CONTRACTS AND REGULATIONS 12

A broker has a 4-year contract to manage a property for an investor. The broker will receive 50% of the first month's rent and 5% of each remaining month. The rent is $600, how much will the broker receive over the term of the agreement. 1710 2480 2580 3080

1710 The broker gets 50% or $300 for the first month and he will get 5% or $30 for each additional month times 47 = $1,410 + $300 = $1,710.

An office rents for $4500 a month and measures 12 feet by 20 feet. The advertised monthly rent per square foot for this space would be: 1.875 18.75 4.5 22.5

18.75 12 x 20 = 240 $4500 / 240 = $18.75

A retail space was leased for $1,200 per month. The owner also pays the shopping center 8% of the gross income which is $50,000 monthly. How much does the owner pay annually? 62400 48000 14400 1200

62400' Multiply $50,000 by 8% = $4,000 X 12 = $48,000 + ($1,200 X 12 = $14,400) $14,400 = $62,400

A landlord can evict a delinquent tenant by: Giving him three days notice Giving him thirty days notice Calling the sheriff Bringing court action

Bringing court action A landlord must institute court action in order to evict a tenant which is called an unlawful detainer action.

Tenant Teri signs a six-month lease and agrees to pay $375.00 a month in rent, utilities included, on an apartment unit. Teri moves out after two months because the electrical service has been cut off. Teri: Is in violation of her lease and is obligated to continue paying rent Is not obligated to continue making rent payments as she has been constructively evicted Has been actually evicted and need not continue paying rent Has abandoned the property and may be sued for specific performance

Is not obligated to continue making rent payments as she has been constructively evicted

When a lessor dies the lease is affected in which of the following ways? It is terminated It is void It is not affected in any way It can be terminated by the lessee

It is not affected in any way The death of the lessor does not affect the lease in any way and it cannot be terminated or renegotiated.

Which of the following provisions is not essential to the validity of a lease? Competent lessor and lessee Rent provision Judgment clause All of the above

Judgment clause A judgement clause is usually found only in a commercial lease and is infrequently used.

Which one of the following is not a person who acquires title to real estate? Vendee Devisee Grantee Lessee

Lessee A lessee is the holder of a lease estate; therefore he does not actually have title to real estate.

A non-disturbance clause is for the protection of the: Lessee Developer Lessor Mortgagee

Lessee A non-disturbance clause protects the lessee

Property management security deposits Must be held by the property owner May be held in the management trust account Should be held in a separate, security deposit trust account by the property manager Are normally used for property expenses until needed for return to the tenant

Should be held in a separate, security deposit trust account by the property manager Commission rules call for security deposits to be held in a separate trust account to prevent commingling with operating expenses.

Which of the following leases would best protect the interests of a lessee from a lessor's desire to terminate the lease? Tenancy at will Tenancy for years Tenancy at sufferance Tenancy from month to month

Tenancy for years Tenancy for years has a definite ending date.

Should the lessor die after the lease has been signed by all parties what happens to the lease? Rescinded Renegotiated Unchanged Cancelled

Unchanged The lease remains in force if the landlord or lessor dies.

The principal difference between an estate for years and a periodic estate from year to year is that: an estate for years is a life estate an estate for years cannot be terminated a periodic estate has an expiration date a periodic estate has no expiration date

a periodic estate has no expiration date A periodic estate continues until it is terminated, an estate for years automatically terminates the day the lease expires.

A 1994 Colorado law allows "undesirable and dangerous persons" to be evicted: after a five-day notice to quit after a three-day notice to quit within 24 hours of a posted notice

after a three-day notice to quit A 1994 Colorado Law allows "undesirable and dangerous persons" to be evicted after a three-day notice to quit.

As part of his new property management business, Ron Dvorak has just agreed to manage several downtown apartment buildings for an owner. As a property manager Dvorak must: collect rents and keep detailed accounting records be a licensed real estate broker not commingle rents with his own money all of the above

all of the above

The options of a property manager in dealing with a risk are: to avoid to retain it to transfer it all of the above

all of the above A property manager may deal with a risk by removing it, retaining it by insuring against it with a large deductible, or transfer it by taking out an insurance policy.

