sc property management exam
Fortunes Law Curve
Rate ÷ Income ÷ Value ×
A TRUST ACCOUNT MUST BE
TITLED TO INCLUDE THE WORD TRUST OR ESCROW
Office Park or Business parks
also industrial parks
commingling
combining trust funds w/ PM biz or personal funds
lead based letters
due to all home built before 1978, must be handed and signed before lease is signed.
business incubators
helps new / start up company by offering office space
what are examples of special-purpose properties?
hotels, resorts, nursing homes, theaters, scools, church, cemetery, etc.
Routine Maintenance
regular housekeeping
ROI
return of investment
condemnation
the process of taking private property for public use.
Gross Lease
(also called a straight lease) - the tenant pays a fixed amount and the owner pays all other expenses.
Triple Net Lease
(net) + (net-net) + agreed on items of repair and maintenance
TO QUALIFY FOR A LICENSE YOU MUST (6):
1. BE 21 (BROKER, PMIC, OR BIC) 2. BE 18 (SALESMAN OR PROPERTY MANAGER) 3. BACKGROUND CHECK 4. GRADUATED HIGH SCHOOL 5. SUBMIT PROOF OF COMPLETION OF EDUCATION 6. PASS THE EXAM
WHAT ARE 3 PENALTIES FOR DISCRIMINATION
1. COMPENSATE FOR DAMAGES 2. PROVIDE EQUITABLE RELIEF (MAKE HOUSING AVAILABLE) 3. PAY THE GOVERNMENT A PENALTY
Maintenance program
1. Preventive maintenance 2. Routine inspections 3. Handling maintenance requests 4. Control plans
*WHAT ARE ILLEGAL DISCRIMINATIONS* (7)
1. RACE 2. CREED/RELIGION 3. COLOR 4. SEX 5. NATIONAL ORIGIN 6. FAMILIAL STATUS 7. DISABILITY 8. SEXUAL ORIENTATION (POSSIBLY)
powers are duties of commission
1. determining the standards for qualification and eligibibility of applicants for licensure 2. conducting disciplinary hearings on alleged violations of this chapter and regulations promulgated under this chapter and deciding disciplinary actions as provided in this chapter for this found in violation 3. recommending changes in legislation and promulgating regulations governing the real estate industry relative to the protection of the safety and welfare of the public 4. establishing a fee schedule through regulation
an unlicensed employee of the owner of a multi unit rental property or an unlicensed individual who works under the supervision of a licensee is permitted to perform only the following duties (in multi units):
1. maintenance 2. clerical / adminstrative support collection of rents which are made payable to the owner or real estate company 3. showing rental units to prospective tenants 4. furnishing published info 5. providing applications and lease forms to the owner or licensee for approval
What are considered good reasons to defer maintenance on a property?
1. not enough time or money 2. seasonal or weather conditions 3. property is being sold "as-is" 4. parts or labor unavailable
no broker in charge or property in charge license may be issued or renewed for an applicant unless:
1. the applicant has an ownership interest in the applicant's company 2. is actively engaged in the operation and management of the company
an unlicensed employee or an unlicensed employee working under the supervision of a licensee may not:
1.discuss, negotiate, or explain a contract, listing, buyer agency, lease agreement, 2. deviate from rental price set by owner 3. approve applications or leases 4. conduct or host an open house or manage on site sales office 5. show property (except in multi-unit housing) 6. answer questions regarding company listings, title, financing (or other info that is not publicly available) 7. be paid solely on the basis of real estate activity (commission) 8. negotiate or agree to compensation with a licensee
HOW MANY MEMBER ARE WITH THE SC REAL ESTATE COMMISSION
10
when can you evict a tenant?
5 days after rent is due
How many members of Real estate commission and who elects them?
9 members 6 who actively practice real estate elected from congressional districts 2 appointed by the governor - non real estate 1 elected by the other 8 real estate member
Functional obsolescences
Because rapid technology change industrial loss
How can an agency relationship be terminated in the eyes of the law?
Death. Destruction of property. Title lost. Bankruptcy. Law changes. Performance
Physical
Depreciation has 3 categories economic, functional
Lighted walkways
Determine for criminal activity
Landlord may not dispose of property left in unit by tenant. T/F
False. $500 or less may be disposed of. Over $500 landlord is not liable for property unless negligent.
landlord can evict for a noncompliance reason after problem persists for 30 days. T/F
False. 14days
If landlord does not attempt to re-rent property they can sue tenant for damages. T/F
False. This would be considered acceptance of abandonment and lease is terminated by landlord
the owner is required to pay for any equipment or facilities beyond the building standard, such as additional staircases, partitions, doors, truck docks, or sprinkler systems. T/F
False. the tenant is required to pay anything beyond building standards
conversion/embezzlement
"borrowing" $ from trust account for other expenses
steering
"directing white client to a white neighborhood"
blockbusting
"panic selling" encouraging consumers to move out by saying a certain "protected class" is moving to the area
molds
#1 environmental concerns. Buildings sealed to prevent heat or cooling loss host the perfect mold-growth environment: limited air flow, continued condensation, poorly installed stucco, and poor drainage. Once water gets inside, it is trapped. Molds also like temperatures between 40 and 80 degrees and a relative humidity of about 55%—exactly the conditions in which humans also thrive. As a result, indoor air quality may be 10 to 200 times worse than the outdoor air.
up to how much money & to who does it go to for a license renewal?
$10 can go to the SC real estate commission education and research fund - must be established as a separate and distinct account within the office of the State Treasurer.
What is the penalty for lead based paint non disclosure?
$11,000 per incident
civil penalties
$16,000 for the first offense, and up to $65,000 for a third violation within seven years. The time limitations pertain to real estate companies. In the case of individuals, there are no time limitations for multiple offenses
how to reinstate certification
$25 per month up to 6 months after 6 months reinstate
FINE FOR CFC LAW VIOLATION
$25,000 PER DAY
IF THE COMMISSION FINDS THAT THEY HAVE GROUNDS FOR DISCIPLINE, YOUR FINE MAY BE*
$500-$5000 FOR EACH VIOLATION
What dollar amount does the magistrate courts have up to?
$7500. If its more, then it has to go to civil side of circuit court
Familial status
minimum for establishing familial status is the presence of at least one individual in the family who is younger than 18, or the presence of a pregnant woman, or one who has or is obtaining custody of children
New construction maintenance
performed at the request and expense of the tenant, it is a category of maintenance closely tied to leasing and tenant relations. upgrading is when it's extensive
Institute of Real Estate Management
publishes a series of income and expense analyses for all types of properties including apartments, office, condo co-op, retail, and subsidized housing
direct mail
quickest way to lease a large building
strengthening a property's earning power
raise rents and strive for better operating efficiency
price of labor
rises faster than that of any other commodity, and higher rents as a result
preventive maintenance
routine maintenance and inspections to keep property in good working order
Leasing Agent
sales people skilled in marketing, communicating, and closing sales of themselves and properties
Track marketing cost
see if all is working
What is the purpose of antitrust laws?
to promote competition in an open marketplace.
Fair Housing Amendments of 1988
added two of the protected classes previously mentioned: familial status and handicap.
National Affordable Housing Management Association, NAHMA
advocates on behalf of multifamily property managers and owners who are involved in affordable housing
reappraisal lease
agreement rent will be determined by independent appraiser. need to very CLEAR and unambiguous.
valuable consideration
all lease contracts must contain some type of valid and value consideration
after-tax cash flow analysis
allows the owner to analyze actual return on investment after taxes and decide whether it is economically more advantageous to keep the property, invest more money in it, refinance it or sell it. Also, the owner may use the manager's operating reports, particularly the cash flow, as a "report card" or measure of the manager's performance
expense stop
alternate method of escalation; the landlord is obligated to pay expenses up to a certain dollar figure per square foot per year; the excess is prorated to tenants
general agent
may act on behalf of the principal on a range of matters and may obligate the principal to any contracts signed by the agent that are within the scope of that agent's duties. This relationship usually is long-term
when does a sc real estate commission's term commence?
on the te date of election or appointment is certified by the Secretary of state
one of the members needs to be elected how? (on the sc carolina real estate commission)
one elected from each of the seven congressional districts by a majority of house members and senators, representing the house and senate districts located within each of the congressional districts
a lease is...
only the evidence of what you legally possess, the right to use someone else property
estate
or tenancy-type and amount invested in properties by tenants
Merchant's Association
organization of shopping center tenants, facilitates joint advertising
What is retaining risk?
out-of-pocket funding of losses
escalation clause, or passthrough clause
overs the unavoidable annual increases in real estate taxes and operating expenses in addition to keeping up with anticipated increases in market rents.
administrative function
oversees collections, disbursements, payroll preparation, and recording, submits monthly operating reports and keeps records in all areas
who are the parties to the lease?
owner and tenant
exemptions of Fair Housing
owner-occupied smaller buildings (four units or less), single-family housing sold or rented without using a real estate agent, and housing that is owned and/or operated by organizations and private clubs that limit occupancy to members
3 factors managers look at when using concessions
owners financial position, competition in market and urgency of prospects to move in
what is another term for blockbusting?
panic selling
subletting
partial transfer of tenants rights to a 3rd party
who appoints the two members representing the public who are not professionally engaged in the practice of real estate?
the governor (with advice and consent of the senate)
resident manager
the most important member of the apartment building staff.
absorption
the net change in the amount of occupied space from one period to the next period - the space "absorbed" by tenants - includes construction of new space and demolition
how is the 10th and final member of the sc real estate commission selected?
the nine elected and appointed members shall elect from the state at large one additional member who must be in the active practice of real estate.
absorption rate
the number of square feet that have historically been leased in the market area
capitalization rate
, an analysis of the projected net operating income (NOI). For comparison and measurement purposes, return is expressed through capitalization rates. Essentially, the capitalization rate converts future income to a present value;
Ground Lease
A lease of land only
Apartments are usually what type of lease? (payment wise)
Gross lease
Claim adjusters
Hurricane & earthquake prop mgr role
optimum rent
Ideal Rent for a specific type of unit
Commercial Property
Income producing properties
Office Property
Income-producing property where services are rendered.
Commercial Property
Income-producing property; public accomodation
Retaining the risk
Increasing insurance deductible is
Night janitor
Individual commercial office cleaned by
Freight trucking industries
Industrial firms leave congestive metro area
Market oriented industries
Industries rely on large populations, growth trends
Low occupancy will result in ?
Lower rents
A. SOMETHING THAT SIGNIFICANTLY AND ADVERSELY AFFECTS THE VALUE OF REAL ESTATE
MATERIAL ADVERSE FACT
Personal property
Own of cooperative
Three Pronged approach
Personnel, Equipment, and Procedure
WHAT ARE PROTECTED CLASSES
RACE, COLOR, RELIGION, NATIONAL ORIGIN, SEX, FAMILIAL STATUS, OR HANDICAP
WHAT DEGREE DO YOU HAVE TO HAVE TO GET A LICENSE
REAL ESTATE DEGREE
IF THE BUYER ASKS YOU ABOUT INFORMATION CONCERNING SEX OFFENDERS, WHAT SHOULD YOU DO
REFER THEM TO THE LOCAL AUTHORITIES WHERE THEY CAN OBTAIN A CURRENT LIST
ALL DEMOGRAPHIC AND ECONOMIC INFO FOR THE SUBJECT REGION
REGIONAL MARKET ANALYSIS
What is protected under the fair housing act?
Race, color, religion, national origin, sex, family status (people with children, this is NOT based on marriage), and handicap (disability)
Employee, employer
Relationship that colleges, private institution
WHAT SHOULD REMAIN IN THE TURST ACCOUNT UNTIL THE LEASE OR RENTAL TRANSACTION EXPIRES OR IS TERMINATED
SECURITY DEPOSITS, PET DEPOSITS, ADVANCE RENTALS
SHOWING WHITE PEOPLE HOMES IN WHITE NEIGHBORHOODS AND SHOWING BLACKS THEIR OWN NEIGHBORHOODS
STEERING
ASSOCIATED LICENSEES
SUBAGENTS
THE LAW REQUIRES THAT A SEPARATE RECORD BE MAINTAINED FOR EACH INDIVIDUALS MONEY BEING HELD IN THE TUST ACCOUNT
SUBSIDIARY ACCOUNT LEDGER
AN EXCERPT FROM THE GENERAL LEDGER PERTAINING ONLY TO THE FUNDS BELONGING TO ONE PARTICULAR INDIVIDUAL, PROPERTY, OR TRANSACTION
SUBSIDIARY LEDGER
WHEN THE LEASE EXPIRES AND THE TENANT REFUSES TO VACATE
SUFFERANCE
Tenant turn owner rent loss collection coast higher
Subsidized housing mgr as other type of housing observable differences
Management Plan
The financial and operational strategy for the ongoing management of a property
Allocation
To distribute
Net leasing
To insure continuity from store to store franchising chains prefer
Property managers can determine a more realistic picture of a property's income potential by forecasting the income and expenses for how many years out? a. 3 b. 4 c. 5 d. 6
c. 5
Tenancy at Will
estate gives the right to posses for an indefinite period. Terminated by death or termination by either party.
estate period to period
estate has a STARTING date with out ending date, month to month, not terminated by death
when does SC certification ned to be renewed
every 2 years before June 30 cannot work if not renewed
Most important inquiries or qualification
exact zoning status required by a prospect. industries handling hazardous materials, the availability of hazardous material disposal sites also may be a critical factor
What are industrial managers concerned with achieving?
expansion & potential workforce
Mixed-use developments
expansion of planned unit developments; Generally, the MXD is a combination of retail, office, and residential areas, even sometimes including light industrial properties. Hotels been doing this
Land employment density
expressed as the ratio of the number of principal shift employees to total land area.
Milking and slumlords
extracting every possible dollar from the property by owner without putting any money back into the property
FCRA
fair credit report act; send letter explains why they did not qualify
Fair housing Law SC
file to human affairs commission must be filed 180 days after incident and be completed in 100 days
Dun and Bradstreet reference book
financial status of commercial or industrial tenants can be ascertained
SC real estate commission has power to
fine, suspend and revoke licenses.
What is corrective maintenance?
fixing what is broken
Sale Leaseback Agreement
guaranteed long-term lease. The corporation will then sell the chosen site to the investor and simultaneously execute a long-term lease
National Emission Standards for Hazardous Air Pollutants (NESHAP),
guide matters involving air pollution.
maximum percentage lease
has a clause setting a ceiling on the amount of rent to be paid over the course of the year,
valid lease
has all the essential elements and can be enforced
Escalation Clause
can be tied to outside factors other than economic indexes. Union pay scales, taxes, and overall operating costs for the premises are common controlling factors.
fair housing law federal
can complain up to ONE year of alleged incident
routine maintenance
can consume as much as 18% -26% of the budget in commercial properties
universal agent
can do anything a principal can do for them selves needs a power of attorny
Institute of Real Estate Management's (IREM's) Journal of Property Management
cost is the overriding concern for most respondents, followed by bus and highway accessibility, environment of the property, and labor market, in that order
Foreign Trade Zones (FTZ)
allows a company to import finished goods or component parts and to warehouse them duty free until shipped
Americans with Disabilities Act, ADA
applies to any management company that has 15 or more employees. does not encourage, authorize, or prohibit drug testing that is not considered a medical exam
tax breaks
available to the party who makes these changes: a maximum of $15,000 deduction and a tax credit of 50% of eligible access, maximum $10,250
What happens if tenant turns off utilities?
immediate abandonment
estate from period to period
lease-hold estate that is automatically renewed for periods of time until either party gives notice
estate for years
leasehold for a specific period not terminated by death or either party
Enterprise Zones
local governments may grant tax concessions to businesses enterprises in return for the creation of new jobs.. some port cities have created free trade zones - you can import goods without paying taxes immediately
loft
low rent apartments that were converted from a manufacturing or storage facility
Revival
lowest part of the business cycle (Nadir)
SC RE courts
magistrates $7500 under and circuit court above $7500
infastructure
man-made urban features: roads, highways, sewage, utility facilities, etc.
Resource Conservation and Recovery Act of 1976 (RCRA)
management program intended to regulate the handling, storing, and disposal of hazardous substances. The EPA issues regulations that implement RCRA. important for industrial managers and some commercial managers
loyalty
means that the property manager must always put the property owner's interests first, above his or her own interests.
duty of obedience
means that the property manager must carry out, in good faith, the property owner's instructions
randon
naturally occurring, ororless, carcinogen, of radio active gas
Resource Orientated Industries
need to be located near their source of raw materials or supplies to minimize materials transportation costs. An example is a steel plant, because it needs to be located close to its fuel or bulky raw materials, such as iron ore
ECOA equal opportunity act
no discrimination: race, color, religion, national origin.sex, marital status, age and receipt
acknowledgment
witness by court: noterized
independent contractor
workers who control their own work and pay their own taxes
Active resorts
55 to 65 age sell larger homes move into
PROGRAMS FOR THE ELDERLY AGE RANGE
55/62
IF YOU FAIL THE EXAM, YOU CAN BE REEXAMINED WITHIN WHAT PERIOD
6 MONTH
COMPLAINTS AT THE STATE LEVEL MUST BE FILED WITHIN WHAT TIME PERIOD
6 MONTHS
What clause protects owner from missing rising market rates?
escalation clause
Step up Clauses are also called...
graduated or escalation leases
WHAT IS A BREACH OF TRUST AND PUNISHABLE AS A CRIME
CONVERSION
index lease
A lease containing an escalation clause that is tied to a certain index.
Multi Family Units
apartment buildings of 5 or more units
Gross leases are mostly used in__________ properties.
apartments
HOW MANY ARE ELECTED AND APPOINTED FROM THE STATE AT LARGE AND SOMEONE WHO IS ACTIVE IN THE REAL ESTATE INDUSTRY
1
SC LAW REQUIRES HOW MANY OPERATING SMOKE DETECTORS ON EACH LEVEL OF RESIDENTIAL PROPERTIES
1
COMPLAINTS FILED ON THE FEDERAL LEVEL MUST BE FILED IN _____ OF THE EVENT
1 YEAR
landlords must give ___ hrs notice before entering unit.
24
IF YOU LICENSE IS REVOKED, WHEN CAN YOU REAPPLY
3 YEARS
HOW MANY HOURS DO YOU HAVE TO COMPLETE TO GET A LICENSE
30
HOW LONG DOES THE COMMISSION GIVE A RESIDENT LICENSEE TO PROVIDE NOTIFICATION THAT THEY AREA A NONRESIDENT
30 DAYS (IN WRITING)
how long do you have to give back security deposit?
30 days
VARIANCES OR RESTRICTIONS IN ZONING
BUILDING CODES AND REGULATIONS
NO VENTING BAN
CHLORFLUROCARBONS (CFC) LAWS
Leasehold estates that continually renew until either party gives notice to quit are called A. tenancy at will B. Tenancy at sufferance C. Estate from period to period D. Estate for years
C. estate from period to period
Promoting community watch programs
Effective way to reduce crime
How can an agency relationship be terminated by acts of involved parties?
