Scenario 4: Agreement of P&S Countered by Seller, and BupsESecepted ‘© Offer should have buyer and sellers signature Common Mistakes Seller should sign on any amendments AY Irrevocability should be by SELLER Confirmation of acceptance should be by b Form # 500 Commercial or Muith¥¥édential City of Anyity and Region of Any Region Agreement of Purchase and Sale (COMMERCIAL) Deposit —Herewith / Upon Acceptance/ As otherwise Described ~ Check Condition in Schedule A [No interest shall be earned, received or paid on the Deposit. Can buyer earn interest? > Check schedule and a clause should be there to pay interest ‘Schedules ~ Any number of Schedules mentioned here should be attached Irrevocability - Should always say buyer. Only if counter offer ~ should say seller. it should be initialed and signed Initials ~ Check if buyer signed in Buyer's Seller in Seller's; check if right persons initials Lot Size ~ Frontage x Depth. Ifreversed, check the story and verify Title Search Section ~Present use if left blank It could be left blank and is not a mistake If blank - means ~ Buyer can withdraw offer if present use is violating zoning by-laws No Zoning Title Search Date ~ Could be too early, but not a mistake. Page 46 of 92SCHEDULE A: Calculate Pay Balance: + Pay Balance = Purchase Price ~5.A.D. (STB, Assuming Mortgage, Deposi/s 1, 2,3) + Buyer is assuming a mortgage of $300,000. He has paid an initial deposit of $50,000. After inspection Buyer has given a further sum of $25,000. He is requesting the seller to give a mortgage of $50,000 and seller has agreed. Based on this, what will be the pay balance, considering that the buyers and sellers hhave agreed on a price of $500,000? Assuming Mortgage ‘© Assuming Mortgage condition must be fulfilled. ‘+ Itis always conditional upon Mortgagee’s approval- ie. check credit, Business Inspection: ‘+ Inspection Condition can be waived, but must be mentioned in the clause + Hfwaiver is not clearly worded or omitted then condition is poorly worded Seller Take Back (STB): + fno other Mortgage is available can seller take back Bs 1% Mortgage? + Answer: Yes As Additional Deposits: y + Please note that ‘additional deposits are given Buyer to seller. + Thesearenotrequted tobe cert Thgkg be Cath, Chea, Bank aft Money orderete Postponement Clause: + This is required when the 2° MorteGE Term is more than the 3" Mortgage term Sale of Buyers Property (SBP): ‘+ Buyers’ property address must be clearly mentioned, Escape Clause: ‘© Maximum 48 hours’ notice is allowed. However, seller can delete and put 36 hours, or 24 hours. During, this time, Seller may continue to show and market the property. Seller may receive offers — But CANNOT accept or counter any offers. Seller must inform buyer and give notice to waive SBP clause, Form 510 or Form 511 rinted ~ COMMERCIAL AGREEMENT TO ‘© Long Form Form 510: this is used for Big businesses like ~ Wal-Mart, Sears, Bay, etc. + Short Form ~ Form 514: this is used for Small Businesses like ~ Retail Store, Convenience Store ‘Types of Questions: Find the mistakes Read the Story carefully and look at the questions. Question may be asking you to find the critical (serious) mistakes only. Page 47 of 92‘The Types of Errors: Clause 1 / Clause 2 / Clause 3 © Clause 1—Premises : Rentable Area or Usable Area. Ifusable area:-cannot calculate Deposit. If rentable area: — always calculate the monthly rent and verify the deposit amount in the agreement. «Clause 2— Use: should be specific .e, Professional, Doctors, Lawyers. If written as ‘Retail’ it is too vague or a mistake. f use mentioned Retail ~it is a mistake, It should be retail jewelers, retail clothing, ete, + Clause 3 Term of Lease’ 3a + Should give the specific time. It is Usually 36 months or 60 months. fit says 36 years or 60 years—it is a mistake 3a: Commencement / Termination date should be same and match Section B. 3b: Renewal Term should always be 1 additional term of 36/60 months. + Clause 4— Rental: Check the calculations: $24sqft x 2660= 63840 / 12 = $5320 per month rent. Check for all the terms as there may be an error Le. First, Second, Last year rents. + couses-Depos whole depstpnbiers? Usualy its the listing brokerage. (Vv In case of Lease agreement it could go tothe laprd Le. Foundation Holding ne Wit tgptnesepm tuted ct aur iW not, the words “held in trust” must be deley@a crossed off and intialized by both parties. tials: Initials of Buyers and Seller sqaltbe signed at the bottom, Check f initials are switched or any initials are missing. Clause 6 & 7- Services: make sure th check markisin proper place. Types of Gross Lease Fixed amount of Payment should be there i.e. $1,200 per month. Net Lease Tenant to pay Base rent + some specified expenses, Tenant to pay $1,200+ pay for light bulbs Net Net Lease Base Rent + Some additional Rent (Part of the common expenses}. Net Net Net Lease Carefree to landlord. Tenant is responsible for all Rent and Additional rent except Landlord Mortgage and Income Tax payments. Please note mortgage payments could also be referred as “Mortgage Funding interest.” Page a8 of 92(Clause 11-Landlord and Tenant’s Work: Every lease agreement has a schedule B or C. These specify the Landlords and Tenants Work. This work description states what the Landlords responsibility is and what ‘the Tenants’ responsiblity i. ‘Question: Can both these work schedules / responsibility be mentioned together on the same schedule? ‘Answer: Yes it can be, as long as, separately listed or differentiated. If listed together, itis a mistake. (Clause 12-Signage: The wording on the signage may be too lengthy. : Direction ~ Tenant submitted offer for signage to be on North and South side. Landlord counters but crossed off North side and initialed. (Tenant may only display signage on South side) Signatures & Seals: Check signatures and one of the following ‘+ If seal is used: Corporate Seal affixed, or ‘+ fo seal; “1 have the Authority to Bind the Corporation” or “Authorized to Bind the Corporation” Successors and Assigns: * Observe the names of Buyer and Seller ‘+ Which Company does Buyer represent / Sellers company ‘+ Witnesses should be done by the agent or any competes on Confirmation of Acceptance \v + Alldates must be before the revocable dates. <0), + Should be signed by Seller unless countered, tg Buyer siens ‘Acknowledgement y ‘Can be same date or after acceptance ~Ga ster revocable Dates Al dats mst be checked. I ngQbeabe Date nd nea expe ts cial mistake Page 49 of 92CASE STUDIES (OFFER MISTAKES) case Study 1: “This case study requires you to review an accepted Agreement of Purchase and Sale. The property 228 Parkdale Road is a multi-unit residential apartment building listed by XYZ Real Estate Ltd. The property consists of 16 residential units and has existing first mortgage for $345,000 @5.50% that is assumable without Ace Capital's approval. The offer has been obtained by ABC Realty Inc., the co-operating brokerage. The offer ‘ade by Peter Wilson of Horizon Holdings Ltd., has been accepted by the seller. You are reviewing the accepted Agreement and realize a number of errors were made when Agreement was negotiated and completed. The errors are items that would be considered unacceptable in a properly drafted ‘Agreement. This case requires you to identify those errors. Before choosing your answers to each question, wview the choices and then select what would be considered an error from the list provided. For the purpose of this case study, assume today's date is February 25, 2015. Review the Agreement of Purchase and Sale and answer the 5 questions that follow. 1 2 2 "The enementdserbedon Page 1 ofthe Aree ony 10eetn wth an, therefore, sould not onl cna ote ef berated nt ter cn : feel grt ‘ ‘This is a residential apartment builgigg-dhd the Agreement should be on Form 100, the standard residential Agreement of Purchase ahd Sale. Select the statement from the choices below that accurately describes an error within the Agreement of Purchase and Sale. a, The legal description cannot be “Lot 8 and the South half of Lot 9, Plan 2432.” b. The length of time allowed to search the titles too long. c. The offer should be irrevocable by the Seller, not the Buyer. 4d. Schedules 8 and C should be included on the list of schedules in the Agreement. -—-- Select the statement from the choices below that accurately describes an error within the Agreement of Purchase and Sale. a, The amount of the balance due on completion is incorrect. b. The condition for the seller take back second mortgage should have a waiver. Its not clear when the buyer must submit the deposit. 4d. Inthe Title Search Clause, the zoning for the property must be inserted. The Space cannot be left blank, Page $0 of 92Select the statement from the choices below that accurately describes an error within the Agreement of Purchase and Sale. a. The rate of interest for the existing first mortgage that is being assumed is not accurately and completely described b. The interest rate for the second mortgage cannot be lower than the rate for the first mortgage, given that second mortgages have a greater risk than first mortgages. ©. The inspection and due diligence clause should include a waiver. ~ 4. The monthly payment for the first mortgage that is being assumed is incorrect. Select the statement from the choices below that accurately describes an error within the Agreement of Purchase and Sale. 1, The seller take back second mortgage should not be written as a condition. ~ b. Because of the five year term for the second mortgage, the monthly payment should be One Thousand Eight Hundred and Eighteen Dollars and Four Cents ($1,818.04). The offer should be conditional on the Buyer being approved to assume the existing first mortgage. 4d. The wrong person has signed the Confirmation of Acceptance. Page 51 of 92i @ Ei Agreement of Purchase and Sale This Agreement of Purchase ond Sale doted this ..20th. doy of. February, , 2088. ‘aUYER,.. Horizon Holdings Ltd | agrees to purchase from iain crai SELLER, . Metro Investments In. 1 the following REAL PROPERTY: ‘Address. 228 Parklale Read fronting on the West. sido of... Parkdale Road. in the. Gityof Any City. Region of Any Region ‘ond having a frontage of 160.25 Feet more or less by @ depth of 254 Feet, more or less ‘ond logolly described as. Lot 8 and South Half of Lot, Plan2432 Subject oa Hyco Easement Over the Westery.10, Feet ofthe Property and Being regulary Shaped. the "property. PURCHASE PRICE: Nine Hundred Twenty-Five Thousand Dollars (CDNS). 925,009.00, DEPOSIT: Boyer submits .28 otherwise described in this Agreement, 7 . pen tence edi gma Fifty Thousand, Dollars (CONS), . 60,000.00, by negotiable cheque poyable lo XYZ, Real Estate Lid Deposit Holder” Peo Red in nut pending compllon o ober leminain of his Agreement ane be ceded tac he Purchase Price on completion For the purposes of ths Agreement, “Upon Acceplance” shall mean that the Buyer is required fo deliver the deposit to the Depeait Holder within 24 houts of the ceceplance of this Agreement. The portos fo this Agreement hereby acknowledge that, Unless otherwise provided for in this Agreement, the Deposit Holder shall place the deposit in srt in the Deposit Holder's SOninteresf bearing Real Estte Trust Account and no interest shall be earned, received or paid on the deposit Buyer agrees to poy the bolance os more particularly set out in Schedule A attached. SCHEDULES) A attached herete form(2) part of this Agreement. This offer soll be irevocable nfl 6 on 1. IRREVOCABILITY: This offer sholl be ble by. BUYEE gugggay me Ul 6:00 Bam the 24th oy of February 2018. _ offer which time, i not accepted, this offer shell be null [Link] and the deposit shall be returned tothe Buyer in fll without interest. 