Chapter 19

According to the Fair Housing Act, what is steering?

Channeling of protected class members to certain buildings or neighborhoods

What type of plan does a property manager implement to manage renters who do NOT pay their rent in a timely way?

Collection plan

A high tenant turnover rate results in higher profits for the owner.

False

Corrective maintenance helps prevent problems and expenses before they arise.

False

Courts have always held that tenants, rather than property owners and their agents, are responsible for protecting against physical harm inflicted by intruders.

False

Examples of variable expenses of property management are employee wages and utilities.

False

In a commercial property, the risk of a shopper suffering a slip-and-fall injury would be covered by casualty insurance.

False

The manager of a residential building should carefully consider a prospective tenant's compatibility with existing tenants.

False

The three types of maintenance necessary to keep a property in good condition are preventive, rehabilitation, and tenant relations.

False

Under Title I of the ADA, all existing barriers must be removed from both residential and commercial properties.

False

Unlike real estate brokers' commissions, property management fees may be standardized by local associations.

False

What is the purpose of an operating budget for a property manager?

It is a guide for the property's financial performance in the future.

How can tenants insure their personal belongings in apartments they rent?

Obtain HO-4 or renter's insurance

Which of these is an example of corrective maintenance?

Repairing a leaking water heater

What is the annual rent per square foot for a 30 ft × 40 ft property that rents for $2,950 per month?

The annual rent is $29.50 per square foot: 30 × 40 = 1,200 square feet; $2,950 × 12 = $35,400; $35,400 ÷ 1,200 = $29.50.

A cash flow report is the most important financial report because it provides a picture of the current financial status of a property.

True

A critical maintenance objective is to protect the physical condition of the property over the long term.

True

A depreciated value policy insures a building for what it would cost to rebuild it.

True

An example of a readily achievable modification under the Americans with Disabilities Act (ADA) is installing a ramp at a building entrance.

True

One of the key responsibilities of a property manager is to preserve or increase the value of the property.

True

Property managers have a responsibility to properly manage hazardous environmental problems, such as asbestos.

True

Rental rates are influenced primarily by supply and demand.

True

Tenant improvements are major alterations to the interior of commercial or industrial property to accommodate the tenant.

True

The ADA requirements for new construction are stricter than those for buildings existing before the law was implemented.

True

The four alternative risk management techniques are transfer, control, avoid, and retain.

True

The management agreement creates a general agency relationship between an owner and the property manager.

True

All of these should be included in a written management agreement EXCEPT

a statement identifying the manager's creditors.

Of these, a high vacancy rate MOSTlikely indicates

an undesirable property.

A company was moving from one part of the city to another. During the move, a truck carrying computer equipment worth more than $250,000 accidentally ended up in a river, and the equipment was destroyed. Fortunately, the company was insured under several policies. The policy that would most likely cover the computer equipment during the move from one facility to another is a

contents and personal property policy.

All of these are principal responsibilities of the property manager EXCEPT

forcibly removing tenants for nonpayment of rent.

One way that property managers meet the goals of ECOA is by

making sure to use the same lease application for every applicant.

A property manager's first responsibility to the owner should be to

realize the highest return possible consistent with the owner's instructions.

The property manager's relationship with the owner is most similar to that of a

salesperson with his or her broker.

Under the ADA, existing barriers MUST be removed

when removal may be accomplished in a readily achievable manner.

If an apartment rents for $750 per month and the manager receives a 12% commission on all new tenants, how much will the manager receive when renting an apartment, assuming that this commission is calculated in the usual way?

$1,080