Mutual agreement. Fired by principal. quitting. disloyalty
ALL PERTINENT INFORMATION PERTAINING TO THE RENTALS IN THE SUBJECT NEIGHBORHOOD
NEIGHBORHOOD MARKET ANALYSIS
USED IN OFFICE AND RETAIL PROPERTIES THAT REQUIRES TENANT TO PAY PART OR ALL OF THE OPERATIONAL AND MAINTENANCE COSTS OF THE PROPERTY
NET LEASE/TRIPLE NET LEASE
Inside finished surface of the dominant portion
Rentable area is computed by
Management agreement & mortgage
Which of the following will be in a permanent file
Statute of Frauds
agreements can be made orally, but have to be in writing in order to be enforcable.(oral agreements can be forcable if less than one year)
An apartment building with 50 units has a gross potential annual income of $300,000 per year and an estimated vacancy rate of 6 percent. The management firm has computed an adjusted per unit fee of $300 for this property. What percentage management fee should be charged? a. 5 percent b. 6 percent c. 7 percent d. 8 percent
a. 5 percent $300 (fee) x 50 (units) = $15,000; $300,000 (possible gross annual income) x .94 (vacancy factor) = $282,000 (gross collectible income). $15,000 / $282,000 = 5%. Adjusted per unit fee divided by gross collectible income = percentage management fee
A housing discrimination charge must be filed with the SC Human Affairs Commission within a. 6 months b. 1 year c. 2 years d. 30 days
a. 6 months
Which of the following certifies that an insurance policy has been purchased as shown as an abstract of the most important provisions of the insurance policy? a. Certificate of Insurance b. Insurance Binder c. Certificate of Authenticity d. Proof of Insurance
a. Certificate of Insurance
The Federal Anti-trust law which prohibits property managers from conspiring to set a commission or fee is called the a. Sherman and Clayton Acts b. Equal Credit Opportunity Act c. Real Estate Settlement and Procedures Act d. Fair Housing Act
a. Sherman and Clayton Acts
In SC, applications for any real estate license must a. be completed before taking the written exam b. contain a picture of the applicant c. be made before May 31st of each year d. be accompanied by a sworn statement attesting to the applicant's character
a. be completed before taking the written exam
The services you must give to a customer do not include: a. confidentiality b. accounting for money and property received c. providing a meaningful explanation of agency relationships d. providing an explanation of the scope of services to be provided
a. confidentiality
When purchasing a condominium, it must be owned in a. fee simple b. defeasible simple c. fee simple subject to conditions subsequent d. any of the above
a. fee simple
Leases often provide for automatic cancellation if the a. property is condemned b. premises are partially damaged c. lessee becomes unemployed d. lessor becomes bankrupt
a. property is condemned
The first step for a property manager is to a. identify owners objectives b. identify tenant requirements c. negotiate the commission d. have the property appraised
a. identify owners objectives
Mark, a licensed broker, procures a ready, willing, and able buyer for his seller-principal. The seller first accepts the buyer's offer in writing, then experiences a change of heart and withdraws the original acceptance. In this situation, the broker a. is entitled to collect a commission b. is out of luck because the transaction was never completed c. may sue the broker d. may retain the deposit as commission
a. is entitled to collect a commission
The SC Real Estate Commission has the authority to a. make and enforce rules by which all licensees must abide b. compose the examination questions on the state exam c. administer the exams given at the testing sites d. enact the laws that govern real estate licensees
a. make and enforce rules by which all licensees must abide
When describing the premises to be rented, an apartment lease should include the a. street address of the building b. legal description of the property c. dimensions of the space d. floor plan of the building
a. street address of the building
Due to the risk involved when conducting business, property managers may look to purchase types of insurance to cover potential liability. Concerning risk management, this step would be an example of a. transfer it b. control it c. retain it d. avoid it
a. transfer it
An industrial building of 11,000 square feet costs $370,500, and the owner wants a 12% annual return on the investment. The minimum rent per square foot the manager should obtain for the space is a. $2.22 b. $4.04 c. $6.23 d. $7.37
b. $4.04 $370,500 x .12 (desired annual return) = $44,460 / 11,000 sq.ft. building = $4.04
How many members are in the SC real estate commission a. 12 b. 10 c. 8 d. 9 e. 7
b. 10 members
Many property managers may choose to establish a reserve fund for each property. A reasonable percentage to put in the reserve fund for unforeseen issues would be a. 5-10% b. 10-15% c. 15-25% d. 25-30%
b. 10-15%
In SC, if a landlord wants to terminate a month-to-month tenancy, how much notice must the tenant receive? a. 7 days b. 30 days c. 60 days d. no notice
b. 30 days
Which of the following is TRUE of mandatory continuing education? a. 8 hours are due every year b. 8 hours are due every 2 years c. it is required of every real estate licensee d. it is required to maintain inactive status
b. 8 hours are due every 2 years
concession
benefit or boon to the tenant because the owner agrees to less than the original terms in order to influence a prospect to become a tenant
As a responsibility of conducting business, there are several tax forms a property manager must have prepared. The form used to report tax exemption by the employee is a. Employment Identification Number (EIN) b. Employee Allowance Withholding Certificate (W-4) c. Employment Eligibility Verification (I-9) d. Employers Quarterly Tax Return (941)
b. Employee Allowance Withholding Certificate (W-4)
The type of insurance to cover medical bills and some lost pay as a result of injury to an employee is called a. Errors and Omissions b. General Liability and Workers Compensation c. Office and Floater d. Surety Bond
b. General Liability and Workers Compensation
According to the statute of frauds of MOST states, a. a lease must be in writing to be enforceable b. leases for more than one year must be in writing to be enforceable c. leases must comply with the Uniform Residential Landlord and Tenant Act d. leases must be on standard forms
b. Leases for more than one year must be in writing to be enforceable
In South Carolina, real estate license law is administered by the a. South Carolina Human Affairs Commission b. South Carolina Real Estate Commission c. South Carolina Association of Realtors d. Department of Housing and Urban Development
b. South Carolina Real Estate Commission
concessions
benefits tenant to get them to rent cost owner $$ rebates, free rent lent of tome, tenant alteration, defraying moving cost, expansion option
manager's cash flow analysis
enables the owner to evaluate the return on the property investment
Under SC law, which of the following is exempt from continuing education requirements for license law a. a licensee who is 65 and has been in the business for 20 years b. a licensee who has completed a property management course c. a licensee who is a referral company d. a licensee who wishes to change from inactive to active status
b. a licensee who has completed a property management course
The SC Real Estate Commission may investigate for all of the following reasons EXCEPT a. its own initiative b. a written complaint submitted by an agent about a cooperative commission arrangement c. the director has reason to believe that a licensee is unfit to practice d. a written complaint submitted by a disgruntled customer
b. a written complaint submitted by an agent about a cooperative commission arrangement
All of the following are considered Essential Services according to the SC Landlord and Tenant Act EXCEPT a. heat b. air conditioning c. electricity d. hot water
b. air conditioning
The Jones v. Mayer upheld the Civil Rights Act of 1866 by prohibiting a. some racial discrimination b. all racial discrimination c. sexual discrimination d. discriminatory advertising
b. all racial discrimination
The type of ownership providing the owner with a proprietary lease and the owner pays no rent a. condominium b. cooperative c. apartment d. PUD
b. cooperative
Security deposits received in the agent's personal rental transaction are not required to be deposited in a trust account? a. true b. false
b. false
If a South Carolina Real Estate licensee guarantees a buyer a future profit, he should know that a. he is doing the buyer a favor b. he is not allowed to do this by SC license law c. he must be a broker and five years experience d. he should also give the buyer legal advice
b. he is not allowed to do this by SC license law
The owner of real estate who leases it to another is called a. vendor b. lessor c. grantor d. trustor
b. lessor
When a licensed broker-in-charge changes his or her place of business a. a new license will be issued by the SC Real Estate Commission immediately b. the broker-in-charge must notify the SC Real Estate Commission within 10 days c. a new license will be issued for a full term d. the broker-in-charge's new address must be approved by the SC Real Estate Commission
b. the broker-in-charge must notify the SC Real Estate Commission within 10 days
noncompete clause
grant a tenant an exclusive right to operate w/o competition in the property (might need to pay extra)
net operating income
gross collectable income - all operating expenses
An apartment building has fixed costs of $75,000 per year and a variable costs ratio of 25 percent. What is the break-even point for the property expressed in dollars per year? a. $68,750 b. $75,000 c. $100,000 d. $300,000
c. $100,000 BE = $75,000 (FC) / 1.00 - .25 (VCR) = $100,000
A commercial property containing 35,000 square feet is rented at $6 per square foot. However, actual retail collections over the past year amounted to only $168,000. What occupancy rate should be used in the budget forecast for the next year? a. 48% b. 78% c. 80% d. 85%
c. 80% The same percentage that was realized this year.m 80% should be used in the budget forecast for the next year as it is preferable to use present rental rates for the estimates
The "Protecting Tenants at Foreclosure Act" requires the lein holder to provide tenants with _____ days notice to vacate upon foreclosure a. 30 b. 60 c. 90 d. 120
c. 90
types of leases
gross lease, net lease and percentage lease
expansion options
guarantee that a tenant may lease additional adjacent space in a property after a certain period of time.
A tenant pays rent and a security deposit. What are the regulations regarding the deposit of these funds? a. the rent must be deposited into the general account and the security deposit placed into the escrow account b. the rent must be deposited into an escrow account and the security deposit placed into another escrow account c. both the rent and the security deposit can be deposited into the same escrow account d. the rent must be sent directly to the owner and the security deposit placed into the escrow account
c. both the rent and the security deposit can be deposited into the same escrow account
A licensee who wishes to manage condominiums a. must have a broker's license b. does not need to have a property management license c. can have a provisional real estate license d. can have a time share license
c. can have a provisional real estate license
As an analytical tool, which report would be best used to determine the short term viability of a company, particularly the company's ability to pay bills? a. profit and loss statement b. net loss statement c. cash flow statement d. profit feasibility statement
c. cash flow statement
A person must be licensed as a real estate broker or salesperson if that person is a. selling his or her house b. buying a house for his or her personal use c. engaging in the real estate business d. constructing houses
c. engaging in the real estate business
In SC, the following requirements for obtaining a broker's license EXCEPT a. having successfully completed 150 hours of approved real estate courses b. being at least 21 years of age c. having been actively engaged as a licensed salesperson for at least 5 years d. being of good moral character
c. having been actively engaged as a licensed salesperson for at least 5 years
In SC, an unlicensed real estate assistant may perform all of the following activities EXCEPT a. compute commission checks b. answer questions about advertising c. hold an open house d. prepare and distribute flyers and promotional materials
c. hold an open house
The on-site property manager from Acme Apartments is responsible for negotiating leases for the apartments. In this position, the on-site manager a. is exempt from licensing requirements b. must have a brokers license c. must have a real estate or property managers license d. may negotiate but may not sign leases without a license
c. must have a real estate or property managers license
An unlicensed salesman negotiated the sale of real estate. The commission is payable to a. the broker b. the salesman c. no one d. an escrow holder
c. no one
A licensee on inactive status may a. receive compensation for referrals b. work as a part-time assistant showing houses c. not conduct real estate activities d. work as a leasing agent at a property management company
c. not conduct real estate activities
The heater in the water tank of a rental property is broken and the landlord has indicated the heater will be repaired in a month or so, The SC Residential Landlord and Tenant Act requires a. the tenant move promptly b. the tenant make the repairs c. the landlord make the repairs as soon as possible d. the landlord provide cold, not hot water
c. the landlord make the repairs as soon as possible
All of the following are protected classes under Fair Housing Laws EXCEPT a. race b. handicap c. value d. national origin
c. value
A tenant signs a lease that sets a minimum monthly rental rate of $600, or 6% of gross sales. If rent is computed on a monthly basis, what is the total amount of rent paid in the fourth quarter if gross sales were $8,000 in October, $11,000 in November, and $12,000 in December? a. $1,860 b. $1,800 c. $1,920 d. $1,980
d. $1,980 ($8,000 x .06) = [$480] $600; ($11,000 x .06) = $660 ($12,000 x .06) = $720 $600 + $660 + $720 = $1,980
A retail department store has a percentage lease at a rate of 2.5% of gross monthly sales. First-quarter sales were: January, $5,270; February, $4,500; March, $6,320. What was the total rent for the first three months? a. $244.25 b. $270.50 c. $289.75 d. $402.25
d. $402.25 Add three months and multiply by 2.5% $5,270 + $4,500 + $6,320 = $16,090 $16,090 x 2.5% = $402.25
In terms of financing the purchase of condos, FannieMae has instituted new guidelines that require at least __________ of units be owner occupied if using FHA loans a. 20% b. 35% c. 50% d. 70%
d. 70%
blockbusting
encouraging people to sell or rent by claiming that the entry of a protected class of people into area have a negative impact on values.
The enforcement agency over Megan's Law is a. SLED b. FBI c. Attorney General's Office d. Local Sheriffs Dept
d. Local Sheriffs Dept
The type of ownership that does not have to comply with zoning laws and subdivision regulations is a a. condominium b. cooperative c. apartment d. PUD
d. PUD
The law requiring leases in excess of one year to be in writing is the a. Anti-trust law b. Sherman and Clayton Act c. Real Estate Settlement and Procedures Act d. Statute of Frauds
d. Statute of Frauds
A broker-in-charge intends to open a branch office in a neighboring town. The broker-in-charge applies for a branch office license, giving a name that clearly identifies its relationship with his main office. The BIC names a licensed real estate salesperson as the branch office manager. Under these facts, could the BIC receive approval for the branch office a. yes, the BIC has fully complied with all requirements b. no, under the license, brokers cannot be in charge of branch offices in more than one municipality c. yes, by naming the salesperson as branch manager, the BIC is in compliance with the requirement that a broker may be in direct operational control of only one office or branch d. Yes, if the SC Real Estate Commission approves one broker acting as BIC of two offices
d. Yes, if the SC Real Estate Commission approves one broker acting as BIC of two offices
Under SC law, which of the following needs to be licensed? a. the owner of a 30 unit apartment building b. an employee of the State Housing Authority c. a man who has been appointed trustee of an estate d. a auctioneer who auctions farm land
d. a auctioneer who auctions farm land
Practicing dual-agency without the full written knowledge and consent of all parties is: a. acceptable if both parties verbally agree to the reduction in service b. acceptable if the BIC creates a form stating the intent to reduce services and both parties sign the in-house form c. acceptable if the office policy is dual or designated agency d. a violation of license law
d. a violation of license law
The SC Fair Housing Law provides protection from discrimination for all of the following classes EXCEPT a. sex b. creed c. national origin d. age
d. age
In SC, all of the following would be grounds for revoking a broker's license EXCEPT a. being convicted of forgery in SC b. guaranteeing future profit from the resale of property c. depositing escrow money into his or her personal checking account d. agreeing with a seller to accept a listing for more than the normal commission rate
d. agreeing with a seller to accept a listing for more than the normal commission rate
Which of the following statements is TRUE? a. all leases must be in writing, regardless of term b. 15 month oral lease is enforceable c. a lease of less than 6 months would have to be in writing d. an 11 month oral lease is enforceable
d. an 11 month oral lease is enforceable
The principal difference between an estate for years and an estate from year to year is that a. an estate for years is a life estate b. an estate for years cannot be terminated c. an estate from year to year must be in writing d. an estate from year to year has no expiration date
d. an estate from year to year has no expiration date
if a tenant declares bankruptcy, the PM should.. a. constructively evict the tenant b. forcibly evict the tenant c. complain to the bankruptcy court d. ask an attorney to check the latest laws and cases to determine the owner's rights
d. ask an attorney..
Which of the following activities does NOT require a real estate of property management license in SC? a. approving applications of leases b. negotiating fees c. conducting an open house d. being paid a salary to manage an agent's marketing campaign
d. being paid a salary to manage an agent's marketing campaign
In SC, licenses are renewed a. annually, in the month issued b. every two years in the month of the licensee's birthday c. on December 30 of every even numbered year d. biennially, on June 30 of each even numbered year
d. biennially, on June 30 of each even numbered year
Property owners are only concerned with the bottom line, such as converting property value into income. when estimating the owners potential return on the investment, the property manager must know the a. cash analysis b. net report c. cost approach d. capitalization rate
d. capitalization rate
The duties and powers of the SC Real Estate Commission include all of the following EXCEPT a. promulgating regulations to protect the public b. conducting disciplinary hearings c. determining the standards for licensing d. conducting investigations of a real estate office based on an irate phone call
d. conducting investigations of a real estate office based on an irate phone call
The process of monitoring, controlling, and conserving energy in a building or organization is called a. health management b. home management c. office management d. energy management
d. energy management
Which of the following actions is legal and is NOT a violation of license law a. encouraging a seller to reject an offer because the prospective buyer is a Methodist b. placing a "for sale" ad in the newspaper in anticipation of receiving a listing c. delaying a closing until a commission is agreed upon d. having the buyer client pay the commission
d. having the buyer client pay the commission
Non-freehold estates are established by a. contract for deed b. addendum c. contract of sale d. lease agreement
d. lease agreement
A licensee can be disciplined for: a. telling his/her client about stigmatizations b. disclosing stigmatizations in response to a direct inquiry c. disclosing material facts that appeared in an inspection report d. making an intentional misrepresentation in response to a direct inquiry
d. making an intentional misrepresentation in response to a direct inquiry
When conducting a property analysis, which of the following is NOT typically a consideration in determining the rental price? a. operating costs b. equipment c. competition d. shopping
d. shopping
A broker who represents a seller under an exclusive-agency listing receives two offers for the property at the same time, one from one of his salespeople and one from the salesperson of a cooperating broker. What should the broker do? a. submit the offer from his salesperson first b. submit the offer from the other salesperson first c. submit the higher offer first d. submit both offers at the same time
d. submit both offers at the same time
If a licensee violates a provision of the license law, the licensee may be subject to which of the following? a. revocation of license for a minimum of six months b. minimum fine of $500 c. hearing in front of an administrative law judge d. temporary restraining order
d. temporary restraining order
If a person feels that he/she has been discriminated against by a property manager, a complaint must be filed with a. the U.S. Supreme Court b. a local magistrate c. the real Estate Commission d. the Dept of Housing and Urban Development (HUD)
d. the Dept of Housing and Urban Development (HUD)
How must a landlord hand the security deposit? a. it can only be collected on a residential unit b. landlord must pay tenant interest on the security deposit c. at the end of the lease, the landlord cannot apply security to rent owed by the tenant d. the landlord must return the security deposit, with an itemized list of deductions, to the tenant within 30 days of the end of the lease
d. the landlord must return the security deposit, with an itemized list of deductions, to the tenant within 30 days of the end of the lease
Cap rate goes down, value goes ....
up
High occupancy rates suggest?
Raising the rent
NAME 4 ELEMENTS OF AN AGREEMENT
1. IDENTIFY PARTIES 2. CONTRACT PERIOD 3. MANAGERS RESPONSIBILITIES 4. OWNERS RESPONSIBILITIES
single office space
100 square feet, suitable for middle managers, to a 345-square-foot private office
strip centers
10000-30000 sq ft 4-10 retail spaces often owner-managed
how many members are there in the SC real estate commission and how are they appointed?
*10 members *7 of them must be actively practicing real estate (one from each of the 7 congressional districts by a majority of house members and senators) *two members representing the general public, chosen by the governor w/ advice & consent from senate *the 9 members choose a 10th member that must be actively involved in real estate
Capitalization rate
Rate of return invertir asks for investment. Wanted by investor set by market
NAME 12 THINGS A GENERAL LEDGER SHOULD HAVE
1. DATE OF TRANSACTION 2. DEPOSIT/CHECK NUMBER 3. DATES OF CHECKS 4. DATE OF DEPOSIT 5. PAYOR 6. CLIENT 7. PROPERTY ADDRESS 8. PAYEE 9. FOLIO NUMBER 10. CHECK AMOUNT 11. DEPOSIT AMOUNT 12. BALANCE IN THE ACCOUNT
NAME 4 THINGS THE SC REAL ESTATE COMMISSION CAN DO
1. DETERMINE THE QUALIFICATION AND ELIGIBILITY OF APPLICANTS 2. CONDUCT HEARINGS ON VIOLATIONS 3. RECOMMEND CHANGES IN LEGISLATION 4. ESTABLISH A FEE SCHEDULE FOR LICENSE
Three basic relationships can exist between a property manager and the individual or corporate owner of a building
1. Employer-employee relationship 2. Formal fiduciary relationship trust 3. Principal-agent arrangement
4 Steps of Business Cycle
1. Expansion 2. Recession 3. Contraction 4. Revival
NAME 3 REASONS WHY YOU MAY GET DISCIPLINED FROM THE COMMISSION REGARDING DEPOSITING MONEY (3)
1. FAIL TO ACCOUNT FOR MONIES COMING INTO HIS POSSESSION WHICH BELONGS TO OTHERS 2.. ACCEPTS DEPOSIT WITHOUT INFORMING WHO WILL HOLD THE MONEY 3. ISSUES A CHECK THAT IS RETURNED FOR INSUFFICIENT FUNDS OR A CLOSED ACCOUNT.
