Unit 13 Quiz: Leases
According to the North Carolina Tenant Security Deposit Act, which of the following is NOT a permitted use of a tenant security deposit? A To reimburse the landlord for the tenant's fair share of the ordinary wear and tear on the rental unit plus routine cleaning after the tenant moves out B To reimburse the landlord for the costs of eviction and re-renting the unit if the tenant breaches the lease C To pay for repair or replacement of something the tenant has seriously damaged or broken by force in the unit, such as a doorframe, window, or countertop D To pay for unpaid rent due to the tenant's failure to fulfill the terms of the lease
Answer: A To reimburse the landlord for the tenant's fair share of the ordinary wear and tear on the rental unit plus routine cleaning after the tenant moves out Explanation: Tenant security deposits may be used for DAMAGE but not ordinary wear and tear. A TSD may also be used to cover unpaid rent, costs for breaching a lease, costs of re-renting the property after a breach, etc.
In a commercial lease, the landlord agreed to make certain improvements specific to the tenant's use and to amortize these improvements into the lease payment. This is an example of which of the following? A Upfitting B Sale and Lease back C Net Lease D Full Service Lease
Answer: A Upfitting Explanation:Upfit is the customization of a space to fit the tenants needs and the amount is often based on the length of the lease term. A sale and lease back is just that the sale of building to an investor who then leases it back to the seller. A net lease is where the tenant takes on some or all of the taxes, insurance and common area maintenance. A full service lease includes utilities, security or cleaning services, with the landlord responsible for taxes insurance and common area maintenance.
All of the following would allow a tenant to terminate a residential lease early, except A the property management agreement ends B transfer or base for a servicemember of the military C rental properties that are subject to a foreclosure sale D victims of domestic viloence
Answer: A the property management agreement ends Explanation:The owner of the property can hire a new property manager or decide to self manage. The termination of the property management agreement does not terminate the lease. The termination of a lease does not terminate the property management agreement.
According to the North Carolina Tenant Security Deposits act, which of the following is true regarding the accounting for a tenant's security deposit? A A property manager has 45 days from the termination of the lease to account for the security deposit B A tenant's security deposit can be used to pay delinquent water and sewer bills at lease termiantion C A Property Manager can keep security deposit in a federally insured trust account or in a North Carolina insured performance bond D Any interest earned on a security deposit in a broker's trust account must be credited to the tenant at the termination of lease
Answer: B A tenant's security deposit can be used to pay delinquent water and sewer bills at lease termiantion Explanation:A tenant's security deposit can be used to pay bills that could prevent future service due to non-payment. The property manager has 30 days to provide an accounting for how the security deposit has been used. A property manager must maintain a trust or escrow account and is not permitted to be bonded. The lease agreement and property management agreement may contain a provision allowing for the retention of interest from the security deposit to cover the costs of maintaining the account.
Barb allowed a friend, Carol, to stay in her guest house when she recently lost her job. Due to Carol's misfortune, Barb has charged her no rent on the property. Recently, Barb had an opportunity to rent the guest house but Carol is refusing to leave voluntarily. Which of the following statements is true? A Carol is a tenant at will and, as such, she can be forced out at any time B Carol is a tenant at sufferance and will need to be evicted if she refuses to leave. C Barb can call the sheriff's department to have Carol removed as a trespasser since she did not leave when asked D Barb may cut off the utilities to the guest house in an effort to make the property uncomfortable so that Carol will leave
Answer: B Carol is a tenant at sufferance and will need to be evicted if she refuses to leave. Explanation: Since Carol stayed "beyond" her welcome, she is a tenant at sufferance and her rights can only be severed by an eviction. Once Carol has established residency, she is not considered a trespasser, even if she refuses to leave. Cutting off utilities is known as a self-help eviction and is always illegal.
A lease may be terminated in all of the following ways, EXCEPT A Breach by the lessor or lessee B Death of a residential tenant C Accord and satisfaction D Reaching the end date with no notice in an Estate for Years
Answer: B Death of a residential tenant Explanation: The death of a tenant does not automatically terminate the lease agreement as an heir may be able to perform or a claim can be made against the tenant's estate. Breach may end a lease if not cured. An agrement by the landlord and tenant to take less than what was originally agreed to is known as accord and satisfaction. An estate for years terminates without notice as it has a definite end date - which can be for a week, a month, a year or 10 years.
