Property Management Flashcards
What is an estate for years
A leasehold estate for a defined period of time
What is an estate from period to period
The lease does not contain a specific expiration date
What is an estate at will?
Gives the tenant the right to possess property with the landlord’s consent for an unspecified or uncertain time
What is estate at sufferance
When a tenant who lawfully possessed real property continues in possession of the premises without the landlord’s consent after the rights expire
What are the requirements and general conditions of a valid lease?
Capacity to contract (Legal age, not drunk, etc), Legal objectives clearly states, Offer and acceptance by both parties, and Consideration
What is a gross lease?
Fixed rent, landlord pays everything else
What is a net lease?
Tenant pays for all or some of the operating expenses in addition to rent
What is a percentage lease?
Rent is based on a minimum fixed rental fee plus a percentage of the gross income generated by the tenant doing business on the leased property.
What must a landlord do to begin the eviction process?
A legal action filed in court by the landlord called a “forcible entry and detainer”.
What does a property manager do?
Maintains the owner’s investment and ensures that the property produces an income
What are the elements of a valid property management agreement?
Property description, period of agreement, property manager’s Responsibilities, Owner’s purpose, Property Manager’s Authority, Reports Required, Fee, Allocation of Expenses, and an EEOC statement
What is a property manager responsible for?
Every aspect of the leasing operations, including:
- Marketing the Property
- selecting Tenants
- Collecting Rents
- Maintaining the Property
- Reporting to Landlord
- Account Receivables and Account Parables
- Risk Management
The statute of Frauds requires that lease agreements be in writing to be enforceable if they are for more than how long?
1 year
What is the tenant’s right to possess real estate for the term of the lease called?
Leasehold estate, or a less-than-freehold estate)
What is the normal consideration given for the right to occupy the leased premises?
Rent
What is usually required for the landlord to enter the leased property?
the tenant’s permission
Can the tenant make improvements to the leased property?
Yes, but only with the landlord’s permission
What is lease assignment?
When a tenant transfers all of his leasehold interest to another person
What is it called when a tenant transfers less than all the leasehold interest by leasing them to a new tenant?
Subleasing
What is a right of first refusal clause?
A potential clause in the lease agreement allowing the tenant the opportunity to buy the property before the owner accepts an offer from another party
Which type of insurance coverage insures an employer against MOST claims for job related injuries?
Worker’s compensation
The cost of residential leases are usually expressed as
a monthly rate per unit
Avoid, control, transfer or retain are the four alternative techniques of what?
Risk management
From a management point of view, apartment building occupancy that reaches as high as 98% would tend to indicate that…
Rent could be raised
A guest slips on an icy stair at an apartment building and is hospitalized. A claim against the building owner for medical expenses may be paid under which of these policies held by the owner?
- workers compensation
- Liability
- causality
- Fire and Hazard
Liability
When a property manager is establishing a budget for the building, what should be included as an operating expense?
Utilities
A property manager is offered a choice of three insurance policies with different deductibles. If the property manager selects the policy with the highest deductible, which risk management technique is being used?
- Avoiding risk
- retaining risk
- controlling risk
- transferring risk
Retaining risk
Contaminated groundwater, toxic fumes from paint and carpeting, and lack of proper ventilation are all examples of what?
Environmental concerns that a property manager may have to address
Tenant improvements are
- always constructed to be fixtures
- Removable by the tenant
- paid for by the landlord
- Adaptations of space to suit tenants’ needs
Adaptations of space to suit tenanants’ needs
When a manager developes an operating budget, which of these is considered a variable expense?
- employee wages
- utilities
- Building repairs
- Basic operating costs
Building repairs
In MOST market areas, rents are determined by what
Supply and demand factors
A highrise apartment building burns to the ground. What type of insurance covers the landlord against the resulting loss of rent?
Consequential loss, use, and occupancy
A property manager hires a full-time maintenance person. While repairing a faucet in one of the apartments, the maintenance person steals a television set, and the tenant sues the owner. the property manager could protect the owner against this type of loss by purchasing
- A surety bond
- liability insurance
- workers compensation insurance
- Casualty insurance
A surety bond
Which of these might indicate that rents are too low?