WHAT IS REQUIRED OF THE LEAD BASED PAINT DISCLOSURE
1. GIVE AN EPA APPROVED PAMPHLET ON LEAD BASED PAINT 2. DISCLOSE ANY KNOWN INFORMATION CONCERNING HAZARDS (LOCATION) 3. PROVIDE ANY RECORDS OF USE
WHAT ARE 4 REQUIREMENTS THE TRUST ACCOUNT MUST MEET
1. INCLUDE ALL INFO REQUIRED BY SC REAL ESTATE LICENSE LAW 2. IDENTIFY THE EXACT AMOUNT IN THE ACCOUNT AT ALL TIMES 3. IDENTIFY OWNERSHIP OF FUNDS 4. PROVIDE A CONSISTENT AND LOGICAL RECORD OF THE ACCOUNT
SC real estate commission
1. Is authorized to implement and enforce license laws 2. fine licensed violators a minimum of $500 and max of $5,000 per violation and or imprisonment 6 mnts
A BIC MUST HAVE A RECORD KEEPING SYSTEM THAT CONSISTS OF (2 THINGS)
1. JOURNAL OR ACCOUNTING SYSTEM 2. A SEPARATE RECORD FOR EACH TENANT
five general filing categories
1. Lease file 2. General correspondence file 3. Work estimates file 4. Financial file 5. Permanent file
AN UNLICENSED EMPLOYEE CAN ONLY PERFORM WHAT DUTIES (7)*
1. MAINTENANCE 2. ADMINISTRATIVE SUPPORT 3. COLLECTION OF RENT 4. SHOW UNITS TO PROSPECTIVE TENANTS 5. FURNISH PUBLISHED INFORMATION 6. PROVIDE APPLICATIONS AND LEASE FORMS 7. RECEIVE APPLICATIONS FOR APPROVAL
NAME 6 THINGS THAT A FIRM MUST HAVE IN AN AGREEMENT
1. NAME & SIGNATURES OF AN AGREEMENT 2. PROPERTY IDENTIFICATION 3. METHOD OF COMPENSATION 4. ABILITY TO CANCEL THE AGREEMENT WITH/WITHOUT 30 DAYS NOTICE 5. COMPENSATION FOR FUTURE LEASE RENEWAL 6. TERMS AND CONDITIONS OF LEASE ARRANGEMENTS
*NAME 10 THINGS AN UNLICENSED PERSON CANNOT DO*
1. NEGOTIATE AND EXPLAIN A CONTRACT 2. NEGOTIATE OR DEVIATE FROM THE RENTAL PRICE 3. APPROVE APPLICATIONS 4. TELL THE PUBLIC THAT THEY ARE IN A POSITION OF AUTHORITY 5. CONDUCT/HOST AN OPEN HOUSE 6. CANT SHOW APARTMENTS THAT ARE OCCUPIED (CAN SHOW VACANTS) 7. ANSWER QUESTIONS REGARDING LISTINGS, FINANCING, AND CLOSING ISSUES 8. BE PAID SOLELY COMMISSIONS 9.NEGOTIATE COMMISSION OR OTHER FEES 10. ENGAGE IN ANY ACTIVITY REQUIRING A LICENSE
NAME 3 THINGS A PROPERTY MANAGER CAN DO
1. NEGOTIATE RENTALS OR LEASE REAL ESTATE OR IMPROVEMENTS TO REAL ESTATES 2. LIST REAL ESTATE AND PROVIDE A CONNECTION TO LEASE OR RENT 3. ADVERTISE OR REPRESENT THE PUBLIC REGARDING REAL ESTATE
NAME 6 THINGS A BROKER CAN DO
1. NEGOTIATE SALE 2. AUCTION 3. SOLICIT A REFERRAL 4. OFFERS SERVICES AS A REAL ESTATE CONSULTANT 5. SUBAGENT WHO REPRESENTS A CLIENT IN A TRANSACTION 6. ADVERTISES
NAME 6 FIDUCIARY RESPONSIBILITIES
1. OBEDIENCE 2. LOYALTY 3. DISCLOSURE 4. CARE, KNOWLEDGE, AND DUE DILIGENCE 5. ACCOUNTING 6. CONFIDENTIALITY
Three different financial planning reports are a major part of the management plan
1. Operating budget, usually for one year 2. Five-year forecast 3. Comparative income and expense analysis
NAME 8 THINGS THAT YOU MUST CONSIDER WHEN DOING A PROPERTY ANALYSIS/APPRAISAL
1. POTENTIAL RENTAL INCOME (CAN YOU GO UP) 2. EXPENSES OF PROPERTY 3. LEASES 4. QUANTITY AND QUALITY OF SPACE 5. PHYSICAL CONDITION OF PREMISES 6. EQUIPMENT 7. HEALTH & SAFETY HAZARDS 8. EVALUATE THE COMPETITION
NAME 3 ANTI-TRUST LAWS
1. SHERMAN ANTITRUST 2. CLAYTON ACT 3. FTC ACT
WHAT DO YOU HAVE TO DO TO GET YOUR LICENSE REINSTATED (4)
1. SUBMIT PROOF THAT YOU HAVE A GOOD REPUTATION 2. SUBMIT PROOF OF EDUCATIONAL QUALIFICATIONS IF IT IS OLDER THAN 5 YEARS 3. PASS THE EXAM 4. MEET ANY OTHER QUALIFICATION THAT APPLIES TO ANY NEW APPLICANT
WHAT ARE THE DUTIES OF A BIC OR PMIC
1. SUPERVISE EMPLOYEES OR LICENSEES TO ENSURE COMPLIANCE 2. REVIEW AND APPROVE AGREEMENTS AND CONTRACTS 3. MAINTAIN REGULAR CONTACT WITH LICENSES 4. BE AVAILABLE TO THE PUBLIC (BSN HOURS) 5. MAINTAIN A WRITTEN OFFICE POLICY 6. ENSURE THAT ALL LICENSEES HAVE AN ACTIVE REAL ESTATE LICENSE 7. INSTRUCT EMPLOYEES ON THE PROPER HANDLING OF TRUST FUNDS 8. ENSURE THAT ACCURATE AND COMPLETE RECORDS ARE MAINTAINED 9. ENSURE THAT YOU HAVE BACKUP COPIES OF TRUST ACCOUNTS * NOTIFY COMMISSION BY MAIL OF ANY CHANGE TO BUSINESS NAME, ADDRESS, EMAIL ADDRESS, OR PHONE NUMBER*
routine operating costs
1. Salaries for the building staff. 2. Cost of utilities not charged to the tenants. 3. Contract services, such as lawn maintenance, elevator maintenance, Rubbish removal, and security guards. 4. Supplies and equipment. 5. Advertising and management expense
info needed to handle maintenance requests
1. Scope of the job 2. Location of the job 3. Job priorities 4. Method to accomplish each job 5. Materials needed 6. Number of personnel 7. Hours of work performed
A Residential manager will specialize in the following,
1. Size of family units, 2. the median income level, 3. population trends, 4. current employment rates, and 5. the area's social and cultural facilities
OWNERS CANNOT BE HELD LIABLE AND DO NOT HAVE THE RESPONSIBILITY TO DISCLOSE (4)
1. TELL IF THE DWELLING WAS OCCUPIED BY AN INFECTED PERSON 2. SOME DIED IN THE UNIT 3. ANY OFF-SITE HAZARD THAT DOESNT DIRECTLY AFFECT THE PROPERTY 4. GHOST OR PSYCHOLOGICAL IMPACT
What are Anti-trust violations? (4)
1. Territorial Allocations 2. Tie-in agreements 3. Boycotting 4. Price-fixing
granting concessions
1. The owner's financial and strategic position.. 2. long-range goals and urgency to lease. 3. Competition in the area market 4. Urgency of the prospect's need to move
Superregional center
1.5 million square feet or more of shops and appurtenant areas.
a lease requires a minimum rent of $1200 plus a 1% increase for every point the consumer index rises during the course of a year. If the index rises 6 points during the first year of he lease, what will the rental level for the next year be?
1200 x 06 = $ $72 1200 +$72 = 1272
How many days does a landlord have to fix an issue before constructive eviction is warranted?
14
When is a unit considered abandoned by tenant?
15 days after default or unexplained absence
upon written notification from a tenant that a smoke detector is deficient, how long does the owner have to replace the detector?
15 days.
How old do you need to be to apply to be a salesman?
18
When was the civil rights act?
1866
civil right act
1866 act that made it illegal to sell or rent based on race
When was the Fair Housing act?
1968
Fair housing act
1968 act prohibits discrimination in sales, rental, financial transactions based on race, color, religion, national origin, sex, familial status and handicap
After what year were buildings built free of lead based paint?
1978
HOW MANY MEMBERS REPRESENT THE PUBLIC WHO ARE NOT PROFESSIONALLY ENGAGED
2 (APPOINTED BY THE GOVERNOR)
Duplex
2 unit apartment building
Typical real estate cycle in years
2-10. Years Residencial 6 months behind market, commercial 13 months
HOW MANY ACCOUNTS MUST BE MAINTAINED FOR EACH TRANSACTION
2. OWNER AND TENANTS LEDGER
How old do you need to be to apply to be a broker?
21
How long do sc real estate commission members serve their term?
4 years and until their successor is appointment
How many years do commission members serve?
4 years and until their successors are elected or appointed to qualify
How many hours after an eviction judgement before the tenants property is removed?
48
HOW LONG DO YOU HAVE TO DEPOSIT MONEY
48 HOURS
A PMIC OR BIC MUST ESTABLISH AND MAINTAIN A TRUST ACCOUNT WHERE
A INSURED FINANCIAL INSTITUTION THAT IS AUTHORIZED TO DO BUSINESS IN THIS STATE
SOMEONE WITH AN ACTIVE PROPERTY MANAGERS LICENSE MUST BE LICENSED UNDER WHO
A PMIC OR A BIC
***AN APPLICANT WHO PASSES THE EXAM MUST APPLY FOR A LICENSE WITHIN WHAT PERIOD**** OR THEY MUST TAKE THE EXAM
A YEAR
how long do you have to wait and what do you have to if your license gets revoked and you want it back?
A Year 1. submit proof of trustworthy and honest 2. submit proof of educational requirement if file is more than 5 years old 3. pass exam 4. meet other qualifications and conditions which apply to someone who has never been licensed
Commercial and liability insurance
A completed operations risk may exist if a management company repairs the property of others. Owners and management companies also have products liability if they sell or rent property or equipment to others
Financial interests
A cost-conscious prospect will prefer a gross lease. The landlord, wanting safety, stability, and a reasonable level of income, will press for a net lease.
General agent
Work for principal in consistent and continual basis and CAN make decisions w/in frame work of their job.
associated licensee
licensee who is affiliated with a broker in charge or a property manager in charge
therapy animal
provides help with emotional distress and ias a disability thus protected
punitive damages
rewarded to punish a party for dishonest conduct
branch offices
Accuracy and uniformity of reports and records is a by-product of centralization. Perhaps the greatest benefit, however, is that new properties can be acquired and managed with fewer additional staff to the branch office and with minimum additions at the main office.
Estate for Years
Leasehold that has a definite beginning and end. Neither party is required to give notice at end of term. NOT terminated by death or sale; obligation goes to heirs
Reserve funds previously established
Manager can usually pay cost from
Facility manager
Person handle team specialist
Trustee
Person who holds legal title to trust property.
Had insufficient income
Prop mgr may deny a lead because individual
Market conditions
Prop mgr negotiates renewal of the lease what would the strongest influence over terms
Loyalty
Prop mgr put their own interests last & the owners first
Comparables
Properties similar to your own in the Market
In SC who can manage the properties of others?
Property Manager Broker Salesperson
Identify the amount of rent
Property manages new property renewing the lease
Special agent
Works for principal for one specific situation, once transaction is done relationship is over. Can NOT make decisions for principal.
CAN ONE LICENSE COVER MULTIPLE MULTIUNIT RENTAL PROPERTIES
YES
CAN PRIVATE CLUBS SHOW PREFERENCE TO CLUB MEMBERS
YES
CAN THE COMMISSION ENTER AGREEMENTS WITH ANOTHER JURISDICTION OR ANOTHER STATE (GO THROUGH A BROKER IN CHARGE)
YES
useful property analysis
A thorough description of the subject property Data on similar properties in the area Data to be able to estimate the average operating cost of the building What is needed to make the subject property competitive to the best available space
Types of real estate
Residencial, (single family-multi family),commercial, (office-retail), industrial , special purpose.
Which type of property is the largest source of demand for the services of professional property managers?
Residential Property
Largest need
Residential property is the largest source of demand for the services of professional property managers
employer-employee relationships
A trust is created (a device by which one person transfers legal ownership of a property to someone else's to hold or manage for the benefit of a third party) property owner = trustor PM = trustee *no formalized contract is necessary *written authorization from owner to PM to sign and authorize binding leases
3 months before extension
Residential tenants should be about renewing lease
Gross leases are most often used with? A. Apartments B. retail c. office d. industrial property
A. Apartments
National Franchising chains prefer which kinds of Leases? A. Net B. Net-net C. Triple net D. Gross lease E. Percentage Lease
A. Net Lease to control expenses and to ensure continuity between stores.
A Percentage lease is also called a A. Overage lease B. Straight Lease C. Net Lease
A. Overage lease
Malls typically use what kind of lease? (payment wise) A. Percentage B. Net C. Gross
A. Percentage
A valid lease should A. clearly identify the property b. be acknowledged c. be on a standard form d. be in compliance with the Uniform Residential Landlord tenant act
A. clearly identify the property
15 DAYS OF UNEXPLAINED ABSENCE & RENT HASN'T BEEN PAID
ABANDOMENT
THE PHYSICAL OUSTER OF A TENANT FRO THE LEASED PREMISES
ACTUAL EVICTION
PROHIBITS AGENCIES FROM DISCRIMINATING AGAINST THOSE WITH DISABILITIES IN JOB APP PROCEDURES, HIRING, FIRING, TRAINING
ADA COMPLIANCE
WHAT IS THE FIDUCIARY RELATIONSHIP WHICH REQUIRES LEGAL OBLIGATIONS O THE PART OF THE PMIC AND THE OWNER
AGENCY
WHEN A PMIC MANAGES PROPERTY FOR THE OWNER, WHAT MUST BE ESTABLISHED
AGENCY RELATIONSHIP
A REAL ESTATE BROKERAGE FIRM IS THE _____ OF A BUYER, SELLER, LANDLORD, OR TENANT
AGENT
Asbestos Hazard Emergency Response Act of 1986 (AHERA)
AHERA amended TSCA, and mandates that all elementary and secondary schools to be inspected within established time frames and abatement action to be implemented where exposure to asbestos is likely
WHO IS AFFECTED BY THE LEAD BASED PAINT DISCLOSURE
ANY ONE USING FEDERAL ASSISTANCE FOR HOUSING
A LICENSEE AFFILIATED WITH AND UNDER THE SUPERVISION OF A BROKER IN CHARGE OR PMIC
ASSOCIATED LICENSEE
Index Lease
Adjustment of price often based on cost of living index and the wholesale index.
Blind Ads
Ads that do not contain the name, address, or phone number of the company
CAN YOU DISCRIMINATE BASED ON FAMILIAL STATUS IF THE HOUSING APPLIES TO OLDER PEOPLE
YES
actual or punitive
An aggrieved person can obtain an award of actual damages and injunctive relief in either an administrative or federal court. An administrative law judge can also impose the civil penalties mentioned above. In a court action, however, a judge or jury can award unlimited punitive damages to the aggrieved party
DO YOU HAVE TO SUBMIT TO A BACKGROUND CHECK
YES (YOU PAY)
CAN A PMIC WITH MULTIPLE OFFICES UTILIZE ONE TRUST ACCOUNT
YEST
Resident Manager Job
An apartment and office for a resident manager is usually part of the complex. Job descriptions for these managers include regular and routine office activities, such as marketing and showing space, leasing, maintaining the grounds, maintaining tenant relations, monitoring the usage to which the space is put, and providing additional security. Professional property managers are hired when the owner does not have the skill to keep track of irregularly scheduled rental and mortgage payments and handle rental delinquencies and other tasks created by the high tenant turnover in a ministorage operation.
WHAT SHOULD BE ON FILE WITH THE COMMISSION
YOUR PHYSICAL AND CURRENT ADDRESS AND CONTACT INFORMATION
Physical Condition
You don't get a second chance to make a first impression
During a deflationary period, what would be the best lease choice for the owner?
long-term lease @ highest possible rental rate
neighborhood shopping center
approximately 100,000 square feet and must be supported by at least 1,000 families located within a 1.5-mile radius. It usually incorporates 15 to 20 stores located on about three acres of land and is often anchored by a supermarket and may contain a pharmacy, dry cleaner, and other small stores
land write-down
local government will, in appropriate circumstances, assemble and subsidize the purchase of land to be sold at a lower-than-acquisition price, hence the term write-down
lead based paint
are 11 possible violations per lease. Failure to comply with these regulations could result in civil fines up to $16,000 per violation. A violator also may be assessed for triple the damages suffered by the tenant or the buyer in addition to any criminal fines and imprisonment
garden units
are common in the suburbs and are fairly large (two or three bedrooms) and offer some recreational facilities
Labor Orientated Industries
are concerned with the availability and cost of the labor pool.
Government agencies
are interested mainly in preserving the value of the properties they administer.
tenant union
local organization of residential tenants working together for common interests
depreciation
loss of value do to physical deterioration
What's another word for lease?
Demise
Carry greater visual impact
Displays ads generally cost more they
When space is in short supply rent is ?
High
security deposit
payment made by tenant held solely for destruction of property
In what types of properties do tenants have the right to install trade or chattel fixtures?
Commercial or industrial tenant may be given this right.
familial status
Any household with 1 member being under 18 years old or a pregnant woman
Commercial strip centers are also called convenience centers
located on the edge of urban areas or in the suburbs. They are about 10,000 to 30,000 square feet (four to ten retail spaces) on a main thoroughfare and are primarily for convenience shopping
Sale-leaseback
Arrangement by which seller becomes tenant
Asbestos
Asbestos management and control was an important concern for commercial property managers in the 1990s, but is lessening today.
What type of risk management is not adding a jungle gym?
Avoidance
The leasehold estate MOST commonly used by the property managers is an estate A. from period to period B. For years C. at will D. for percentage
B. For years definite beginning and end; Most leases start as estates (or tenancies) for years and then convert to period to period.
Triple nets are mostly widely used in ... A. Residential B. Industrial C. Office D. Retail
B. Industrial
Percentage Lease is commonly used for ... A. Industrial B. Retail C. Residential D. Office
B. Retail
Percentage leases are MOST often used with A. apartments B. Retail c. office D. industrial
B. Retail
A TRUST ACCOUNT MUST ALSO
BE ESTABLISHED AND MAINTAINED BY A BIC OR PMIC TO SAFEGUARD FUNDS BELONGING TO PARTIES OF A REAL ESTATE TRANSACTION
ILLEGAL PRACTICE OF GETTING HOMEOWNERS TO SELL THEIR PROPERTIES BY MAKING THEM BELIEVE THE VALUE WILL GO DOWN BECAUSE THE ENTRY OF A CERTAIN GROUP
BLOCKBUSTING
ASSOCIATED LICENSEE WHO HAS MET THE EXPERIENCE AND EDUCATION REQUIREMENTS AND HAS PASSED THE EXAMINATION FOR A BROKER LICENSE AND WHO, FOR A FEE, SALARY, OR COMMISSION, WITH THE INTENT OR EXPECTATION OF RECEIVING COMPENSATION
BROKER
SOMEONE DESIGNATED TO HAVE RESPONSIBILITY OVER THE ACTIONS OF ALL ASSOCIATED LICENSEES AND ALSO HAS THE RESPONSIBILITY AND CONTROL OVER AND LIABILITY FOR A REAL ESTATE TRUST ACCOUNT
BROKER IN CHARGE
THE RELATIONSHIP B/T THE PMIC AND OWNER MUST BE ESTABLISHED HOW
BY HAVING IN WRITING A PROPERTY MANAGEMENT AGREEMENT
basis for judging the manager's competence.
Break-even analysis Return on investment Capitalization rate
BOMA
Building Owners and Managers Association
The list of amenities provided by owner at no charge is called?
Building Standard
Air quality
Building management & design problems
When is the escalation clause most often used? A. Retail B. Industrial C. Office E. Residential
C. Office It is called an "expense stop."
Which lease requires the tenant to pay all the expenses related to the property? A. Gross B. Percentage C. Triple net D. Recapture
C. Triple Net
Superfund Amendments and Reauthorization Act of 1986 (SARA)
CERCLA was modified in 1986. SARA gave the federal government a lien on contaminated property subject to a federal government cleanup action, subordinate to all previously perfected security interests. SARA also limits liability for damages caused by normal application of pesticides registered under the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) of 1972. Current and past owners may be liable for cleanup, so it is imperative that property managers monitor usage and storage of hazardous materials or anything containing oil or gasoline.
ACCOUNT CHECKS RETURNED FOR INSUFFICIENT FUNDS OR CLOSED ACCOUNTS MAY BE GROUNDS FOR DISCIPLINARY ACTION
CHECKS RETURNED FOR INSUFFICIENT FUNDS
A PERSON WHO ENTERS A WRITTEN AGREEMENT ESTABLISHING AN AGENCY RELATIONSHIP WITH A REAL ESTATE FIRM THROUGH ITS BROKER IN CHAGE, PMIC, OR LICENSEE
CLIENT
AN AGENTS COMPENSATION FOR THE PERFORMANCE OF THE DUTIES OF THE AGENCY
COMMISSION
TO MINGLE OR MIX FUNDS
CONNMINGLING
WE HSOULD SEEK TO CARRY OUT OUR DUTIES IN A FAIR, EQUITABLE AND CONSISTENT MANNER
CONSISTENCY OF POLICIES
ACTIONS FO A LANDLORD WHICH INTERFERE WITH A TENANTS USE AND ENJOYMENT OF THE RENTED PREMISES TO SUCH AN EXTENT THAT THE TENANT IS CONSIDERED TO HAVE BEEN IMPROPERLY FORCED OUT OF THE PREMISES (14 DAYS TO CURE)
CONSTRUCTIVE EVICTION
MEANS TO USE TRUST FUNDS FOR A PURPOSE OTHER THAN THE PURPOSE FOR WHICH THEY ARE HELD.
CONVERSION
A BUYER, SELLER, LANDLORD, OR TENANT WHO USES THE SERVICES FO A LICENSEE BUT DOES NOT ESTABLISH AN AGENCY RELATIONSHIP THROUGH A WRITTEN AGENCY AGREEMENT WITH THE FIRM
CUSTOMER
Society of Industrial and Office REALTORS®
Can act as referral networks
COALD
Care Obedience Accountability Loyalty Disclosure -agents responsibility t o principal
Fair Housing
Civil Rights Act of 1968, as amended, makes it illegal to deny a prospective purchaser or tenant on the basis of race, color, religion, national origin, sex, familial status, disability, handicap, and other protected classes added by states and cities
boma building classification
Class A—Prestigious buildings competing for the best tenants with above-average rental rates; high quality finishes, state-of-the-art systems, excellent accessibility, and distinct market presence. Class B—Buildings vie for wide range of tenants with average priced rents for the area; fair-to-good quality finishes and systems are adequate, but value is not as good as Class A for the same price. Class C—Buildings compete for tenants who require functional space priced below-average rents for the area.
