Chapter 23 Flashcards

1
Q

agency
duties

A

the
legal obligations that real
estate agents owe to their
clients, including loyalty,
obedience, disclosure,
confidentiality, accounting,
and reasonable care

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2
Q

antitrust

A

Antitrust laws are regulations
designed to promote fair
competition in the
marketplace and prevent
monopolistic practices,
collusion, price-fixing, and
other forms of
anticompetitive behavior.

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3
Q

confidentiality

A

the
obligation to protect sensitive
or proprietary information
shared by clients or
customers and not disclose it
to third parties without
permission

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4
Q

conflict of
interest

A

A conflict of interest occurs
when an individual or entity’s
personal interests or
relationships interfere with
their ability to act in the best
interests of their client or
employer

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5
Q

ECOA
(Equal Credit
Opportunity
Act)

A

ECOA is a federal law that
prohibits lenders from
discriminating against
applicants based on race,
color, religion, national
origin, sex, marital status,
age, or receipt of public
assistance in any aspect of a
credit transaction

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6
Q

errors and
omissions
insurance

A

Errors and omissions (E&O)
insurance is a type of
professional liability
insurance that provides
coverage for claims alleging
negligence or mistakes in
professional services
provided

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7
Q

fair
housing

A

the
principle of equal opportunity
in housing and the
prohibition of discrimination
based on protected
characteristics such as race,
color, religion, national
origin, sex, familial status,
or disability

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8
Q

general
liability

A

refers to the
legal responsibility of
individuals or entities for
injuries or damages caused
to others as a result of
negligence or unsafe
conditions

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9
Q
A
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10
Q

risk
reduction

A

Risk reduction involves taking
measures to minimize the
likelihood or impact of
potential risks.

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11
Q

risk
retention

A

Risk retention is the decision
to accept and bear the
financial consequences of
potential risks rather than
transferring them to
another party

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12
Q

risk
transference

A

Risk transference involves
shifting the financial burden
of potential losses to another
party, typically through
contractual agreements or
insurance.

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13
Q

trust
fund

A

designated
account where funds are
held in trust by a real estate
broker or agent on behalf of
their clients, typically for
earnest money deposits or
other escrow funds related to
real estate transactions.

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14
Q

unauthorized
practice of law

A

refers to the provision of
legal advice or services by
individuals who are not
licensed attorneys, which is
prohibited by law.

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15
Q

What is the primary reason for mastering risk management in real estate?

A

To create a safety net for your business and build trust with clients

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16
Q

Which of the following is cash flow?

The total of rents plus revenues from other sources generated by a property

Fixed operating expenses minus variable operating expenses

Effective gross income minus net operating income

Net operating income minus debt service and reserves

A

Net operating income minus debt service and reserves

17
Q

One of the principal concerns for a manager in selecting a commercial tenant is

A

compatibility of the tenants business with that of other tenants

18
Q

Commercial fire and hazard insurance policies usually require coverage to equal at least 80 percent of the propertys

A

replacement value

19
Q

If a propertys vacancy rate is significantly lower than market rates, it may be a sign that the manager needs to

A

raise rental rates

20
Q

A certain building has a vacancy rate above that of the general market. The most likely reason for this is

high property tax rates

a bad market

poor management

lack of incentives from the municipality

A

poor management

21
Q

If an apartment contains a refrigerator that is not included in the lease,

A

the property manager does not have to maintain it

22
Q

If an apartment contains a washer and drier that are included in the lease,

A

the property manager is responsible for maintaining them

23
Q

The rights, duties, and liabilities of the landlord and manager are

apportioned under the terms of the management contract

dictated by common law

identical

regulated by the Universal Landlord Tenant Relations Act

A

apportioned under the terms of the management contract

24
Q

Why does a manager need to keep tenants happy?

A

High tenant turnover increases expenses and reduces profits

25
Q

What kind of agency is commonly created by a management agreement?

Universal

Specific

General

Vicarious

A

General

26
Q
A