- A pooorly maintained building
- High building occupancy
- Many For Lease signs in the area
- High tenant turnover rates
High building occupancy
A property manager repairs a malfunctioning boiler in the building. This is classified as which type of maintenance?
Corrective
A property manager who enters into a management agreement with the owner usually is a
- Special agent
- universal agent
- General agent
- Designated agent
General agent
Which law requires removing existing barriers when readily achievable in public buildings and adding Braille markings to elevator buttons?
Americans with Disabilities Act
Which action by a property manager is a breach of her fiduciary relationship to the owner?
- Generating a high net operating income by maintaining the property
- Maintaining good relations with the tenants
- Checking the credit history of minority applicants only
- Scrutinizing property expenses
Checking the credit history of minority applicants only
A property manager’s total compensation consists of a monthly salary, a 12% commission based on annual rental for each vacant unit the property manager fills, and the free use of one of the apartments as the property manager’s personal primary residence. Based on these facts is the property manager required by illinois law to obtain a real estate broker or managing broker license?
No. Persons acting as resident managers, who live in the managed proeprty, are specifically exempt from the general licensing requirements
The property manager of a small, 20-unit apartment building requires a security deposit. In this case, the property manager
- must pay interest on the security deposit.
- is not required to deposit the security deposit into the security deposit.
- may deposit the security deposit into the general operating fund
is not required to deposit the security deposit into the security deposit
Under the Fair Housing Act, which action is legal permitted?
- Restricting occupancy in an apartment complex to senior citizens, if qualified and registered as housing for seniors
- Altering the terms of a loan to discriminate against a member of a minority group
- Refusing to rent an apartment to an individual because of his physical disability
- Telling a minority individual that an apartment has been rented when in fact it has not
Restricting occupancy in an apartment complex to senior citizens, if qualified and registered as housing for seniors
Encouraging people to sell or rent their homes by claiming that entry of a protected class of people into the neighborhood will have a negative impact on property values constitutes what?
blockbusting
The federal Fair Housing Act prohibits discrimination in housing based on
- sex
- all of these
- Disability of familial status
- Race, color, religion, or national origin
all of these
During a listing presentation, a real estate licensee said to the seller, who owned two residential properties, “I hear a family of those people are moving in, and you’d better put your hosue on the market before values drop!” Has the licensee violated any fair housing law?
Yes The licensee is guilty of blockbusting
A licensee entered into a buyer agency agreement with a Japanese man. The licensee showed him only properties where it was obvious that other Japanese people lived there. Has the licensee violated any fair housing law?
Yes the licensee is guilty of steering
A lender’s refusal to lend money to potential homeowners attempting to purchase properties located in predominantly African American neighborhoods is called what?
Steering
Which of these is NOT permitted under the federal Fair Housing Act?
- The owner of a 20-unit residential apartment building rents to white men only
- An expensive club in Chicago rents rooms only to members who are graduates of a particular university
- A Catholic convent refuses to furnish housing for a Jewish man
- An owners refuses to rent the other side of her duplex to a family with children
The owner of a 20-unit residential apartment building rents to white men only
As an office policy, a sponsoring broker requires that sponsored licensees show prospective buyers from racial or ethnic minority groups only properties that are in certain areas of town where few members of their groups currently lvie. The sponsoring broker prepares a man illustrating the appropriate neighborhoods for each racial or ethnic group.Through this policy, the sponsoring broker hopes to achieve racial balance in residential housing. Which of these statements is TRUE regarding the sponsoring broker’s policy?
- because the effect of the sponsoring broker’s policy is discriminatory, it constitutes illegal steering regardless of his intentions.
- While the sponsoring broker’s policy may appear to constitute blockbusting, application of the effects test proves its legality
- The sponsoring broker’s policy clearly shows the intent to discriminate
- While the spooring broker’s policy may appear to constitute steering, application of the intent test proves is legality.
because the effect of the sponsoring broker’s policy is discriminatory, it constitutes illegal steering regardless of his intentions.
If a seller refuses to sell her home to a buyer on the basis of that buyer’s race, what law is violated?