Recapture clause
Clause gives landlord to recover space
Regulated emission of toxic air
Clean air act is
Formaldehyde
Colorless, organic chemical with a strong odor that can contribute to "Sick Building Syndrome"
Industry
includes all activities involved in the production, storage, and distribution of tangible goods as opposed to intangible services. It refers to the transformation of raw materials or components into finished products and extends to packaging, warehousing, distributing, and transporting these finished products
Direct mail by industrial & commercial prop owners
Company advertising the prop mgr should
First step in developing a Management Plan?
Comprehensive analysis plan
Maintain or increase current levels service
Conditions indicate a rental increase mgr should
Chlorofluorocarbons
Contact the local public works department and ask about home appliance recycling or CFC-HCFC recovery programs. Contact local home appliance retailers about their refrigerator and home appliance collection program or the availability of refrigerant-recovery services. Inform the local hauler or service person about the problem, the law, and the penalties, up to $27,500 fine per day, per violation.
Development of suburban area
Contributing factor to decline of commercial districts
Tenancy at will
Couple renting from owner, what type of estate do they have lease expires but the go month to month
All persons as group & individuals loss
Court strict joints & several liability
Dun & Bradstreet Inc.
Credit reporting agency reporting businesses ratings
Expansion,Recession,Contraction and Revival are phases of what ?
Cyclic fluctuations
Net leases are most commonly used with? A. Apartments B. Retail C. office D. industrial
D. industrial most - if not all expenses
CONVEYANC BY LEASE AGREEMENT
DEMISE
SC REAL ESTATE COMMISSION IS UNDER WHOSE ADMINISTRATION
DEPARTMENT OF LABOR, LICENSING AND REGULATION (LGEGISLATURE)
FUNDS ACCEPTABLE FOR DEPOSIT IN A BANK WHICH ARE RECEIVED BY THE LICENSEE FOR THE BENEFIT OF OTHERS
DEPOSITABLE TRUST ITEMS
*ADVERTISING OR MAKING ANY STATEMENT WHICH INDICATES DIRECTLY OR INDIRECTLY AN INTENT TO MAKE A LIMITATION, SPECIFICATION, OR TO DISCRIMINATE WITH RESPECT TO MEMBERS OF ONE OF THE PROTECTED CATEGORIES*
DISCRIMINATORY ADVERTISING
TO REMOVE A PERSON FROM OCCUPATION OF A PROPERTY BY LEGAL ACTION
DISPOSSESS
MUST BE DISBURSED PER THE CONTRACT OR AGREEMENT. OTHERWISE, THE DISPUTE MUST BE RESOLVED BY INTERPLEADER ACTION, COURT ORDER OR MEDIATION
DISPUTED FUNDS
WHAT HAPPENS IF THE OWNER RELINQUISHES HIS RIGHT TO AN INTEREST BEARING ACCOUNT
DUE CARE MUST BE TAKEN TO WITHDRAW THE MONEY FROM THE TRUST ACCOUNT PERIODICALLY TO PREVENT A COMMINGLING SITUATION
Cap rate goes up, value goes....
Down
A COURT ACTION TO RECOVER REAL PROPERTY
EJECTMENT
Toxic Substances Control Act of 1976 (TSCA)
EPA is permitted to determine which substances are likely to pose health hazards to human beings or to the environment and impose controls on the testing, manufacture and distribution of such substances. A notorious example is polychlorinated biphenyl (PCB),
Revival
Economy begins to rebound and consumers venture back into the market.
Types of real estate relationships
Employer/employee, trust, principal agent
ECOA
Equal Credit Opportunity Act law protects borrowers, lender can not deny based on Race, Color, Religion, Sex, Geographic Location, etc.
ECOA
Equal Credit Opportunity Act - federal law that credit must be made available without discrimination.
An estate for years
Estate owned by tenant that continues for a specific period of time
Real estate seasonal cycle
Expansion, recession(peak),contraction, trough (low)
Estate from Period to Period is terminated by sale of property or death T/F
F
LAW THAT REGULATES THE COLLECTION, DISSEMINATION, AND USE OF CONSUMER INFORMATION, INCLUDING CONSUMER CREDIT INFORMATION
FAIR CREDIT REPORTING ACT
PROTECTED CLASSES RENDERING IT ILLEGAL TO DISCRIMINATE IN THE SALE, RENTAL, OR FINANCIAL OF HOUSING.
FAIR HOUSING ACT
T/F. RELIGIOUS ORGANIZATIONS CANNOT SHOW PREFERENCE TO MEMBERS OF THE SAME RELIGION WHEN OFFERING NON COMMERCIAL (FREE) HOUSING, SUCH AS SHELTERS OR NURSING HOMES
FALSE. THEY CAN SHOW
Flood Insurance
FDIC-insured lenders must require flood insurance on their collateral if the property is located in a Special Flood Hazard Area zone (SFHA). A preferred risk policy (PRP) can be written in non special flood hazard areas IF the property has never had a loss. PRP has lower rates than the standard flood policies. However, it is not eligible for properties located in the special food hazard area (SFHA).
how long is a vacation rental?
FEWER than 90 days
AN INTERNAL OR SUB ACCONT NUMBER CREATED BY THE INDIVIDUAL MAINTAINING THE TRUST ACCOUNT RECORDS-USED TO NUMERICALLY IDENTIFY THE SEPARATE ACCOUNTING FOR INDIVIDUAL TRANSACTIONS
FOLIO NUMBER
HOW LONG SHOULD RECEIPTS AND DEPOSIT SLIPS BE KEPT
FOR 5 YEARS
prima facie evidence of discrimination
Failure to post the equal housing opportunity poster
In SC, security deposits must be returned in full at the end of every lease within 30 days.
False
The more "nets" the less the tenants are paying T/F
False
upon noncompliance by landlord, tenant may recover up to 3xrent wrongfully withheld and reasonable attorney fees. T/F
False
trust fund to finance & paid claims
Famous super fund blaw to
FHA
Federal Housing Administration agency authorized to provide rental/mortgage insurance to developers of low-income housing
FUTA
Federal Unemployment Tax Act for every employee who works 20+ wks or earns $1500 in a year
Section 8
Federal subsidized housing program administered by HUD. Tenant pays 30% of adjusted monthly income and HUD pays the difference.
Section 202
Federal subsidized housing program that provides capital for new construction on low-income or rehab properties for the elderly.
Management Plan
Financial & operational strategy for management of a property. Based on Market & Property Analyses and Owner's Goals
Contraction
Follows recession . There is less and less demand for product
Chlorofluorocarbons (CFC)
are manufactured, inert, nontoxic, nonflammable chemicals gases used primarily as refrigerants in motor vehicle air conditioners (MVACs), building air conditioning units, refrigerators, and freezers. They are also used as industrial cleaning solvents. Unfortunately, once released from their original containers, CFCs float into the stratospheric atmosphere where they may survive from 2 to 150 years. A single molecule of CFC can destroy 100,000 molecules of ozone.
optimum price
From this figure the expected base income for the property can be calculated
ANY LICENSEE UNDER THE PMIC OR BIC
GENERAL AGENT/SUBAGENTS
A CHRONOLOGICAL RECORD OF FUNDS WHICH ARE RECEIVED AND DISBURSED
GENERAL LEDGER
THE RECORDING OF ALL FUNDS GOING IN AND OUT OF THE TRUST ACCOUNT
GENERAL LEDGER/JOURNAL
LEASE ALLOWS FOR AUTOMATIC INCREASE OR DECREASE IN RENT
GRADUATED LEASE/STEP UP CLAUSE
USED IN RESIDENTIAL PROPERTIES THAT REQUIRES THE LANDLORD TO PAY ALL OPERATING EXPENSES
GROSS LEASE
Most residential leases are what type of leases? (payment wise)
Gross Lease. (they pay a fixed amount while the landlord pays rest) - tenants usually pay utilities as well.
In What type(s) of leases is the step-up clause found?
Gross and Net Leases
How to find value of building
Gross income- annual expenses=anual net Anual net \ capitalization rate= value property
Three types of lease payments
Gross lease percentage lease net lease
CAN A LEASING AGENT GO OVER APPLICATION OR LEASE TERMS
HELL NO
ONE WHO STAYS ON THE LEASED PREMISES AFTER HIS LEASE HAS EXPIRED (OPTIONS=EVICT OR REMAIN ON PROPERTY AND PAY RENT)
HOLDOVER
FEDERAL FAIR HOUSING LAW ARE ENFORCED BY
HUD
Who enforces federal Fair Housing Laws?
HUD
Who protects the protected classes through legislation?
HUD
SCHAC - south carolina human affairs commission
Handles complaints. must be filed within 180 days, 1 year to file a sujt, penalties from 10,000 to 50,000
step up clause
long term lease that rent increases over time.
Greater demand for rentals
Housing prices have increased what are the consequences
Units in three-story walkup and multilevel elevator buildings
are smaller and more modestly equipped. Multistory and highrise buildings are concentrated near the downtown areas of large cities or in older more densely populated suburbs
actual income
Income items should be realistic estimates of actual income, with the rent loss and vacancy factors built in. The most difficult source of income to predict is the overage rental income based on percentage or escalation clauses.
Megan's Law
Laws requiring sex offenders to register with local law enforcement
Industrial real estate
includes all land and buildings used or suited for use by industry
ON SEPTEMBER 2, 1965, THE PETITIONERS FILED A COMPLAINT IN THE COURT, ALLEGING THAT THE RESPONDENTS HAD REFUSED TO SELL THEM A HOME IN THE COMMUNITY OF ST LOUIS FOR TEH SOLE REASON TAHT THE PETITIONER WAS A NEGRO. THE COURTS DECLARED THAT THE CIVIL RIGHTS OF 1866 PROHIBITS ALL RACIAL DISCRIMINATION IN THE SALE AND RENTAL OF REAL PROPERTY. NO ONE CAN DISCRIMINATE BASED ON RACE
JONES VS. MAYER (SUPREME COURT DECISION OF 1968)
on what day does a license expire?
June 30th
when must you renew your license?
June 30th - every 2 years
Honesty, integrity
Knowledge expertise for a prop mgr characteristics
REQUIREMENT TO DISCLOSE THE USE OF LEAD-BASED PAINT ON HOMES BUILT BEFORE 1978
LEAD BASED PAINT DISCLOSURE
TENANT
LESSEE
LANDLORD OR OWNER
LESSOR
AN INDIVIDUAL CURRENTLY LICENSED UNDER THIS CHAPTER
LICENSEE
Field mgr
Large management organization daily operation performed by
communities
Large multifamily complexes
Anchor tenants
Large stores bring customers are called
Security officers
Life Safety officers
Incubator Spaces
Located in Research parks for beginning companies
Step up clause
Long term lease require $400 1st year $500. 2nd yr
What is the ratio of rentable space to usable space called?
Loss Factor
AFTER EVALUATING OTHER RENTAL PROPERTIES WITH THEIR ADVANTAGES AND DISADVANTAGES, AS WELL AS THE RENTS TAKEN IN BY THESE PROPERTIES, YOU HAVE THE
MARKET VALUE
INFORMATION THAT INDICATES THAT A PARTY TO A TRANSACTION IS NOT ABLE TO OR DOES NOT INTEND TO MEET AN OBLIGATION UNDER A AGREEMENT MADE CONCERNING THE TRANSACTION
MATERIAL ADVERSE FACT
SIGNIFICANTLY REDUCES THE STRUCTURAL INTEGRITY OF IMPROVEMENTS TO REAL ESTATE
MATERIAL ADVERSE FACT
SOMETHING THAT POSES A HEALTH RISK TO OCCUPANTS OF REAL ESTATE
MATERIAL ADVERSE FACT
LAW THAT REQUIRES STATES TO NOTIFY THE COMMUNITY OF THE PRESENCE OF SEX OFFENDERS WHO POSE A RISK TO PUBLIC SAFETY
MEGANS LAW
AN ACT PERFORMED BY A LICENSEE NOT INVOLVING AN EXERCISE OF DISCRETION OR JUDGMENT OF A LICENSEE ON BEHALF OF A PERSON WHO IS NOT A CLIENT AND THAT ASSIST THE NONCLIENT TO CONSUMMATE A REAL ESTATE TRANSACTION
MINISTERIAL ACT
Where does landlord go to obtain evictions?
Magistrate
Contract service
Maintenance task performed by outside labor specific fee
Key Tenant
Major department store in shopping center.
Classified ad
Major type of advertising
Comprehensive Management Plan includes?
Market and alternative analysis, proposed financing and other recommendations
Effect of the value of specific property
Marketing analyst goal the property mgr Is to identify
Revenue Reconciliation Act of 1993
May 13, 1993, the new provision increased the recovery period of nonresidential property from 31.5 years to 39 years. Subsequent capital improvements to income-producing property may, with certain exceptions, be depreciated over the useful life of the improvements. Leasehold improvements are depreciated over the life of the lease unless the life of the property itself is extended by the improvements. In the case of extended life of the whole property, a longer schedule is required that reflects the true benefit of the improvements.
Differed maintenance
Mgr of commercial building did not inspect property lots of wear & tear
major rental income
Minimum rental guaranteed by the tenants' leases Overage rent based on percentage clauses Rental income from rent escalation clauses Income from sale of services to tenants Income from sale of utilities
Conciliation attempts to provide
Monetary relief in the form of damages, including damages caused by humiliation and embarrassment, plus attorney fees Other equitable relief, possibly including access to the dwelling or comparable dwelling Injunctive relief to eliminate the discriminatory practice affecting the aggrieved person
Technical over supply
More units available than tenants
A technical oversupply
More units available then potential tenants .
Personal contact
Most effective way to find tenant shopping center
Compatibility w/ other tenants
Most important commercial tenancy is
Be conservative in all forecast
Most important for operating budget
Built before 1978
Mrg must make lead base disclosure
cooperative
Multi-Family residential building where title is held by each occupant who possess the right to occupy a certain unit.
Condominium
Multi-unit building where occupants own their unit and share common areas
CAN A PROPERTY MANAGER BE UNDER MORE THAN ONE PMIC
NO
CAN FAITH BASED ORGANIZATIONS DISCRIMINATE IF THEY RECEIVE FEDERAL GRANTS
NO
CAN SOME BE LICENSE IN LMORE THAN ONE CLASSIFICATION AT THE SAME TIME
NO
SELLERS AND LESSORS MUST RETAIN A COPY OF THE LEAD DISCLOSURES FOR HOW LONG
NO LESS THAN 3 YEARS FROM THE DATE THE LEASING PERIOD BEGINS
ANY INSTRUMENT OR EQUITY OR THING OF VALUE NOT ACCEPTABLE FOR DEPOSIT IN A BANK WHICH IS RECEIVED IN LIEU OF MONIES BY THE LICENSEE FOR THE BENEFIT OF OTHER (CD)
NON-DEPOSITABLE TRUST ITEMS
legal description of property
NOT the street address
NAA
National Apartment Association
Emphasis on the prestige address
Neighborhood analysts for office property nightlight transportation
15-20 anchored by a super market
Neighborhood shopping center have
Cash Flow
Net operating income - Debt service - Operating expense
cash flow
Net operating income before debt service − Debt service − Reserves
insurable interest.
No one can buy insurance on something or even someone unless he or she has a reason to be involved with that entity or person
Single family homes
Of the following offers marginal financial return
Risk Management
One of the most critical areas of responsibility for a property manager, Increasing the insurance deductible is another way of retaining some of the risk
NEPA
One procedure mandated by the 1970 National Environmental Policy Act (NEPA) requires the preparation of an environmental impact statement (EIS) prior to every major federal action significantly affecting the quality of the environment. This procedure is overseen by the Environmental Protection Agency (EPA)
Up keep grounds & exterior
Only maintenance required for industrial prop mgr is to
I.R.E..M (Institute of R.E management )
Organization designated certified property mgr
To share the lease fee
Outside brokers, prop mgr may expect
Condominium
Own purchase receives fee simple ownership as well as undivided interest
Both the mgr & owner are liable
Owner has given specifics to not rent to Hispanics
Financing will not be in danger
Owner not make mrg payment
Must avoid chipping that pertains to paint
Owners mgr of older residential property
Freehold Estate
Ownership of real property "bundle of rights"
USED IN RETAIL ESTABLISHMENTS WHERE PART OF THE GROSS INCOME WILL BE CHARGED AS THE RENTAL AMOUNT
PERCENTAGE LEASE
AN ESCROW ACCOUNT OR DEMAND DEPOSIT BANK ACCOUNT PROPERLY DESIGNATED TO INCLUE TEH WORDS TURST OR ESCROW THAT IS ESTABLISHED AND MAINTAINED BY A LICENSEE TO SAFEGUARD FUNDS BELONGING TO PARTIES TO A REAL ESTATE TRANSACTION WHE THE TRANSACTION INVOLVES THE LICENSEE REAL ESTATE AND IS NOT MANAGED BY A FIRM
PERSONAL TRUST ACCOUNT
Resident Manager
PM who resides at the managed property
THE PROPERTY OWNER IDENTIFIED IN THE MANAGEMENT AGREEMENT
PRINICIPAL
AN ASSOCIATED LICENSEE WHO MEETS THE EDUCATIONAL REQUIREMENTS AND PASSES THE EXAMINATION FOR A PROPERTY MANAGERS LICENSE, AND WHO WILL RECEIVE COMPENSATION
PROPERTY MANAGER
SOMEONE WHO IS DESIGNATED AS HAVING THE RESPONSIBILITY OVER THE ACTIONS OF ASSOCIATED LICENSEES AND ALSO THE RESPONSIBILITY AND CONTROL OVER AND LIABILITY FOR REAL ESTATE TRUST ACCOUNTS
PROPERTY MANAGER IN CHARGE
Four Goals of Any Program
Preventing emergencies or security breaches Detecting a breach as early as possible and sounding an alarm Containing or confining the damage or intrusion as much as possible Counteracting the damage by prompt and proper action, such as extinguishing a fire or arresting an intruder
Discover & property report emergency
Primary propose life safety & security technology
Hazard Warnings
Producers of chemicals or chemical byproducts are required to evaluate chemical hazards, to label containers according to a hazardous material identification system (HMIS) and to provide material safety data sheets (MSDSs) to serve as hazard warnings to purchasers of their products. hazard warning means any word, picture, symbol, or combination thereof that conveys the hazard(s) of the chemical(s) in the container(s
Expansion
Production increases , country working at full employment
PMIC
Project manager in charge
2nd had a lower value
Prop # 1 cap rate 12% , 2 prop 14%
Dominant portion
Prop analysts major floor are excluded in stairwells, elevators
Must possess some knowledge of construction
Prop mgr acts as the prime or general contractor
Owners objective
Prop mgr administrative responsibility are governed by
Primary goal sign lease benefits both parties
Prop mgr are negotiating contracts
Legal description
Prop mgr contract to identify property all of the following are correct except
Lengthy written procedures should be condensed
Prop mgr has emergency procedures they need to know
Preventative maintenance
Prop mgr initiates service maintenance interior/ exterior
Risk management theories
Property values must be updated at least annually and when improvements are underway
Exact zoning
Qualify prospective tenants industrial property
A PERIODIC PROCESS WHEREBY THE ACCOUNT BALANCE SHOWN ON A BANK STATEMENT IS COMPARED TO AND BALANCED WITH GENERAL LEDGER, THE SUB LEDGER, AND THE CHECKBOOK BALANCES
RECONCILIATION OF TRUST ACCOUNT
BEING DENIED A LOAN BASED ON THE RACIAL COMPOSITION OF AN AREA
REDLINING
MUST BE DISBURSED PER THE CONTRACT OR MUTUAL AGREEMENT
REGULAR TRANSACTION
MUST BE DISBURSED IN ACCORDANCE WITH THE CONTRACT; SECURITY DEPOSITS MUST REMAIN IN THE TRUST ACCOUNT UNTIL THE TERMINATION OF THE LEASE
RENTAL FUNDS
WHAT IS THE FINAL RESULT OF THE REGIONAL AND NEIGHBORHOOD MARKET ANALYSIS
RENTAL PRICE
WHEN YOU OBTAIN COMPARABLE RENTAL PROPERTIES IN TEH AREA
RENTAL PRICE/SHOP
TO TAKE BACK PROPERTY
REPOSSESS
What are the protected classes?
Race, Color, National Origin, Religion, Familial Status, Sex, Handicap
Radon
Radon is an invisible, odorless and tasteless radioactive gas that occurs in small amounts almost everywhere. Its presence in the interior environment of homes and other enclosed structures has been found to cause lung cancer. Of all the environmental risks, radon is the easiest to mitigate by sealing the property and installing PVC pipes
Institutional Property
Real estate owned and occupied by a major corporation.
market analysis
Regional & neighborhood economic study to determine market trends.
In formulating a Management Plan, PM focuses on?
Regional & neighborhood market analyses, Specific property analysis, Analysis of Owner's objectives
computing rentable area
Rentable area ÷ Usable area = Rentable/usable ratio (R/U ratio) Usable area × R/U ratio = Rentable area (of an office on that floor) Rentable area ÷ R/U ratio = Usable area
May want to get individual credit reports
Renting residential property a mgr should
50%
Revenue how much time R.E agent have to write off
Residential Multi family
Rising construction costs and a decrease in the availability of usable land have increased the popularity of multifamily developments such as town homes or row houses, condominiums, and cooperatives, many of which are individually owned
Who enforces STATE Fair Housing Laws?