2. COMPLETION DATE: This Agreement shall be complated by no later thon 6:00 p.m. on the...208 day of. APL ,, 2078... Upon completion, vacant pessession ofthe property shall be given to the Buyer unless otherwise provided for in this Agreement oats oF BuvER mas oreasnsy: EM ETD | Sse te ak a agence ram form 500 teved 2015 Page tot 5 "OFFER 2015 oo BReogeney Sas Com 526403 omelifeMiracle Realty LidNOTICES: The Soller hereby oppoints the Listing Brokerage at agent forthe Seller for the purpose of giving an 9: fRezhing aottee purguolty If kaioemert Whede'e Bekaage SO ge, Sle, for Me eurpere of iving end Sgreement wih the Buyer, the Buyer hereby appoints the Buyer’ Brokeroge es eet og thes purpose of giving ond receiving notices pursuant Vo this Agreoment. Where a Brokerage represents both the Seller ana he Buses ple raraecenigen) foe Sera hall nl be sppoined or surtzed ty be agent for eit {ethereal Be iuring noe rig am proveisn coffe herein ond ty Sched Prato, his olen ny Gunter-ofer, notice of ecceptonce thareot or ony noice to ba given er received pursuarl 1 this Agreement of Say Sorel hecho tiny “Bec Sl sored nae fecsved when daivered personaly or hand defwered tho reo Serta ogre no snl bo ohae eee ee oped diae opener See {fargrted slecronically oot acre number or ere cress, resp, n wid casa, fe Sexvohtep) of he ony feng sha Ee icemed fo be original fat Waa a ere ee oil Address: mail Address... 5 5 pans aaa - et ati 4, CHATTELS INCLUDED: See Schedule C Unless otherwise sintad in this Agreement or any Schedule hereia, Soler agrees io convey all ies” ond choiile Included inthe Purchose Bien a Gen ol ions Ohcanbsnces closes ooting he xd Rh ae he. 5. FIXTURES EXCLUDED: See Schedule © 6. RENTAL ITEMS (Including Lease, Lease to Own): The following equipment js rented ond nat included in the Purchase Price. The Buyer agrees fo ossume the rental contracts), i assumable See Schedule C The Buyer ogres 10 co-operate and execu sch documentation os maybe required To fects such exsumpion 7. HST: thesate of the property (Repl Property ax described above) is subject to Harmonized Soles Tox {HSiy then Soeh tex shall"be In ection $6 Ine Purchese Pree Thar Set al oe celal SEY He Be pirates ein selec ol he Sue, © vgtiged under fhe Bee Tex A FUR, coche ih op Re Borer ETA reistsionso waranty ther he Btyer Sell set oaars tore he RET papebe ee He he eee {etm dd shal indemnity the Seller in respect of dry HET paycble: he leveqeing waryahfe, eel! tot meine Ser shal Eusive fhe completion ofthe worsocton thease othe p"pary i nes aed ew VST Salinger eee cee clone cling, atthe worsacion eel ebje¥0 HST. Any PS cot Gta Wphble tisha io ach fe 8. FATE SEARG ups shollbs loved vl 00pm. onthe TON doy of MA. aye Requisition Date] lo examine the Tile the propertyat his own expense ond uri the ear of Gi irom the [ec ve Rogen Bic or wats om SER etre acre orl eee GE iy dav tom ihe (i) five doys prior to completion, to saisly himeell Wot there are no ousionaing work orders or aekience rather, affecting th Bropety, hal its present ue | ) inoy be lowly fonttiued ond thatthe pend Bilng may be ngured ogainl koe Sellar Kacy concen ih municipal or ether governmental apecies releasing o Buyer details of ol eusionding work orders and Selcieney nsices ailecing te propery and Seller ogrees fo execule and deiner such turer auiborsotons in his regord os Boyer oy ‘reoronsbly require. INMALS OF BUYERS) PWD mumais or seuse RMET Exe ee tas meee10, n 12, 14, B FUTURE USE: Seller ond Buyer agree tha! there is no represeniction or warranty of any kind thot the future intended use ‘ofthe [Link] Buyer i or wil be lowiul except os may be specifically provided fer in this-Agreement TITLE: Provided thot the file to the property is good orid free from all registered restictions, charges, lisns, ond tncumbronces except os otherwise specifically provided in this Agreement and save ond except for (a) any registered feskidions or cevenonis thot run with the land providing thot such ore complied with; (6) ony registered municipal Gareements and registered agreements with publicly reguated uilies providing such have been complied with, or soturily has been pasted fo ensure compliance and completion, as evidenced by a letter from the relevant municipality Gr eguloted wilh; () ony minor easements forthe supply of demesic vill or telephone services fo the property oF Sdjacent properties; and (2) any easements for drainage, slorm or sanitary sewers, pubic uit lines, telephone lines, Sabie television lines or other services which do not materially affect the use of the propery. If wihin the specified times ‘eferred fo in paragraph 8 any vlid objecion to file or fo any outstanding work order or deficiency notice, or 10 the {oct the seid present use may not lavduly ba continued, or that the principal building may net be insured ogoinst risk of {re iz mods fn wring to Seller ond which Seller ie unable or unwaling 10 remove, remedy or satisfy or oblain insurance rove ond except agains! rsk of fire [Tle Insurance) in favour ofthe Buyer and any morlgogee, (with al related costs at tho expense of the Selle) ond which Buyer will not waive, thie Agreement notwihstanding any intermediate acts oF egotations in respect of such objections, shall be ct on end ond all monies paid shall be retumed without interest or eduction ond Selle, Listing Brokerage ond Co-operaing Brokerage sholl not be liable for any costs or damages. Save ‘sto ony vold objection so mode by such day and excep! for any ebjecon going 10 the root ofthe fille, Buyer shall be Conelusively deemed fo have accepted Seller's tle tothe property. CLOSING ARRANGEMENTS: Where soch of the Sellor and Buyer retoin a lowyer to complete the Agreement of Purchase. and Sole of the Property, and where the transaction will be completed by eleckronic registration pursvent to Part I of the Land Registration Reform Act, RS,0. 1990, Chapter L4 and the Electronic Registration Act, 5.0. 1991, CChopler 44, and ony amendments thereto, the Selier and Buyer acknowledge and agree that the exchange of closing fonds, non-regierable documents ond other tema (he "Requisite Deliveries") ond the release thereof to the Seller ond Buyer wil fo) not occur of the same me as the registrfion of the wrarefer/deed (ond any other documents infended 10 be registered in comecion with the completion of Th transaction) and (b) be subjec! to conditions whereby the lawyer(s) recehang ony of the Requisite Devries wil be required to hold some in tus! and not release some except in accordance sth the ferme of o document registration agreement between tho scid lowyers. The Seller end Buyer irrevocably instruct the seid lewyers to be bound by the decumant registration ogreement which is recommended from time to time by the Low Society 6 Upper Conado, Unless otherwise agreed fo by the lawyers, such exchange of the Requisite Ostiveries wil ‘cecur in the opplicable Land Tiles Offce-or such other locaton agreeable 10 both lowes. DOCUMENTS AND DISCHARGE: Bvyer shall not cal for the production of ony file deed, abstract, survey er other Sidlenee of file fo he properly except such as are in the porsession-or contal of Sele. If requested by Buyer, Seller wil Ualiver ony sketch or survey ofthe property wihin Selle’s contol to Buyer Gs soon os possible ond prior fo the Requisition Date. If discharge of-ony Charge/Mortgage held by a corporation incorporated pursuant to the Tryst And Loon ‘Companies Act (Canada), Chartered Bank, Trust Company, Credit Union, Caisse,PopUlsire-or Insurance Compony and whieh is nol fo be essumed by Buyer on completion, is nol avoilable in repsirable foem on completion, Buyer agrees to Sccept Seller's lawyers personal undertaking 10 obtain, out ofthe closing funds, 0 discharge in registable form and to fogisar same, oF couse same to be registered, on tile shin @ reasonable period of fime after completion, provided that ‘Galor before completion Seller shell provide fo Buyer o morgage siciemen! prepared by the morigagee seting out the Bolonee required fo obfoin the dischorge, ond, where a real-ime electronic cleared funds transfer eysiem is not being CELEPS dracon exeevied by Seller dvecing payment fo tha mortgagee of the amount required fo obtain the discharge but the balones due on competion INSPECTION: Buyer acknowledges having had the opportunity to inspect the property and understands thet upon Ccceptonce ofthis bles there shall be @ binding agreement of purchase and sole between Buyer ond Seller. INSURANCE: All buildings on the property and all other things being purchased sholl be ond remain until completion dhiho rek of Seller. Pending-completion, Seller shall hal all ineurance polices, if any, and the proceeds thereof in trust {or the paris os theirinferets may appear and in the event of substantial damage, Buyer may ether terminate this ‘Agreement ond hove sll monies paid returned without interest or deduction ores toke the: proceeds of any insurance Cad completo the purchase. No insurance. shall be Wonsferred on completion. Seller is taking back o Chorge/Moroage, or Buyer ie assuming @ Charge/Morigage, Buyer shall supply Seller with reasonable evidence of Sdequete insurance fo protec Sellers or ether morigagee’ interest on completion. PLANNING AET: This Agreement :hell be effactiva fo eeole an interest in the property only if Seller complies with the obdhision contol provisions ofthe Planning Act by completion ond Seller covenants fo proceed diligently at his expense fo oblain ony necessary consent by completion. iTS OF BUYERS)” cto ‘inUTIAES OF SELLER(S}: emis nun ie mera bread Ate pc dnc oe Ree ee ete re atta carckapctesnpesarteemronreatnaan —FOMmS00 Reveal 2015 Page 3 516, DOCUMENT PREPARATION: The Tonsier/Deod shall, sove for the Lond Transfer Tax Affidavit, be prepored ir regisizable [Link] the, expense of, Seller, and any Chorge/Morigage to be given back:by the Buyer to Seller atthe ‘expense of the Buyer. ll requested by Buyer, Seller covenonis tha the Transfer/Deed fo be delivered on comploton shel contain the statements contemplated by Section 50(22) af the Planning Ac, RS.0. 190, 17. RESIDENCY: (o) She! 1 (.) below, the Seller represents anid warrants that he Seller snot and on competion wil no bbe o non-resident under the non-residency provisions of tha Income Tax Ad! which fepresentofon ond worrany sell survive ond nol merge upon the completion af this warsoction and the Seller shall deliver 40 the Buyer & ekcton, ecloration that Sellers not hen @ non-resident of Canada; (b) provided thot if the Seller is @ non-resident under the non-residency provisions of the Income Tax Ac, the Buyer shall be credited towards the Purchase Price with the amount, if any, necessary for Buyer to. poy te the Minister of Notion Revenue fo satisfy Buyer's labliy in respect of tax payable by Seller under the ner-residency provisions ef the Income Tox Act by reason of this sole. Buyer sholl nol claim such credit Seller delivers on completion the prescribed cerificle 18, ADJUSTMENTS: Any rents, morigoge interest, realy taxes including local improvement rotes ond unmelered public or Privale usfiy chorges and unmetered cost of fuel, os opplicable, shall be opportioned and ‘llowed fo the doy ©: ‘Completion, the day of completion ial to be apportioned to Buyer. 