The formula for calculating net operating income (NOI) is: A Potential Gross Income - Operating Expenses = NOI B Effective Gross Income - Operating Expenses = NOI C Effective Gross Income - Vacancies & Collections = NOI D Potential Gross Income - Vacancies & Collections = NOI
Answer: B Effective Gross Income - Operating Expenses = NOI
All of the following are examples of non-freehold estates, EXCEPT? A Estate for Years B Life Estate C Periodic Tenancy D Estate at Sufferance
Answer: B Life Estate Explanation: A life estate is a freehold estate (of ownership) that is not inheritable. Non-freehold estates are leasehold estates: tenancy for years, tenancy from year to year, tenancy at will and tenancy at sufferance. Note: tenancy and estate can be used interchangeably.
In commercial real estate leases, what is the type of lease that exists when the tenant pays a monthly rent plus some or all of the costs associated with owning/maintaining the property such as maintenance, insurance, and property taxes? A Graduated lease B Net Lease C Full Service Lease D Percentage Lease
Answer: B Net Lease Explanation:Net leases are leases in which the tenant pays rent PLUS separately pays all the other expenses normally associated with ownership of the property. A Full Service lease is a lease usually used in office space where the tenant pays one amount which includes all expenses (even electric, water, internet, phone, janitorial). A percentage lease is usually used in retail settings where the monthly amount varies because it is tied to some percentage of the tenant's sales for that month. A graduated lease is simply one where the rent rises on a preset schedule.
What would the spendable income due to a property owner as a result of owning rental property be called? A Positive leverage B Positive cash flow C A buildup of equity D Net Operating Income
Answer: B Positive cash flow Explanation: Leverage refers to the power of borrowing money and has nothing to do with spendable income. Equity is the buildup of cash value over time that an owner has in a property as they pay down debts. Net Operating Income is CLOSE to spendable cash, but you would still have to remove the debt service payments to get to cash flow (spendable cash)
A Lessor and Lessee enter into a lease agreement that requires the lessee to take care of all repairs in exchange for a reduced rent. Recently, a plumbing issue arose that caused the only toilet in the house to become inoperable. The lessee had been ill and unable to make the repair. Which of the following answers is most accurate in this circumstance? A The tenant must make the repair, or hire a contractor to do so, or he will be in breach of the lease terms B The landlord must make this repair despite the fact that the agreement between the parties was for the lessee to make all repairs C The landlord could evict the tenant for breach of lease D Since the lessee agreed to the condition regarding repairs, the landlord can waive his obligation to keep the premises "fit and habitable"
Answer: B The landlord must make this repair despite the fact that the agreement between the parties was for the lessee to make all repairs Explanation: The landlord can never waive the obligation to keep the property fit and habitable, so to say that the tenant is responsible for "all" repairs would be a violation of public policy, which is known as abrogation. The tenant will not be in breach for having the landlord fulfill his legal obligation. Constructive eviction terminates the lease agreement but not the property management agreement.
A commercial tenant assigns the remainder of his 10 year lease term to another tenant. Which of the following is true regarding this scenario? A The new tenant retains all liability to the landlord B The original lessee will remain secondarily liable unless the lease has been novated C This assignment is an example of what is typically referred to as a sublease or sandwich lease D Assignments are always a violation of the lease unless the landlord specifically agrees to it in writing
Answer: B The original lessee will remain secondarily liable unless the lease has been novated Explanation: Novation releases liability in the event that the new party does not perform. When the lease is assigned the new lessee will be primarily responsible, however if they fail the original tenant is secondarily liable.
A family rented a beach house for a two-week vacation. Their leasehold interest in the beach house is an estate A at will. B for years. C for sufferance. D from period to period.
Answer: B for years. Explanation:Any definite period of time that does not automatically renew itself is considered a lease (or estate) for years. Periodic tenancies will have some statement about automatic renewal or the need to give notice to terminate. An estate at will is one with no binding terms....no period of time, no promise to stay or promise to pay. An estate at sufferance happens when a tenant stays past (holds over) the time when they should have vacated the property.
According to the North Carolina Tenant Security Deposit Act, landlords A must collect a tenant security deposit on each tenancy of more than 60 days in duration. B must provide tenants an itemized written accounting of any repairs being charged against the security deposit within the time prescribed by the Act following lease termination. C may use the tenant security deposit to pay for normal cleaning of the unit between tenants. D must refund any pet fee within 30 days of lease termination if there is no substantial damage caused by the tenant's pet.