SC Human Affairs Commission
MONEY DEPOSITED BY OR FOR A TENANT WITH THE LICENSEE WHICH IS PLACED IN TRUST. THE LANDLORD MAY CLAIM, UNDER CERTAIN CIRCUMSTANCES, PORTIONS FO A SECURITY DEPOSIT TO OFFSET DAMAGES CAUSED BY THE TENANT
SECURITY DEPOSIT
OUTLAWS ALL CONTRACTS AND CONSPIRACIES THAT RESTRAIN TRADE, WHERE COMPETITORS FIX PRICES AND RIG BIDS
SHERMAN ANTI-TRUST LAW
THE PMIC OR BIC HIRED TO REPRESENT THE OWNER
SPECIAL AGENT
THE SOUTH CAROLINA HUMAN AFFAIRS COMMISSION ENFORCES WHT
STATE FAIR HOUSING LAWS
Distraint for Rent
Selling and taking personal possessions for non payment of rent
contract services
Services performed by outside persons on a regular basis for a specified fee
Controlling Asbestos
Several actions can be taken to manage asbestos. The first is encapsulation, a process that leaves the asbestos in place but encloses it with an adhesive that will permanently immobilize the asbestos fibers, preventing their release into the air. The second method, enclosure, simply erects an airtight barrier (which must be impermeable) between the asbestos, which is left in place, and the balance of the space. The third and most drastic—and therefore most expensive—method is removal, which must be handled only by an authorized contractor under the supervision of qualified engineers.
Power center
Shopping center 3000 to million is called
equal housing logo
Should be in all advertisement
Air quality issues
Sick building syndrome (SBS) was first described in the 1970s, and is used to describe a situation in which reported symptoms among the population of building occupants can be temporarily associated with their presence in that building. Building-related illness (BRI) is a clinically diagnosed condition that is caused by toxic substances or pathogens. Unlike SBS, BRI persists when an occupant leaves the building.
Service as advertising
Sign in a shopping center
Mini storage
Small storage rented to individuals
What is the difference between a GENERAL and SPECIAL agent?
Special Agent - hired for specific transaction General Agent - hired for a wide range of matters
Research Parks
Specialize in hair gah tech computing and engineering
three standard methods for computing the rate of physical deterioration pre 1981
Straight-line method Declining balance method Sum-of-the-years'-digits method
Potential Responsible parties
Strict liability, as defined in law, generally means that intent or fault is not an element of the act; the act (of being an "owner or operator") is sufficient in and of itself. Joint and several liability means that all such persons, as a group and individually, have complete responsibility for the entire loss, damage, or expense. The government may, therefore, recover the full cost of cleanup from the present owner or operator even though that entity did not own the site or participate in the activity that led to contamination. The innocent owner (or innocent purchaser) is a defense that an owner may use against a claim for liability. An owner may not be held liable if it can be shown that the release or threat of release of a hazardous substance and the damage resulting there from were caused solely by an act of God, an act of war, or an act or omission of a third party who is not an employee or agent of the owner-defendant.
Need professional on going management
Subsidized housing mgr realize that
WHAT SHOULD HAPPEN IF THE LICENSEE BECOMES DISASSOCIATED WITH A PMIC OR BIC
THEY NEED TO NOTIFY THE COMMISSION IMMEDIATELY
Which leasehold is an informal lease?
Tenancy @ Will
before being included, the "option to renew" clause must be carefully considered as it favors the ...
Tenant
Tenancy at Sufferance
Tenant occupies property without consent of owner
Apartment
Tenant of what property uses a gross lease
Net lease (net-net)
Tenant pays rent + taxes, assessments and insurance
Percentage lease
Tenant requires to pay additional amount to landlords when business goes up
Have leadership qualities
Tenant warden should
Economic oversupply
Tenants can't afford the price of available spaces
To insure they meet current life safety provisions
Tenants remodel plan should reviewed
Superfund
The Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) is the famous Superfund law, named because two trust funds were created to help finance cleanup projects and payment of property damage claims. CERCLA establishes a body of remedies available to state and federal governments, as well as private parties, for action against the release or threatened release of hazardous substances into the environment. Petroleum is not included as a hazardous waste for purposes of requiring CERCLA cleanup because federal regulations specifically exclude "wastes associated with the exploration, development or production of crude oil (or) natural gas." Other laws govern that area.
capital expenditures
includes income from the sale of assets, payments on the principal of a mortgage or other debt, and yearly expenses for repairs or additions that will be depreciated over several years.
recapture clause
landlord can call lease null and void if tenant does not pay the % of sales
reversionary right
landlords right to get property back after lease ends
trophy buildings
landmark buildings with latest technology to attract most exclusive tenants
What is the purpose of the Real Estate Commission?
protect the public interest in real estate
files to keep 5
lease 5years, general correspondence, work estimates (5years), financial cancelled checks (5years) and all permanent documents
loss factor
The ratio of rentable space to usable space; a reflection of the efficiency of space utilization on a single-tenancy floor. On a multiple-tenancy floor, this relationship is referred to as the load factor. Spaces with a high loss factor should compensate with a lower base rent
National Multi Housing Council, NMHC
are those who are involved in the apartment industry, including ownership, development, management, and financing of larger apartment buildings. It works with the National Apartment Association, NAA, to advocate on legislative and regulatory affairs relating to rental properties of five or more units
Shopping centers
are usually classified by market area, pattern, ownership, or merchandising
foreign trading zone
area designated to permit DUTY-FREE goods
straight percentage lease
lease based on gross sales
What are the COALD duties?
The duties of an agent. Care Obedience Accountability Loyalty Disclosure
Life safety officer (LSO)
assist tenant evacuation and enforce safety precautions. It is also the officer's responsibility to provide an elevator (or alternate means) for evacuation of the disabled.
escalation clause
lease clause providing that rental rate will increase or decrease according to economic conditions
step-up clause
lease clause that increases rate at specific times over the lease
National Association of Industrial and Office Parks (NAIOP)
association of professional developers, owners, and managers of industrial and office parks that provides interchange of experience and professional training for its members through programs and seminars.
straight line method
assumes that the deterioration proceeds at a stable rate over the useful life of the building
Employer liability insurance
The manager/owner of commercial properties may have duties and risks over and above those covered by statutory workers' compensation insurance. These risks arise under tort liability and may be insured against by the purchase of employer liability insurance, plus purchase of coverage B of the standard workers' compensation and employer liability insurance policy. The growing number of third-party-over suits against employers mandates the purchase of employer liability insurance
Current Challenges as Property Manager
The most recent specialty is managing REOs, bank-owned real estate, as a result of so many housing foreclosures.
If property is abandoned by tenant, what must landlord do?
attempt to mitigate damages & return security deposits
Estate from Period to Period
lease that automatically renews unless either party gives notice of termination. Leases can run week to week, month to month etc.
estate for years
lease that has a starting date and ending date tenant may have right to use the property for a period of time
conciliation period
attempts to bring the parties together will be made; If that fails, either the case will be heard by an administrative law judge or as a civil action in the appropriate U.S. district or state court. The burden of proof falls on the complainant who must prove that the discrimination occurred
Who formalize agreements into legal terms after negotiations?
attorneys
special agent
authorized to represent only the principal on a specific matter or transaction, the authority is both limited in scope and time. no authority to sign contracts
financial reports
automating these functions can take the sting out of preparing reports. After entering data once, a fully integrated accounting system can dramatically reduce the manager's time spent on accounting functions by generating reports at the touch of a button. Some of the best programs permit separate accounts for each property and owners, set up on a cash or accrual basis, calendar or fiscal year.
most important step is to insist that all maintenance requests
be in writing by mail or email
Neighborhood analysis begins with ?
begins with a tour of the area
Sick Building Syndrome
condition caused by substances in the building whos symptoms will disappear when subject leaves building
regional analysis
considers the growing sectors of the regional economy, which may draw national firms to relocate there or to open branch offices
Software programs
Which should be consulted 1st before investing new technology
Rental are refused long hair ride motorcycle
Which sunshine rental policy is legal fair housing act
Prime Contractor
construction supervisor contracted to over-see a job
ross collectible rental income
Total rentable space − All space not rented
assignment
Transfer of tenant's rental rights to a 3rd party
If landlord retaliates unlawfully, he may have to pay 3 months rent or twice actual damages. T/F
True
If you own THREE or fewer homes, it is legal to discriminate who you buy/rent to so long as you don't do it more than once every 2 years T/F
True
Many residential agreements are a combination of both estate for years and period to period T/F
True
Tenancy at Will is terminated by death T/F
True
The more "nets" the more the tenants are paying T/F
True
if a landlord does not sign and deliver a written rental agreement which has been signed and delivered to the landlord by the tenant, accept of rent without reservation by the landlord gives the rental agreement the same affect as if it had been signed and delivered by the landlord T/F
True
you may have a clause in the lease that allows automatic renewal of leases so long as each party has the right to cancel - if they give 30 days notice after original expiration date T/F
True
you cannot discriminate based on religion T/F
True and False. There is an exception. You can require someone to be of certain religion so long as you don't discriminate who can become part of that religion
15 days are considered an abandonment. T/F
True.
Failure to pay rent after 5 days may terminate the lease. T/F
True.
If tenant appeals a court judgement they may remain in the unit. T/F
True.
You can not give legal advice to clients if you're not a lawyer. T/F
True.
constructive evictions is grounds for termination of a lease T/F
True. Most states recognize this as basis for termination of the lease, for an action to recover possession, or for a suits for damages. - for owner's protection, the lease should require the tenant to provide some time for the owner to remedy the situation before tenant claims constructive evictions.
what it is called when the tenant must vacate the premises because the landlord has failed to provide essential services?
constructive eviction
Industrial Property
Type of property that converts raw materials into finished product. also, goods distribution
What is the retaliation law?
Under uniform Landlord Tenant law, a landlord may not get even with a tenant who files a complaint
Pollution liability insurance
Underground storage tank store file insurance required
3 types of agents
Universal, special, general
principal-agent relationship
created by written contract signed by both parties
Enterprise Zones
created through state statutes, and consist predominantly of warehousing, light manufacturing, or assembly zones.
Net lease
What form lease for industrial purposes
Cash flow report
Which financial report tells source of income & experiences net operating
All of the above
Which of the following can assist mrg w/ stable tenant population
Bounties & land use
Which of the following major part of neighborhood analysts
Which of the following offers a combo of home ownership and rental sites a. manufactured home parks b. housing for the elderly c. loft buildings d. condos
a. manufactured home parks
ADA
alcohol drug is a disability...using drugs is NOT
option to renew favors
always the tenant
Life-cycle costing
both the initial and the operating costs of equipment over its expected life must be measured to compare the total cost of one type of equipment with that of another.
A licensee may have a license revoked by the SC Real Estate Commission if the licensee a. has been arrested for drugs b. fails to mention a murder on the property to a potential buyer c. pays a clerk to type up contracts d. fails to inform the tenant that the security deposit will be held by the owner of the property, not the management company
d. fails to inform the tenant that the security deposit will be held by the owner of the property, not the management company
What type of proprety is a mini storage?
industrial
conservation
minor repairs or renovation of building
freehold estates
own property outright
Ocean Pollution
permit system regulating the dumping of all types of materials into ocean waters was set up by the Marine Protection, Research and Sanctuaries Act of 1972. The EPA has the responsibility for designating disposal sites and establishing the rules governing ocean disposal, including incineration of hazardous material at sea.
roomer
person that rents out just a room but shares living and kitchen, bathroom area
antitrust laws
promote competition in an open marketplace
management fees and computing
range from 2-20% of gross collectible rent; per-unit cost of management, which is derived from the operating budget for the management organization. A second method employs a standardized management pricing worksheet.
multipersonal areas
ranging from 55 to 90 square feet per person,
cap rate
rate of return investor is looking to get on property
capitalization rate
rate of return investor will demand for their investment
Safe Water Drinking Act
to protect and improve the quality of drinking water. primary responsibility for complying with federally established standards lies with the states. Amendments passed in 1995 set up new programs for technical assistance
How long is a lease if no time is specified?
1 year
A BROKER MUST DO 2 THINGS AT THE END OF A TRANSACTION
1. ACCOUNT FOR ALL MONEY DURING THE RELATIONSHIP 2. KEEP INFORMATION CONFIDENTIAL
THE OWNERS LEDGER SHOULD HAVE (2)
1. ALL RECEIPTS APPLICABLE TO THE PROPERTY 2. DISBURSEMENTS FOR EXPENSES
WHAT ARE 2 THINGS YOU CAN NEVER ASK WHEN A PERSON HAS A DISABILITY
1. ASK IF THEY ARE DISABLED OR THE NATURE OF DISABILITY 2. REQUIRE AN APPLICANT TO TAKE A MEDICAL EXAMINATION BEFORE MAKING A JOB OFFER
What are some considered handicaps?
1. Aids 2. Mental Illness 3. Drug rehabilitated individual 4. Cancer, MS, Diabetes
NAME 5 THINGS CONTAINED IN A LEDGER
1. IDENTIFICATION OF THE UNIT/ADDRESS 2. THE UNIT OR PROPERTY OWNER 3. AMOUNT OF RENT 4. DUE DATE OF RENT 5. AMOUNT OF SECURITY DEPOSIT HELD
An industrial manager will specialize in the following,
1. Opportunities for expansion, 2. transportation facilities, 3. special utility services, 4. the availability of raw materials, and 5. the potential workforce in the area
A Commercial manager will specialize in the following,
1. Traffic counts and patterns, 2. the location of competitors, 3. public transportation facilities, 4. parking space, and 5. the median income of the population
WHAT ARE 2 THINGS YOU SHOULD DO IN MANAGEMENT PLANNING
1. UNDERSTAND THE OWNERS OBJECTIVES FOR SHORT TERM AND LONG TERM GOALS 2. CONDUCT A REGIONAL AND NEIGHBORHOOD ANALYSIS
IF THERE IS A DISPUTE OVER MONEY, THE DEPOSIT MUST BE HELD UNTIL IT IS RESOLVED BY (4)
1. WRITTEN AGREEMENT 2. FILING OF AN INTER-PLEADER 3. ORDER OF A COURT 4. VOLUNTARY MEDIATION
Qualifications for licensure
1. age requirements (21 for broker, pm in charge, broker in charge) (18 for sales agent and PM) 2. credit report (if commission doesnt like your credit you have 60 days to respond) 3. graduated HS or equivalent 4. submit proof of completion of education & experience is applicable 5. pass exam
What is CFC?
1. chemical gas, breaks down the ozone layer 2. found in a/c and refrigeration 3. only epa certified techs can work on a/c 4.fines of $27,500 a day
powers and duties of the real estate commission?
1. determine standards for licensure 2. enforce standards for licensure with disciplinary hearings etc recommending changes in legislation 3. establishing fee schedule
Powers and duties of the commission
1. determining qualification's for applicants for licensure 2. disciplinary hearings for alleged violations 3. recommending changes 4. setting fee schedule through regulation
When may a landlord enter a unit without consent?
1. emergency 2. 9a-6p for routine maintenance 3. 8a-8p for requested service 4. court order 5. safety violations 6. for law enforcement 7. tenant abandonment
In the market analysis, the specific goal of the PM is to :
1. identify economic trends & their effect on the value of similar properties
PMIC must
1. maintain a place of business 2. maintain adequate, reasonable and regular contact with associated licensees engaged in real estate transactions 3. may be in charge of more than one branch office
smoke detector laws
1. must have and working condition if before 1994 can be battery operated if after needs to be hard wired. 2. Show its working and how to change battery 3. tenant needs to notify in writing 4. landlords have 15 days to comply (do it earlier)
what are the three financial planning reports that are a major part of the management plan?
1. operating budget (usually for one year) 2. five year forecast 3. comparative income and expense analysis
information required to formulate operating budget
1. optimum rents 2. gross annual scheduled rental income 3. anticipated revenue 4. income adjusted to reflect anticipated market trends 5. yearly operating costs 6. necessary reserve funds 7. cash flow in light of the owner's objective
exemptions to HUD law
1. owner and live in duplex, triplets or quad can discriminate not working with Real estate agent, or use discriminatory advertising. 2. own 3 or fewer single fam. homes can discriminate not working with Real estate agent, or use discriminatory advertising. 3. housing developed by private club, along as no discrimination to join club and can discriminate not working with Real estate agent, or use discriminatory advertising. 4. senior living: government can do what they want, others need to apply get permission
exemptions to protected classes
1. owner-occupied smaller buildings (four units or fewer) 2. single family housing sold or rented without using a real estate agent 3. housing that is owned or operated by organizations and private clubs that limit occupancy to members 4. do not use discriminatory advertising
What components must a lease have to be valid? (4)
1. parties agree 2. parties have mental capacity 3. legal purpose 4. valid consideration
what are the exemptions from the fair housing laws?
1. private clubs 2. elderly housing 80% 3. Mrs. Murphy - owner occupied building > 4 units 4. For Sale By Owner
exclusions from the residential landlord & tenant act
1. residents ast public or private institutions (medical geriatric, educational, counseling, religious) 2. occupancy under a contract of sale of a dwelling unit or the property of which it is a part, if the occupant is the purchaser or a person who succeeds to his interest 3. occupancy by a member or a fraternal or social organization 4. transient occupancy in hotel, motel, or other accommodations subject to sales tax 5. occupancy by an employee of a landlord who's right to occupancy is conditional upon employment and about the premises 6. occupancy by an owner of a condo unit or a holder of a proprietary lease in a cooperative 7. occupancy under a rental agreement covering the premises used by the occupant primarily used for agricultural purposes 8. occupancy under a rental agreement (time share) 9. residence, whether temporary or not, at a charitable or emergency protective shelter, public or private.
WHAT DOES THE FAIR HOUSING ACT PROHIBIT (9)
1.REFUSING TO SELL TO AN INTEREST TENANT (CANT IGNORE CALLS) 2. APPLYING A DIFFERENT SALE TO DIFFERENT PEOPLE (BLACKS = HIGHER DEPOSITS) 3. STEERING (TO DIFFERENT LOCATIONS) 4. LYING ABOUT AVAILABILITY 5. FRIGHTENING PEOPLE (BLOCKBUSTING-BLACKS ARE MOVING IN) 6. DISCRIMINATION IN FINANCING 7. HARASSMENT 8. ZONING LAWS 9. THREATENING OR INTIMIDATING TENANTS
if you change offices as a PM in charge, how long do you have to notify the department of the new address?
10 days
how many members are on the sc real estate commission?
10 members
industrial leases
10-25 years in length
Ideal % to keep occupancy
95%
TERM OF SC REAL ESTATE COMMISSION
4
What level of randon should be mitigated (weakened)?
4
how long is the term that commission members serve?
4 years & until their successors are elected and appointed and qualify.
how long does a PM in charge have to deposit money in bank after it is given to them by principal?
48 hours - excluding saturdays, sundays and bank holidays - unless the renter is an employee of the owner of the property .. this can be put in operating account
How many days notice must you give on a week to week lease?
7
how many members of the SC real estate commission must be professionally engaged in the active practice of real estate?
7
HOW MANY MEMBERS ARE ACTIVE IN REAL ESTATE
7 (CONGRESSIONAL DISTRICTS/HOUSE & SENATE)
What does the civil rights act say?
All citizens shall have the same rights as white citizens to inherit, purchase, lease, sell, hold, and convey real and personal property.
General correspondent file
All correspondence from a tenant should be kept
direct costs
All costs incurred by an individual manager or management firm
Replacement versus actual depreciated value
Actual cash value insurance can be a problem on older buildings because partial losses will be reimbursed on a depreciated basis while repairs are at replacement costs. Replacement cost insurance guarantees that partial damage to old, depreciated property will be fully replaced by new construction.
All of the above
Advertising brochure 12 most effective
A gentor a company manager several owners
State law requires which of the following individual to have a license
Machinery and equipment insurance
Boiler explosions have been the source of catastrophic loss of life. Machinery breakdown coverage is important for air-conditioning and refrigeration equipment necessary to the use of the property or for preservation of food, furs or chemicals
Decentralize authority & responsibility of property
Benefit for professional prop mgr for multiple projects
Land , subsurface, air space, improvement
Best definition of R.E property
Dunn & Brad street
Best reporting service for financial reports
Have a joint inspection prior to the tenant moving in
Best way to establish good tenant relationships
By producing of manufactured item environmental
Definition hazard waste
Invention of elevator
Demand for property mgmt 1900 century
Research and development centers
Designed to bridge the gap between an industry engaged in high technology and the educational resources of its state or locality, research and development (R&D) centers provide assistance through facilities engineers and scientists at research universities
expenses
Direct expenses do not fluctuate with rental income and can be either regularly recurring costs or periodic costs. Regularly recurring costs arise each month; examples include employee wages, basic operating costs, and maintenance expenditures. Periodic costs such as property taxes and insurance premiums recur at longer intervals. These costs are directly incurred by the building
you need to be 21 to apply to be a property manager T/F
False. 18
Estate for Years Lease is terminated by death or sale of property T/F
False. Obligation goes to heirs
there needs to be three members on the south carolina real estate commission that are not professionally engaged in the practice of real estate T/F
False. TWO members
There are a number of exceptions to the civil rights act T/F
False. There are NO exceptions to the civil rights act
Landlord who makes a unlawful entry into unit can not be sued. T/F
False. tenant may seek damages
the 10th and final member of the sc real estate commission does not need to be in the active practice of real estate T/F
False. the 10th member needs to be in the active practice of real estate.