19. TIME LIMITS: Time shall in all respects be ofthe essence hereof provided thatthe time for doing or completing of ony ‘matter provided for herein may be extended or abridged by an agreement in wring signed by Seller ord Buyer o: by ‘hole respective lowyers who may be specifically authorized in tho! regard, 20. PROPERTY ASSESSMENT: The Buyor and Seller hereby acknowledge tha! the Province of Onterio hes implemented current value essessment ond properties may be re-cssaused on an annual basi, The Buyer ond Seller agree thot nc cloim wil be made agains! he Buyer or Sele, or ony Brokaroge, Broker or Slesperson, Yor any changes in property tax 9s 0 tel of arecssessment of he propery, sve and exc cry property foxes that acciued prior to fe om soioy 21, TENDER: Any fender of documenis or money hereunder may be mada upon Seller or Buyer or their respective lawyers {0n the day set for completion. Money shall be fendered wih funds drawn cn a lewyer’s tus! oecour it fhe forwy oo bbank'dralt, cerified cheque or wire Wansler using the Large Value Transier Sytem, 22. FAMILY LAW ACT; Seller warronts tho! spousal consent is not necessary Ic this transaction underthe provisions of the Family Law Act, RS.O. 1990 unless Selle’s spouse has executed the consent hereinaler provided. 28. UFFI: Seller represents ond warrants to Buyer that during the time Sellar has owned ihe property, Seller has not coused ‘ony building on the property fo be insulated with insulation containing urecformaldehyde, ond that to the bes! of Seller's knowiedge ne building on the property contains or has ever contained insulation thal contains Ureatorimaldchyde. This worranty shall survive and not merge on the completion ofthis Wonsactisn, and ithe building is part of a multi unt building, this warranty shall only apply to thot port af the building whichis she subject of this noncoction 24, LEGAL, ACCOUNTING AND ENVIRONMENTAL ADVICE: Ths partes acknowledge thal ony information provided by the brokerage is not legol, ax or environmental advice, and thal it hos been recommended that the poise soiuia ‘independent professional advice prior fo signing this document 25, CONSUMER REPORTS: The Buyer is hereby notified that a consumer report containing eredit and/or Personal information may be referred to in connection with this transaction. 26. AGREEMENT IN WRITING: If there is conflict or ciscreponcy between any provision added 10 this Agreemant (including ony Schedule ctoched hereto) and eny provision in the standard pre-set portion herecf, the added grove, shall supersede-the stondard pre-set provision to the extent of such conflict or discrepancy. This Agreement incladny ory Schedule atiached hereto, sholl consivie the entire Agreement between Buyer and Seller. There is no-representation, worranty, collateral agreement or condition, which offects this Agreemiont clher thors expressed herein, For the purposes of this Agreement, Seller meons vendor and Buyer means purchaser. This Agreement shall be tead with al Changes of gender or number required by the context, 27, TIME AND DATE: Any reference o a ime and dote in thi Agreement shall mean the ime and dole where the properly is located 2s ements oF surges: CBU). BLS tne tests aneaets hnamans OF SELLERS)28, SUCCESSORS AND ASSIGNS: The heirs, executors, administrators, successors ond ossigns of the undersigned are bound by the forms h ~ SIGNED, Seki aio DELNERED reserca of” IN WITNESS whereof awe hereunto se my hand and seal Linea Achigan diddy a op Gb Se et 2 Bett Boo |, the Undersigned Seller, agree io the above offer. | hereby irrevocobly instruct my lawyer to pay directly 10 the brokeroge(s) Lames cena Sipe eonmeeien ae en belnes of he sommeafon anche wh opPicable Forged Sole Tor land any Ser foxes cs may herecer be epplicble) rom fue proceeds ofthe sole prior to any payment To the Undraignad on compotion, os advised bythe brokerages 1 my lawyer: SIGNED, SEALED AND DELVERED in he presence oft INWATNESS wheal hove heruno sl my ond ond sal Metro Investments. Ine wy. fbn f ome Reb 49 ps nt shave Be Cre ae zap & ; ar riko How (is (i ia SPOUSAL CONSENT: The Undersigned Spouse ofthe Selle: hereby consenis to the deposition evidenced herein pursuant to the provisions of the Family Law Aci, R3.©. 1990, and hereby agrees with the Buyer thet he/she will exocute all necessary ‘oF incidental documents to give full force and effect to the sale evidenced herein. amu HH owe CONFIRMATION OF ACCEPTANCE: Nowitanndng ania crn hern oh conka cron i Areemet wh o changes both yped and writen wos finely accepted by al partes of. UO eenipamttis RAMA dey ot .Febsuarsy, 2015. Rabest el nnis INFORMATION ON BROKERAGE(S) Sees tt Cn eens VE Real Eee =) tne (416) 2564745 re paren hora (ATBYTATSSTTT on Fax 16) TAT =T908,.... Rapresettne "ACKNOWLEDGEMENT apet-op gh gg Ament Rio] antag ect my sped apy of he pA Raone SE NE is SB is | ESCA LEEK eb ae 2 oare BATE ‘tes for Serve. 55: Brownfield Rone Sie er tovce T7-Galt AVE. favety ‘rene (708) 866-9467 | “Anvety MBZ 7L4 rrone 70.5667 4048 ters toe dames Meo GO Mier of Romy aoe’ Br O0ks Duneand Ascites soos 13 Eastoogte Avenve Anyety KBY 205. se 244 Conservation Bid, Anvely P7E S36 tna tna (aio 222242 io rea striate gio rrr8t61 ESS een ae Can han tn dS ny Seda ot nd aie yn eras oon aerate cisioc ee pian d mp betta Sse mae hed oes Reopen cosmos onmnan a yee dee eS RSTEUTAGR aes an gremedy hbo er peng commen rat DatD ext nde i cape lt lowing erent Pree ae BOE son tes 2018 page sats {tee iaREA write Schedule 4 = Agreement of Purchase and Sale - Commercial Form 505 Tis Schade sosoched jo ond lors pt lhe Agree! Prchose oe Scle beeen: euver, .. Horizon. Holdings 14d, " ond seue, ..[Link], Lid, : - forthe purchase ond soe of .225, Parkdale Road City of [Link] of Anyregion, Setedthe 208B ne [Link], 20.12, Buyer agrees to pay the balance as follows: ‘The buyer agrees to pay a further sum of Four Hundred and Thirty Thousand Dollars ($430,000)** subject to adjustment to the seller on completion of this transaction with funds drawn on a lawyer's trust. ‘account in the term of a bank draft, certified cheque, or was transfer using the Large Value Transfer System, ‘The parties to this agreement hereby acknowledge thatthe deposit holder shall place the deposit in the Deposit Holder's interest-bearing realestate trust account, which earns interest atthe rate of 1.90% per ‘annum, and the Deposit Holder shall pay any interes it earns oF receives on the deposit in excess of '875,00 to the Buyer. The parties to this Agreement hereby acknowledge and agree thatthe Deposit older shall be entitled to retain any interest earned or retained on the depesit that is $75.00 or less as an administrative fee, ‘This offer is conditional on the Buyer's lawyer, accountant, and consutants (structural, environmental, fire, mechanical, surveying, appraise, te.) conducting an inspection both the property and the due diligence documents provided by the Seller, and determining thatthe information obtained from the inspection of the property and from the documents provide by the Seller is acceptable and satisfactory to the Buyer in the Buyer's sole and absolute discretion, unless the Buyer gives notice in writing delivered to the Seller personally or in accordance with ny other provisions for the delivery of notice in this Agrecment of Purchase and Sale or any Schedule thereto not later than 5:00pm on the 15 day of March, 2015, that this condition is fulfilled, this offer shall be mull and void and the deposit shall be returned to ‘the Buyer in full without deduction, The Seller aprees to co-operate in providing access tothe property for the purpose of the inspection, The Buyer agrees [Link] the existing frst Charge/Morigage held by Ace Capital Ine. for ‘approximately Three Hundred and Forty-Five Thousand Dollars ($345,000) at an annual interest rate of 5.5%, calculated semi-annually notin advance, and repayable in blended monthly payments of Two ‘Thousand One Hundred and Ninety-Seven Dollars and Forty-One Cents ($2,197.41), including both principal and interest, and due on the 30 day of June 2019. Seid mortgage does not require approvil by the mortgage ta be assumed by the Buyer. ‘** PP 925,000 — Deposit 50,000 — STB 100,000 — Assumption 345,000 = 420,000) INMALS OF BUYER'S): RramariseN SO aiactams acetone eases cgi RAR SRS eae ice rataOREA wstias Schedule Agreement of Purchase and Sale - Commercial This Schedles oboched ond forms pote Agenectf Pacha nd Sole beeen: 1» Holdings Ld . ond seu, .. Metro Investments Lid suver, .. Hori forthe pacha and sale of .225 Parkdale, Road City. of Anycity. Region of Any Region, dotdthe 201... doyot Bebra. . snes 2, ‘This offer is conditional onthe Seller agreeing to take back a second charge/mortgage in the amount of ‘One Hundred Thousand Dollars ($100,000.00) bearing interest at the rate of 3.5% pre annum, calculated semi-annually not in advance and repayable in blended monthly payments of Nine Hundred and Fight Seven Dollars and S)xty-Fight cents ($987.68), including both principal and interest, and to have aterm of five (5) years. (STB cannot be conditional) ‘The seller agrees to provide and make available to the Buyer within five (5) business days of acceptance of this offer, the due diligence documents required by the Buyer. Such due diligence documents will ‘include without limitation; the Rent Roll for the property, copies of all tenant leases, fenancy agreements and the income and Expense statements for the property copies ofall tenant leases, tenancy agreements, the income and Expense statements forthe property, any rental increase applications to the Ontario Landlord and Tenant Board and copies of any pri or pending hearings before the Board, a report of any capital improvements completed by the Seller during the Seller’s ownership of the property, any exiting contracts forthe property or equipment rental agreements forthe property, copies of property tex ascessment notices, any survey in the Seller’s possession, and such other documents as may be reasonably requested by the Buyer. ‘The Seller further agrees to provide to the Buyer within fifteen (15) business days of acceptance of this offer, an up-to-date Tenant Rental Suite Status Report for each real unit on the teal property confirming partment numbers, number of bedrooms in the apartment, tenant names, monthly rentals, offers to lease, notices of termination, prepaid rents interest on prepaid rents, parking rents if any, arrears of rent if any, other deposits ifany by the enants, inducements if any, rent-free periods ifany, and any other information that has or may have any adverse impact on such tenancies. The seller represents and ‘warrants that the information will be true and accurate, Such alist isto be updated prior tothe date of closing and will reflec the changeover in tenancies up tothe date of closing: ‘The Seller agrees to provide to the buyer an-updated Tenant Rental Status Report in the form of a Statutory Declaration prior to closing. Tis om mtb tld by ol otis 6h Agree of Phos ond Sle verusorsoraen Pl > (Bsecicnieon soneeysretsone mentee REE RR TE es tanto rot ttO@REA wets Schedule ‘ewcatet Agreement of Purchase and Sale - Commercial Form 505 This Schad och nd rms pr th Agent Pace nd Sala ten sures, . Horizon Holdings Lid. se Od sauce, .. Metso Investments L1d, forthe pcos ond ale of 225 Parkdale Rod City of Anyity Region of Any Region, etic 20, dyot RebTUAY, 20,12 ‘The buyer covenants and agrees that all information provided by the seller and obtained by the buyer of| the buyer's consultants shall be kept in strict confidence and must not be released to anyore except for the purposes of arranging financing or unless the Seller provides prior written consent for the release ofthe information ‘The buyer covenants and agrees thatthe Buyer shall not call for any governmental inspections of the property without the prior writen consent of the