Answer: B must provide tenants an itemized written accounting of any repairs being charged against the security deposit within the time prescribed by the Act following lease termination. Explanation:Any tenant security deposits must be held in a trust account until the tenant has actually moved out of the property. Once the tenant has moved out, the landlord/property manager has 30 days to either refund the deposit or provide the tenant with a detailed accounting of what the deposit was used for.
What public official is tasked with hearing and deciding cases of residential evictions? A Superior Court Judge B Clerk of Court C Civil Magistrate D Constable
Answer: C Civil Magistrate Explanation: Summary ejectment is heard by a civil magistrate in small claims court. Judicial means must be used when evicting a tenant. Summary ejectment terminates the lease agreement but not the property management agreement.
Property managers routinely do all of the following EXCEPT: A Process lease applications, collect tenant security deposits, and accept rental payments from tenants. B Handle tenant complaints and maintain the rental properties in good condition. C Determine best investment of net income based on last year's statistics. D Initiate eviction proceedings on behalf of property owners when a tenant violates the terms of his/her lease.
Answer: C Determine best investment of net income based on last year's statistics. Explanation: Property Managers manage all income, expenses, maintenance, and ongoing operation of the property. The money generated by the property as cash flow belongs to the owner and thus would be used as the owner (not the manager) sees fit.
For which of the following would a landlord most likely be liable according to the law of negligence as applied to residential tenancies? A A tenant who is injured moving a refrigerator within the unit to clean behind the appliance B A tenant being injured by a criminal who has broken into the apartment C Injury to the guest of a tenant on the properties playground D A tenant's child who is injured by the family dog in an apartment that allows for pets
Answer: C Injury to the guest of a tenant on the properties playground Explanation:A landlord may be liable for injuries that occur on the property or on the ammenites provided. The landlord would not typically be liable for injuries that were caused by others or caused by the actions of the tenant. It is best practice to require a tenant to maintain a tenant insurance policy.
Which of the following describes the PRIMARY responsibility of a broker-property manager? A Identify preventative and corrective maintenance needs B Establish rental rates that are competitive in the local marketplace C Realize the highest return on the property that is consistent with the owner's instructions D Create a standardized tenant screening process based on the owner's instructions
Answer: C Realize the highest return on the property that is consistent with the owner's instructions Explanation: These are all items that should be the focus of a property manager, but 3 is definitely at the top of the priority list.
All of the following are considered to be rights of a tenant in a residential lease, EXCEPT A Right of possession B Right of Use for any legal purpose C Right to renew lease at the end of of lease period D Expectation of quiet enjoyment
Answer: C Right to renew lease at the end of of lease period Explanation: The landlord does not have to renew the lease at the end of the lease term. A tenancy for years terminates without notice on a definite end date. The tenant has the right of possession and quiet enjoyment to use the property for legal purposes. The tenant has a leasehold interest while the landlord has a leased fee interest.
Which of the following methods may a landlord use to seek relief from a tenant who has breached a lease? A Constructive eviction B Self-help eviction C Summary Ejectment D Distraint of chattel
Answer: C Summary Ejectment Explanation: Summary ejectment is the same as eviction (also, judicial eviction). Self help evictions (changing locks, cutting out power) are always illegal. Constructive eviction is the tenant's right to get out of the lease based on the landlord's breach and distraint of chattel means to hold the tenant's personal property unitl he/she pays. Summary ejectment terminates the lease but not the property management agreement.
When considering a tenant applicant for an apartment, the property manager may lawfully consider all of the following factors EXCEPT the A applicant's criminal record. B applicant's employment history and income. C current number of apartment complex residents with small children. D number of vehicles owned by the applicant that will be parked at the apartment complex.
Answer: C current number of apartment complex residents with small children. Explanation: Families with children are protected under the Fair Housing Laws. It is illegal to discriminate against a tenant because of children in the family. It is furthermore illegal to even have a discussion about the number of children in a family. The subject is off-limits in residential real estate transactions (both sales and leases).
A long-term lease of unimproved land on which the tenant will construct a building is called a A net lease. B construction lease. C ground lease. D improvement lease.
Answer: C ground lease. Explanation: Ground leases are leases where the tenant rents the bare ground from the land owner and then the tenant pays to construct improvments (building, cell tower, etc) on the property for their use while they are renting the property. These leases are usually for a very long period of time.
The heating system in a residential tenant's apartment in North Carolina has failed during very cold weather. The landlord has not made the necessary repair within a reasonable amount of time after having been properly notified of the problem. Given these circumstances, the tenant has the right to A stay in the property and withhold rent for the period of time the unit is without heat. B stay in the unit, purchase a space heater and deduct its cost from the rental payment. C move out of the unit and initiate a court action against the landlord to recover rent for the period of time the unit was uninhabitable. D move out and automatically be entitled to punitive damages under the North Carolina Residential Rental Agreements Act.
