Q&A Hero

Q: What are the tests for determining whether an employer must pay workers' compensation to an employee?

Q: While the risks of construction lending may be less in a number of respects than those associated with land acquisition, banks still require a premium in their lending rate as compensation for the risks involved. For construction loans, banks typically require a premium above LIBOR that ranges from: A. 0-50 basis points B. 50-150 basis points C. 150-250 basis points D. 250-350 basis points

Q: When construction costs exceed the amount of the construction loan, a developer may seek to cover the gap using mezzanine financing. All of the following statements regarding mezzanine debt are true EXCEPT: A. Mezzanine debt use is less expensive than normal construction financing B. Mezzanine debt use avoids dilution of equity returns C. Mezzanine debt use is less expensive than equity financing D. Mezzanine debt use avoids the foreclosure process in the case of default

Q: A man opening a small business, while applying for a loan, intentionally omits the fact that he declared bankruptcy recently and still has bad debts. The bank makes the loan based on the information provided by the man. Discuss.

Q: Courts generally interpret workers' compensation laws to favor: A.The employer. B.The employee. C.Insurance carriers. D.The state.

Q: Since banks seldom loan 100 percent of construction costs, developers often turn to mezzanine financing to obtain necessary funds. With mezzanine debt, which of the following entities is typically pledged as collateral to the lender? A. Land B. Ownership shares in the development entity C. Personal assets of the developer D. Construction materials

Q: In each stage of the development process, the developer faces risks that can have a profound impact on the success of the particular project. Which of the following risks is of primary concern after the construction phase has been completed? A. Environmental risk B. Title risk C. Market risk D. Permitting risk

Q: Dram shop acts impose liability on: A.All merchants. B.Wholesalers. C.Tavern owners. D.Whiskey manufacturers.

Q: The developer will face a variety of costs throughout the project's life. Which of the following would be classified as a soft cost? A. Legal fees of the permitting process B. Costs of materials C. Labor cost of subcontractors for construction D. Cost of land

Q: Common carriers are not liable for: A.Rain damage caused by a downpour in Seattle Washington. B.Damage caused by robbers that steal a truck and damage the cargo. C.Damage caused by police who pull the truck over and search the cargo. D.Common carriers are not liable for damage cause in each of the above.

Q: The majority of financing for the acquisition of land for development is most likely to come from which of the following parties? A. Developer B. Banks C. Pooled equity of a limited liability corporation (LLC) D. Insurance companies

Q: In Van Stan v. Fancy Colours & Company, the plaintiff was fired and sued for intentional infliction of emotional distress. The court discussed the type of conduct that rises to the level of extreme and outrageous. Which of the following was not considered extreme and outrageous conduct giving rise to intentional infliction of emotional distress? A.Firing an employee when she refuses to have sex with her boss and then threatening to bring a legal action to challenge her rights to custody of her child, threatening to rape her, threatening to kill her and threatening to disrupt her new employment. B.Firing an employee with a bipolar disorder who needed reduced hours because of the disability by calling their home to fire them and falsely claiming it was for low production. C.Neither a or b were considered extreme and outrageous conduct in an employment situation. D.Both a and b were considered extreme and outrageous conduct even in an employment situation.

Q: Development involves a complex organization of many moving parts. Which of the following choices is often viewed as the single greatest cause of project delays and cost overruns? A. Obtaining permits B. Financing C. Effective communication between developer, architect, and engineer D. Selecting the architect

Q: Assuming the same facts as question #55 above, David is guilty of: A.Slander. B.Libel. C.Civil assault. D.None of the above.

Q: The expertise of several types of engineers must be coordinated by the architect in bringing together the final structure design. Which of the following types of engineers is responsible for specifications to achieve safety and stability for a structure's foundation? A. Soils engineer B. Structural engineer C. Mechanical engineer D. Civil engineer

Q: The strength of a successful developer lies in his or her ability to select design professionals and engineers that play vital roles in the project's plan and completion. Which of the following individuals would be most concerned, on a general level, with the design aesthetics, optimal use and preservation of the site, traffic flows, utility systems and drainage systems? A. Land planner B. Landscape architect C. Mechanical engineer D. Environmental agent

Q: David and Jay are alone in a room when David calls Jay a thief. In fact, Jay has never stolen anything in his life. Jay denies the allegation and tells David, "You're lucky I'm not a violent man because if I were, I'd beat you up." Jay is guilty of: A.Slander. B.Libel. C.Civil assault. D.None of the above.