Seller. ‘The Seller covenants, represents, and warrants as follows: (8) All eurent rents for the property are legal ‘and in accordance with the Residential Tenancies Act. (b) All accounts of work and services, including any capital improvements performed on the eal property, are fully paid for by the Seller by closing and ‘no one will be entitled to claim a lien under the Construction Lien Act for work performed by or on bebalf ofthe seer. (¢) To the best ofthe Seller's knowledge and on the date of acceptance, there are no lawsuits ‘outstanding or actions pending or threatened against the seller or the rel property that may affect the property or the ttle tothe property. (2) To the best of the seller's knowledge on the final date of acceptance, the seller isnot aware of any environmental contamination on the real property. (e) The Fire Retrofit provisions asset out in either Ontario Regulation 627/92 or 388/97 or 213/07 Ontario Fire Code part 9 or section 9.5 have been completed and the seller will provide, prior to closing, a letter fiom the local fie department verifying the same. ‘ Included in the purchase price are 16 refiigerators, 16 stoves, all existing fixtures and chattels owned by ‘the Seller and integral to the operation of the property, including all janitorial equipment and supplies, all ‘existing alarm systems and fire-fighting equipment, emergency equipment, garbage disposal equipment, ‘one model 3200-Master carrier mini-tractor, all keys in the Seller’s possession, and all lobby and office funiture. The laundry equipment under contract with Coin op Lid, is not included in the purchase price and the Buyer sgrees fo assume the rental contract, Al fistures and chattels owned by tenants are not ‘included in the purchase price. Tis fxm stb nile by ol pres tothe Agreement of Puchse are Soe maraas orsurenss CP ty) > ‘RaccetaRMAt on Sey tt ena Nee en ae ade ta ae EGER ema peers Form 505 tried 2008 Page oftCase Study 2: The case requires you to review an accepted Agreement of Purchase and Sale for a property at 188 Cedar ‘Avenue. The offer was made by the Buyer. A counter-offer was made by the Seller and the Buyer agreed to counter-offer. A number of errors were made when this Agreement was negotiated and completed. The errors are items that would be considered unacceptable in a properly drafted Agreement. This case requires you to identify those errors. Before choosing your answers to each question, review the choices and then select what would be considered an error from the list provide. Review the completed Agreement of Purchase and Sale and answer the 5 questions that follow: 1. Select the statement from the choices below that accurately describes an error within the Agreement or Purchase and sale: a. There is an error in the sequence of dates indicated for the signing by the buyer and seller. There must be fax numbers for both the seller and the buyer. . The amount indicated in the balance on completion is incorrect. ~ 4d. For the commercial Agreement, the irrevocable period should not expire in the evening, after business hours. Purchase and sae ys Meine ore stertotte bck eg Ss deren crest € Asgotsmusnenw pan meyer wa 3. Select the statement from the choices below that accurately describes an error within the Agreement of. Purchase and Sale: a. The order in which the clauses in Schedule A are placed is incorrect and not acceptable. There is no provision in the Agreement for the deposit to be submitted in any way other than “Herewith’ or “Upon Acceptance”. According to the Real Estate and Business Brokers Act, 2002, the additional deposit must be paid by way ofa certified cheque. d. The condition pertaining to the approval of the leases and financial information should include a Select the statement from the choices below that accurately describes an error within the Agreement of Purchase and Sal ‘a. The Confirmation of Acceptance was signed by the wrong party. ~ b. According to the terms of the Agreement, there should be additional Schedules for the financial statements included in the Agreement. Corporate seals are required next to the signatures of the parties. 4d. Amistake was made when describing the lot, as the frontage and depth are obviously reversed. Page 60 of 925. Select the statement from the choices below that accurately describes an error within the Agreement of Purchase and Sal b, « 4 ‘The deposit should be held by the Seller, not the Listing Brokerage. ‘The counter offer was not properly completed by the seller. — Itis not possible that the seller would sign the Acknowledgement on the 22 of April The length of time for the Buyer to search the tite is too long. Page 61 of 92@ xwietaitwe Agreement of Purchase and Sale : Commercial This Ament Pach ond oe dae is 18. doy ot APL ou 703 over, Platinum Pioperties Lid, . * rs — sos phone em sau ate, Holding Ine... “ _ the lini a, Ronen Ts ‘Fi ogame oo Sibi cesta saat proven ao 18. Cedar Aver - Irceting on he North... of Coder Avenue, = veto Gio Any it, Resin Any Re e z nd hing tsp t 32845 Fe set rl by ap of 6A et eros cede decd z 7 lock B, Resstored Flan M29 nen PRS I ia ag aoa a a eerste Ke Ajrhn,.600°00, unenAse rece: re ral, alls (CONS SHERROHEOR. ‘One Million Two Hunded Taunt. Thousand, 7 Dain osm er nimin a terse. descrbed in hie Arosment etal ree i a AS saciid Ten Thousand, Dollars (CONS) 19.000,09....... boy negotiable cheque poyoble to. ABC Realty Ine. “Deposit Halder” (uc heldn atpendingcompaion oe temiran sf [hts Agreement, “Upon Aezaplocs’ shall mean ha! Baye fhe came. pas fos Agreement hereby anole rite boing ea ee Tu exon ‘he depots fe Depo Hl is Agrement ont be Buyer agrees 1 pay the balence as more pertcslerly set out in Schedule A etteched, ScHEDULES) A lalalal 9 v am ur T fr sol be trovecable by BAYT... IREVOCAEIITY: Thi fest be by BNE te 2a. oy of ADIL 20.32, “ecto lon wd en the dope sal bu wned ioe Boye nfl wot ines, 22, COMPLETION DATE: Th Agrees cepa byron than 6:0 pi. on te 2032, i ci yond fis Rgcement wmais or srt, (KP > ‘Sided Sword efron Pin conponFrthe perp eeeircd i deter be dept te Qvpet olde wihin 24 own che oceporce “gethor os cherie previed fore Agent bx Depest Hoe sl place SF ct sh be sored eee or paid eth depart etieshed erate Focm(] pot ofthis Agreement vet amJpsm ln which ine, rt oceped it oy of ARE Upon complain, vcon poten propery shal began the Ber (Rmsmpalinseenrenat ernest eegercute paeno amer SPs a mes erecta reste umaisorseurscy Co orm $00 tvind 2015. Roget ‘wesromre Fabre‘3, NOTICES: the Slee huby oppint te Lisng Schrage ot age he Salles the prone of gvng ond sctvingrtces parent ahs ‘Agroenert. Where a Brcbrope [byes Bcktoge) hos ened ie o representation agement wk te Bet, the Buyer hereby opel he Boyes Bckoroge ot ogert ore perpve ef ging and tecohing oes parson! obs Agreaner, Whore a Brokerage represents bath ‘the Sellor end the Buyer (muhiple representation), the brokerage thall not be appointed or authorized te'be gent for ‘ther the Buyer or the Sellor for the purpose of giving and receiving matics. Any rte wag blo o provided lorem el be i wir. fn adtion any provision conta Herm ond in on Scala but, a, eny contre, noice of acceptance treat any notice 1 be gon ered pursvn oh Ageunart cr ony Scie heres fony cf em “Decent el be deoed given ond ‘ecaved when delivered pasonl howd dered the Ads Sx Service proved inthe Acknowledgement blo, whee 6 oxime urbe or enol odes sponded han, when rosie ceil at ciie number e sb eds, respechaly,n wich on, the sro lhe pny pais) shal be deomed to be ina Fx Nos (416). 238-4825, Terai taxnios (SSN ASSSSSS, ic ah i Bec Email Adres: Email Address: Jagdish. sidhar@[Link]. ivy acacia er ciery Doamen Bc 4. caarris mcivoen: All existing chattels now. on she real property, [Link] by the Seller includine two, (2). concrete, and wood bench. units, garbage. receptacles flower planters, and any maintenance, equipments. now. on the real, property, but not including [Link] all existing, [Link] fixtures. owned, by. [Link], a rte ted ns ene oy Se ae, ala gsc bes nc clad he ache ce as Irmo tr, reubroncs oc acing head ares od ch 5. roxrumes exciuoeo: Any. and all existing fictures owed by the tenani and excluded from this ‘ransaction and upon termination of leases, the lease terms re: nents’ fixtures, will apply (6. RENTAL ITEMS (Including Lease, Lease to Own: The Iollowing equipment is rerted and mot iced inthe Purchase Price. The Buyer ogres 10 cna th etl coax #cxamabl NA The Buyer ogres o cooper od eect uch docananoon a my be requ ffx such osomion 7. HST If the sale ofthe property (Real Property es described above) is subject to Hormoniaed Sales Tex (HST then such ‘ax shall be in odion tothe Purchase Price. The Sar wil not alec HST he Bye provides oe Slee wosony lhe Sayers recired under the Excise Tax Ac (ETA), ogee wha copy of he Buyer' ETA regtcton, 2 waror hat he Beet sl fase onde 'he HST payable nde the prescribed fm ad hllndorly fe Sle in respect fy HST pay, Te ego wants shal wel merge sol sre he compen he rarsacin, Ihe sl he property il ito! nS, Solr apes lo cel en bleeding tat Se ‘rosacon is ot subject OHS. Any HST on chal, Kopp, ct node inte Pchose Bc. ramaasoraurinsy CP > smmaisor seuss: Raa Saas hb ceceetatncrcioyette ESS TER aa repeats|B, TITLE SEARCH: Buyer sholl be clowed until 6-00 p.m. on the Lh... day of. UL. 20.12. Tepito Dal oxnie bat he prepare or expensed le cater i By dy om it oh eon Bo 55S Agere ile red oan ly tt ee cre natn ws tr dkny oes lng he ropa tpt 8 Ui. Commerelal Mall...) oy be inal count od be be pip lg oy be raed gail Slr hy cosa he mre cher ovarmertel Conca Be es ch eto wr reddy veer cg ropa, ad ce gan earn oe br ich ua auras as eps Byer ny esrb ee. 9. FUTURE USE: Selo ond Boyer egos i hre i norepresniton or warn ny kind that re ended se fhe ropa by Buyer ce wlb lawl exp ot my be pula povided orn his Areemet 10. TITLE Proved tot the ile the prepay ie god and re rom alleged rescore, charges ins, ond eneambronces except cherie ‘pectialy provided inh Agreemert ond sor ond ehcp xf] Oy ered eins or covenants tun with eld prowideg that ‘ch ov complad wy (any rgitred muncipe oreemens ond regered openers wh publ ragold wiles peeing wch hove ‘ben compe wih, of eel hes ben posed ensrecmplane ond completion, o dened by a Wo he relevant muncply ot regulled tye) ony mint easements fr he pl of dames liye ophone tars oe pope ojocert propre: ond 2) 27 ‘oisment er rings, tarm er anor sewers, ple i he, lepers tes, cole lin Feo lar es which do nel mally ‘fe thew of he propyl win he spaced ines laren perograph & any vad cbjeon oe eo any cotondng werk ord or ‘Selene nts, ot oh fo Se sid patent na. may nat fly be conned, oat he pnp bling may nl be ware ogc koh fire is meen wing Slr and which Sela swab or unwing lo remove, reedy ost er ein insane ov ced exe gost ak of ie ie rane in focus of he Bojer end any mergooe, il eae cons a expense fo Sar, end which Bye wl net woe, this Agveenetshwitonding oy ila ont or negtaon in respect fsck bacon, shal be oan ed end all mri pi shal be retuned wiht nr er deduce ond Slr, Using Bkaroge ond Coping roars sal nel be ikl fo any cose or damages Sve ‘to any vl objection 20 made by sich yon exept or ony bon going oth! tl, Buyer sb be canlalvely deemed eo have ‘cepted Sela’ ile ob pope, 11, CLOSING ARRANGEMENTS: What coch he Sal ond Buyin alwyer'o empl heAeyeamant of Puchas ond Saleh propa, ‘nd whee the Wonoacson wil be comple by alco oitaion prs Fo I lhe and Eegiatn Reem fe, 25.0. 1990, Chose ond th Boctone Regain Ac 5.0. 