Answer: C move out of the unit and initiate a court action against the landlord to recover rent for the period of time the unit was uninhabitable. Explanation: This is called "constructive eviction". If a landlord does not maintain the property appropriately, the tenant can give written notice that they are moving out (breaking any lease) and cease to pay rent from the day they move out. They can also file a lawsuit against the landlord trying to recover any rent they paid for the time the property was not maintained.
Which of the following is best described by the process of deducting vacancy and collection losses, operating expenses, and debt service from the total possible income a property could produce? A Net cash flow to owner B Net operating income C Gross potential income D Before tax cash flow
Answer: D Before tax cash flow Explanation: This is simply the formula for calculating Before Tax Cash Flow
Which of the following tasks would a property manager NOT be given in most cases under a property management agreement? A Generate income for the owner B Accomplish any goals the owner sets for the property C Maintain the value of the property by utilizing preventative maintenance D Invest the profits generated by the property into other ventures to grow the wealth of the owner
Answer: D Invest the profits generated by the property into other ventures to grow the wealth of the owner Explanation: The broker is responsible for anything that happens before arriving at "Before Tax Cash Flow". The owner is responsible for that money because it belongs to them.
In what type of lease does a tenant pay a portion of prorata expenses of the property as part of the overall lease? A Gross B Percentage C Full Service D Net
Answer: D Net Explanation: Net leases require that the tenant pay a portion of the costs of the property, such as TICAM charges (Taxes, Insurance, Common Area Maintenance). Percentage lease are typical of retail properties and are based on a percentage of sales. Full service leases include all services, often including janitorial, utilities, etc
The Tenant Security Deposits Act would apply to all of the following properties, EXCEPT A Rental of a mobile home space within a mobile home park B rental of an apartment in a 200 unit complex C Rental of a single family home from an owner with no license D Rental of a retail space
Answer: D Rental of a retail space Explanation:The Tenant Security Deposit Act applies to all residential leases. It does not apply to commercial leases.
A residential landlord Is evicting a tenant for nonpayment of the rent due under a lease. Which of the following statements is correct regarding this situation? A The landlord can deduct the unpaid rent from the tenant's security deposit at any time after the rent is late. B The landlord cannot legally hold a security deposit unless they are a licensed real estate broker C The tenant security deposit can be charged for basic and routine cleaning of the unit before a new tenant moves in. D The landlord may deduct the unpaid rent from the tenant's security deposit only after the tenant has left the property
Answer: D The landlord may deduct the unpaid rent from the tenant's security deposit only after the tenant has left the property Explanation:Tenant security deposits must always be held in a trust account whether the person holding it is a licensed real estate agent or not. Even private landlords can and should open a trust account to hold tenant security deposits. A tenant security deposit must remain in the trust account untouched until after the tenant has vacated the property. Basic and normal cleaning is an expectation of the landlord and cannot be charged against a tenant security deposit.
A lessee is several weeks delinquent with his rent payment. The lessor becomes angry with the tenant and locks the tenant out of the apartment when the tenant goes to work. Which of the following is true regarding this scenario? A The lessor acted appropriately since the lessee would be classified as a holdover tenant at this point and has no legal rights B The lessee will be given 10 days to remove his property but no other remedy C The lessee will receive free rent for the remainder of the lease term since the landlord was in breach D The lessee may recover damages since the landlord has violated the law
Answer: D The lessee may recover damages since the landlord has violated the law Explanation: The lessee may recover damages as landlords must follow statutorily prescribed remedies to remove a tenant. Holdover tenants have protections under the law until the culmination of the judicial eviction process
A tenant dies while in the middle of a 1 year lease. All of the following statements are true, EXCEPT A The personal property of the tenant must be handled in accordance with the Residential Rental Agreements Act B A tenant's heirs will be bound by the lease C The tenant's security deposit may be used to settle any damages to the landlord based on the untimely death of the tenant D The tenant's death will immediately terminate the lease
Answer: D The tenant's death will immediately terminate the lease Explanation:Death does not terminate a lease, although the tenant is bound to breach the lease unless the heirs complete the lease term.
Which of the following would be a result of the government exercising its right of eminent domain on a property that is subject to a residential lease? A The landlord could keep the tenant's security deposit since the tenant will be compensated as a result of the eminent domain action B The condemnation action would be delayed until the end of the lease term C A tenant must be given a minimum notice to vacate of 180 days in the event of condemnation D The tenant's lease would be terminated and the tenant may be compensated moving expenses by the state.