Internet
Free
Carefully study minimum personal requirements
Hiring site maintenance personnel prop mgr should
Special Purpose Property
Hotels, motels, clubs, resorts, nursing homes, theaters, schools, colleges, government institutions, and places of worship are considered
exceptions for elderly
Housing that is provided by a state or federal program designed to assist older persons Housing that is intended for and solely occupied by those 62 years or older Housing designed for older persons in which at least 80% of the housing is occupied by at least one person who is aged 55 or older
USED IN COMMERCIAL AND INDUSTRIAL LEASES THAT ENSURES RENTS ARE REFLECTIVE OF MARKET CONDITIONS. THEY ARE BASED ON CPI (MEASURES INFLATION)
INDEX LEASE
HOW DOES A LICENSEE PLACE THEIR LICENSE IN AN INACTIVE STATUS
INFORM THE COMMISSION IN WRITING (STILL HAVE TO RENEW EVERY 2 YEARS)
***TRYING TO LIMIT THE BENEFITS OF RENTING OR BUYING HOUSING IN AN AREA BECAUSE THE PERSON IS A MEMBER OF ONE OF THE PROTECTED CATEGORIES. THIS INCLUDES TRYING TO COERCE, THREATEN, RETALIATE AGAINST, OR INTERFERE WITH THE USE AND ENJOYMENT OF HOUSING****
INTERFERENCE, COERCION, INTIMIDATION
PURPOSE OF THE SC REAL ESTATE COMMISSION
IS TO REGULATE THE INDUSTRY & PROTECT THE PUBLICS INTEREST
What are trade or chattel fixtures?
If tenant attaches fixture, they have the right to take it because it always remained personal property. "the tenants taking of possession" is different than "as of the beginning of the lease"
Federal Community Right-to-Know Act
In 1986, the Superfund Amendments and Reauthorization Act, mentioned earlier, became law, part of which is Title III, the Emergency Planning and Community Right-to-Know Act. The act encourages and supports emergency planning efforts at the state and local levels and provides citizens and local governments with information concerning potential chemical hazards present in their communities. Employers required under the OSH Act of 1970 regulations to prepare or have available material safety data sheets for hazardous chemicals in their workplaces must also submit chemical hazard information to state and local governments.
Cash flow
In item in the properties financial operating reports that represents the net operating income minus all additional disbursements such as debt service and capital improvements
employer-employee relationship is found most often in banks, colleges, large corporations, and other private institutions that require managerial services for their properties
In lieu of a contract, the manager should obtain from the employing corporation written authorization to sign binding leases
Employer
Individual or company who pays people to work for them. Are classified by # of employees, working conditions, and wages paid
IREM
Institute of Real Estate Management
Optimum income potential is determined by the ________________?
Management Plan
AGENT
ONE AUTHORIZED AND EMPOWERED BY A WRITTEN AGENCY AGREEMENT TO PERFORM ACTIONS FOR A CLIENT
A SUB ACCOUNT RECORD WHICH IDENTIFIES FUNDS RECEIVED FROM, OR DISBURSED TO, A PARTICULAR OWNER OF PROPERTY BEING MANAGED
OWNERS LEDGER
expansion
Phase of business cycle where production increases
Manufacturing home parks
Prop mgr involves working w/ inexpensive ownership
Ownership reverts to fee simple estate
Remedies are cooperative lease owners does not pay incorrect
Prime factor influencing the real estate market
Supply and demand
EXIST WEHN THE LESSEE REMAINS IN THE PROPERTY AFTER THE EXPIRATION OF THE LEASE AND WITHOUT THE LANDLORDS CONSENT. CAN RESULT FROM A TENANT BEING IN BREACH OF CONTRACT OR A REFUSAL TO VACATE
TENANCY BY SUFFERANCE
A SUB ACCOUNT RECORD WHICH IDENTIFIES FUNDS RECEIVED FROM OR DISBURSED TO A PARTICULAR TENANT
TENANTS LEDGER
ALL PERSONS BORN IN THE US AND NOT SUBJECT TO ANY FOREIGN POWER, EXCLUDING INDIANS NOT TAXED, ARE HEREBY DECLARED TO BE CITIZENS OF THE US, AND SUCH CITIZENS, OF EVERY RACE AND COLOR, WITHOUT REGARD TO ANY PREVIOUS CONDITION OF SLAVERY OR INVOLUNTARY SERVITUDE, EXCEPT AS A PUNISHMENT FOR A CRIME WHEREOF THE PARTY SHALL HAVE BEEN DULY CONVICTED, SHALL HAVE THE SAME RIGHT, I EVERY STATE AND TERRITORY, TO MAKE AND ENFORCE CONTRACTS, TO SUE, TO INHERIT, PURCHASE, LEASE, SELL, HOLD, AND CONVEY REAL AND PERSONAL PROPERTY, AND TO FULL AND EQUAL BENEFIT FO THE LAWS AND PROCEEDINGS FOR THE SECURITY OF PERSONA AND PROPERTY, AS IS ENJOYED BY WHITE CITIZENS, AND SHALL BE SUBJECT TO ANY LW
THE CIVIL RIGHTS ACT OF 1866
WHAT IS THE MOST IMPORTANT THING TO REMEMBER ABOUT WHAT THE SC REAL ESTATE COMMISSION CAN DO
THEY CAN CONDUCT PERIODIC INSPECTIONS OF THE OFFICES OF LICENSEES TO ASSIST WITH AND ENSURE COMPLIANCE (INSPECT AT ANY TIME)
T/F. A LESSOR RENTING TO A TENANT MAY REPOSSESS A PROPERTY IF THE TENANT FAILS TO MAKE PAYMENTS
TRUE
T/F. EACH DEPOSIT INTO THE TRUST ACCOUNT MUST BE SUPPORTED BY A CONTRACT
TRUE
T/F. MONIES THAT ARE DEPOSITED IN A TRUST ACCOUNT CAN BE DEPOSIT INTO A INTEREST BEARING ACCOUNT
TRUE
T/F. THE TOTAL OF THE SUB-ACCOUNTS SHOULD EQUAL THE RUNNING BALANCE RECORDED IN THE GENERAL LEDGER AND CHECKBOOK AT ALL TIMES
TRUE
T/F. TRUST ACCOUNTS MAINTAINED BY A BIC MUST BE LOCATED IN AN INSURED FINANCIAL INSTITUTION AUTHORIZED TO CONDUCT BUSINESS IN SC
TRUE
AN ACCOUNT SEPARATE AND APART AND PHYSICALLY SEGREGATED FROM LICENSEES OWN FUNDS, IN WHICH THE LICENSEE IS REQUIRED BY LAW, TO DEPOSIT ALL FUNDS COLLECTED ON BEHALF OF CLIENTS OR OTEHR PARTIES
TRUST ACCOUNT
AN ESCROW ACCOUNT OR PROPERLY DESIGNATED DEMAND DEPOSIT BANK ACCOUNT
TRUST ACCOUNT
FUNDS RECEIVED ON BEHALF OF ANOTHER PERSON BY A LICENSEE IN THE COURSE OF PERFORMING A REAL ESTATE ACTIVITY
TRUST FUNDS
MONEY OR OTHER ITEMS OF VALUE NOT BELONGING TO, BUT RECEIVED BY THE LICENSEE ON BEHALF OF TOERHS
TRUST FUNDS
THE PERSON TO WHOM FUNDS ARE ENTRUSTED UPON CERTAIN TERMS AND CONDITIONS FOR THE BENEFIT OF ANOTHER
TRUSTEE
THE PERSON FROM WHOM FUNDS ARE RECEIVED AND TO WHOM FUNDS HELD IN TRUST BELONG
TRUSTOR
LICENSEES RECEIVING FUNDS FROM BUYERS AND SELLERS MUST DO WHAT WITH THE MONEY
TURN IT OVER TO THE BIC OR PMIC IMMEDIATELY/THE NEXT BUSINESS DAY
Two organizations are working to advance the professional standing of life safety and security personnel:
The American Society for Industrial Security (ASIS), which has developed a designation program, Certified Protection Professional (CPP) based on its training courses The National Burglar and Fire Alarm Association (NBFAA), which provides a certification course for security installations personnel
Identify & analyze owners goals
The final step in completing management plan
Absorption
The net change in the amount of occupied space from one period to the next Absorption is the space "absorbed" by tenants during the period (normally a year). It includes construction of new space and demolition of existing space.
Net leases
The straight net lease requires the tenant to pay for some or all of the real estate taxes and assessments in addition to the rental obligation. Under a net-net lease the tenant must generally pay the taxes and assessments plus the insurance premiums set forth in the lease agreement. The net-net-net or triple-net lease holds the tenant liable for taxes and assessments, insurance premiums, and the cost of repairs and maintenance work stipulated in the lease terms.
commercial and industrial tenant alteration costs
The tenant is required to pay for any equipment or facilities beyond the building standard, such as additional stairways, partitions, doors, truck docks, or sprinkler systems.
special facilitites
a conference room for four people requires about 200 square feet of space as does a reception area for three visitors and a receptionist. A lunchroom for four should contain 250 square feet
lease
a contract, a legally binding contract thus can be legally enforced. a year or less is legal if oral
escalation clause
a lease clause providing that the rental rate will increase or decrease according to a selected index of economic conditions
associated licensee
a licensee who is affiliated with a broker in charge or pm in charge
concession
a negotiating point in the lease, usually in the favor of tenant
Tenancy at Sufferance
a property renter is allowed to live in a property after the lease has expired, but before the owner demands them to leave. - the original lease conditions must be met. (also called "hold over" tenancy) - they have overstayed their welcome.
building standards
a specific amount of outlets, light fixtures, windows and such - that are provided in the rental space at the owner's expense.
Declining balance method Sum-of-the-years'-digits method
accelerated depreciation
In SC, the landlord may terminate the rental agreement if a tenant fails to pay rent within how many days of the scheduled due date? a. 5 days b. 7 days c. 10 days d. 30 days
a. 5 days
Economic oversupply
market condition where rental space is priced above the capabilitiesof of potential tenants.
A tenant vacated a property due to the landlord not fixing the hot water heater. This is called a. constructive eviction b. actual eviction c. partial eviction d. legal ejectment
a. constructive eviction
A tenant has signed a two year lease and provides $1500 security deposit. The tenant has waived their right to any interest that would accrue during the lease period. The property manager places the security deposit into a one year high yield certificate of deposit (CD). This would be an example of a. conversion b. commingling c. accounting d. business
a. conversion
The authority to carry out the eviction of a delinquent tenant from rented property comes from a. court b. landlord c. sheriff d. property owner
a. court
Cash required over a given period for the payment of principal and interest on a debt, such as mortgage payment on a property is considered a. debt service b. credit service c. savings service d. money management service
a. debt service
The first step in qualifying a tenant is to a. determine the amount of space the tenant needs b. fill out an application c. run a credit check d. verify income
a. determine the amount of space the tenant needs
which of the following lease forms is MOST recommended? a. lease form drawn up by the attorney for the owner b. preprinted forms taken from the internet c. lease used by the manager in his or her previous company d. common lease used by local apartment association
a. lease form drawn up by attorney
It is an acceptable practice for a licensee to: a. make direct contact with the buyer client of another licensee as long as he/she does so with the knowledge and permission of the buyer's agent b. talk someone into breaking a representation agreement with another as long as the licensee discloses why he/she thinks it is in the best interest of the client c. advise a tenant to break a lease in order to sell him/her a property as long as the licensee discloses why he/she thinks it is in the tenant's best interest d. none of the above
a. make direct contact with the buyer client of another licensee as long as he/she does so with the knowledge and permission of the buyer's agent
curable
when obvious repairs are postponed and not made when needed but they can be curable.
An agent's license renewal fee has been returned for insufficient funds. The SC Real Estate Commission a. may take disciplinary action against the licensee b. must allow the licensee a grace period of 30 days to pay the fee c. may require the BIC to pay the renewal fee d. must cancel the license immediately
a. may take disciplinary action against the licensee
Which of the following would be a condition for licensure as a salesperson in SC? a. pass the state exam within five years of the provisional licensing course b. complete an additional 30 hours of post licensing within three years c. be at least 21 years of age d. attend a provisional licensing course
a. pass the state exam within five years of the provisional licensing course
In SC, which of the following would need to be a licensed BIC? a. person who employs fewer than 3 agents b. son acting under a power of attorney to convey real estate c. owner of a duplex d partnership selling a building owned by the partners
a. person who employs fewer than 3 agents
the growth of the shopping centers has been stimulated by a. population shifts to the suburbs b. declining instruction costs c. urban renewal programs d. the international council of shopping centers
a. population shifts to the suburbs
A schedule of planned maintenance actions to curtail breakdowns and failure is called a. preventative maintenance b. corrective maintenance c. curtail maintenance d. routine maintenance
a. preventative maintenance
When managing office buildings, the property manager will need a good starting point in determining a rental schedule and income and expenses for the property. This would be called a a. property analysis b. neighborhood analysis c. regional analysis d. income analysis
a. property analysis
When working the maintenance programs, the property manager is responsible for all the following EXCEPT a. report expenses to lessee b. schedule tasks c. calculate costs d. maintain records
a. report expenses to lessee
Property Manager's Role
achieve the objectives of the property owners; generate income for the owners; and preserve and/or increase the value of the investment property.
A licensee who receives compensation in real estate transaction from more than one party can be disciplined unless the fee is accepted with the full knowledge and written consent of all parties. a. true b. false
a. true
A resident licensee may pay a part of his/her commission on a cooperative basis to a licensee of another state if that licensee does not conduct any of the negotiations for which a fee, compensation or commission is paid in this state. a. true b. false
a. true
Action may be instituted against a real estate licensee by a customer for information contained in the Residential Property Condition Disclosure Form if the real estate licensee is a signatory to that report. a. true b. false
a. true
a lease may be assigned a. unless its term prohibit assignment b. only if it is a gross lease c. so that the owner may ensured that the tenant is stable and financially secure d. only with consent of the owner
a. unless its term prohibit assignment
Clean Water Act Amendment
amendments contain two basic goals: To achieve water clean enough for swimming and recreational uses and for the protection of fish and wildlife To have no discharges of pollutants into the nation's waters Although neither goal was reached by 1994, an EPA report did cite dramatic improvements in the conditions of water sources in most parts of the country.
Cash flow defined
amount of money available for use after paying expenses and the debt service mortgage. Cash flow is determined by subtracting the total adjusted operating expenses plus debt service from the anticipated revenue for the upcoming year.
Monthly newsletters
an excellent way of educating occupants about current market conditions, improvements being made to the property, building activities, and other events, such as the appointment or promotion of management personnel
agent
an expert on whom the principal can rely for professional advice; the agent acts for the principal to bring him or her into legal relations with third parties. The agent is governed by the terms of the contract and by certain legal and ethical considerations based on the law of agency.
What must be returned with the security deposits?
an itemized deduction, if any
equity
an owners "interest" in a property over any liens
The Standard Industrial Classification Manual
another valuable reference tool that groups related industries and firms. By looking up one company that is particularly suited for a property (such as a previous tenant), the manager can find related firms with similar equipment, space, and location requirements
Civil Rights Act of 1866
any manner of racial discrimination in real estate is a violation. also knows as fair housing act
after March 1991
any newly constructed multifamily building (with four or more units) must allow access and use by handicapped persons (for example, by including wheelchair ramps and elevators). It is not sufficient to "build to the local code
Disability
any physical or mental impairment that limits a persons life activities
Statutes of fraud
authority to rent, operate, and manage premises
constructive eviction
when owner doesn't hold their part of the lease the tenant can walk out with notice
employer-employee relationships is most often found where?
banks, colleges, large corps, and other private institutions that require managerial services for their properties.
One of the principals to a property management agreement is the Property Manager-in-charge. What type if agent is the Property Manager-in-charge? a. general agent b. special agent c. universal agent d. routine agent
b. special agent
Which of the following tenancies does not involve a lessor-lessee relationship? a. tenancy at will b. tenancy in common c. tenancy from month-to-month d. tenancy from year-to-year
b. tenancy in common
Which of the following is not an essential element of a property management agreement? a. expiration date b. tenant income requirements c. identification of the parties d. owner responsibilities
b. tenant income requirements
steering
channeling members of protected class to areas that are already occupied primarily by members of those same classes, away from members of the other classes.
A broker is convicted on May 1st of possession and distribution of a controlled substance. Both the crime and the conviction took place out of state. On June 15, the broker calls the SC Real Estate Commission and leaves a message informing them of the conviction. Based on these facts, which of the following is true? a. the broker has properly informed the SC Real Estate Commission within 60 days after the conviction, and the broker's license may be renewed b. both the conviction and the broker's failure to notify the SC Real Estate Commission within 10 days violate the Commissions regulations c. because the conviction did not occur in the sate, it is not evidence of unworthy conduct d. the conviction is evidence of both improper dealing and fraud
b. both the conviction and the broker's failure to notify the SC Real Estate Commission within 10 days violate the Commissions regulations
A property manager has received $800 security deposit for a rental property, which is immediately deposited into the property manager's operating account. This would be an example of a. conversion b. commingling c. accounting d. representation
b. commingling
A lease would be terminated by which of the following? a. sale of a leased premises b. death of the tenant c. abandonment of leased premises by tenant d. expiration of term in a lease of years
b. death of the tenant
A SC real estate salesperson may lawfully collect compensation from a. either a buyer or a seller b. his or her employing broker only c. any party to the transaction or the party's representative d. a licensed real estate broker only
b. his or her employing broker only
A licensee from another state applying for a license in South Carolina must file with the SC Real Estate Commission a. certificate of specific performance b. irrevocable consent to suit c. corpus delicati d. copy of their birth certificate
b. irrevocable consent to suit
Pertaining to failure to disclose agency relationships: a. surveys have shown the public understands how state statutes control the actions and behaviors of licensees b. licensees are required to give a meaningful explanation of agency at first substantive contact and give the agency disclosure brochure to all consumers with whom they have substantive contact c. licensees are required to give a meaningful explanation of agency at first physical contact, but do not have to give the agency disclosure brochure to anyone except clients d. no action can be brought against a licensee for failure to disclose the party or parties for whom the licensee will be acting as an agent
b. licensees are required to give a meaningful explanation of agency at first substantive contact and give the agency disclosure brochure to all consumers with whom they have substantive contact
the SC Residential Landlord and Tenant Act applies to a. property management licensees, not real estate licensees b. managers of townhouses c. office leasing agents d. licensees who manage property, not owners who manage property
b. managers of townhouses
Regarding licensing and duties of personal real estate assistants in SC, they a. must be licensed b. may insert factual information into form contracts under the employing broker's supervision and approval c. may show houses for their supervising broker d. must be unlicensed individuals, licensees must be either salespeople or associate brokers
b. may insert factual information into form contracts under the employing broker's supervision and approval
A lessee who pays some or all of the lessors property expenses has a a. gross lease b. net lease c. percentage lease d. sublease
b. net lease
A real estate license is required for all of the following EXCEPT a. managing real estate b. selling a personal mobile home c. selling real estate d. collecting rent for the use of real estate
b. selling a personal mobile home
Short term lease
in which the landlord will accept the risk and pay the expenses in exchange for a chance to increase rents
No cause of action may arise against a licensee for failure to disclose a. material facts that should have been know to the agent b. the location of any registered sex offender c. any offsite condition that materially impacts the property being transferred d. the fact that the road is set to be widened to four lanes in the next year.
b. the location of any registered sex offender
What obligation does the smoke detector law impose on a landlord in a duplex? a. none, only single-family rentals are impacted by smoke detector regulations b. to provide and maintain smoke detectors c. at advise the tenant to provide their own smoke detectors d. to repair a malfunctioning smoke detector within 30 days
b. to provide and maintain smoke detectors
Generally, an oral lease for five years is a. illegal b. unenforceable c. a short term lease d. renewable only in writing
b. unenforceable
How long must a landlord wait before he or she can raise rents due to a substantial increase in taxes? a. never because this is illegal b. until the lease expires c. six months d. four months
b. until the lease expires
Security deposits and pet deposits must be deposited into the trust account a. within 30 days of signing the lease b. within 48 hours of receipt, excluding Saturday, Sunday and bank holidays c. immediately upon receipt, excluding Saturday, Sunday and bank holidays d. immediately upon receipt for cash or certified funds
b. within 48 hours of receipt, excluding Saturday, Sunday and bank holidays
Formaldehyde
best known of the volatile organic compounds (VOCs), formaldehyde is implicated as a cause of many indoor air quality complaints. Formaldehyde is a colorless, organic chemical that usually has a very strong, pronounced odor. Originally considered harmless, formaldehyde was widely used as an inexpensive preservative and bonding agent (used in home insulation and pressed wood particles). It is a component of finishes, plywood, paneling, fiberboard, and particleboard in furniture and cabinets. Urea Formaldehyde Foam Insulation (UFFI) is now legal, but rarely used
lease requires to have
both parties have to have capacity to be legally competent, must reach mutual accord, must have legality of purpose and must be valid consideration given.