1991, Chop 4, ond ony orandnnts eee, he Sallr ond Boye eclaawiedge ond ore at the exchone of cxng fics, nonselect cn ca ons fhe "Resse Davee" cd te race thereto the Sell ond Baye ‘(occur th seine ox gion of he torifo/ded lnd nyo cuss ited to be rgitred in connecon wth he onglee his worn] oe bw subject condos heey he yer] vce ny othe Roque Clveris wil be rogue Yoel Seer inet ond-nollane ween incomes wile rls decent rogilsonopeemert bles th sad ler. The Saler ‘nd Bye nevocaby niche cl ler be band bythe docometregtoion agreement which econmended rm ine ie by te aw Soy cf UrperConodo, Unless raise ogred bythe lowers, such xchonge of he Reuse Devers wil cur in te opscoble ard Ties Olen or sh oer lac oreebl io bts lowes 12, DOCUMENTS AND DISCHARGE: Bur shal nl calla teprodicon of nyt dead otal wrwey oF cot eden bie oh prop ‘vce sch foe in he possi cont of Sl aque by Bye, Sel wil Sener ar scr srveyo he property witha Salers ‘onto Byer o 0 a potiblond ee Requision Dae 2 Gachge of ny Chrge/Mertgoge hl by corpraton incorporated Purwott the Te And Lon Cempoies At (Canad, Chrtwed Bar, Tt Cempary, Cid Union, Cas Populate of hsratce Company ‘ed which nolo be snene by Buje on complon, nt ovale reitale em on campeon, Boyer open o cee Sees lomyers ronal veering oc, ot oth ding nd 0 dchage i gitar onde reper ame, ee cae zane ta be repiered, en "wan oeasnabe paid line ler conpion, rove ta ener ble complain Sar shall provide to Bye © morgage sere repre by th mrtgogee sing atthe oars equa toon te Gachage ond whee arene seconc coed lds Hose ser ‘bing wed 0 dracon execu by Sle drag poymet otis oven eq io bln he charge ot lh lence thon compton 13, eSPECTION: Buyer acinowlegs having hd he pporniy epee he popey ond undestord thal pen axceptnceot his fr her shall bec binding ogeamen of purchase ond ae between aye ond Sales, 14, INSURANCE: Al lings onthe groper and a ter ings bing prchared sal be ond emo ul conplaon athe ik of Sele Peng ‘comglan, Slash tlt ll insrancs pois, ony, ond the proces thereto paies nes moy pear ere i the ‘rent cf nub damage, Boer may eer ferinae hs Agree’ ond ove oll mosis Fat eked wha eestor dedcsen of che {ake be proceed ofan imance nd conic the achare, No nernce shal be orale en complain I Salroing back Chrge/ engage or ures etmingo Chrge/Megage, tye shal spy alr wih eoonale ein of adequte mance fo rote Sle ot ‘he: maigage' ines on conpeon wmais or uvens: CRP > Een ieee chase gesagt ate nea yaa Fait Madan eon eae ON MN poem 300 tend 2015 Page 3 of15, PLANNING ACT: Th Agrcemert sal be aleve aia inert in he ropecy lyf Sele compl wi the bdvson cna rovsons of the Plonning At by compan ond Sal covenant precend geo! is expae a cin cy neceay cone! by cone, 16, DOCUMENT PREPARATION the Tiidr/Dnd tl, z ee Ln tT Allo, be repre in rei ah othe eiphin of Sls, ond oy Choge/Morgoge be given back bythe Buyer o Sel ow expanse oh Bayer Breguet Bye, Sel coven lhe Torler/Deed io be Glieed on colton shel crane tment conte by Seton S22) a te Height 8 $.0.1090, 17 RESIDENT: Subj ot below, th Sele vpreset and wort th he Sefer snc oon compton wll bso nonresident nde he rosidencyprovsions cl he ome Tot Ac whith repeerion end waranty sal avve ord nt merge soon he clan l hs Warecton ‘ad he Sl Shall ve th Ber sory dcoon Sa Slt hen on eset of Can [rove tot he Slr 0 noseiden! unde he noneesseny pcre cf te come fx A, the Buyers be ceed iowa the acho Fie wih hw aneunt, my acer er Boyer o py to he Mint of Noel fever sally Buyers bly in eases at poyabl by Seer unc: the nonresideney proviso hw Income Tax At by rato hi sole. Bye hl net isch re f Sl dale on compen he preribed cea, 18, ADJUSTMENTS: Any ens, morgage inert, ray xs inclicing loa ingroveeel ts and unnared pub o privat ty choges ond metered cost of os opplcabe, shall be eppotioned and allowed the dy of competion he day el canplaion ia tobe epporines s Bye 19, TIME LIMITS Tine shln of expec be he sence hae grove tht hin dng or comping fey mar provided fr hein may be exter cr abridged by on areemon! in wing signed by Sle and Bye by tsp lowers who oy peccaly hore inet regard 20, PROPERTY ASSESSIRENT: The fiye ond Seler heey ocknowsdge tht he Fovnc of Ont hos inplneled cet ve oxexsnen) 2d popes may be reosesed on on a boss. The Bye ond Seber ages tha olan wl be mae cpsind the Buyer Selo oy {ckerage, Bola or Sleption, fx any chonges in propery ox sa esl ofa recsieant lh propery oven excel ony pop nee ‘hot cara pie othe campeon a is arson 21. TENDER: Any tnd of docomenl or mona rsd moy be mode vpn Selo bye orth piv owes on he doy st for competion Mong sal be tad wa nd crown ono yes Roca in he fm of © bnk et ceed hago swt vr wag he tops Nl oar Sate (22, FARILY [Link], Selle: wortonts that spovsol consents not necessary to this rarsoction wn the provisions of he Family aw Act, RS:O=1990 snlese Sle’ spss ho nec the cone Brine povided. 23, UPFE: Str rezone ond warns Bye th ing the ine Sela ox owned th oat, Slr ha nol oud ny bung on he propery 1p be insted wi inssaton conning estore, nd tht the bes Salers oul no bing en he prope cole hae re conene nslaen ot cortoins welcomed Ths waren shel sve ard el erg complain ol is Fontston, od he ‘uidng sport of emule unit bulking, hs wean salen apy lo thal por the uing wich he abcst i erro, 124, LEGAL, ACCOUNTING AND ENVIRONMENTAL ADVICE: Ths patie: acknowledge tht ony nlrmaion povided by he bickerage is rot koa, ax or enicnmenal dv, ond tha thes boon recommended ht the pes ein irdopendr lesion ode i ening his ocimest 25. CONSUMER REPORTS: The Buyer is hereby notified that a concumer report containing ereit and/or persona information may be referzd ton connection with thie wansocion. 26. ROREEMENT IN WRITING: tee conc iceponey between any provision ade ois Agreement cing any Schade ooched roc) od ony provision inte dondard preset porn htt, headed proven sal aspera he tondard rest prion the eto sch cof or dcrepancy. This Acree ining ary Schodseatoched aes certs hee Agreometbeween oye id Sele Theres no reptsenaon, waranty, cola! agreement or contin, whch alec ths Agreement che nos egress hain fos ppoes 1 hs Agra, Saber means ver ond Byer means pcos This Agere shal eta wall hanges ol gender x ramber essed by the conn 127, TIME AND DATE: Ary eleerce fo ime nd olin hie Agrsnt Sal man etme on ee where he rope i cole. mnmassorsonnce CP >) mimaisor seuss: (>) BD reinstate cede tt SERRE at is pacts28, SUCCESSORS AND ASSIGHS: The hls, xc, onion, secs and cng off Undsgned obo by the as hewn [NLYTNESS waa hve hereto st my hand ad ea Platinum Properties Lid Alames Keameth Parks... TW ate Api! 19,2012, a Pras A Se dei i Tczathont tend the comers, @ one ste Undonigned Sale, gre fo the cbove of herby inevocaly nrc my owye 10 py del oh bckragel wth whom | have oped 1% pay commision, he wpe lone of ha conmision foster wih eppcale Harmonised Sees ox fd oy ter oes os may haecer be ‘opeal) em he proceed ote leper tony payne othe nde er complete, as obvaed byt Schrage to my lawyer. [SONED, EAED AND EINERED ne peer ckINWINESS wes ove hero yh od Easiate Holdings Lid Wills Pate , John Scott EUS gee April 21.2012 iva acne 3 - we convertion : as AME SaaRREL a &™ ‘SPOUSAL CONSENT: The Unengred Spouse the Sele hereby cosets he dpeston evidence hen pratt provisn ol he For {ew Act BS.0.1990, and berby eon the Bayer e/sh wl enced ol naesey ordi decane iB Tc od ae sels esened bac is 7 wi a> CoMMmAATON OF ACCETANEE Nahanni ning oid ath cer cn is yn wth ong bh ped cond writen wes lly oeceped by cil pres ot 6:00... pm this 218t.... doy of ABE 2012, len, Scott penne TRORNATON OW BROKERAGE) ing ble ABC eal ou ne 416238 4045, 123 Main Sveet Anyeity LAH 64 Coop/topeBeheoge XYZ Reel Estate Lh 2 Maple Siret Anyety L2H TKS ‘abipa n “tne (005) 4544000 ‘ap ia "ACKNOWLEDGEMENT I ecnowledge esp of my sgned copy i cepa Agreement cf | Taknowee rst of my sighed apy is xcept Aone ck Poche ond Son ovher te Belonge ofr copy lowe. | Pc el Sol odors eek arward9 copy my ow John Seott are Apl.12,201. | Kenneth Parks... coare April 21,20 sie oe pa Dale al ia ‘aes for Serco Jas or Savicn TENG on TaN Sates twee TBD. ayers tower TBD. Ades : Ades. not : Eni Texoma UO STON TUT HORN 1s: cope elapse aging Agel ce i ie eran eh ser noe Ccbesun fg Coane taste alison stl egos cr Seema Speer op decline ht hs Sod ete pl bch sgn on ges etme RSE bens marae, Bg Berna pee pe ped mee Air lle aaah oe ‘Webromeo rays@REA tx" Schedule A room jurchase and Sale. - Commercial Form500°. = "= [Link] P Sale. orci ‘Th Schade otoched Sond os po fhe grant ol chose ond Soe beter: PP Ldhacoo nuven, latinum Propeties Lid, suum, Esteste Hodis Ihe Bh tee ie Bseaso tere puch ode 88 Cedar Avems, it of Any, Reson of Ane, , 18th. April. Neos * 12. oct he doy ne 0 ijt pay lcs i BSyoaee 3 See ‘Afurther sum of Three Hundred and Sixty Thousand Dollars ($360,000) subjedt to adjusiment to the ‘completion ofthis transaction with ands daw on alae’ trast account nthe tim ofa bank dat, ered ) (A tetrennonsoeeee nur omen tai a CSSA SRS nase meatseee denietestene Schedule A «een g00 = Aaraement of Purchase and Sale ~ commercial Form Ferm torestom Ths Schedule noha oe oe pat oe Agra! of acho ond Soe babe ond suven, Pltinum Properties Ltd seuuer, Esstoate Holdings Ino of 188 Cedar Avene, City of Anyeity, Region of Anyregion ed fe FEB aan doy of ABEL 2012 forthe purchve and sce ye opens poy he blac o ow: ‘The seller represents and warrants that there are no outstanding lawsuits or actions pending or threatened against, the Seller or the real property and, to the sellers knowledge and bel, the building has no structural dfiiencies and there is no environmental contamination onthe property. ‘The buyer covenants and agrees that all information provided by the Seller and obtained by the buyer shall be kept In strict confidence and must not be released to anyone except for the purposes of arranging financing or unless the Seller provides prior wetten consent forthe release ofthe information. The buyer agrees to poy an oditional deposit of Forty Thousand Dollars ($40,000.00) to ABC Reolty inc. by ‘negotiable cheque at the time of notation of fulfilment or removal of the condition pertaining tothe opproval of the leases and finncial information to beheld in trust nthe some manner asthe initial deposit pending ~ competion or ther communication ofthis Agreement, and tobe credited towards the purchase price upon completion ofthis ogreement ‘This form must be initiated by all parties tothe Agreement of Purchase and Sle. ‘hs frm usb ied byl pare ofhe Agreement Fchose and Sle sumais orzummse CRP > nami or seusrsis: C [R mccotneeramerertnate rates nae on icgeaieieene shee eee RSH y yg mameleCase Study 3: 1. Select the statement that best describes a problem with the way the offer was drafted: The information on payment of services and expenses for the property is contradictory, as the Landlord is unlikely to pay the utilities when the Tenant pays additional rent for the property expenses. Both the landlord's work and the Tenant’s work cannot be Schedule B. "Neglecting to insert the fax numbers of the brokerages in the “Notices” clause Is a violation of the Real Estate and Business Brokers Act 2002. The rent per square foot should be quoted monthly, not yearly. 