Answer: D The tenant's lease would be terminated and the tenant may be compensated moving expenses by the state. Explanation: The lease will be terminated by eminent domain action (operation of law). The tenant has no stautory protection against condemnation however may be compensated for moving expenses.
Which of the following best describes a landlord's interest in a rented property? A A leased fee interest B A leasehold estate C Defeasible fee estate D Estate at Sufferance
Answer:A A leased fee interest Explanation: The owner gets the fee and therefore has a leased fee interest. The tenant has possession or a hold on the property and therefore has the leasehold interest. A defeasible estate is one that can be defeated - which is either determinable or conditional. An estate at sufferance occurs whent he tenant will not vacate after the tenancy has ended. The owner must use judical means.
Which of the following tasks would generally NOT be authorized under a standard property management agreement? A Market the property for rent and select tenants B Place the property for sale in the local MLS C Conduct repairs which the broker deems necessary to maintain the value of the property D Begin legal actions against tenants in order to remove them from the property or recover rent due to the landlord
Answer:B Place the property for sale in the local MLS Explanation:Property management has nothing to do with sales. If a broker is going to market the property for sale, they need a listing agreement, not a property management agreement. If they want to market the property for rent and for sale at the same time, they need BOTH a property management agreement and a listing agreement.
All of the following would typically be found in a property management agreement EXCEPT A The possibility of an automatic renewal of the agreement B The number of broker employees who may show units C The method in which the property management fee will be calculated D How often financial reporting should be provided to the owner
Answer:B The number of broker employees who may show units Explanation: Note that automatic renewal IS possible in property management agreements, but not in sales agency agreements. A property management agreement should definitely specify how the fee will be collected and how often financial reporting must be done. It would not, generally, limit how many employees the broker might use to show the propertyÂ....that will be up to the broker property manager.
Which of the following expenses would NOT be taken into account for a rental property manager who is attempting to maximize the Net Operating Income of property that they manage? A A vacancy rate of 5% of the available units B Total potential income of $350,000 if all units are rented C Monthly Mortgage payments of $11,500 D Maintenance Expenses of $23,480 for the year
Answer:C Monthly Mortgage payments of $11,500 Explanation: The calculation of Net Operating Income does NOT take into account any monthly mortgage payments (debt service) on the property.
When preparing an operating budget for a managed apartment complex, the broker-property manager will consider all of the following to be "operating expenses" EXCEPT: A Debt service on the ownerÂ's mortgage on the property. B Real property taxes on the property. C Property insurance premiums. D Reserves for upgrading kitchen appliances.
Answer: A Debt service on the ownerÂ's mortgage on the property. Explanation:Debt service (mortgage interest and principle) is NOT an operating expense
If an office space needs to be "upfit" in order to rent the property, the property manager is considering the possibility of A upgrading obsolete features of the property. B improving the building's energy efficiency. C altering the parking area to meet current building code requirements. D modifying the property to accommodate the tenant's needs.
Answer: D modifying the property to accommodate the tenant's needs. Explanation:Upfit means customization. Certain tenants in commercial rentals need the building modified to work for them. They often ask the landlord to make these modifications for them. This process of the landlord paying to modify the property to suit the needs of the tenant is called upfit.
A buyer purchases a property with a tenant in place with 9 months remaining on a one year lease. Which of the following is most correct regarding this scenario? A The purchaser must honor the existing lease B The purchaser may terminate the lease with 90 days notice since he plans to live in the unit C The lease automatically terminates at the closing of the purchase of the property D The tenant may opt to terminate the lease with as little as 10-days notice
Answer: A The purchaser must honor the existing lease Explanation:Lease agreements transfer with the property and the new owner must fulfill the term.
Which of the following statements concerning the North Carolina Residential Rental Agreements Act is true? A The tenant must maintain the rented premises in a clean and safe condition. B The tenant can withhold rent payment until the landlord makes required repairs to the residential unit. C The landlord's duties under the Act are reduced if the landlord has hired a property manager for the rental property. D The landlord may lease a residential property that has an inoperable air conditioning system if the landlord reduces the normal amount of rent charged.
Answer: A The tenant must maintain the rented premises in a clean and safe condition. Explanation:Tenants in residential leases have few actual responsibilities. They must pay the rent on time and they must maintain the safety and cleanliness of the property. They can never withhold rent even if the landlord has not done what they should. Landlords are always responsible even if hiring a property manager. Tenants and landlords in residential leases cannot negotiate away the responsibility of repairs.