Q: If more than one person was careless and contributed to the plaintiff's injury: A.Each tortfeasor must pay an equal share of the damages. B.The jury will decide which defendant pays how much. C.The plaintiff can recover the entire judgment from one tortfeasor or a portion from each one. D.None of the above.

Q: A developer's selection of an architect is a vital step in the development process as the architect fulfills a number of important roles throughout the life of the project. As compensation for contributions in the design phase, the architect is often given a percentage of the construction cost. For moderately complex designs, the average compensation will be: A. 1 to 2% B. 3 to 7% C. 7 to 10% D. greater than 10%

Q: Since the architect can be involved in various stages of the development process, there are a number of methods used to compensate him for his services, each of which may depend on the particular phase of development. If the architect provides pre-design services or schematics early in the development process, he will typically be compensated: A. on an hourly basis B. as a percentage of construction expenses C. by a fixed fee plus expenses D. only if he stays on the project through completion of the construction phase

Q: In a negligence suit, a plaintiff must prove: A.The defendant actually caused the injury. B.The defendant could have caused the harm. C.The plaintiff knew the potential for injury. D.Nothing. The burden of proof is on the defendant.

Q: There are a number of ways that a developer can finance the establishment of site control, each with its own advantages and disadvantages. Which of the following methodologies calls for only the initial land rent to be paid out before development actually gets under way? A. Joint venture B. Option C. Contract for deed D. Ground lease

Q: In Wells Fargo Bank v. Arizona Laborers, Teamsters and Cement Masons, the court examined the distinction between fraudulent concealment and mere nondisclosure. The court determined that: A.Wells Fargo was not liable because they had no fiduciary duty to provide information to the Arizona Laborers. B.Wells Fargo was not liable because Arizona Laborers had not specifically requested the information so they had no duty to provide it. C.Wells Fargo was liable because they have an affirmative duty to provide information to those who they know are dealing with a customer subsequent to their original transaction whether asked for the information or not. D.Wells Fargo was liable because it was shown that they actively concealed information that Arizona Laborers would have requested had they known existed.

Q: Once a specific use has been chosen for a site, the first stage in the development process, often considered the "entry ticket to development," is: A. establishing site control B. feasibility analysis C. financing D. construction

Q: The most common type of tort action is for: A.Battery. B.Negligence. C.Strict liability. D.Defamation.

Q: In Iannelli v. Burger King Corp., Iannelli was assaulted by one or more rowdy teenagers in the defendant's establishment. In determining liability, the court said: A.Commercial establishments have a duty to protect against hazards such as wet floors but no protection is due regarding fellow customers. B.Since landlords don't have a duty to protect tenants from criminal attacks, commercial establishments should never be liable based on the same reasoning. C.Commercial establishments owe a duty as insurers against criminal attacks against their customers at all times and under all circumstances. D.Commercial establishments owe a duty to protect customers from criminal attacks when there is a foreseeable risk of harm that a criminal act is likely to occur that can be prevented.

Q: Assume a retail tenant is paying a base rent of $120,000 per year (or $10,000 per month). In addition, the tenant must pay 7 percent of gross store sales in excess of $143,000 per month as percentage rent. If the store produces $170,000 in gross sales in a month, what is the total rent due for the month?A. $10,000B. $10,158C. $11,890D. $21,900

Q: John rents a movie from Video Rental Co. but instead of returning it he lends it to Sam in whose care the movie is destroyed. What tort did John commit? A.Conversion. B.Theft. C.Fraud. D.Trespass.

Q: Given the following information, calculate the load factor for this office property. Total usable area: 20,000 sq. ft., Tenant's prorated share of common area: 5,000 sq. ft. A. 0.25 B. 0.80 C. 1.25 D. 4.00

Q: What is the most common intentional cyber-related tort? A.Negligence. B.Fraud. C.Conversion. D.Defamation.

Q: Given the following information, calculate the effective monthly rent payment. Lease Term: 10 years, Concession: 1 year free rent to be spread over the term of the lease, Rental Space: 5000 square feet, Rental Rate: $20 per square foot per year, Landlord's discount rate: 10%. A. $4,676 B. $5,901 C. $7,081 D. $10,122

Q: The Pig House, a pulled pork and rib restaurant is engaged in fierce competition with The Cow House, a burger and steak restaurant. If Pig House started an untrue rumor that Cow House was buying meat from a foreign country known to have a mad cow disease problem, Pig House would be guilty of: A.Injurious falsehood. B.Intentional interference with contractual relations. C.Defamation. D.Intentional infliction of emotional distress.

