Ch. 19 Property Management

Question 1

budget comparison statement

Answer 1

compares actual results with the original budget, often giving either percentages or a numerical variance of actual versus projected income and expenses

Question 2

cash flow report

Answer 2

monthly statement that details the financial status of the property

Question 3

corrective maintenance

Answer 3

correction of problems after they have occurred

Question 4

management agreement

Answer 4

a contract creating a general agency relationship between the owner and the property manager. The management agreement defines the duties and responsibilities of each party; it is a guide used in operating the property, as well as a reference in case of any future disputes

Question 5

management plan

Answer 5

plan outlines the details of the owner’s objectives with the property, as well as what the property manager expects to accomplish and how, including all financial objectives

Question 6

multiperil policies

Answer 6

insurance policies that offer protection from a range of potential perils, such as fire, hazard, public liability, and casualty

Question 7

operating budget

Answer 7

the projection of income and expense for the operation of a property over a one-year period

Question 8

preventive maintenance

Answer 8

small repairs that help prevent bigger problems and expenses

Question 9

profit and loss statement

Answer 9

financial picture of revenues and expenses used to determine whether a business has made money or suffered a loss

Question 10

property manager

Answer 10

someone who manages real estate for another person for compensation. Duties include collecting rent, maintaining the property, and keeping up all accounting (typically considered a general agent)

Question 11

risk management

Answer 11

evaluation and selection of appropriate property and other insurance/treatment of risk by deciding whether to Avoid it, Control it, Transfer it, or Retain it (ACTOR)

Question 12

routine maintenance

Answer 12

day to day duties such as cleaning common areas, performing minor carpentry and plumbing adjustments, and providing regularly scheduled unkeep of heating, air-conditioning, and landscaping

Question 13

surety bonds

Answer 13

cover an owner against financial losses resulting from an employee’s criminal acts or negligence while performing assigned duties

Question 14

tenant improvements

Answer 14

build-outs, construction alterations to the interior of the bldg to meet a tenant’s particular space needs

Question 15

workers’ compensation acts

Answer 15

State laws that require an employer to obtain insurance coverage to protect employees who are injured in the course of their employment

Question 16

BRI & SBS

Answer 16

Building related illness/ sick bldg syndrome

Question 17

HO-4

Answer 17

Renter’s insurance to protect personal belongings

Question 18

Coinsurance Clause

Answer 18

requires the insured to carry fire coverage, usually in an amount equal to 80% of a bldgs replacement value

Question 19

Leasing Agent

Answer 19

state-licensed real estate professional working as an independent contractor or property manager on a commission basis

Question 20

Federal Laws affecting property management

Answer 20

Americans w/Disabilities Act (ADA), Equal Credit Opportunity Act (ECOA), Federal Fair Housing Act.