A lease that goes from month to month is known as: a life estate an estate at will an estate from period to period a fee simple estate

an estate from period to period An estate from period to period is an interest in a leased property that goes from period to period, be it week to week, month to month, or year to year.

Ordinances that specify construction standards when repairing or erecting buildings are known as: equipment codes building codes variances permits

building codes

A tenant leases a heated apartment, but the landlord fails to provide heat because of a defective boiler. The tenant vacates and refuses to pay rent. This is an example of: actual eviction abandonment negligence constructive eviction

constructive eviction Constructive eviction occurs when a property is not habitable.

If a building collapsed and the tenant was forced to move out, this could be called: actual eviction effective eviction illegal construction constructive eviction

constructive eviction Constructive eviction occurs when a property is not habitable.

If a landlord breaches a lease by allowing the property to fall into severe disrepair, which causes her tenant to leave the property because it is uninhabitable, this is known as: actual eviction breach of lease termination of lease constructive eviction

constructive eviction In a constructive eviction, it is the LANDLORD breaching the lease, rather than the tenant. In an actual eviction, it is the tenant breaking the lease.

The covenant implied in a lease that ensures that the tenant will not be evicted by someone claiming prior ownership to that of the lessor is the: covenant of quiet enjoyment covenant of warranty forever covenant against encumbrances

covenant of quiet enjoyment A tenant has the exclusive right to possess real property because of the implied covenant of quiet enjoyment.

A situation in which the tenant's lease has expired and the tenant is no longer paying rent, but is living on the property is known as an: estate for years estate at will estate from period to period estate at sufferance

estate at sufferance In an estate at sufferance, the tenancy is by a lessee who lawfully occupies the landlord's property, but then continues to occupy the property improperly after his rights have expired and the lessor "suffers" from not having the unit available to rent.

The type of lease, which is for an indefinite amount of time and may be cancelled by the landlord or tenant at any time is known as: a life estate estate at will an estate from period to period a fee simple estate

estate at will An estate at will is an interest in a leased property that continues indefinitely, and may be terminated by either party - it is governed by the interested parties' WILLS, or intentions

A commercial lease is terminated by: sale of the leased premises death of the tenant abandonment of the landlord expiration of the term of lease

expiration of the term of lease A lease is terminated when it expires. Sales are made subject to the lease, and a lease is treated as personalty and passes to the heirs of a deceased tenant.

The type of lease that allows for the rent to be increased or decreased periodically based on changes in the government cost-of-living index is known as a(n): percentage lease graduated lease index lease assignment lease

index lease An index lease allows for increases OR decreases in the rent dependent on the an index, such as the cost -of-living index, or the all-commodities-wholesale price index.

After a tenant gave notice and vacated an apartment, the landlord discovered substantial damage to the unit. No time was set in the lease specifying the length of time the landlord had to account or refund the security deposit after deductions. Which of the following is an appropriate action by the landlord? return the deposit immediately and bill the tenant for the repairs when completed if the damage is obviously more than the deposit, the landlord may keep the damage deposit without notice notify the tenant that his or her damage deposit is forfeited within 60 days itemize the damage in writing and return any excess deposit within one month

itemize the damage in writing and return any excess deposit within one month The maximum amount of time a landlord can specify in a lease that they will hold a security deposit after lease termination is 60 days. If no time was specified in the lease, the default maximum is 30 days.

The owner of real estate who leases it to another is called a: vendor lessee lessor grantor

lessor The lessor is the landlord; the lessee is the tenant.

A tenant's, written, estate for years lease will expire on May 1. In order to obtain possession on May 1, the landlord must give the tenant: 30 days' notice 60 days' notice no notice notice on April 30

no notice An estate for years lease requires no notice for termination by either the landlord or the tenant.