Q: To the extent the tenant is permitted to alter the leased premises, the lease should clearly state when this may be done, and under what circumstances. The lease must also be clear about the ownership of such improvements once completed. Which of the following terms refers to items of personal property that are attached to the real property, are paid for and installed by the tenant, and may be removed by the tenant at the termination of the lease? A. Trade fixtures B. Anchors C. Concessions D. Expense stop

Q: Using the factual situation in #45 above, how much will the plaintiff receive in a contributory negligence state? A.$20,000. B.$80,000. C.$100,000. D.Nothing.

Q: A jury determines that the plaintiff is 20% at fault for her injury. The jury determines that the total amount of damages to the plaintiff should have been $100,000, but for the plaintiff's share of the fault. How much will the plaintiff receive in a comparative negligence state? A.$20,000. B.$80,000. C.$100,000. D.Nothing.

Q: Lenders may request that property owners of rental properties include a clause in their lease agreement that gives the lender the right to terminate the lease and evict the tenant, even if the tenant has fulfilled all of its responsibilities under the lease, in the case that the owner of the property defaults on her mortgage. This part of the lease agreement is more commonly referred to as a: A. Subordination clause B. Non-disturbance agreement C. Relocation option D. Expansion option

Q: Studies indicate that the comparative negligence principle leads to ________ frequent and ________ awards for the plaintiffs. A.Less; smaller. B.More; larger. C.Less; larger. D.More; smaller.

Q: Newer industrial parks have begun to specialize in providing space that can be configured to suit the diverse needs of various tenants. This type of industrial space is more commonly referred to as: A. Warehouse B. Plant and Factory C. Flex space D. Research and Development

Q: Dr. Hacker, a surgeon, cuts his hand on his new surgical knife. The manufacturer declares that this product met the prevailing industry standards at the time of the manufacture of the knife. This defense called: A.State of the art. B.Statute of repose. C.Contributory negligence. D.Comparative negligence.

Q: The large and generally well-known retailers who draw the majority of customers to a shopping center are more commonly referred to as: A. Outlets B. Anchors C. Strips D. Chains

Q: In retail property types, rents are quoted on the basis of which of the following? A. Usable area B. Gross floor area C. Gross leasable area D. Rentable area

Q: Brooke has fallen asleep on the beach. Eight guys get into a circle around her and one gets real close and screams, "snake" into her ear. When she jumps up screaming in fright, they all start laughing at her. What tort, if any, have they committed? A.Battery. B.Assault. C.Both of the above. D.None of the above.

Q: A statute of ________ specifies a period of time following a product sale after which a plaintiff would lose their right to bring a law suit for product related injuries: A.Repose. B.Repast. C.Repentance. D.Reproach.

Q: Retail establishments are found in a variety of forms, the simplest of which is: (Hint: fast-food franchise) A. Freestanding retail outlet B. Strip center C. Power center D. Regional mall

Q: The two most important determinants of the classification of an office property are age and obsolescence. Which of the following classes includes office buildings that are older and reasonably maintained, but are below current standards for one or more reasons? A. Class A office B. Class B office C. Class C office D. Investment grade property

Q: Injurious falsehood is sometimes called: A.Defamation of character. B.Libel. C.Trade disparagement. D.Trade discouragement.

Q: The majority of residential units in the U.S. are contained in multifamily structures, or apartment buildings that contain five or more housing units. Which of the following multifamily structures will range in height from four to nine stories and are typically found in both cities and suburbs? A. High-rise apartment buildings B. Midrise apartment buildings C. Garden apartments D. Condominiums

Q: Which statement is false concerning defamation? A.Actual damages and punitive damages can be awarded. B.Individuals may sue for defamation. C.Corporations may not sue for defamation. D.Nearly one-third of defamation suits are brought by employees against current or former employers.

Q: The effective rent calculation is a common measure used to compare the true cost of one lease to another. While there are a number of limitations to this methodology, the effective rent calculation captures: A. interlease risk B. re-leasing costs C. the advantages associated with lease flexibility D. the time value of money

Q: The basic defenses to defamation are truth and: A.Knowledge of prior bad acts. B.Privileged communications. C.Ignorance of pertinent exonerating evidence. D.All of the above.