break even
break even = fixed cost OVER 100%- variable cost ratio
adaptive reuse.
buildings in prime locations have been successfully converted into condominium apartments, shopping malls, restaurants, and bars
grantee
buyer
Condominium properties must be created by recording a master deed and bylaws as required by the a. SC Condominium Act b. SC Condominium Association c. SC Horizontal Property Act d. SC Real Estate Commission
c. SC Horizontal Property Act
A BIC fails to renew her license by June 30 but continues to engage in real estate transactions. What penalties could be incurred? a. none, because the license remains active if the renewal and penalties are all paid within six months b. an automatic hearing with the commission after 90 days with a possible $1,000 fine and/or six months imprisonment c. $500 fine and/or six months imprisonment upon conviction d. none, if the BIC can prove that non-renewal was not of malicious intent
c. $500 fine and/or six months imprisonment upon conviction
A management company has indirect costs of $20,000 and direct costs of $35,000 annually. It can handle about 750 units and wishes to make a 20 percent profit. What is the minimum per unit fee that should be charged? a. $47 b. $73 c. $88 d. $164
c. $88 $20,000+$35,000=$55,000 / 750 (units) = $73.33 x .20 (profit) = $14.66 $73.33+$14.66=$88 Management fee divided by the number of units firm is capable of handling plus percentage of profit=Minimum per unit fee
If a tenants whereabouts are unknown, how many days must the landlord wait before declaring abandonment? a. 5 days b. 10 days c. 15 days d. 30 days
c. 15 days
All potential tenants must be provided an EPA Booklet and required to sign a lead based paint disclosure form for all rental properties built before a. 2000 b. 1980 c. 1978 d. 1972
c. 1978
Security deposits must be returned to the tenant within a. 14 days b. 15 days c. 30 days d. 45 days
c. 30 days
Fiduciary duties
include care, obedience, accounting, loyalty, and disclosure
A couple has signed a lease containing a provision to waive the rights to interest earned from the security deposit. This provision is a. unenforceable, thus making the lease invalid b. unenforceable, but the lease is still valid c. enforceable, because the couple agreed to the provision d. enforceable only up to a security deposit of $1000
c. enforceable, because the couple agreed to the provision
When negotiating the lease, the property manager should account for future expenses and or profits by allowing for rents to increase for certain reasons. This provisions is known as the a. rental increase clause b. concession clause c. escalation clause d. competition clause
c. escalation clause
the traditional concentration of retail property in downtown areas became decentralized as a result of a. development of light industry in the suburbs b. development of multifamily apartment buildings c. evolution of the suburban shopping center d. expansion of public transportation
c. evolution of the suburban shopping center
what kind of lease provides for increases in the rental rates based on a selected index of economic conditions? a. percentage b. economic c. index d. cost of living
c. index
Which of the following is correct regarding an applicant for broker-in-charge a. must be at least 25 years of age b. must have been licensed as a salesperson for at least five years as a salesperson c. may be exempt by the SC Real Estate Commission from the education requirements d. may substitute the property manager-in-charge license for the broker-in-charge license
c. may be exempt by the SC Real Estate Commission from the education requirements
a lease should contain all of the following provisions except.. a. use of the premises b. building rules c. permission to sublet d. possession of the premises
c. permission to sublet
The company's financial/cash flow statement that indicates how the revenue is transformed into net income is called a. profit feasibility statement b. net loss statement c. profit and loss statement d. financial performance statement
c. profit and loss statement
An applicant for a real estate license in SC must a. have completed at least 2 years of college b. be at least 21 years old c. submit to a credit (background) check d. show proof of passing the license exam any time up to six months prior to the application
c. submit to a credit (background) check
Which of the following would NOT be true about nonresident licensees? a. must be licensed as a broker or salesperson in some state b. be licensed under a resident SC broker c. take all of the education course requirements in SC d. must notify the commission in writing within 60 days of becoming a SC resident.
c. take all of the education course requirements in SC
Disputed trust funds can be disbursed in the following ways: a. verbal agreement between the parties b. broker interprets contract and writes checks c. written agreement between the parties d. following buyer client's instructions as to disbursement
c. written agreement between the parties
Graduated rental structures
calculated on a base standard rental rate are often used for office space,
Rent factor
calculated using the percentage of gross return the owner wants to earn on the investment. If the owner paid $600,000 for the building and wants a 10% return, the rental rate will be around $60,000 per year
Indemnity Clause
can require the property owner to indemnify the manager for any damages not caused by the manager's own negligence or willful misconduct.
management plan
cannot be completed until the manager has identified and analyzed the owner's goals, which will vary widely among the individual, corporate, fiduciary, and government owners. The management plan may suggest changing the current operation of the property through rehabilitation, alteration, and modernization
Fiduciary duties
care, obedience, accounting, loyalty and disclosure
Retail property
categories for commercial R.E
What are seasonal variations?
changes occurring at regular intervals due to custom or nature
alterations
changes requested by tenant
Industrial Property
includes all land and facilities used for heavy and light manufacturing, for storage, and for the distribution of goods
Steering
channeling of members of protected classes to buildings or neighborhoods that are already occupied primarily by members of those same classes and away from buildings and neighborhoods occupied primarily by members of other classes
steering
channeling of members of protected classes to buildings or neighbors that are already occupied primarily by member of those classes and away from buildings and neighborhoods occupied primarily by members of other classes
usery
charge more interest law allows
The Occupational Safety and Health Act (OSH Act)
charges property managers with familiarizing themselves with potentially hazardous substances—asbestos, radon, toxic leaks from underground storage tanks, urea formaldehyde, PCBs, and lead paint.
What are the two types of jurisdiction courts in the landlord tenant act?
circuit courts and magistrate courts
What do you call a person who hires a licensee?
client
Clean Air Act
combating air pollution by requiring the EPA to set national air quality standards for major pollutants that have an adverse impact on human health. Ambient air quality standards are prescribed in two levels: primary standards, designed to protect human beings from harm, and secondary standards, designed to protect the environment itself. was amended to include laws to protect the stratospheric ozone layer. up to $25,000 per day
Transportation consideration
combined with the lower cost of suburban land, have been a catalyst for the construction of industrial developments in outlying areas. encouraged new factories and branch facilities to locate in suburban areas
facilities manager
commercial property professional responsible for maintaining leased space
Percentage Lease
commonly used for retail property. Usually provides for the payment of a fixed base rental fee plus a percentage of the tenant's gross income in excess of a predetermine minimum amount of sales.
basic elements of a lease
complete legal names of both parties, description of property, terms of lease, amount of rent, time method of payment, use of premisses, rights and obligations of both parties and possession of premisses
Educational requirements for Property Manager
completion of 30 hours or bach in real estate must get a passing grade on examination if you fail the test, you can take the test within 6 months without having to do the course
rental area
computed by measuring to the inside finished surface of the dominant portion of the permanent outer building walls. The restrooms, janitor closets, and rooms such as electrical rooms, which are necessary to the operation of the building, are included
Fair Credit Reporting Act
consumer protection law that requires a denied credit report.
percentage lease
contains most of the standard rights and obligations of landlord and tenant stipulated in other lease forms.
If you are representing a seller as a single-agency client, what forms should be used? a. an agency-disclosure brochure and a buyer-agency agreement b. a listing agreement and a buyer-agency agreement c. an agency-disclosure brochure and a designated agency consent agreement d. an agency-disclosure brochure and a listing agreement
d. an agency-disclosure brochure and a listing agreement
The office manager for a local real estate firm is responsible for the following activities: coordinating the flow of paperwork through the office, preparing forms and advertising copy, hiring and supervising clerical personnel. the office manager is a. violating the license law b. required to have a broker's license c. required to have a salesperson's license d. exempt from all real estate licensing requirements
d. exempt from all real estate licensing requirements
All of the following may be grounds for disciplinary action by the SC Real Estate Commission EXCEPT a. inducing a party to break a contract b. interfering with the agency relationship of another agent and client c. conviction of violating state fair housing laws d. failure to disclose the death of a seller due to cancer
d. failure to disclose the death of a seller due to cancer
A real estate licensee who wishes to also become a property manager a. may also apply for a property manager's license b. must first acquire a broker's license c. must attend a 30-hour property management class d. may manage property with a real estate license
d. may manage property with a real estate license
Recession
when supply meets and begins to surpass the demand for products and services. This is the peak of the cycle.
A broker has an exclusive-right-to-sell listing on a building. The owner is out of town when the broker gets an offer from a buyer to purchase the building providing the seller agrees to take a purchase money mortgage. The buyer must have a commitment from the seller before the seller is scheduled to return to the city. Under these circumstances the a. broker may enter into a binding agreement on behalf of the seller b. broker may collect a commission even if the transaction falls through because of the seller's absence from the city c. the buyer is obligated to keep the offer open until the seller returns d. the broker must obtain the signature of the seller to effect a contract
d. the broker must obtain the signature of the seller to effect a contract
Acme Property Management has four offices in South Carolina. How many trust accounts must be established? a. one for each office b. no more than two companies can use one trust account c. every property manager-in-charge must have their own trust account d. the company may have one centralized account for all four offices if the SC Real Estate Commission approves the account
d. the company may have one centralized account for all four offices if the SC Real Estate Commission approves the account
management contract
dated agreement signed by both the manager and the owner or the owner's authorized representative, that defines the relationship between the parties, serves as a guide for the operation of the property, and provides a basis for the settlement of any future disputes
Regional Market Analysis includes?
demographic and economic information on the regional or metropolitan area in which the subject property is located
condemnation
denied use of property because appropriated or condemned by owner
Agency
describe the special relationship between the principal, the one who hires, and the agent, the one who does the work
Multiperil policies
designed especially for each type of property: apartments, office buildings, warehouses, row houses, and fireproof structures. Multiperil policies usually contain related covers such as loss of income and premises liability. The policies contain four parts: The insurance agreement Policy exclusions, limitations, and reductions Policy conditions and warranties, if any Policy territory
cosmetic maintenance
designed to increase the marketability of the property.
gross collectible rental income
determine the percentage of probable rent loss resulting from vacancies, tenant defaults on leases, and tenant turnover. These estimates must be subtracted from the gross rental income figure
Gross rental income
determined by multiplying the amount of space in the building by the base rental rate for that type of space
chief property manager or property management executive
determines the success or failure of the operations, this person must be knowledgeable and experienced to control both the strategic and the operational aspects of property management
boma
developed a standard method of floor measurement that measures construction, rentable, usable and store areas in an office building. The BOMA Standard has been accepted and approved by the American National Standards Institute (ANSI)
trust
device by which one person or institution transfers legal ownership of property to someone else to hold or manage for the benefit of a third party. Trusts are created by written agreements that establish formal fiduciary relationship
marketing rental space
directed toward a single goal—the signing of a lease agreement between the owner or manager and the tenant
service animals
do service for people that could not do for them selves. Need to allow in and NOT pay pet fees can ask for letter from doctor but no more
Real Property
earth surface extending downward to center & upward into space, includes anything permanently attached
principal
either an individual who designates another as their agent or the original amount of a loan
neighborhood analysis
emphasizes transportation, parking and proximity to businesses and services. The prestige of the address should be highlighted, as should improvements, renovations, and new construction in the area
Private industry councils (PICs)
employ federal funds to operate employment and training program
Tenant Wardens
employees of tenant companies who are schooled in emergency procedures by the building staff to direct their fellow employees during routine drills and actual emergencies.Special clothing, such as red baseball caps, should be provided to tenant wardens for use during drills and actual emergencies. Recognition of the tenant warden team by holding regular monthly training sessions and other activities will increase their visibility and creditability and make them an effective supplement to the building staff during emergencies. A tenant employee should be selected to lead the warden team
ADA title 1
employers if have more than 15 employees cannot discriminate due to disabilities and must accommodate
Federal Reserve Board
enact policies that seek to control runaway growth
types of lease hold estates
estate for years, estate period to period, tendency at will and tendency at sufferance
comparative income and expense analysis
estimate of the costs of improvements, alterations, or remodeling that are consistent with the owner's objectives and are needed to command optimum rentals. provides the owner with the potential income increase resulting from the proposed capital improvement and how long it will take to recoup the owner's initial capital expenditure
credit reports
fair housing laws require a management firm to utilize credit reports for all applicants if it is going to use them at all
defalt
faliure to meet obligation
property analysis
familiarizes the manager with the nature and condition of a particular building and with its position relative to similar properties in the neighborhood
category killers,
feasible for only one of each merchandise classification to be in each complex. Power centers are popular with developers because the national credit status of the majority of tenants significantly assists in arranging financing.
Civil rights act of 1866
federal law stating all races have the right to conduct real estate transactions; reaffirmed in 1968 john vs. mayer
Regional Cooperative
feel that an industry established anywhere within a reasonable distance of their location will benefit industry in all cities in the area
When hired, what type of duties do you owe to the principal/client?
fiduciary duties
Flat or fixed fee versus percentage fee versus other fees
flat fee per unit may be most appropriate when managing a condominium or cooperative complex inasmuch as the owners want management to contain expenses, not increase them. The percentage fee is a wonderful incentive, on the other hand, for the manager to seek to improve the income of the building, although a minimum fee may be established to protect management fees if the building revenue drops.
Building systems
focal point of up-to-date emergency response systems is a master central control panel in a life safety control room that automatically monitors smoke detectors, water flow switches for the sprinkler system, and manual fire alarm pull stations located throughout the building.
What happens when you do not renew your license?
for each active and inactive license not renewed by expiration, there may be a reinstatement penalty of $25 per month for a period of 6 months .... if you do not renew, you must retake the test. ..... $10 goes to the SC real estate commission education and research fund as a separate account
1099 tax form
for independent contractor who makes > $1600 a year
actual eviction
forcible removal of tenant by an officer of the court after judgment has been issued against them
Penalties for breach of client-level responsibilities?
forfeiture of commission, damages, punitive damages, loss of licence
941 tax form
form of all taxes withheld from employees
detailed plans for maintenance
foundation of effective maintenance supervision
Modified Accelerated Cost Recovery System, 1986
four new classes of property were added, two of which were classes of real property. Both must be depreciated on a straight-line method. Residential rental real estate was assigned 27.5 years of depreciable life and nonresidential real property was assigned 31.5 years.
what are 2 types of estate
free hold estate and non freehold or lease hold
Advantage of percentage lease?
from tenants point of view: it is a long term lease with a fair minimum rental, obligating the tenant to pay additional amounts only when the business volume justifies an increase.
advantage of a percentage lease
from the tenant's point of view is that it is a long-term lease with a fair minimum rental, obligating the tenant to pay additional amounts only when business volume justifies an increase. From the manager's and owner's perspective, the percentage lease implies that any new business is due to the tenant's location and the marketing efforts of the owners and the manager. when leasing retail space for more than three or five years.provisions to verify the accuracy of the gross income reported by the tenant.
Office and retail leases
generally 5-10 years
power centers
generally large centers, from 300,000 square feet to in excess of 1 million square feet. These stores are mostly large national chain outlets that would be considered anchors in a conventional shopping center with a few adjoining small stores.
Net-Net Lease
generally requires tenants to pay all items included under the net lease terms plus the insurance premiums agreed on in the contact.
property analysis
gives the manager a basis for setting a rental schedule, estimating income and expense for the property, and anticipating the reactions of prospects
code of ethics
good business conduct guidelines
eminent domain
government right to take private property for public good, use condemnation to do so.
Enterprise Zones
have been established in some states in economically depressed areas to encourage the establishment of businesses, including industry, in those zones. The incentives are in the form of ad valorem tax abatements for a period of time for each new job located in the zone.
Industrial Development Incentives
have been made possible in large part through liberalized zoning ordinances in growing communities. Industrial revenue bonds enjoy a special tax advantage
more firms are leaving the traditional bastions of industrial activity
in the northeastern United States for locations in the Southwest, South Central, and Southeast, and even overseas. A number of factors—lower property taxes, a better labor market, lower pay scales for workers, fewer unions, lower construction costs, and a better climate—have fostered this trend.
property managers who find opportunities
in this area must take special precautions to learn and define the legal responsibilities and requirements of the relationship
HOPA
housing for older people act
essential elements of a management contract
identification of parties, period over which contract will run, authority and respionsibilities of manager, responsibilities of owner, fees/leasing sales commission and signatures of parties
first step in long-term cost-control planning
identify opportunities to save on operational expenses
key to successful maintenance
identifying what needs to be done, who is doing it, how much it costs, and whether the job was done right. It is useful to approach maintenance management from a customer service perspective
qualifying tenants
identity, fair housing rental history, financial status, references, credit reports
ADA tilte 3
if a place is open to the public they HAVE to be handicap accessible
disclosure
imposes on the property manager the duty to keep the owner fully informed of all material facts regarding the management of the property
executive function
includes preparing budgets, developing an advertising program, leasing, inspecting properties, communicating with tenants, contacting owners, contracting for services, hiring, training, and supervising both office and on-site employees, directing major repairs and supervising all administrative functions
gross effective revenue
includes the gross collectible income and other sources of income from the property
Total land requirement
includes the total land area within the property boundaries both open acreage and the area covered by buildings, parking lots, landscaping, docks, and so forth. Custom-service, market-oriented industrial firms generally require fewer than 10 acres of land
indirect costs
incurred when a management department shares facilities and expenses with other divisions of the parent company or real estate agency. Although they may amount to 25% or more of the total cost of operating, they are less visible than direct costs and, therefore, are often ignored when drawing up a management department's budget. A proportionate share of occupancy costs, general office overhead, and accounting overhead should be assigned to the management department as its indirect costs.
Net Leases are most commonly found in __________ properties.
industrial
liability insurance
insurance protecting property owner against damages due to neglect
Insurable Interest
insurance term for an ECONOMIC INTEREST that has suffered a loss
performance bond
insures incomplete contract work
functionally obsolete
intact building with out-of-date usage
trust
inter vivos, that is, set up during one's life, or it may be testamentary, established by will
Office Manager, Comptroller
interprets the income and expense reports, makes major decisions regarding new procedures, and submits profit and loss statements to the owner. A single comptroller is usually responsible for all of the properties managed by the firm. Because this is a crucial function, the executive property manager in a smaller operation will usually assume responsibility for it.
Corrective maintenance
involves the actual repairs that keep the building's equipment, utilities, and amenities functioning as contracted for by the tenants
performance bond
is a guarantee from an independent bonding company that the work will be completed despite any financial or other problems the contractor may experience. nature and size of the project, as well as the contractor's reputation, experience, and financial standing help the owner determine whether to demand a performance bond
rental center
is a special leasing area located in a real estate development typically found in complexes larger than 100 units
Ethics
is a system of moral principles, or rules of conduct that refer to fidelity, integrity, and competency. he manager-agent pledges to act in the best interest of his or her principal and to handle all transactions involving the property with honesty and discretion
local economic information
is an important indicator of the supply and demand for housing, which will affect the rental rates that can be charged.
hazardous substance
is broader in scope and may include everyday items such as household cleaning products and paint.
Hazardous waste
is generally a byproduct of a manufactured item which itself may not be subject to environmental law or regulation.
void lease
is missing one or more elements, not considered a contract so not enforceable
spatial requirements
is one of the first areas of qualification for a new tenant
most common owner-property manager relationship
is that of principal-agent and is created by a written contract signed by both parties
Blockbusting or panic selling
is the act of encouraging people to sell or rent by claiming that the entry of a protected class of people into the area will have some negative impact on property values
dominant portion
is the inside finished surface of the permanent outer building wall, which must be 50% or more of the vertical floor-to-ceiling dimension. If there is no dominant portion or if the dominant portion is not vertical, the measurement for area is the inside finished surface of the permanent outer building wall where it intersects the finished floor. Any major vertical penetrations of the floor, such as utility shafts, stairwells and elevators, are excluded.
multi story building
is the most common type of office space
usable area
is the number of square feet that can actually be occupied. It is computed by measuring from the finished surface of the office side of corridor and other permanent walls to the center of partitions that separate the office from adjoining usable areas, and to the inside finished surface of the dominant portion of the permanent outer building walls
Gross floor area
is the total of all floor space within the exterior walls of the building with no allowance made for structural projections. To be classified as part of the gross floor area, a space must have a ceiling height of at least 7.5 feet. Unenclosed areas, such as loading platforms, should not be included in the gross floor area.
unenforceable lease
it is legal all the elements are present but can not be enforced, not in writing. *except when it is a year or less
Fixed-asset financing, land write-down, Urban Development Action Grants (UDAG), and tax abatement financing
just some of the many other incentives to industry to locate in a community. Under a fixed- asset financing assistance program, competitive financing is made available through Small Business Administration and other guaranteed loan programs, revenue bonds, and other financing mechanisms.
negotiated contracts
large construction projects, contractors then submit a joint proposal estimating the total cost of the project
Good Consideration
lease or agreement that has value but can't be converted to money
index lease
leases tied to an index CPI and is sporadically evaluated to see if it need to increase, typical office space, could be net or gross lease
actual eviction
legal eviction by court order
show list
list should itemize no more than three apartments of each type and size in the building that are available for inspection by prospects
Tax participation clause
long-term leases generally require the tenant to pay any increases in taxes or assessments above the rates for a specified base year.
five-year forecast
long-term projection of estimated expenditures and income based on predictable changes
prime concern of the trustee
maintaining the value of the property entrusted to its care while earning a reasonable income for the trust beneficiary
risk management
management that focuses on minimizing risk of damage
deflationary trend
manager should favor a longer lease term to secure the current higher rental rate for as long as possible
general economic trend is inflationary,
manager should probably push for an increased rental rate and a short-lease term or for an escalation clause
good filing system
mark of an efficient management office
Competitive bids
may be obtained from general contractors for all or part of the job or directly from representatives of skilled trades and suppliers
Voidable lease
may or may not be able to enforce, has all the element but party may come back and recant/ ex 17 year old...only tenant can enforce
wilful
means an attempt to intentionally avoid obligations under the rental agreement or the provisions of this chapter
comparative analysis
measures and records data such as size, location, amenities, and rental structures for buildings similar to the subject property
mold
microscopic organism that exists in and out doors, requires moisture, and causes air-quality issues
overage lease
minimum-guaranteed percentage leases and are more beneficial to the owner. Although payments of overage rent may be made monthly, they usually are adjusted on an annual basis. The adjustment may be either on the tenant's lease anniversary or on a calendar year basis. By fixing a minimum rent, the owner is assured of a certainly level of income, no matter how the tenant fares
reserve funds
monies set aside for an operating budget
Polychlorinated Biphenyls (PCBs)
more than 200 chemical compounds not naturally found in nature. high levels of the chemicals remain in various parts of the country as a result of leakage of old equipment, leaching from landfills, and from previously contaminated sediments.only way that they can be destroyed is by burning them in a closed environment with a temperature of higher than 2,400 degrees! The commercial or industrial property manager is most likely to deal with PCBs.