2. Select the statement that best describes a problem with the way the offer was drafted: ‘The description of the signage is too detailed. For a commercial agreement, the Landlord should hold the deposit, not the brokerage. The commencement date for rent payable should not be June 1, 2012. ‘The tenant has not completed the signing process required to make the offer~ 3. Select the statement that best describes a problem with the offer was drafted: The rents, as described, do not describe the rent for the ll five years of the term. i) **0n the exam, you might se two aditionY mistakes as follows ‘Schedules (clause 8): REFERENCE PLAN will be listed as one of the schedules. Thi site plan/floor plan is given to tenants, never reference plan. Sis incorrect. A Irrevocability (clause 9): The case facts will state that “today's” date is September 154, but the irrevocable date will be for September 14" meaning thatthe irrevocable time has passed and the offer is no longer valid, Page 69 of 92GREA wsretaisue Agreement to Lease Risocaion Commercial - Long Form Form 510 “hs Agron oom doe ti. th doy ABA 20.12. ‘TENANT (Lessee) Golden Optical Ltd irae c LANDLORD (Lessor, East-West Holding. In, ‘iis aise “The Tenant erty fer fo os am fhe Land th preizes ox desc hersn onthe ns ond subject condos ot sou nhs Agreament 1. PREMISES: the Premises” consisting of oproninatey 1,750... agra Fe mee ee on tet Noor fa a -euibing incu municipal ox 2042 Leslie Steet Unit 27 inthe. ity of Anycity, co Any Region _Frosnef Onerie,o shown ould he plon aachadas Schl’ 2 ahi hl dee tek Tybes ol, afoul Duagpnibad 3. TERM OF LEASE: (6) The one shale fr arm of. Sixty 190... momhe commencing one ASE Soy of June, 120.12......,andterminclingonthe.318¢, doyol May, 20.11, {b) rvied te Fenentis ott ay Sne in dau ny covenants whine Lean, he Tenot salle cleo renew thi Leas for. TWO, cedaionl ws ot SI854(60)..._mowhs foc ox-witon netic Yo he Lael ivan. es than LES, north pie the ‘rpiyof he eae! em. elt be rage! Inthe avert he Landa ard ant conch agree on fe aed minimum Pent tet ‘wo onthe prior oem he cre! ae, the bed minum ee the renewal period kal be deemind by ein in ocordonc with ‘he Abiroion Ac er any suecesor replacement |A._ RENTAL: Fined nium en The aed minim et pyable bythe Teo foreach compos helms paid ding he oe wre shal be: From 4:06:12. 1.31:05-14 inne, $33;600.00 ger onmmbing $2,600.00: parm oid pie 18.0... pasa Ft ai From 9}:06:14..1.31:05-17 icles, 35170000 per nnn ing $2:975.90... pment bosedvpon$17.0...peia Ett " : Tarai From vs Ince, _peromumbeing sermon, bred von: ae fron. wo. ine peronnm bing. pron bose pon 0 rom. oo inch, cnr 698 month bored pon . f 8 perormunbog$, cp a Pe ‘ls HST, and ter ox ar thon income impose on he ann the Tenor wih spectre opt by he Tenant, payable: [check one box eniy] $0.18 onda ech mnt commencing ume, 12012, Oe. dey oh st natrmmcielking compan felons Wr ‘The ned minimum tn shall be aed fhe ata masicmant oe ected Prenas illo th pprsinol crea. The acl mesure sal ‘agreed upon ad falag ogrenant, calested by on Ona Land Suveyer/Arche! wing the cert Biking Owners Ard Managers Asocaon onder erm of mactrenen od skal be bind om bok pores. wennscrmuimes OS —aemsoruseinons CD ssutmirsegri Srl ; eerie ta earsincectereetyretic= aoe ERE TSE a naam ste tated 208 eget ttIT AND PREPAID RENT: Th Tenn vrs [Link], Spares Em Pew pie he died and beynegcbl chen poyae to ABC Realty Tn; Dasa? ‘i amoinof Six Thousand Five Hundred Twenty-Five Dollars and Seventy: Five Costs ‘Canedion dlls (Cont $1825.75, 40 be deposited ond hed in ust os security for the faith performance by the Tenant of of ors, covenants ond cordon of he Agreement ond air fe wor of cerpancy by he tenn! o necutan of he Lose be apped by he London point he Fits onabast oh et ond HS. he Agresment toxoid he dept i oe feted to the "enanwiew ines o deacon ortho porsse ie Agreemert, "Upon Aceplnce” sl moan ta the ena fs fue! Slee deposi he Depost Holler wihin 24 hour ol the acaptonce a his Agreement. The prin oi Agree herby acknowledge el ales ‘therwie provided fein is Agretnen he Depot! Hele shal place he cpt nl inh Depot Hodes nen res baarng Real Ee Trust Aezoinond no tet hal be cod ressned cr paid en he depos 5. SERVICES: (check one box only) DT Toon shot pay He cos of ye, gos, wot, heating, ctcondoing ond orale services ond sles oF oy be provided he premises. The ron soll orange wah he eal authori for conecson af gas, lecicly and wit inthe nome feta. [Zhe encod shal poy the ooh, gs, lr, oon, cicondioing od cle sevice and iis os my be provided othe proms 7. ADDITIONAL RENT AND CHARGES: ‘Check this box if Aditional Rent ox described below to be paid by Tenant The Terart sho addon po a proportionate shore of ll ots and expen ncured by the Lana in missing, peroting, hein, inning ond eporing he propery on whe! Unig the gvealy oh foregoing, such cae aed expense sellin he con oh (7 snow garbage, ond kesh omsva (i) brdscaping ond plans, (Ut, venting ad i-condioning, od proving ht ond cld wale anche vie end service, ond opting the commen ote al the piety, and mining ond epoieg the mochiay ond euipman uch wits ond sevice, (the ea ows, sessment, rls, charges ond dies ved or rested ogo he propery are any ax onthe personal income ofthe tendo (11s the popay ond sch ter insurance 0 fe Lenard wil fle! agin publica, propary damage, lose income ond ‘has cml ond wo 8. SCHEDULES: The Schedule ctached hereto shallform on inlegra pat otis Agreement to Lease ond consittok Schedules). AcReference Plan, Schedule B- Landlord's and Tenant's Work, 19. IRREVOCABMITY Thiol soll revocobe by FEMAM unt LI00, pam. onthe 17 oy tine ot Api 20.12... er which tine nc ccepled, hs fers be ll nd cdo ll monies po hen shal be returned othe Tena with ret ddcon, VO. NOTICES: Te London heeby cpp the ising karoge os opto te Land for the pape of ging ond eshingwotices pronto ths Aateement. Where Brkeroge (rans Bctaroge hos ented i @repreenaton ogre’ wi the ran, fe Ten hereby pois the tenons reerage ot ogert for he purpose of ging ond resting noc pro Bs Agenmare Where & Brokerage represents both the Landlord and the Tenant (multiple representction, the Brokerage shall not be appointed or authorized ta be agent {for cther the Tenant or the Landlord forthe purpase of giving and receiving netice. iy nce elong hae e preides fr herein sol b in wring In adion wo ny proven celoned hres ond in ony Schedule Hee, i any comic netics ef eeepc thera! or en nice abe given or tceved pun! otis Ages er ay Sched eso any of hem, Decomen?) Sel be Sacmed gen ‘ond received hen dlered personaly or bond devered othe Ars for Suvce proved ihe Aebnowlegemert below, or wists Scale ‘umber or eval aes s provided herein, when tansmited elewoncaly toh! Facile umber crema ass, rexpecvay a which cae, ‘he sgn ofthe purty (patie] sallbe deve se eigina Fax No: NA. fax Nos NA. He air aa ia ayer fat Adens NA. sone Eni Ane NA ‘or dabesy al Becmeris Landi ot ‘et daiacy of Bocemens io ann wants or tease CS g mamais or tunpionois: (R moransoasmaeesene erent geintctton SPisgenrtins serene ata lero tha trea rete SS pate apy ena pate ebro do Ferm S10 esas 2016 Page? of11, LANDLORO'S AND TENANT'S WORK The and creo comple hs wa deste the "Land Wo in Seba Ba .* (toch ree The enn! ges comet ny edit werk necessary to prepare fh Penis fer he Tena’ we, der “ea Werk in Sehedle“B.....- tached brea. The Tenor shal nt proceed with ny work win flectng fe Poles without fe Londra’ pcr witen approval, wich opperel hal nol be eset ital 12, SIGNAGE: The Toran may, cum ean, tl snags in god ond werkmania mnt, sj © musical bylows oe government ‘radon ond wo the Lond writen approval seth eign, clu, end cone of ny sch vas, which apo shal et be evecsonciy wid ond be lst ll no sons ach side of freestanding pylon at the shopping cente entrance, third business listed fom the top of the pylon, 18, INSURANCE: The eon preston he pop od opts fhe Trent nig inonce frre and sch atonal pris sore realy ned open, billy sutceond oy cher sarnce ox may be essay rete ty Landlord 14, EXECUTION OF MASE: The Leave :hallbe prop by he andl tte Landos expan in c:cordonce wih fn ems aed condo ‘arene: The lon wil be ied ard exceed by bth pres tao pit oh crmencaen of wok onthe panies by iter pony ond prior cecyponcy by he Tenet 15. OCCUPANCY OR RENT TO ABATE Ino se! the reins ae st compe by the ander exopancy bythe Tenant on th dt eh ‘hrc br Comment of Tern elec, the et de is agement sh bt othe een sh doy. end th Tenn! hsb Gover ccep ch ebtemat fet ail stoma! lina che Tana! mig terse make bec ho Premios ware a ody (er czipancy bye id de 16, ASSIGNMENT: This Agena o Lose dst be czlgrable or cherwisewonftbl by the Tent The Ton my nt sb or og of ‘onl inre nt Loe contd aun vt acing the write conser hme andre, whch comet hal not be wressonbly vith, provid Rowers the eres fre he Tene! shal emai cle rol cblgoons ver Lec Te Tenn io coor te tank oe moj of fhe ound shows nthe opal teck, oon Fader, sane edition foe ol Ccxpeia scans toe cool he corporis desu l ups ob en atgrnet win fhe mein tis Agar ‘Sl enpiacte: The rovon allot ppt crporoon whore share ree ond ode onan rcaprized pbc sock echonge Io Conoda or te Used Sows. 17, PARKING: Uses thre splat, poling, appcbl, hell b in common nd need 18. AGHEEMENT IN WRITING: ¥ tae is ony snl ce dicrepony beveen ony proven added © fis Agynoen!Fcldng ony Sched ‘och bate and any proven ne sarcdad preset porto el, fe od prvsin sal speed he ondord preset rvs the ‘Sowel ch coaicericopene Ths Agrueetnclng ony Shs ocd erat cove he eis Agesmon tween endo ‘rd enon The rsteprnenten, warn cored agreement cr canison,wich of his Aormen ob than os xpased bre Ths ‘ojeemert hal be read wth chones gone nme requtedby the cove 19, LEGAL, ACCOUNTING AND ENVIRONMENTAL ADVICE: The pares ecnowede ta ny inlxmetion rove bye bok so Was, ‘rcunteg, over smivrmentl ceca ha ha been recomended hl he partes alin independent profesionel evi por Hi 20, BINDING AGREEMENT: Thc Ageemet ond he aceon rol shall cone 9 indngoginnent byte pate ene noth aoe ok fhe emt decd by th ms ond eardns ren oraned nenszorreumes C25. samaisorunoiotnse > GB [Link] et oem neat “ SESS SSE ORE REET tains 2016 pag tt ‘Wem 821, SUCCESSORS AND ASSIGN: The hos, xe, adminis, scar and gn of undesired ee hound by fe ems bin, {S1GNED,SEAIED AND DELVERED in he rtence of IN WINES urea hi hier st my hand and ec: Jane Wilson Piesident ‘Golden Optical Lid Alivert Lee Jane E Wilson @ var ned iron S65 OES &) nsssnsnss - Ebave authority 1 bind the corporation... @ oa ‘i c) April 15th, 2012, iv aa aon ‘Wh ondord heey accept above fer, ol tet the commision together wth apiale Harmonized Sle Tx ond en her ox at ‘hoy haacarbe opens nay ba dee Kom th dp ond kth ogre yay rncing belenc el conmition rhe @ oar, ia tices gg Cea ; c @ ow ‘i ins ipeh a ‘CONFIRMATION OF ACCEPTANCE: Noticing ping coneinedarea oth conan colimthi oyement wi iichnges buhtypd er writen wo nly ecaped byl poe Un hy 20. tr ocr a ia aa i INFORMATION ON BROKERAGEES) Lutng tckege ABC Realty Tne rain. 416-414. 