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DC PM > DC PM Study Guide > Flashcards

DC PM Study Guide Flashcards

1
Q

A Management Plan describes:

A property’s: a)__ b)__ c)__ d)__ e)__

A
  • fiscal projections, and any operational issues
  • current use along with its physical condition
  • the competing properties
  • potential improvements or alternative uses for the subject property
  • an analysis of the market (both regional and neighborhood)

mnemonic: FUSCIA

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2
Q

A Market Analysis focuses on what 7 things:

A

Both a regional and neighborhood evaluation, which includes:

  • the demographic conditions,
  • geographic features,
  • governmental prospective,
  • existing real estate supply,
  • potential future developments
  • tenant/ resident demand
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3
Q

Determining a property’s “highest and best use” may be achieved by performing a________________OR a __________?

A

Market Analysis and Competitive Property Analysis
They make it is easier to identify the subject property’s strengths and weaknesses. The manager can then consider different alternatives to improve the property’s weaknesses or further enhance its strengths with the ultimate goal to improve overall economic performance.

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4
Q

Among the alternatives to consider in an Analysis of Alternatives are:

A
  • Rehabilitate the property without altering its existing use
  • Modernize the property by updating finishes, purchasing new or more efficient equipment or enhancing existing features or amenities.
  • Change the use of the building, including the conversion from one property type to another (i.e. from industrial to single story office), or by demolishing it for a completely new development.
  • Conversion to a condominium ownership structure
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5
Q

What are some other things a manager should consider while evaluating all the alternative programs in an Analysis of Alternatives?

A
  • the costs
  • the projected payback,
  • the property’s zoning
  • building codes
  • neighborhood characteristics
  • labor costs (in-house versus contracted)
  • timing
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6
Q

Projects that help extend a property’s useful life are frequently considered?

A

Capital Expenditures

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7
Q

What are the three types of obsolescence?

A
  • Physical Obsolescence is characterized as a condition of aging (i.e. wear and tear) or deferred maintenance. Examples are worn carpets, peeling paint, a leaking roof, or dead landscaping.
  • Functional Obsolescence is characterized by old or outdated designs or building systems. Examples include equipment that is not repairable because parts or no longer manufactured; single pane window systems because they waste a large amount of energy; outdated bathroom fixtures because of changing designs and tastes.
  • Economic Obsolescence represents a loss in value due to outside forces (i.e. location, market conditions). An example would be an office building, located in a small town, where the major employer closes. This may result in both lower demand and rental rates.
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8
Q

What is Depreciation?

A

It represents the loss in value from the various forms of obsolescence. It can be economically estimated on a broad level.

Properties begin to deteriorate as soon as they are completed.

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9
Q

What are two ways the Investment Value of a property are determined?

A

By calculating the Net Operating Income and applying a Capitalization Rate to it
OR
From Cash Flow by determining the Return on Investment.

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10
Q

What should determine all of the recommendations and decisions related to the property?

A

The OWNER’S OBJECTIVE

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11
Q

What is the name of the value used by government tax assessment offices?

A

Assessed Value

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12
Q

What are the definitions for Market Value, Depreciated Value and List price?

A
  • Market Value* – This is the value that is agreed to between a buyer and seller. It represents the “meeting of the minds”.
  • Depreciated Value* – This is used for income tax purposes and affects a property’s tax basis. In the past, the Federal Government has implemented accelerated depreciation programs to help promote economic growth.
  • List price* – This is only the price that the owner has offered to sell a property for.
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13
Q

The purpose of a Comparison Analysis is to not only identify physical differences as well as strengths and weaknesses, but also to?

A

To determine a value for each element and to make adjustments to the subject property’s rental rate, up or down, based on the results.

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14
Q

A Comparison Analysis form should include?

A 
Age of the properties 
Locational advantages/Accessibility
Curb Appeal
Interior conditions, quality of finishes
Amenities
Rents per square foot (commercial) or Rents per unit (apartments)
Operating expenses per square foot

Mnemonic: CARR OIL

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15
Q

The Budget Process generally occurs on an annual basis and involves preparing a detailed list of all anticipated income and expenses (both operating and capital). The purpose of the Budget is to?

A

To develop a means to both track the property’s performance and to organize the various types of income (such as rent, miscellaneous income, etc.) and expenses (such as utilities, insurance, payroll, etc.) in a meaningful way.