Which of the following would be an example of damage beyond normal wear and tear for which a landlord may keep a portion of the security deposit? A Broken window B Small hole in the wall for a nail hanging a family portrait C The tenant failed to have the carpet professionally cleaned, in violation of lease agreement, before moving out D Worn carpet when tenant moves out after leasing the property for 7 years
Answer: A Broken window Explanation:A tenant does not have a defense for leaving the landlord with a broken window. Small holes in wall for pictures or art are considered normal wear and tear. Carpet cleaning should not be charged to security deposit unless it is filthy beyond normal wear and tear. Worn carpet in a high traffic area is considered normal wear and tear. Damage caused by everyday activities, when tenants are being careful, would be considered normal wear and tear - dirt or dust on the walls or windows, repairs to appliances based on age of the unit, scuff marks. Crayon, nail polish, motor oil, or burns to walls, trim or carpet are damages that can be charged against the security deposit.
Which type of lease would be most likely associated with an apartment rental? A Gross Lease B Net Lease C Percentage Lease D Index lease
Answer: A Gross Lease Explanation: It is common for residential leases to be gross leases - with rent being charged at a fixed rate. A net lease is common in commerical property since the lease term is for a longer period of time and protects the owner from increases in property taxes, insurance and common area maintenance. A percentage lease is common in retail rentals, where the tenant pays a base rent as well as a percentage of sales. An index lease allows the rent to rise or fall based upon changes in the index through an escalation clause.
Myron leased a property from Mr. Bigg, an absentee landlord. Mr. Bigg was difficult to reach and often was slow to make repairs. The furnace in Myron's unit broke down during an especially cold spell in February . Although Myron provided Mr. Bigg with a written request for the repair, Mr. Bigg has failed to fix the problem. Which of the following actions by Myron would be acceptable? A Myron could remove himself and all of his belongings from the property and vacate the premises, based on the lessor's breach B Myron could withhold rent until Mr. Bigg has remedied the defect and then pay him in full with no late fee C Myron could have the unit repaired, pay the HVAC technician and then tender the remaining rent to Mr. Bigg D Myron could place his rent monies in a trust account to hold for Mr. Bigg when he ultimately makes the repair
Answer: A Myron could remove himself and all of his belongings from the property and vacate the premises, based on the lessor's breach Explanation:This is an example of constructive eviction and is the common law remedy for the tenant in the event of a landlord's breach. There are no circumstance in NC (short of a court order) which would allow a tenant to stay in the property and withhold rent. The tenant can't make the repair without permission and then reduce the amount of rent by the amount of the bill. Constructive eviction terminates the lease agreement but not the property management agreement.
According to the NC Tenant Security Deposit Act, which of the following is NOT a permitted use of a tenant security deposit? A Reimbursement to the landlord of the tenants share of the ordinary wear and tear on the property B Reimbursement to the landlord for the costs of eviction and re-renting the property if the tenant breaches the lease C Pay for repair or replacement of an item the tenant broke such as a door, window, or counter D Pay unpaid rent due to the owner because the tenant did not fulfill the lease
Answer: A Reimbursement to the landlord of the tenants share of the ordinary wear and tear on the property Explanation:The tenant security deposit may never be used to cover items defined by the state as "wear and tear". "Wear and Tear" items include things like dirty carpet, worn out blinds or curtains, old carpet, etc. The security deposit can be used for actual damage done to the property by the tenant or costs that are associated with some breach of the lease by the tenant. Remember that no money under ANY circumstance can be removed from a tenant security deposit until after the tenant has vacated the property.
Which of the following would NOT be a duty that a broker-property manager would likely perform on behalf of an owner? A Secure financing for property improvements B Institute legal actions against tenants C Establish rules for multi-tenant properties D Supervise property maintenance
Answer: A Secure financing for property improvements Explanation: Securing financing (getting a loan) is a function of the owner, not the property manager. All of the other items would absolutely be expected of a property manager
A commercial tenant was given a lease for 3 years exactly, with no rights for renewal. This lease would be described best as a(n)? A Tenancy for Years B Periodic tenancy C Life Estate D Defeasible estate
Answer: A Tenancy for Years Explanation: An estate or tenancy for years is defined as a "fixed-term" lease. Periodic tenancies allow for renewals or terminations, with notice. Life estates and defeasible estates are freehold estates.