9020, 27 Center Street Anyciry apa tas cosp/tmesolaroge XYZ Real ESeL8 : tn hn, 416234.6789, 137Main Street, Anyeity aaa a Ws ACKNOWLEDGEMENT | eclnonledge eit of my signed copy a tis orcphd Agreement 6 acknnladye rent oy sl apy lhe accepted Agent leose andl auhorze the Behr forward eepy my lojer” | lea andi auhors he Brag overdo op omy pe aa = — bate bate Aad for Seve, Ne WING tendon awe. Senor Lowe. Address Addhes. : Foal a egecbecsesa'te Coeprng beteapt poely te epg grenade et nner eae by me nce th ‘Remo comonomer tele ein os Tapco kant Ces ‘at Agents ed ated llr eo gonad es sprang Came Ta CED de ow od ine epost ne ‘vole ba ds aise ~ (i mactrasteomstineateltte eta tncretei 7 ESSRSS SSE to muss repeats WEREitmie Schedule 3 _ Agreement to Lease ~ Commercial REA tes: Form 512 errr Ree of Ons “hs Scud enached i cd fos pth Agent leone eter: send Tenant (lessee, Golden Optical Li, uesson, East-West Holding Ine, serine lon of -2042 Leslig Street #27 City of Any city, hd te 8 doy of ABEL 7032. Clarets wore >> _casaEDaun Peer The london agrees compet he ftowing leasehold improveméns tt sole expense in good end workmntike mannee fang seeoring fo leel bung codes ard Yequtements pi ote tenant aking Secopancy ote un 4: Install doubie door rom he shipping ateatecevng atta tothe showroom, 2 Insal ole dors ons single tame (oo centre suppor) athe ort env ace 5. Payor instalation ofthe tenant's signs win exis frames now lcsted onthe exterior ofthe bung. 4: nota fl height wal (pants cra approximately 20 feet eng sepaating the eceking ares rom the awrcom 8s ‘shown on fw floor pan etached ae Schedule B 5. Insta a separate mele forte un ‘The tenant agrees to complete the following at ts sole expense in good and workmanlike manner in accordance with the tems: tthe lease, ary loa! bung codes and requeements sd eject io nlinspecton sr approval Pe landlord, *. Prove stars for font and wo se nec gn ames sd pela ramet comply wit gh fain races or landiora to neta 2 Tenant py or ary lotic eric equted fre light wa anroninally 2 tng as show one or pion etched as Sohce 8 8. Insta sunsprecng of all wale and clr enclosing thé home het cmonsyaton Som, Specictns tobe provided Sylendord. : Thera scioowindaee nat any expenses concering prs, bences, savings created eres ot he Oty ot Northgate regaring ary onan provements shal bee soe reopenciy of onan Thisfeam mus be ise by al presto the Ageemat eae pmasormunee COS ms ortmororassne > eheeaBUn taeda aceasta RESTS SERENE wan nets he peaked see sept GEA are abt yore oe os naan omarNOI = NOI = Potential Income Vacancy Loss + Other Income — Expenses Ccr0T = cash Fow before Taxes Debt R01 (Return on investment) oF ROE = Pref Overall Rate of Return or Cap Rate NOL % Equity LTV (Loan to Value) or Leverage Ratio GoM (Gross Profit Multipir) an a _ iow * Lot Area © CAT = CASH FLOW AFTER TAX ie (CFBT = CASH FLOW BEFORE TAX wo NOI = NET OPERATING INCOME No Example: an Potential Income = $400,000 ¥ Vacancy Loss = 3%, Expenses = $70,000, Other income = $50,000, ‘Annual Debt = $60,000, Taxes = $80,000, What will be CFAT? NOI = Potential income — Vacancy Loss + Other Income — Expenses += $400,000 ~ 3% +$50,000 - $70,000 = $368,000 Page 75 of 92CFBT = NOI~Annual Debt = $368,000 - $60,000 = $308,000 CFAT = CFBT —Taxes = $308,000 - $80,000 = $228,000 LTV = LOAN TO VALUE (LEVERAGE RATIO) uve yar% Example: Loan = $400,000, Equity VALUE = LOAN + EQUITY = 400,000 + 200,000, = $600,000 (Equity, Down payment & Investment are the same thing) 400,000 600,000 = 66.67% Page 76 of 92GPM = GROSS PROFIT MULTIPLIER (NOT A PERCENTAGE) ‘Example: List = $400,000, offer 410,000, GP = $300,000, what is GPM? VALUE OPM - GROSS PROFIT _ 410,000 300,000 137 TOTAL FLOOR AREA PERCENTAGE FAR Tor AREA wv Example: Floor Area = 3500 sqft, Lot Area = 4000 [Link], FAR =? Page 77 of 92LEVERAGE = ROI (RETURN ON INVESTMENT) ‘OPTION A OPTION 8 a 2 PURCHASE PRICE = $400,000 PURCHASE PRICE = $400,000 EQUITY = $100,000 LOAN = $300,000 @10% LOAN = $350,000 @10% DEBT = $30,000 Noi 50,000 RoI=? = PROF Four = 30.000-30.000, 20% 5A, = POSTIVE LEVERAGE BA, = NEGATIVE LEVERAGE70 Y¥ BA, = NEUTRAL LEVERAGE Page 78 of 92RENTABLE FACTOR R/U FACTOR > Rentable Area = 40,000 [Link] Usable Area =30,000 [Link] Common Area Charges = $1,000,000 If Usable Area = 5550 [Link] Additional rent = =1.33 x 5550 = 7400 sq. 200009 - $95/[Link] x 7400 = $185,000 CoA > capital cost allowance (Deprec cc => Undepreciated capital Cost & DECLINING BALANCE METHOD & + 50% rule applies on new purchases o = Not on land + No 50% rule applies on existing busin Example: CCA Rate is 1026, Purchase P Ucc for 2° year? 3,000,000 Land = $700,000. What is the Purchase Price = 3,000,000 Land 700,000 Building 2,300,000, CCA (10%X%4) = _59618115,000) ucci"Year 2,185,000 cA (10%) =_10%($218,500) cc 2"vear = 1,966,500 Page 79 of 92‘STRAIGHT LINE METHOD ‘= No 50% rule applies + Applies Only on Leasehold Improvements Same amount gets depreciated each year, Example: Leasehold improvements = $80,000, Class oF CCA = 10%%. What is the UCC for the 2° year? Improvements = 80,000 CCA" Year 8000 (10%) uci" Year = 72,000 cca2" Year = _ 8000 ucc2"'Year = 68,000 4 What isthe total CCA for 2 years? Page 80 of 92COMMERCIAL MATH 4. Investor King bought a commercial property in April of 2007. The purchase price was $4,200,000, the land value was $800,000 and the building value was $3,400,000. The Capital Cost Allowance on this type of property is 4%. Using the declining balance method of calculation and keeping in mind the reduced rate for the acquisition year, what would be the un-depreciated capital cost as of January 1, 2009? a. $3,198,720 b. $3,128,000 «$3,196,000 4. $3,133,440 sa developer who is thinking of buying 132 Musgrove Road. It isa 3 acre (130,680 square foot) vacant lot which is zoned for industrial development. The lot coverage allowed by the zoning is 40%. Comparable lots in the area have sold for $500,000 per acre. sim is prepared to pay this price per acre. Based on this information, what would be the cost of the three acres of and per buildable square foot? a. $3.83 per square foot of buildable area, b. $9.57 per square foot of buildable area € $28.70 per square foot of buildable area © 4d. $16.52 per square foot of buildable area. we 3. Investor Cavoukian purchased a 40 unit apartment Aging at 46 Antigua Road. The purchase price was $3,500,000 with a mortgage of $2,100,000. The miyteage has monthly payments of $12,250 A review ofthe financial statements forthe subjget property together with an investigation of comparable properties revealed the fllowigg)” ‘© The Potential Annual Income is $480, {Tevacaney and a et fate a Pte Aaa ame © Other income is estimated at $15,000 a year + Annual Operating expenses are estimated as being 40% ofthe Gross Operating Income and the annual debt service i the monthly mortgage payment x12. Based on the above information, calculate the cash flow before taxes for 46 Antigua Road. a. $139920. b. $95,680 c. $41,920 4. 147,000 Page 81 of 924, The president of a consulting business is about to make an offer to lease office space in a 6 storey office building which has a total usable area of 53,700 square feet and a total rentable area of 62,800 square feet. The office in this building will have 3,420 square feet of usable space. For the first year, the base rent is $11.75 per square foot and the annual Common Area Maintenance for the building is estimated at $279,176. What is the total additional rent (approximately) that the consulting business will be paying over and above the base rate for the first year? a. $17,780— b. $20,880 «$13,000 4. $15,200 5. thinking about leasing 2,600 square feet of rentable space in Anycity Shopping Centre for her dothing store. The shopping centre has 120,000 square feet of rentable area and the common area ‘maintenance (CAM) costs are $2,850,000. Each tenant EXCEPT the LCBO pays additional rent on top of the base rent for their proportionate share of the CAM. The LCBO has 4,320 square feet of rentable area ‘and will not be paying anything towards the CAM expenses. The LCBO’s share of CAM expenses will be included inthe proportionate share paid by the other tenants. Based on the above information, what would be Haniya's additional rent in the first year? a. $88,919.99 & bb. $59,604,25 av $64,056.02. a; 4. $55,515.21 © 6. Dennis Knows of a developer who owns a 6 erp tot (261,360 square feet) and who might be interested He asks Sarah to do some research anétshe comes up with the following information: ‘© The lot is estimated to be worth $328,000 per acre + Based on current zoning requirements, the allowable lot coverage would be 45% ‘Site development costs are estimated at $11.75 per square foot of building ‘+ Building Costs (hard costs) are estimated at $62 per square foot of building # Soft costs are estimated at $16.50 per square foot of building © OPQWarehouses Inc. would be willing to pay a net rent of $8.00 per square foot of building for the ‘maximum building size allowed by the zoning. All expenses would be paid by OPQ. through additional rent Based on the above information, what would be the developer's annual overall rate of return on the investment (both land and building) if the maximum allowable size of building were constructed and rented? 6.27% 10.54% 13.84% 749% in a design/build arrangement for a single stofey warehouse if the return is attractive. Page 82 of 827. Mary isa salesperson with ABC Realty Inc. Her client, Jim, is interested in buying a hardware store, After ooking at several businesses, Jim decides that he would like to make an offer on Anycity Hardware Store. The business isin leased premises. The capitalization rate for this type of busi received from the seller reveal the followir ‘= Sales are $810,000 © Cost of Goods are $505,325, Operating expenses are 30.25% of the sales Based on the above information, what would be the value of the business based on the Direct Method of Capitalization? a. $145,174.25 rounded to $145,000 b, $313,947.37 rounded to $313,947- . $470,565.79 rounded to $471,000 d. $804,236.21 rounded to $804,000 ss would be 19% and the latest financial statements information: 8. Dennis Miller is a salesperson with XYZ Real Estate Ltd. His client is OPQ Warehouses Inc. They are looking to lease a warehouse facility with about 120,000 square feet of floor space. Dennis has shown the CEO of OPQ Warehouse Inca number of spaces in existing buildings, but they do not meet the needs of the company. The CEO has now mentioned that the onety ‘might be interested in a Design/Build arrangement. An investor purchased a commercial property in 1962. fa B00, ‘On December 31 1971, the property was valued at $140,000. The property was for sale on the 8" of November, 2008 and sold ‘on the 10" of April, 2009 for $1,900,000. The im 1ade a number of capital improvements over the years and at the time of sale; the Adjusted [Link] was established as being $340,000. The real estate ‘commissions and allowable expenses on the Safe (including legal fees) totalled $75,000. You can assume ‘that there is no Capital gains exemption gppiitable. Based on the above information, cated fhe actual capital gain enjoyed by this investor. a. $780,000 b. $1,705,000 c. $1,485,000- d. $1,560,000 9. Several months ago, ABC Realty Inc. listed and sold an office building at 123 Main Street for their client. ‘The Allocation for Improvements on the sale of this property was set at $1,400,000. During the period ‘that the client had owned the property, the amount of capital cost allowance that was taken was $134,545.08. The client originally purchased the property for $1,450,000 and at that time the Allocation for Land was established as being $340,000. Based on the information provided, what would be the Recaptured CCA (Capital Cost Allowance) that ‘must be disclosed as income by this client of ABC Realty Inc. (You may assume that there are no capital improvements or soft costs involved in this case). a. $290,000.00 b. $134,545.08. cc. $163.454.92 d. $340,000.00 (Claimed CCA is the answer) Page 83 of 92110. XYZ Real Estate Ltd. leased office space to a tenant at $00 Main Road in 2008 with a total rent of $37.40 per square foot of rentable area. The tenant, who had been in business for several years, already owned, furniture which on January 1% 2008 had an un-depreciated capital cost of $16,452. In August of 2008, this tenant purchased additional furniture worth $10,000. You can assume that the CCA rate for furniture in 2008/2009 was 20%. Based on the declining balance method of calculations and bearing in mind the half-year rule for new acquisitions, what would the un-depreciated Capital Cost have been for the furniture as of the 1" of January 2009? a. $22,161.60 b. $21,452.00 c. $20,161.60 4. $17,161.60 11, A tenant is renting 3,350 square feet of rentable space in the commercial shopping centre. The minimum rent is $26.00 per square foot, and there is a percentage rent of 