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16
Q

The ______________________________ protects consumers by enforcing the laws and regulations applicable to property managers including licensure.

A

District of Columbia Real Estate Commission

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17
Q

The Commission consists of 9 members, who are appointed by the Mayor. Commission members consist of __________________

A
  • 3 Brokers
  • 2 Salesperson’s
  • 2 Property Managers
  • 1 attorney
  • 1 unlicensed consumer
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18
Q

Property managers are required to be licensed in the District of Columbia who act as an agent for the
property owner in all matters pertaining to property management, are under the direction of the owner,
and are paid a fee or other valuable consideration. According to the regulations, a licensee engaged to
manage real estate shall:

A
  1. Perform in accordance with the terms of the property management agreement
  2. Exercise ordinary care
  3. Disclose in a timely manner to the owner material facts of which the licensee has actual knowledge concerning the property
  4. Maintain confidentiality of all personal and financial information received from the client during
    the brokerage relationship and any other information that the client requests during the brokerage relationship be maintained confidential unless otherwise provided by law or the owner consents in writing to the release of such information
  5. Account for in a timely manner, all money and property received in which the owner has or may have an interest
  6. Comply with fair housing statutes and regulations
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19
Q

In order to apply for a license, the applicant must: _________________

A
  1. Furnish evidence of having satisfactorily completed the examination approved by the Commission
  2. Submit a completed application on the prescribed form
  3. Include the applicant’s business and home addresses, which cannot be a post office box, on the application
  4. Have the application sworn to or affirmed before a notary public
  5. Pay the required application fee
  6. Meet specific requirements, some of which include
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20
Q

What specific requirements should a PM applicant meet?

A

a. Must be at least 18 years of age
b. Shall not have been convicted of an offense that bears directly on the fitness of the applicant
c. Must be a high school graduate or holder of equivalency certificate
d. Not had a real estate broker’s, salesperson’s, or property manager’s license denied, other
than for not passing the examination, for one year prior to applying.
e. Not had a real estate broker’s, salesperson’s, or property manager’s license revoked in the past three years.

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21
Q

The District of Columbia requires that certain documents must be obtained and posted at the property. What are the 3 documents?

A

These include:

  • Certificate of Occupancy
  • Housing Business License for residential properties
  • General Business License for commercial buildings.
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22
Q

A Certificate of Occupancy (C of O) is a document that certifies that the use of a building complies with:

A

Zoning regulations and Building Codes

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23
Q

A new Certificate of Occupancy is required for new building construction or changes in:

A
  • Ownership
  • Occupancy Load
  • Use
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24
Q

The rent control in the District of Columbia is covered under the:

A

Rental Housing Act of 1985

25
Q

Who is responsible for administering the Rental Housing Act of 1985 (the Act)?

A

Rental Accommodations Division (RAD)

26
Q

The Rental Accommodations Division (RAD) is part of the:

A

Department of Housing and Community Development’s (DHCD) Housing Regulation Administration (HRA),

27
Q

Under the Rental Housing Act of 1985, an apartment building or apartment complex is called:

A

a housing accommodation

28
Q

Under the Rental Housing Act of 1985, a single apartment or house is called:

A

a rental unit

29
Q

Under the Rental Housing Act of 1985, a landlord is referred to as:

A

a housing provider

30
Q

The Act applies to all housing accommodations in the District of Columbia, unless they are specifically
exempted by the Act. The most common exemptions are rental units in these categories:

A

• Federally or District-subsidized rental units
• Rental units built after 1975
• Rental units (including condominium or cooperative units) owned by a natural person who owns no more than four rental units, provided the rental units are registered as exempt
• Rental units that were vacant when the Act took effect
• Housing accommodations under a building improvement plan and receiving rehabilitation
assistance through DCHD

31
Q

Under the Rental Housing Act of 1985 (the Act), any increase in rent must meet these conditions:

A
  1. The new rent charged may not be more than the prior rent plus an allowable increase, as described below.
  2. The increase in rent charged cannot be more than the increase allowed under any single section of the Act.
  3. The last increase in rent must have been at least 12 months ago (unless the unit is vacant).
  4. The increase must not violate the terms of the lease.
  5. The housing accommodation must be properly registered with the RAD.
  6. The rental unit and the housing accommodation’s common elements must be in substantial compliance with housing regulations.
  7. The housing provider must give a 30-day notice of any increase in rent
32
Q

Rent Control: The most common allowable increase in rent is an annual adjustment, based on the increase in the Consumer Price Index (CPI-W). For most tenants, the most that their rent can increase is:

A

the CPI-W percentage plus 2%, but not more than 10%.