Q: A tenant who expects her business to grow may wish to have a clause included in her lease that grants her the choice to lease adjacent space as soon as it becomes available. This lease option is more commonly referred to as a: A. relocation option B. right of first refusal C. renewal option D. consideration

Q: During an ice hockey game, Claude silently skates up to Gordie from behind and hits him over the head with his stick. Claude is promptly thrown out of the game and suspended by the league. Gordie is not injured because he is wearing a helmet. If Gordie sues Claude, Claude would be guilty of: A.Assault only. B.Battery only. C.Assault and battery. D.Nothing, because there was no injury.

Q: A lease option is a clause that grants an option holder the right, but not the obligation, to renew the lease, cancel the agreement, relocate within a property, or even expand to adjacent space. The existence of these options in a leasing agreement: A. reduces the expected present value of lease cash flows to the owner B. increases the expected present value of lease cash flows to the owner C. does not impact the expected present value of lease cash flows to the owner D. causes the expected present value of lease cash flows to equal zero

Q: While a sublease and an assignment are two distinct choices for a tenant who wishes to transfer his rights during the term of a lease, both agreements: A. transfer all of a tenant's rights to another party B. transfer only a subset of rights to another party C. grant another party the right to cancel the original lease before expiration D. maintain that the original tenant be held liable for fulfilling the original lease unless otherwise specified

Q: Oral defamation is called: A.Gossip. B.Slander. C.Libel. D.Hearsay.

Q: In Pee v. Aum, Inc., Pee developed carpel tunnel syndrome due to repetition activities required by her job. The defendant claimed that repetition injuries were not eligible for workers' compensation relief. The court determined that: A.On the job injuries must be "by accident" and that repetitive trauma injuries were not "by accident" and therefore not eligible for workers' compensation relief. B.On the job injuries must occur at a definite time and repetitive trauma injuries build up over an extended period so there is no definite time as required by statute. C.Both a and b. D.Proving that the injury was directly job related establishes "by accident" and occurring on the job are the primary issues in creating workers' compensation liability with the nature of the accident and the pinpointing of the exact time of the injury being secondary issues.

Q: Some tenants who are subject to long-term leases may desire to transfer all of their tenant rights and obligations to another party. This is commonly referred to as a(n): A. assignment B. sublease C. concession D. lease option

Q: Mike owns a pet tiger that he keeps in his back yard. He has a 24 foot fence placed around his property that he tops with barbed wire and has electrified. Maria, while drunk, accidentally drives her car into the fence and the tiger escapes. The tiger enters a neighbor's house and attacks Monica. If Monica' sues: A.Mike wins because he did everything right and the tiger's escape was not his fault. B.Mike wins only if Monica could have escaped from the tiger but chose to not run or hide from the tiger. C.Mike loses based on negligence because his duty to protect others was breached. D.Mike loses based on strict liability.

Q: When the supply of space exceeds the demand, it is common for owners to provide the tenant with a period of free or perhaps reduced rent. This is commonly referred to as a(n): A. tenant improvement allowance B. concession C. sublease D. expense stop

Q: Jimmy is annoyed because his neighbor's dog is constantly barking. He intentionally walks up to the dog in his neighbor's yard and viciously kicks it. Jimmy is guilty of: A.Civil battery. B.Civil assault. C.Both civil assault and civil battery. D.None of the above.

Q: A recent trend in commercial leases is for tenants to negotiate a cap on the amount of certain operating expenses they are required to reimburse the landlord. Such caps are usually negotiated on operating expenses thought to be at least partially controllable by the owner. Which of the following would typically be considered an operating expense controllable by the owner? A. General maintenance B. Property taxes C. Insurance payments D. Utility expenses

Q: Mega-mart suspects Roberta of shoplifting, solely because she is dressed differently than their typical customer, so store officials detain her. They find nothing improper in Roberta's belongings. Roberta most likely will file a ________ lawsuit against Mega-store. A.Malicious prosecution. B.Battery. C.False imprisonment. D.Trespass.

Q: Of the following choices, which best describes the operating expenses that you would expect to be the paid by the tenant in a net lease agreement? A. No operating expenses B. Only property taxes C. Both property taxes and insurance D. All operating expenses

Q: The intentional unjustified confinement of a non-consenting person is known as: A.Invasion of privacy. B.False imprisonment. C.Battery. D.Malicious prosecution.