4.25% of gross sales over the base sales. The tenant has monthly sales of $200,000. Calculate the total amount of rent per square foot per year payable by the tenant based on the above 12, Investor client Elaine purchased an 80 unit a t building at 97 Southampton Road. The purchase price was $6,500,000 with $2,000,000 comin\gpt of the buyer's own resources. The balance of the purchase price was financed by a weg fh monthly payments of $30,937.50. A review of the financial statements of the building tofether with an investigation of comparable properties was the following: ‘= The Potential Annual Income is $912,000 ‘The Vacancy and Bad Debt Rate is 4.5% of Potential Annual Income Other income is estimated at $15,000 ‘Annual Operating Expenses are estimated as being 45% of the Gross Operating Income ‘The annual debt service is the total of the monthly payments for the mortgage Based on the above information, describe the kind of leverage that buyer client Elaine use for the purchase of 97 Southampton Road. a. The equity rate of return is 16.5% b. The overall rate of return Is 6.2% . The overall rate of return is 8.6% 4, The equity rate of return is 5.8%- Page 84 of 9213. Investor Jim purchased a 110 unit apartment building at 27 Manchester Avenue. The purchase price of. ‘$14,150,000 came out of the buyer's own funds. A review of the financials for the subject property together with an investigation of comparable properties revealed the following ‘+ the Potential Annual income is $1,850,000 ‘© the Vacancy and Bad Debt Rate is 4% of Potential Annual Income ‘© Other income is established at $25,000 + Annual Operating Expenses are estimated as being 38% of the Gross Operating Income. Based on the above information, calculate the overall rate of return for 27 Manchester Avenue. a. 7.89% b. 14.95% 12.29% d. 13.07% 14. A client has a retail business and is about to make an offer to buy a shopping centre which has 197,000 square feet of rentable area. The cost of the centre is estimated at $3,490,500. The minimum rent payable for the rentable space is $21 per square foot with a percentage rent of 5.75% of gross sales, Client is going to lease space with rentable area of 4,150 square feet. Sales for the first year are estimated at $1,650,000. eulate the total minimum and percentage rent per squaraggot the cient willbe paying inthe first 25. Investor Martha purchased a 55 unit apaftgleht building at 46 Chelsea Road. The purchase price was $5,500,000 with mortgage financing af'$3;300,000. The monthly payments for mortgage are $13,750. ‘The balance of the purchase price cam® out of the buyer's own resources. The financial statements for the subject property together with an investigation for comparables revealed the following: ‘© The Potential Annual Income is $792,000 ‘+ The Vacancy and Bad Debt Rate is 4.5% of Potential Annual Income ‘© Other income is estimated at $16,000 ‘© The Net Operating income is estimated to be 58% of the Gross Operating Income © The annual debt service is the total of the monthly payments for the mortgage. Based on the above information, calculate the investor client’s return on equity. a. 12.86% b. 6.36% ©. 19.78% d. 7.68% Page 85 of 92116. Investor Nicholas is looking to purchase a $5 unit apartment building in Anycity for $3,850,000. He would use $1,450,000 of his own money as down payment while financing the balance at an interest rate of 6.5% per annum. The mortgage loan would be interest only with payments being made at the tend of each year. A review of financial statements of the property and investigation of comparable properties in the area revealed the following information: ‘© Potential Rental income $535,000 = Vacancy & Bad Debt 44% of potential income ‘© Other income $24,700 ‘© Net Operating income 57.25% of Gross Operating income Based on the above information, calculate the NOI, Cash Flow before Taxes (CFBT) and Return on Equity a. $230,123; $74123; 5.11% b. $329,480; $164,428; 11.33% c. $309,588; $153,599; 10.59% d, $308,177; $152,177; 10.49% tolease 17. Jane Adams is a salesperson employed by ABC Realty Inc. She currently has 3 clients war ‘commercial space. ‘The following 3 questions cover important topics in connection with leasing commercial space and cover issues such as minimum rents, percentage rents, additional rents and landlord concessions. Client number one has a consulting business and is abo. ike an offer to lease space in a 5 storey office building which has a total rentable of 57,200 squacalfeet and a total usable area of 49,448 square feet. Client number one’s office in this building will fave 3,640 square feet of usable space. For the first year, the base rent is $11.50 per square foot and ti]p-annual Common Area Maintenance for the building is estimated at $261,452. & What is the total additional rent that clientpiber one will be paying over and above the base rate the b. $19,246.18. $22,601.88 d. $22,263.45 Page 86 of 9218, Client number two has a retail business and is considering leasing space in one of two shopping centres. The spaces are identical in size .e. 3,540 square feet of rentable space. Some of the details of the rents for each space are as follows: Shopping Centre 1 The base rent is $41,885 Based on sales from other retail stores, the client estimates the percentage rent would be $9,000 The additional rent is $39,922 The landlord is willing to give a rent free period of 4 months for base rent The landlord will pay for $19,000 worth of tenant improvements in the first year Shopping Centre 2 ‘= The base rent is $40,120 ‘+ Based on sales from other retail stores, the client estimates the percentage rent would be $9,000 ‘+ The additional rent is $39,150 ‘+ The landlord is willing to give a rent free period of 3 months for base rent ‘© The landlord will pay for $17,000 worth of tenant improvements in the first year. Cate the total annual ent othe fst year, nut se et, prcntage rent nthe additional rent and taking into account the concessions fraffiMe landlord. Which ofthe 2 options would bbe the most cost effective for the tenant, based on the €otaf rent per square foot for the first year? a. The space in shopping centre 1 would be the mae ¢pst effective asthe total rent per square foot of rentable space is $16.34 whereas itis $17.30 fdbghopping centre 2- b, The space in shopping centre 2 would be ikefost cost effective as the total rent per square foot of rentable space is $20.13 whereas ti $20¥0r shopping centre 1. . The space in shopping centre 1 wouldag the most cost effective asthe total rent per square foot of rentable space Is $5.06 whereas it'g6.24 for shopping centre 2. 4. The space in shopping centre 2 would be the most cost effective asthe total rent per square foot of rentable space is $24.94 whereas it is $25.65, 19. Client number three has a retail business and is about to make an offer to lease space in a community shopping centre which has 197,000 square feet of rentable area. The minimum rent payable for the first year is $16.24 per square foot of rentable space with a percentage rent of 6.25% of gross sales over the ‘minimum rent. The space that client number three is going to lease has a rentable area of 3,750 square feet. Client number three's gross sales for the first year are estimated at $ 1,420,000. The common area maintenance of the centre is estimated at $3,349,000. Calculate the total of the minimum and percentage rent per square foot of rentable area that the tenant will be paying in first year. Page 87 of 9220. A tenant is renting 3,395 square feet of rentable space in a commercial shopping centre. The minimum rent is $25.50 per square foot and percentage rent is 3.75% of gross sales over the base sales. The tenant has monthly sales of $165,000. Calculate the amount of rent per square foot per year payable by the tenant based on the above information only. a. $2187 b. $1.84 $25.50— d. $30.45 21. A lot with area of 20,000 square feet has a building with total floor area of 80,000 square feet. Calculate the Floor Area Ratio (FAR): a. 0.25 b. 0.75 ce 4.2 Page 88 of 92‘Commercial Math |. 4,200,000 purchase price cca a% £200,000 land value 50% rule for first year Building value 3,400,000 ~ 2% ~ 43% = 3,198,720 4f.=2% Note: Land never depreciates Total sq. Ft.130, 680 * 40% = 52,272 sq. ft. buildable area. Land value 3 acres x $500,000 per acre =1,500,000 divided by 52,272 sq-ft.= 28.70 per __ [Link]. FBT = Potential income~ vacancy + other income — expenses ~ mortgage = CFBT (Cash flow before taxes) 480,000 ~ 3.5% + 15,000 ~ 40% ~ (12250 x 12) 39,920 |. R/U factor is rentable area divided by usable area of plaza Usable area x R/U factor becomes rentable area. amercorismssnnmicm —_« 53,700 A CAMs common area maintenance CAM per sa ft. of plaza = 279,176 + 62,800 = aya & 3,999.50 = 17,780 . 126,000 ~Le80 4320 = 115,680 elle area, CBO wl ot pay CAM AM = 295000 + 115 680 S246 Per sq. ft. x 2,600 sq. ft. = $64,056 3. 261,360 sq ft x 45% = 117,612 sq ft. buildable area Land value 325,000 x 6 acres 4,950,000, Building cost per sq ft. (11.75 + 62 416.50) 90.25 per sq ft + 117,612 « 90.25 10,614,483, Total cost (land + building) 12,564,483, NOI = 117,612 «8 per sq. ft 940,896 Overall rate of return (ORR) = NoI_x100 12,564,483, Page 89 of 927. Sales — operating expenses ~ cost of goods = NOI '810,000 ~ 30.25% ~ 505,325 = 59,650 NO! Value= NOL 59,650 = 313,947 Cap Rate 19% 8, Capital Gain = Sale price ~ ACB~ expenses = 1,900,000 ~ 340,000 - 75,000 __= 1,485,000 9. Purchase price = 1,450,000 — Land value 340,000 Building Value = 1,110,000 Sold Price 400,000 Property sold at profit. Hence no depreciation stouse(o Claimed CCA 0f 134,545.08 stheanswer. OV. 10. 2008 uce 16,452 + A,09Gof purchase) = 26,452.00 carom 20% sagbon rate 29040 YX i000 ~420040 UCCas on Jan 2009 22,161.60 41, Sales yearh 2,400,000 Percentage rent 2,400,000 x 4.25% = 102,000 Rent per sq ft = 102,000 + 3350 = 30.45, Percentage rent is higher than base rent. Therefore landlord will charge higher amount 12, Potential income — vacancy + other income ~ expenses - mortgage = CFBT + equity equity) 912,000 — 4.5% + 15,000 — 45% ~ (30937.50 x 12) + 2,000,000 x 100 = 5.80% }OF (return on. 13. 1,850,000-: 1% + 25,000 - 38% + 14,150,000 (equity) x 100 =ROI 7.89% Page 90 of 92[Link] sales 1,650,000 %agerent 5.75% 94,875 + rentable area 4150 22.86 per sq ft Base rent or percentage rent whichever is higher 15. Equity 5,500,000~3,300,000 = 2,200,000 "792,000 ~ 4.5% + 16,000 x 58% ~ (13750 * 12) (265,000) = CFBT 282,969 + 2,200,000 (equity) x 100 = 12.86% 16. Mortgage amount = 3,850,000 ~ 1,450,000 = 2,400,000 Interest on mortgage = 2,400,000 x 6.5% = 156,000 535,000 ~ 4% + 24,700 x 57.25 = NOI~ mortgage 308,177—156,000 $81 451571» 4480000 300-1040 S 17. Convert usable area to rentable are av sm ~2640-s211-98 we 49,448 sw Total CAM of plaza 261,452 aiden '57200 rentable area = 4.57 per sqft aaiixas7 =1920027 \) 18. Base rent + percentage rent + additional rent ~ 4 months base rent ~ landlord upgrade: rentable are = rent per sq ft 41,885 + 9000 + 39,922 ~ (41,885 +124 37,845 + 3540 = 16.34 per sq ft ‘otal rent 3962) - 19,000 Shopping centre 2 40120 + 9000 + 39150 - (40120 +123 10030) ~ 17,000 + 3540 Shopping centre 1is better. 19. Gross sales 1,420,000 x 6.25% = 88,750 8,750 + 3750 =23.66 Page 91 of 9220. Percentage rent 165,000 x 12 = Rent per [Link]. = 74,250 3395 = 21.87 persqft Minimum (base) rent is $25.50 per square foot. 1um rent is higher than percent rent, the tenant will pay $25.50 per square foot per year. a. FAR= Total floor area > Total Lot Area = 80,000 + 20,000 =4 Page 92 of 92creer ce eere cere cer ererer cre errr rece e ere reese