Property Mangement

A guest slips on an icy apartment building stair and is hospitalized. A claim against the building owner for medical expenses may be paid under which of the following policies held by the owner?

Liability

A property owner of a 10 building apartment complex has told the property management company that he wants the building by the playground to be rented only to families. The buildings by the parking lots to be singles or couples without children and that anyone over 50 should only be offered first floor units. May the property manager follow the orders of the owner?

No, as the request is in violation of fair housing laws.

The owner of a fourplex has an apartment available for rent. She would like for the new tenant to have no children since two of the units are rented to seniors and the other to a young single woman. Can she advertise the unit as adults only?

No, because it would be discriminatory advertising.

A property manager collected a security deposit from a tenant and placed it in the owner's business account. Is this action legal?

No, it is called commingling, and it is illegal.

A hurricane destroyed several apartment buildings in a community, creating an imbalance between the supply and demand of rental units. If the local government imposes a law that restricts the amount of rent a landlord may charge, it is known as

RENT CONTROL

Which of the following actions is NOT a responsibility of the landlord?

Timely payment of the monthly rent

A property manager signed a two-year property management contract with the owner establishing a fiduciary relationship. Has an agency relationship been created, and if so, what type of agent is the property manager?

Yes, authority has been given for the property manager to act on the owner's behalf, and the property manager is a general agent.

A tenant who remains in possession of the property after the lease has expired is called

a holdover.

Upon purchasing a small apartment complex, the owner had the in-ground swimming pool filled in with concrete. This action is an example of

avoiding the risk.

To compute the return on investment, a property manager would need all of the following figures EXCEPT

cap rate.

When a property manager binds a principal/owner to a contract, the manager is directly operating under the fiduciary duty of

care and skill.

A blind person with a Seeing Eye dog wants to rent an apartment from the landlord who has a no-pet policy. The landlord may

charge the blind person for any damages after the tenant vacates the property.

To compute the return on investment (ROI), a property manager must

divide the after-tax cash flow by the equity and multiply by 100%.

Asbestos, sick building syndrome (SBS), and lead-based paint are all examples of issues beyond the scope of

environmental concerns that a property manager may have to address.

A property manager who manages a commercial property would be MOST concerned about

environmental damage caused by the tenants business.

To protect the owner against the mismanagement of monies that the property manager receives, the owner may require the manager to purchase a(n)

fidelity bond.(covers theft or embezzlement along with mismanagement.)

The property manager has a fiduciary duty with the owner and is considered a(n)

general agent.

The primary goals of a property manager are to

generate the highest net operating income for the owner while maintaining the investment.

The primary purpose of a profit and loss statement is to analyze

how the property was managed and make projections for the new year.

A principal broker negotiated a property management agreement with an owner. The property management agreement

is a personal service contract that terminates upon the death of either party.

The purpose for calculating the rate of return is to

measure the profitability of the property.

Residential leases are usually expressed as a(n)

monthly rate per unit.

When a lease is assigned, the assignee is the

new tenant.

Rent is usually

paid in advance.

One of the property manager's responsibilities is to keep the building's equipment in working order. This action would fall under

preventive maintenance.

A statement sent to an owner that does not reflect the entire debt service as an expense is called a(n)

profit and loss statement.

A hurricane destroyed several apartment buildings in a community, creating an imbalance between the supply and demand of rental units. If the local government imposes a law that restricts the amount of rent a landlord may charge, it is known as

rent control.

A person entered into a property management agreement with Barron Properties, Inc. The property management agreement MOST likely stipulates that he will be paid a percentage of

this year's gross income.

A property manager must take which of the following into consideration to determine the net operating income (NOI) that a property produces?

A) After-tax cash flow B) Debt service C) IRS taxes D) Vacancy/rent loss ANSWER-VACANCY/RENT LOSS

Which of the following actions is NOT a responsibility of the landlord?

A) Maintaining a trust account for security deposits B) Keeping the property in a safe and habitable condition C) Payment of property taxes and insurance D) Timely payment of the monthly rent ANSWER-TIMELY PAYMENT OF MONTHLY RENT

All of the following are examples of a property managers duties EXCEPT

A) place security deposits in the proper escrow account. B) screen and qualify tenants. C) negotiate a lease and present it to the owner for approval. D) accept a rebate from a service provider. ANSWER-ACCEPT A REBATE FROM A SERVICE PROVIDER

All of the following events would probably terminate a residential lease agreement EXCEPT

A) when the life tenant, who had leased the property, dies. B) when the owner sells the property. C) when the lessee buys the land from the lessor. D) the property being taken by eminent domain. ANSWER-WHEN THE OWNER SELLS THE PROPERTY

What is the major difference between an assignment and a novation?

Assignments transfer duties but not liability and novation transfers both

Title III of the Americans with Disabilities Act (ADA) impacts which type of property?

Commercial and public accommodations

A broker has become a manager of a property that is difficult to lease. Which of the following leases would the broker MOST likely use to secure a contract with a prospective tenant?

Graduated lease (A graduated lease is used to attract tenants to properties that are difficult to lease since it allows them in for a lower then market rate that increases as the business grows.)

A broker has become a manager of a property that is difficult to lease. Which of the following leases would the broker MOST likely use to secure a contract with a prospective tenant?

Graduated lease(A graduated lease is used to attract tenants to properties that are difficult to lease since it allows them in for a lower then market rate that increases as the business grows.)

To compute the return on investment, a property manager would need all of the following figures EXCEPT

CAP RATE

A property manager repairs a leaking sink. This is classified as which type of maintenance?

Corrective

When the tenant breaches the lease, it gives the landlord the right to proceed with

actual eviction by filing a suit for possession.

A property management agreement is classified as a

bilateral personal service contract.