PM chapter 2

legal in California.

A situation where the owner only cares about the rent money and not about tenant services, repairs, taxes, or other property concerns is NOT negative cash flow. slumlording. legal in California. milking the property.

a formal fiduciary relationship.

A trust is also called an employer-employee relationship. an independent contractor-principal relationship. a principal-agent relationship. a formal fiduciary relationship.

Set up his/her own accounting, recordkeeping, and management systems.

After all necessary information and documents has been given to the manager in the takeover process, what should the manager do? Make whatever changes he/she determines are necessary. Set up his/her own accounting, recordkeeping, and management systems. Follow existing procedures and system just as they are. Meet with the owner to determine what areas need the most attention.

Evaluate whether or not he/she wants to manage the property.

After determining the type of working relationship the owner and manager will have and developing a management proposal, what should the manager do next? Determine what compensation he/she will want. Sign the management contract. Set up a management system for the property. Evaluate whether or not he/she wants to manage the property.

A proposal

An analysis of the property's current physical, financial, and operational status compared to other properties in the market is called what? A marketing plan A proposal A comparative market analysis An appraisal

However often the management agreement dictates

How often should the manager provide the owner with property reports? Weekly Monthly Annually However often the management agreement dictates

Refuse to manage the property.

If trust and respect do not exist between the owner and the manager, what should the manager do? Revise the management plan. Renegotiate the management contract. Ask for higher compensation. Refuse to manage the property.

forego contacting the owner.

In the case of an emergency that calls for a quick decision, the manager should not use his/her best judgment. handle the emergency. contact the owner to discuss the situation. forego contacting the owner.

Income tax laws

The main difference between an employee and an independent contractor is an issue of control as established by what? The management agreement Income tax laws Amount of taxes withheld from wages The management proposal

Confusion

The management contract is designed to eliminate what? Cause for legal action in case of breach of contract Confusion The owner's control Excuses from the manager

ensures residential rental units meet a minimum standard of habitability, consistent with health, safety, and building codes.

The manager cannot be held liable if he/she ensures residential rental units meet a minimum standard of habitability, consistent with health, safety, and building codes. violates fair housing laws. violates credit laws. mishandles trust funds.

an independent contractor.

The property manager is most often an employee. an independent contractor. a trustee. a trustor.

State law

What determines the extent an owner is liable for the acts of the manager and the manager's employees? The management agreement Local law State law Federal law

What the owner's goals are

What information is critical for the manager to know when creating a management proposal? What the compensation will be What the owner's goals are How much maintenance the manager will be responsible for How much space and how many tenants are on the property

An agency relationship

What is formed when one person authorizes a second person to represent him/her to a third person? A management agreement A management relationship An agency relationship An agency contract

Owners do not want to deal with withholding taxes.

What is one main reason property owners frequently hire independent contractors instead of employees to manage their properties? Independent contractors are more experienced. Owners want less control over the management tasks. Owners do not want to deal with withholding taxes. The manager wants to work for multiple owners at the same time.

1 year

What is the minimum length of time a management contract should be valid? 1 year 3 years 5 years 10 years

The termination clause

What part of the management contract will dictate when and how the owner or manager can end the working relationship? The manager's duties The owner's responsibilities The termination clause The manager and owner's liabilities

Principal and agent

When one person authorizes a second person to represent him/her to a third person, what are the first and second persons called? Agent and manager Broker and agent Principal and beneficiary Principal and agent

Whether or not the manager should set up a trust fund for security deposits

When the manager is reviewing existing policies with the owner, which of the following is not necessary for them to review? Whether or not pets are allowed on the property Whether or not the manager should set up a trust fund for security deposits What types of leases are acceptable What the tenant rules and responsibilities are

Throughout the entire state

Where is rent control legal in California? Only in San Francisco Throughout the entire state In some cities Nowhere

List of current tenants

Which of the following components is NOT included in the management contract? Termination conditions Allocation of costs List of current tenants Risk management

Eminent domain

Which of the following is an example of impossibility of performance? Sale of property Manager's mental incompetence Eminent domain Bankruptcy

Contract expiration

Which of the following is not a reason for early contract termination? Property loss through foreclosure Owner incapacity Mutual agreement Contract expiration

List of tenants

Which of the following is not included in a management proposal? Property manager's experience Reporting guidelines Description of the property List of tenants

Using an employee

Which of the following should not be a chosen method for a manager to stay in touch with an owner? Sending an email Making a phone call Using an employee Writing a newsletter

The owner has the right to terminate the management contract according to the terms of the contract.

Which of the following statements is TRUE? The owner does not have the right to enter the premises after the management contract is signed. The owner does not have the right to enter into contracts after the management contract has been signed. The owner has the right to terminate the management contract according to the terms of the contract. The manager has the right to hire and fire regardless of the terms of the management contract.