33
Q

Rent Control: For tenants who are elderly or disabled, the maximum increase in rent charged is:

A

the CPI percentage only, but not more than 5%.

34
Q

District regulations set “Turn On” date for heat as:

A

October 15

35
Q

District regulations set “Turn Off” date for heat as:

A

May 15

36
Q

Landlords must keep heating equipment in good repair and capable of maintaining a temperature of:

A

at least 70 degrees

37
Q

In any living unit where the tenant cannot control or set the temperature, the building’s heat must be kept at least:

A
  • 68 degrees between 6:30 am and 11 pm

* 65 degrees between 11 pm and 6:30 am

38
Q

Each residential building shall be provided with a water heating facility which is properly connected with the hot water lines of the required fixtures, and which is capable of providing sufficient hot water at a temperature of not less than:

A

120 degrees at those fixtures to meet normal demands.

39
Q

In the District of Columbia, a building permit is required for the following:

A
  • New construction and foundations
  • Additions, alterations, or repair of existing buildings
  • Demolition
  • Razes
  • Construction of retaining walls, fences, sheds, garages, or vault construction
  • Erection of signs or awnings
  • Layout of interior space for tenants in new or existing commercial buildings (e.g. changing the floor plan of a building from six one-bedroom apartments to three two bedroom apartments)
40
Q

A building permit issued by the Department of Consumer and Regulatory Affairs does NOT give you the authority to:

A
  • Build in or occupy public space
  • Remove or prune trees greater than 55” in circumference (18” in diameter) on public or private property.
  • Occupy your building after construction. (You must get a Certificate of Occupancy before you open your business or occupy your commercial building.)
41
Q

Security Deposits: The District of Columbia has issued regulations related to leases and security deposits. Some of the pertinent regulations are:

A
  • deposit amount shall not exceed an amount equivalent
    to the first full month’s rent charged.
  • deposit shall be deposited by the owner in an interest bearing escrow account established and held in trust in a financial institution in the District of Columbia.
  • deposit shall be paid into an escrow account within thirty (30) days.
  • The housing provider shall post in the lobby of the building and rental office at the end of each calendar year, the following information: Where the tenants’ security deposits are held and what the prevailing rate was for each 6-month period over the past year
  • within 45 days any security deposit and any similar payment paid by the tenant as a condition of tenancy in addition to the stipulated rent, and any interest due the tenant on that deposit or payment as provided in paragraph, or
  • Notify the tenant in writing of the owner’s intention to withhold and apply the monies toward defraying the cost of expenses properly incurred under the terms and conditions of the security deposit agreement
  • The owner, within thirty (30) days after notification to the tenant pursuant to the requirement of §309.1(b), shall tender a refund of the balance of the deposit or payment, including interest, not used to defray such expenses, and at the same time give the tenant an itemized statement of the repairs and other uses to which the monies were applied and the cost of each repair or other use.
42
Q

There are also regulations related to delinquent rents and evictions under the Rental Housing Act. Some
of these are:

A
  • If a housing provider seeks to recover possession of a rental unit on the grounds that the tenant is violating an obligation of the tenancy, the housing provider shall first serve the tenant with a notice to correct the violation or to vacate.
  • The notice shall provide at least thirty (30) days for correction of the violation and shall specify what actions need to be taken by the tenant to avoid an eviction.
  • The notice to correct the violation or to vacate may state that the housing provider may evict if the violations are uncorrected at the conclusion of the thirty (30) day notice period.
  • No tenant may be evicted from a rental unit for any reason other than for non-payment of rent unless the housing provider has properly served the tenant with a valid written notice to vacate and has served a copy of that notice on the Rent Administrator not more than five (5) days after service on the tenant.
  • No action for possession of a rental unit may be initiated by a housing provider before the expiration of the time period set forth in the notice.
  • If a housing provider seeks possession of a rental unit by bringing an action in the Superior Court of the District of Columbia and the basis for the intended eviction is the non-payment of rent, the notice to vacate pursuant to §501(a) of the Act need not be served on the Rent Administrator.
43
Q

The ________________ refers to the requirement that certain types of contracts be in writing in order to be
enforced.

A

Statute of Frauds

44
Q

The ___________________ regulates land uses through the use of zoning.