Technical oversupply
more units available than tenants to fill them
versatility
most basic qualification for an employee in the field of property management
Underground storage tanks
most common use for underground storage tanks (USTs) is storage of petroleum products. The principal danger from USTs comes from leaking of toxic products
labor intensive industries
most process raw materials and show a high concentration of employees per acre
rent factor
multiplier used to establish rental rate for Industrial Properties
how is gross rental income determined?
multiplying the amount of space in the building by the same rental rate for that type of space
Equal Housing Logo
must be displayed at property and in advertisements
eviction suit,
must fill out an appropriate eviction form
resident manager
must have the respect of the tenants in order to successfully collect rents and deal with problems.
facility manager
n employee of a building occupant who is responsible for the internal arrangement and furnishing of the space leased by that employer-occupant and, in some cases, for maintenance of the leased space
can an unlicensed employee show property to a prospective tenant?
no unless its multi-unit housing
vacation rental
obligated to tell buyer their is a prepaid renter. must hold lease 90 days or less( cannot cancel) mor 90 days can cancel vaycay property needs to send deposit back.
The Major responsibility of Property Manager is....?
obtain highest profit for owner/maintain property
deferred maintenance
obvious repairs are postponed and not made when needed. - the building begins to lose value. Normally curable - (sometimes called curable depreciation or curable obsolescence)
Partial eviction
occurs when a tenant has not physically moved out but is unable to use part or all of the premises for the purposes intended in the lease due to some failure on part of the owner
Major regional shopping centers
offer one of the greatest challenges in property management
institutional property
office buildings owned and operated by same company
HUD adopted the Keating Memorandum
official guidelines for occupancy standards
When surveying for potential tenants.. what do property managers base their decision on? (residential)
past rental performance credit reports outstanding bad checks criminal histories evictions past due balances noise complaints insufficient checks damage to rental units
National Association of Residential Property Managers, NARPM
permanent trade organization for property managers who specialize in managing single-family dwellings
recapture clause
permits the landlord to retain the right to terminate a percentage lease at the end of an acceptable period of time if gross sales have not reached the level anticipated during negotiations. concerned that an anchor may "go dark" rather than terminate a lease, in order to prevent competitors from leasing the space. recapture clause must not be confused with the recapture provision previously mentioned in discussing an assignment and subletting clause
customer
person with who a licensee has NOT established an agency relationship
client
person with who a licensee has established an agency relationship (agent and principal)
fixture
personal property attached to property, which then becomes part of real property
Chattel fixture
personal property put in by tenant to make their business better, intention not to become part of property, they can take it with them. commercial leases.
Deferred Maintenance
physical depreciation caused by postponed maintenance
disabilities
physical or mental impairment that limits one or more life activities
reserve fund
placed in the expense category, often estimated at 10 to 15% of the total cost of all supplies
retail establishments
places where commodities are sold in small quantities directly to consumers
What are the remedies owed to tenant for landlord retaliation?
possession recovery or agreement termination or 3 moths rent and attorney fees
finish out
preparation of a new building shell to accommodate a new tenant
What does a property manager do?
preserve and increase value of a property
statues of fraud
prevent arguments or disputes over oral agreements
break even
primary method of calculating the profitability of a building
monthly earnings report
principal means of regular communication between the manager and the owner or owning corporation. This report usually includes rental receipts, miscellaneous income, gross income, an itemized list of all disbursements and operating expenses, total expenses for the month, cash on hand at the beginning of the month, amount forwarded to the owner, and cash balance on hand.
canvassing
probably the best prospecting method for leasing office space and is most productive when the list of prospects has been prequalified
qualifying process
process of qualifying a tenant is called the qualifying process, which is essentially the same whether for a residential, commercial, or industrial prospect.
what do PMs rely on when surveying for potential tenants? (commercial)
profit and loss records of company over past years - economic growth pattern is important when leasing retail space at a shopping center where each business depends on the strength and success o its neighbors to generate the customer traffic needed to make a profit.
The Equal Credit Opportunity Act (ECOA)
prohibits denying a person a loan simply because of his or her race, color, religion, national origin, sex, marital status, age, and receipt of income from public assistance.
anti trust laws
promote competition in open market
Heavy Manufacturing
property for heavy industry must be designed with the specific needs of potential users in mind, such plants are generally occupied and managed by the owner
draft a management plan
property manager should obtain from the owner a statement of the annual real estate taxes and special assessments on the property, the cost of debt service, and the premiums for insurance policies currently in effect. These figures, along with the manager's market analyses, study of comparables, and inspection of the property, provide the information needed to draft a management plan.
choice between several well-qualified tenants
property manager should pay particular attention to rapidly growing companies.
trustee takes charge of the property for the benefit of the owner(s) of the equitable title
property owner, called a trustor, transfers the legal title to property to a trustee, who will manage the property, and transfers the equitable title to one or more beneficiaries
Accelerated Cost Recovery System .. called acres from its acronym, ACRS
property placed in service in 1981 to 1986. ACRS prescribes methods of recovery of expenditures through a depreciation allowance that varies according to the type of property being depreciated
Tenancy at Will
property tenure that can be terminated at any time by either party
Residential Property
property used as a living space
Multiple Tenancy
uses are a good mix when very large much older inner city type factories and mills are being redeveloped
Structural density
ratio of the total ground-floor area of a building to the total land area is called structural density. average density for a general purpose industrial building in today's market is between 25% and 33%.
structural density
ratio of total ground floor area to total land area on site
Institutional Property
real estate owned and occupied by a major corporation
after revocation of license
reapply after 3 years
refurbished
redecorates or rehabilitates a space for a tenant as a condition of lease renewal
What is controlling risk?
reducing the risk example. installing sprinklers
operating budget
reflects the manager's ability to project realistic, supportable estimates of operating expenses for that particular property
Redlining
refusing to make a loan or give insurance to people of certain ethnicities; the practice of denying services to residence of certain areas based on race
routine maintenance
regular upkeep
fiduciary
relationship between agent & principal requiring good faith
regional and neighborhood analyses
relevant to commercial properties
make ready
renovation of a previously occupied space
Reappraisal Lease
rent adjusts to current market value every 5 years
How is a tenant usually qualified?
rental history, income, background, credit
Unsigned leases will be accepted by...?
rental payment & possession of property
feasibility study
report on potential profitability of proposed real estate project
regional market analysis
report that details demographic & economic info in a metro area
centralized accounting systems
require only a property manager, a secretary-receptionist, and a salesperson who solicits local accounts at each branch. This arrangement can reduce the staffing needs of a branch office by 40% or more, actually increasing the overall efficiency and profit margin of the management company.
Pollution Liability insurance
required by law for underground storage tanks, hazardous waste storage or disposal sites, and transportation of hazardous wastes. written on claims-made forms, meaning only those claims bought within the policy period are covered
Truth-in-Lending law
requires that certain disclosures be made if the ad contains any potentially misleading "trigger items." For example, perhaps the ad mentions a low monthly rent that is actually available only to tenants who sign a long-term lease. This is potentially misleading, so somewhere in the ad, the manager must mention the additional terms required for the lower rate
duty of accounting
requires the manager to accurately report on the status of all funds received on behalf of or from the property owner, such funds are deposited into trust accounts
duty of care
requires the property manager to exercise a reasonable degree of skill while managing the property
Net lease
requires the tenant to pay some or all of the basic property expenses, such as real estate taxes and assessments, insurance, utilities, and maintenance costs. Of all types of leases, these are typically the longest
what type of property are you most likely to find an incubator space in?
research parks
what type of real estate properties utilizes more property managers?
residential
Corridor Development
results from the establishment or growth of two large industrial or business centers at some distance from each other on an interstate highway or other major traffic artery. As these two centers expand geographically, allied businesses and plants that service or feed off the large plants locate along the major arteries that connect them.
Percentage leases are most commonly found in ___________ properties.
retail
federal Unemployment Tax Act, FUTA
return must be filed by every employer of one or more persons who work for some portion of a day for 20 weeks during the year or earn at least $1,500 during the year.
physical inventory
reveal areas of deferred maintenance and curable obsolescence. It should show compliance with building, housing, and zoning codes
security deposit
right to get back minus damage expenses, have 30 days to get it back, tenant need to supply return address
Market Orientated Industries
sell to private or industrial consumers. Industries of this type rely on a large consumer population and are sensitive to growth trends or shifts in the marketplace. They tend to be located near points of distribution to reach their customers more quickly and economically.
Grantor
seller
Fiduciary institutions become involved
services of their trust departments; investment divisions, which purchase income property
Recapture Clause
sets a minimum amount of rent that must be generated by the percentage of gross sales to ensure that the owner receives the anticipated rental rate.
Meagans law
sex offenders are obligated by law to register when they move into an area
Speculative building
shells are easily converted to lighter industrial use or commercial space. The nature of these building shells allows the developer to be able to install more extensive tenant improvements should this be a requirement of a more commercial tenant who will take the industrial spac
Transferring the risk
shifting the hazardous activity to professionals with satisfactory insurance; contractually shifting the legal liability to others by written indemnities to the owner/property manager; and transferring the risk, partially or wholly, to insurers.
optimal price structure
should assure the manager of a 95% occupancy level for all units
property maintenance manager and mechanical technicians
should be in charge of all mechanical functions on the floor where an emergency occurs, reporting to the life safety control operator on conditions existing there.
property manager's rights and responsibilities
should be spelled out in detail in the property management agreement
redlinning
signaling out areas not to deal with
What is the purpose of the SC landlord tenant act?
simplify rights & encourage to maintain and improve housing quality
Industrial Park
simply a suburban industrial subdivision designed to offer land in outlying areas with good accessibility to comparatively small businesses. They attract businesses that formerly occupied lofts because they allow the tenant to combine office, manufacturing, and storage space in a one-story building
cashier bookkeeper
single bookkeeper can usually handle eight to ten properties
Maintenance
single most important factor over which the property manager has control
constructive eviction
situation where a tenant must abandon premises due to owner's negligence in providing essential services
partial eviction
situation where landlords negligence renders part of the premises unusable to tenant.
market
situation where willing sellers and willing buyers exchange goods and services
regional shopping center
six major department stores, accompanied by food stores, satellite stores offering a range of general merchandise, restaurants, and banks. It varies from 70 to 225 stores, serves a radius of 10 to 50 miles, and is supported by 50,000 to 150,000 families. Its size ranges from 300,000 to 800,000 square feet.
non free hold or lease hold estate
someone else property and you are allowed to use/lease and then have legal right to the property
industrial development councils, sometimes called economic development commissions
sources of referrals
tax incentives
special tax breaks for businesses to encourage investment in their area
calculate commercial rent per sq ft
sq ft x total sq ft= X / 12 mnths= monthly rent
The Texas Workforce Commission Civil Rights Division
state agency enforcing the Texas Fair Housing Act. The law is almost identical to the federal law and exists primarily so Texas residents may seek enforcement at the state level of government rather than having to go to federal agencies or into the federal court system.
Statute of Frauds
state law that requires certain instructions to be in writing before legally enforceable.
type of payment options/leases
step up clause, index lease, escalation clause, percentage lease, reappraisal lease,
letting PMIC license expire
stop working in real estate transactions and renew pay $25 for each month after expiration date, MUST renew before 6 months
What is another name for Gross Lease?
straight lease
What are some examples of random economic changes?
strikes, zoning ordinances, government policy changes, reforms, natural disasters, terror attacks
Property Analysis
study made to familiarize pm with the property condition
planned unit development (PUD)
sually meet simple local needs, not serious shopping. Such shops could include convenience stores, dry cleaners, and perhaps small grocery stores; assigning various uses to a tract of land in accordance with a master plan and the particular terrain features of the tract.
If ABC Insurance Company pays a loss that it believes is rightfully the responsibility of XYZ Insurance Company, this is called...
subrogation Subrogation is the right for an insurer to pursue a third party that caused an insurance loss to the insured. This is done as a means of recovering the amount of the claim paid to the insured for the loss
industrial park
suburban subdivision designed to offer accessibility to outlying areas; Business Park
Commercial Real Estate
success or failure of a shopping center often hinges on the property manager's ability to assess the market, conduct sales promotion and public relations, and act swiftly and decisively
Real Property
surface of a parcel of land and moves on to the owner's rights to the air above the surface and the soil and minerals beneath the surface, as well as anything permanently attached to this land, either by nature or by human hands.
conversion
take trust funds and use for another purpose
Property Supervisor, is also known as a Field Manager
takes care of the general administration, directs the daily operation of the property, and reports to the property management executive. 5-20 buildings. sets hiring policy and salary levels for the resident manager and other building employees. comparing bids and obtaining outside contract services for corrective maintenance, housekeeping, and new construction. The supervisor monitors building and office employees, makes maintenance decisions, and approves purchase orders for supplies and services. When maintenance jobs are completed, the supervisor inspects the work and the materials.
economic vs. technical oversupply
technical oversupply: when there is more space available than potential tenants demand economic oversupply: tenants cannot afford the rent
Tenancy at will
tenancy for an indefinite period of time, continue as long as both parties wish for estate to continue. Does end with death either party.
non-competing clause
tenant gets right to operate without competition in same complex
tenancy at sufferance
tenant obtains possession legally but remains on property after the expiration of lease hold interest or permission of owner
gross lease
tenant pays lease, owner pays all other expenses property, typically residential leases
percentage lease
tenant pays rent AND a % of their gross receipts or sales...landlord can lookout books to see if they are getting correct amount
net lease
tenant pays rent and part or all expenses of the property. Typically industrial, the more net, the more tenants pay.
triple net lease
tenant pays: 1. rent 2. insurance 3. tax 4. repairs 5. assesments
Tenant is required to pay rent to landlord during court proceedings if....
tenant raises a defence or counterclaims
attornment
tenant sending rent to new owner , accepting new ownership
hold over tenant
tenant who continues to reside on premisses after lease is over, with out permission of owner
parties to a lease
tenant-owner
Foreclosure rules: "2009 act"
tenants can stay until end of lease or given a 90dlay notice if buyer intends to live on property. Applies to all federally-related mortgages and real property.
determining who should comply
the Building Owners and Managers Association (BOMA) recommends first doing a building survey.
recession
the PEAK of the business cycle Supply = Demand
blockbusting
the act of encouraging people to sell or rent by claiming that the entry of a protected class of people into the are a will have some negative impact on property values. convince white home owners to sell their houses as low prices in fear that black owners would soon move in. Agents would then sell houses to blacks at much higher prices
most important
the agent's authority to sign leases
new york method
the area is computed by measuring to the outside finished surface of permanent outer building walls
What is the role of the attorney when negotiating terms?
the attorney's task is to formalize the agreement by translating it into legal terms after it has been established.
What is the Jones v. Alfred H. Mayer Company case?
the case that upheld the 1968 civil rights act that prohibits ALL racial discrimination
fast track construction
the contractor begins work before final plans are completed
if the case of death or illness of a PM in charge.. what may the department do?
the department may permit an associate licensee to act as a PM in charge for UP TO SIX MONTHS
80% coinsurance
the owner/manager has promised the insurer two things in return for a lower premium: Above-ground property will be insured to 80% of its full physical replacement cost or actual value cost. Insured will maintain insurance coverage on that property at 80% of the value insured basis. The responsibility for maintaining insurance to 80% of the replacement value or actual cash value rests with the owner/manager.
surety bonds
the property manager's employees who handle funds have to be covered by a
straight percentage
the rental rate is based solely on a percentage of the gross income of the business, with no minimum guaranteed rent. This type of lease is uncommon and is employed only in unusual circumstances, such as for distressed property or for interim or seasonal occupancy.
imminent domain
the right of the government to take private property for public use
constructive evictions
the tenant must actually abandon the premises due to the owner's negligence in supplying essential services. (ex). failure to supply water heater, to repair premises.
Net Lease
the tenant pays some or all of the expenses of the property in addition to the stated rent.
Strict Net Lease
the tenants pay utilities, real estate tax, and other special assessments levied against property in addition to rent.
Step Up Clause
they provided for specific increases at specific times. - often used in commercial spaces. (retail/office)
Corporate owners can be divided into two broad classes
those who own real property as an investment, such as Real Estate Investment Trusts, REITs and syndicates, and those who own and use real property for their own benefits
escalation clause
tied to outside forces, rent goes up if utilities go up, long term business/office spaces. mutual agreement
expansion option
usually guarantees tenant will rent space next to space to space rented
purpose of preventative maintenance
to cut down on repair and replacement costs and to avoid interruptions in service to the tenants; helps preserve the physical integrity of the building
first priority of a life safety and security program
to protect human life
escrow trust accounts
to safeguard tenant funds can be in an interest bearing account, and as longs it is up front where the interest goes, PMIC can keep.
Commercial managers are concerned with what?
traffic counts & local competitors
assignment
transfer of ALL the tenants interest, if not on lease they can assign unit to someone else w/o permission.
Subletting
transfer of some of tenants interest, can do w/o permission if not on lease
Assignment of a Lease
transfers ALL of the tenant's remaining right in the property of a third party
Subletting of a Lease
transfers only SOME of the tenant's interest (transfer of the premises for part of remaining term, transfer of part of the premises, or combo of both)
Leasehold Estate
transfers the right to possess to tenant
land lord tenant act doesn't have jurisdiction over what types of property?
under contract for sale, social organizations, hotels, employee of landlord, owner of a confo, agricultural land, time-share, shelters
What are the damages rewarded to tenant when security deposit is not returned in 30days?
up to 3 times the original amount $
community center
usually occupies about ten acres and includes from 20 to 70 stores, often anchored by a smaller local department store. The community center is normally from 150,000 to 300,000 square feet and draws customers from a five-mile trading radius. It depends on a minimum of 5,000 families for its support. Community centers usually includes one or two supermarkets, a variety store, and small convenience stores in addition to the department store(s). In sparsely populated areas of the country, it may serve customers from a wider geographic area.
on-site manager
uthorized to hire custodians, handymen, and other maintenance workers, but the property supervisor will want to retain the right to approve the on-site manager's employment decisions
2 types of consideration
valuable (money or monetary value) and good (of value but not monetary love)
BOMI
was established in 1970 to provide educational programs for property owners and managers of commercial properties
The National Environmental Policy Act
went into effect in 1970, requires the preparation of an environmental impact statement (EIS) in advance for every major federal action that would significantly affect the quality of the environment. to centralize the federal government's environmental responsibilities. Congress has charged the EPA with enforcing the legislation covering air and water pollution, toxic pesticides, waste disposal, etc.
passthrough
when all operating expenses of a building are charged on a pro rata basis to all tenants, the computation is called a passthrough.
unconsciuosabicity
when lease is so bad/wrong/egregious and takes advantage of one party that it is not even considered valid in court
curable physical depreciation or curable obsolescence or deferred maintenance
when obvious repairs are postponed and are not made when needed. The building begins to lose value.curable by making repairs and improvement
management contract
written agreement creating this relationship; empowers the property manager, as agent, to act on behalf of the owner, or principal, in certain situations
Lease
written or oral contract between landlord & tenant that transfers right of possession for a specific time.
oral enforceable lease
year or less even if its not in writing
Can a lease be valid without a signature? If so why? If not why?
yes, payment of rent is acceptance without signature
what must you do if you are a resident licensee who is becoming a nonresident?
you must notify the commission IN WRITING within 60 days of the change in residency and comply with nonresident requirements or place license on inactive status to avoid cancellation.