Q: The rental income generated by a lease can depend significantly on the proportion of property-level operating expenses paid by the tenant. In which of the following types of leases is the tenant responsible for all operating expenses? A. Gross lease B. Net lease C. Net-net lease D. Triple net lease

Q: Congratulations! Your school has published a new catalogue and your picture is on the back cover. Actually it covers the entire back cover and is bright and glossy. Unfortunately the picture makes you look like you were asleep in class because at the precise moment the picture was taken you were blinking. Furthermore, your school never informed you that your picture was being taken and never got your consent to put it on or in the catalogue. You are mad and sue. A.The school is not liable because students have no rights on campus or in the classroom. B.The school is liable for conversion of your image. C.The school is liable for slandering your image. D.The school is liable for invasion of privacy.

Q: The choice of which method to use in constructing the contracted rental rate can also be impacted by the type of property being leased. With which of the following property types would one most expect to see a percentage rent method used? A. Apartment B. Office C. Industrial D. Retail

Q: An intentional infliction of emotional distress suit arises from: A.Outrageous, intentional conduct. B.Conduct that causes emotional distress. C.Conduct that causes physical symptoms such as headaches. D.All of the above.

Q: Tony has admired Ann for months, but he has never talked to her. One day, Tony walks up to Ann, much to her horror because she's afraid of him, and gives her a hug and a kiss. Tony has committed the tort(s) of: A.Assault. B.Assault and battery. C.Battery. D.Commission.

Q: In an indexed lease, rents are dependent on a regularly reported index, most commonly the consumer price index (CPI). By using the CPI as an index rate, the risk of unexpected increases in general inflation is shifted to the __________, and therefore a _________ base rental rate will typically be required. A. Owner; higher B. Owner; lower C. Tenant; higher D. Tenant; lower

Q: A civil battery is: A.An economic threat. B.An illegal touching of another. C.A touch causing injury. D.Is the same thing as assault.

Q: In commercial leases, rents do not necessarily have to be kept constant over the life of the lease term. One option is for there to be pre-specified increases in the contract rental rate over time, sometimes referred to as "step-ups" or "escalations." This type of rent treatment is commonly referred to as: A. flat rent B. graduated rent C. indexed rent D. percentage rent

Q: Sue, a secretary goes to the storeroom to get a box of paper for her department. This is a task she's performed without problem hundreds of times. This time however, she slips and hurts her back lifting the box of paper. She requires treatment and cannot sit for long periods of time so she cannot do her job. A.Sue can sue her employer in court for her injuries. B.Sue is entitled to Workers' Compensation even though her employer was not negligent. C.Sue is entitled to Workers' Compensation only if she can show that her employer was negligent. D.Sue is not entitled to anything because she assumed the risk.

Q: In contrast to rent for residential units, rent for U.S. commercial properties is typically quoted as: A. a dollar amount per month B. a dollar amount per year C. a monthly cost per square foot D. an annual cost per square foot

Q: A tort resulting from an injury following a failure to use reasonable care is a/an ________ tort. A.Negligence. B.Intentional. C.Fortuitous. D.Strict liability.

Q: When securing a new tenant for a commercial rental property, the owner of the property might incur an additional expense that amounts to the cost of refurbishing the rental space to meet the needs of the tenant's business. The allocation of money for this added expense is more commonly referred to as a(n): A. tenant improvement allowance B. concession C. sublease D. expense stop

Q: False arrest is also called: A.False imprisonment. B.False prosecution. C.Malicious imprisonment. D.Malicious prosecution.

Q: For most commercial property types, lease lengths can vary considerably. Therefore, both parties must tradeoff between the advantages and disadvantages associated with particular leasing terms. Owners may prefer longer leases for all of the following reasons EXCEPT: A. Delay of re-leasing costs B. Reduction of risk associated with declining interest rates C. Gain flexibility D. Stability of future cash flows

Q: Maria is driving at night in a very heavy rain. She is driving under the speed limit but accidentally leaves the road and drives across Mike's lawn leaving long deep tread marks. A.Maria has committed a civil trespass and will be liable for compensatory damages. B.Maria has committed a civil trespass and will be liable for both compensatory and punitive damages. C.Maria has committed both a civil and criminal trespass and will be liable for compensatory damages and may suffer criminal penalties. D.The darkness and rain along with Maria's lack of intent frees her from all liability.

Q: Once possession and control are conveyed in a lease agreement, the owner must provide the tenant with uninterrupted use of the property without any interference from any entity that may threaten to impose upon the tenant's leasehold interest in the property. In other words, the tenant is entitled to which of the following? A. Quiet enjoyment B. Tenant improvement C. Concession D. Expansion option