A property manager is normally compensated in all but one of the following ways: commission on new leases percentage of gross profits percentage of repair and major maintenance savings rebates and discounts on equipment and supplies

rebates and discounts on equipment and supplies Savings from rebates and discounts should benefit the property owner, not the agent.

Typical functions of a property manager include all of the following except: maintaining quality service with the lowest possible expenses generating the highest return for the owner selling the property at the highest price for the owner keeping the property in good repair

selling the property at the highest price for the owner A property manager does not sell the property.

Tim has 13 months left on his lease when he receives notice of a job transfer. He transfers possession of his apartment to Brenda for the remaining term of the lease. Brenda pays the rent directly to Tim. Tim is known as a(n): lessor sublessee sublessor assignee

sublessor If a lease is transferred from one party to another and the second party pays the first party the rent money the first and original party is considered the sublessor.

Assume that Mr. and Mrs. Davis did not sign the lease agreement, but upon taking possession of the apartment on August 1 were handed a signed copy by landlord Smith. On August 20, Mr. and Mrs. Davis move out claiming that since they had not signed the agreement, it was a mere tenancy at will. Smith could: sue Davis immediately for the unpaid portion of the lease lease the apartment and upon expiration of the lease, sue Davis for the difference between what he received and what Davis should have paid keep only the security deposit

sue Davis immediately for the unpaid portion of the lease By taking possession, Mr. and Mrs. Davis impliedly accepted the agreement and would be liable for the unpaid portion. Only the lessor needs to sign the lease.

A tenancy that does not involve a landlord and tenant relationship is a: tenancy in common tenancy at will tenancy for years tenancy at sufferance

tenancy in common Tenancy in common is a type of ownership of real property; tenancy at will is a type of lease.

When a tenant sublets all or any part of rented property under a written lease: the tenant assigns all legal rights, title, and interest in the rented property to the new lessee the sublessee becomes primarily responsible to the landlord for payment of rent and upkeep of the property the original lease is automatically canceled, and the sublessee takes possession of the rented property on a month-to-month basis the original lease is unaffected, unless it contains a provision prohibiting subletting

the original lease is unaffected, unless it contains a provision prohibiting subletting The original tenant in a sublease situation still has the primary responsibility for the lease, unless subletting is prohibited in the lease.

Fred Thompson rents an apartment under a two-year written lease. He has occupied the apartment for one full year, and now the landlord is selling the apartment building to a new owner. So far as Thompson's lease is concerned: the sale has no effect on Thompson's tenancy it is automatically terminated, and he must renegotiate with the new owner the new landlord will decide whether or not to renew Thompson's lease for a full lease period it is terminated after 60 days' notice by the new owner

the sale has no effect on Thompson's tenancy A sale of real property is subject to any leases or tenancies that exist on that property.

The authority to carry out eviction of a delinquent tenant from rented property is held by: a landlord the sheriff any of the above

the sheriff The short version is this - a landlord may request an eviction - but only a sheriff has the authority to physically perform one. A fuller explanation of the procedure is: a landlord requests the courts to issue a judgment for an eviction by filing an "unlawful detainer action" in a court. An "unlawful detainer" is a legal way of saying the tenant refuses to give up possession - they are detaining the property from the landlord. If the judge agrees, s/he issues a "writ of execution" which is a court order to a sheriff to physically perform the eviction.

If a property manager chooses an insurance policy with a high deductible, the risk management technique being used is: avoiding risk transfer risk controlling risk retain risk

transfer risk The property management company has now transferred some of the risk to an insurance company. Other approaches they could have taken: assume the property management company had a pool in a building and was concerned about the risk of someone drowning. They could "avoid" risk by shutting it down, they could "transfer" the risk by buying a liability insurance policy with no deductable or select a high deductable and share the risk, they could "control" risk by hiring a lifeguard, they could "retain" the risk by doing nothing.

An oral lease for five years is generally: illegal unenforceable a long-term lease renewable only in writing

unenforceable A lease for longer than one year should be in writing to be enforceable.