NC Property Management

Question 1

Is it legal for a property manager to deposit security deposits into the owner’s businsess account?

A)
Yes, it is considered conversion and it is legal.
B)
No, it is considered capturing and it is illegal.
C)
Yes, as long as the owner gives permission.
D)
No, it is considered commingling and it is illegal.

Answer 1

D)
No, it is considered commingling and it is illegal.

Explanation
Commingling is illegal. Tenant Security deposits must go into a trust account.

Reference: Property Management

Question 2

A property manager showed a two-bedroom apartment to a prospective tenant with three children under five. Which of the following is TRUE?

A)
The property manager can refuse to rent to the prospective tenant, because of the number of children in a two-bedroom apartment.
B)
The property manager can refuse to rent to the prospective tenant, because three children under five would make too much noise for the quiet complex.
C)
The property manager can refuse to rent to the prospective tenant, because there is no playground facility in the complex.
D)
The property manager cannot refuse to rent to the prospective tenant, because of the number of children.

Answer 2

D)
The property manager cannot refuse to rent to the prospective tenant, because of the number of children.

Explanation
It is illegal to not rent to the prospective tenant, because of the number of children.

Reference: Property Management

Question 3

Which of the following agency agreements may renew for consecutive periods, if all parties agree at the onset of the relationship?

A)
Property management agreement
B)
Nonexclusive buyer agency agreement
C)
Exclusive buyer agency agreement
D)
Exclusive right-to-sell agreement

Answer 3

A)
Property management agreement

Explanation
A property management agreement is allowed to renew for consecutive periods unless one of the parties gives notice of termination. Agency agreements must have a definite termination date.

Reference: Property Management

Question 4

A property manager’s basic responsibility is to

A)
protect the owner’s investment.
B)
offer homeowners insurance to the owner.
C)
screen tenants.
D)
show rental units.

Answer 4

A)
protect the owner’s investment.

Explanation
The basic responsibility of the property manager is to protect the owners investment and maximize the owners return of investment.

Reference: Property Management

Question 5

What is the BEST definition of cash flow?

A)
Profit minus down payment
B)
Rental income minus operating expenses
C)
Rental income minus operating expenses and debt service
D)
All rental income added up

Answer 5

C)
Rental income minus operating expenses and debt service

Explanation
It’s the amount of cash left after all the bills and the mortgage payment are paid.

Reference: Property Management