A

District of Columbia Zoning Commission

45
Q

By establishing _________________, the government can regulate certain areas of the city for residential,
commercial and industrial uses.

A

Zoning Classifications

46
Q

Zoning Regulations are also used to control other building aspects within a particular zoning. For example, Zoning Regulations can address:

A

height limitations, density, Floor Area Ratios (FAR), set backs, parking requirements, and green spaces.

47
Q

When a proposed developed is designed to comply with all of the applicable Zoning Regulations for the site, it is called:

A

a Conforming Use

48
Q

When a property previously complied (with Zoning Regulations), but no longer does, it is considered:

A

a Non-conforming Use.

49
Q

In some situations, the _______________ needs to grant a ________________ for a permitted use provided certain criteria are met.

A

Board of Zoning Adjustment (BZA) needs to grant a Special Exception

50
Q

The Board of Zoning Adjustment (BZA) is authorized to vary or modify ____________ any part of the zoning regulations, where because of an exceptional situation, the strict application of the ____________ result in “exceptional practical difficulties or exceptional and
undue hardship” upon a property owner.

A

[a Variance] to the Zoning Regulations

51
Q

The Rental Conversion and Sale Division (CASD) administers the ____________________.

A

Rental Housing Conversion and Sale

Act of 1980.

52
Q

The Rental Housing Conversion and Sale Act of 1980 regulates, among other things:

A
  • tenant opportunity to purchase rights,
  • tenant first rights of refusal,
  • offer of sale notices,
  • notices of transfer
  • the conversion of property to cooperatives or condominiums
53
Q

Some important aspects of the District of Columbia Municipal Regulations (DCMR) related to Sale and Conversion are:

A
  • An owner of a housing accommodation who wishes to convert shall provide to each tenant household and to the Conversion and Sale Regulatory Office a request for election.
  • After receipt of a request for election, a tenant organization, if one exists or is established, may
    give notice and conduct an election.
  • Within thirty (30) days of receipt of the owner’s request for election and after coordinating with the Conversion and Sale Regulatory Office, the tenant organization shall set the date of the election, and notify the owner of the date, time and place of the election.
  • The date of the election shall be within sixty (60) days of receipt of the owner’s request for election.
54
Q

Under Sale and Conversion process, the offer of sale shall include the following information:

A
  1. The asking price and material terms of the sale;
  2. A statement of tenant rights and responsibilities pursuant to the Act;
  3. A statement as to whether a contract with a third party exists for the sale of the housing accommodation and that a copy of such contract will be made available to the tenant(s) within seven (7) days after receiving a request; and
  4. A statement that the owner will provide to the tenants the following information within seven (7) days after receiving a request for any of the following if applicable:
    a. A floor plan of the building, if available;
    b. An itemized list of monthly operating expenses for each of the two (2) preceding calendar years;
    c. Utility consumption rates for each of the two preceding calendar years; and
    d. Capital expenditures for each of the two (2) preceding calendar years.
55
Q

Before an owner can sell a tenant-occupied rental accommodation, the Landlord must provide the Tenant(s) with an opportunity to acquire their residence. This is also known as:

A

TOPA or the Tenant Opportunity to Purchase Act

56
Q

The specific requirements of TOPA vary based upon of rental accommodations of a single unit, 2-4 units or 5 or more units. The general guidelines are as follows:

A
  1. Landlord makes Offer of Sale to Tenant(s)
  2. Tenant(s) may Request Information about the accommodations, including:
    a. Floor Plan
    b. Itemized list of operating expenses; utility consumption rates, and capital expenditures for the previous two years.
  3. The Tenant, Tenants or Tenant Organization submits a Statement of Interest.
  4. The Tenant, Tenants or Tenant Organization then negotiate with the Landlord
  5. The Tenant, Tenants or Tenant Organization reach settlement
  6. If the Landlord has not entered into a sales contract within a specified time period, depending on the number of units, the TOPA process must start over with a new Offer of Sale.
57
Q

The ____________________ program promotes affordable rental housing by maintaining the affordable status of existing affordable rental units as well as increasing the total number of affordable rental units within the District.

A

District Opportunity to Purchase (DOPA)

58
Q

DOPA requires rental property owners to provide the District of Columbia with the opportunity to purchase housing accommodations consisting of:

A

five (5) or more rental units, provided that twenty-five percent (25%) or more of the rental units are “Affordable Units”

DC PM (1 decks)

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