Fair Housing Act
A Lithuanian American real estate broker offers a special discount to Lithuanian American clients. This practice is
- legal in certain circumstances
- Legal but ill advised
- an example of steering
- Illegal
Illegal
Under the Americans with Disabilities Act, which of these is TRUE?
- The ADA requires that employers make reasonable accommodations that enable a person with a disability to perform essential job functions.
- Business and commercial real estate are exempt from the ADA
- The provisions of the ADA do not apply to employers with fewer than 50 employees
- The ADA does no apply to public buildings
The ADA requires that employers make reasonable accommodations that enable a person with a disability to perform essential job functions.
After a broker takes a listing of a residence, the owners specify that they will not sell their home to any Asian family. The broker should
- Explain to the owner that the instruction violates federal law and that the broker cannot comply with it.
- Advertise the property exclusively in Asian-language newspapers
- Abide by the principal’s directions despite the fact that they conflict with the fair housing laws
- Require that the owner sign a separate legal document stating the additional instruction as an amendment to the listing agreement.
Explain to the owner that the instruction violates federal law and that the broker cannot comply with it.
Which of these is TRUE pursuant to the fair housing act?
- A landlord may unilaterally increase her customarily required security deposit if the tenant is disabled.
- Good intentions are always a defense to allegations of a Fair Housing Act violation
- Landlords must make reasonable accommodations to existing policies or practices to permit disabled persons to have equal enjoyment of the premises.
- Steering is not illegal if it is based on the licensee’s reasonable expectations
Landlords must make reasonable accommodations to existing policies or practices to permit disabled persons to have equal enjoyment of the premises.
A real estate licensee tells a single man with two small children that homes for sale in a condominium complex are available only to married couples with no children. Which statement is TRUE?
- because a single parent family can be disruptive if the parent provides little supervision of the children, the condominium is permitted to discriminate against the family under the principle of rational basis.
- the man may file a complaint alleging discrimination on the basis of familial status
- Condominium complexes are exempt from the fair housing laws and can therefore restrict children.
- Restrictive covenants in a condominium take precedence over the fair housing laws
the man may file a complaint alleging discrimination on the basis of familial status
The following ad appeared int he newspaper: “For sale: 4 BR brick home; Redwood School District; excellent Elm Street location next door to St. John’s Church and right on the bus line. Move in condition; priced to sell.” Which of these statements is TRUE?
- The ad is appropriate
- Fair housing laws do not apply to newspaper advertising
- The ad should not mention St. Jon’s Church
- The ad should state the property is available to families with children
The ad should not mention St. John’s Church
A landlord rented an apartment to a person with a disability, and the tenant wants to make certain changes to the unit to accommodate her disability. Which of these does NOT constitute a reasonable modification?
- Widen the doorways
- Lower the kitchen cabinets
- Install a dog run for service animals in the lobby
- Lower the light switches
Install a dog run for service animals in the lobby
Which of these is legal?
- Negotiating with a person with a disability to establish an escrow account for the cost to restore a property after it has been modified
- Charging a family with children a higher security deposit than those with no children
- picturing only white people in a brochure as the “happy residents” in a housing community
- Refusing to sell a house to a person who has a history of mental illness
Negotiating with a person with a disability to establish an escrow account for the cost to restore a property after it has been modified
Which of these is TRUE pursuant to the Illinois Human Rights Act?
- tenants can be held liable for any damages to the premises caused by a service animal.
- It is not a civil rights violation to discriminate against a person who is hearing impaired
- It is a civil rights violation to refuse to sell or rent because the prospective buyer or tenant has a service animal
It is a civil rights violation to refuse to sell or rent because the prospective buyer or tenant has a service animal
When a landlord rented an apartment in his six-unit building to a youg couple, he didn’t notice that the woman was pregnant. After the baby was born, the landlord canceled their lease, citing the elase’s no children clause. Which of these is TRUE?
- The landlord is acting legally under an exemption to the illinois Human Rights Act
- The landlord must give the tenants 60 days in which to find a new apartment.
- The landlord is violating the illinois Human Rights Act regarding the exclusion of children
- The landlord may refuse to rent to families with children only if he lives in the building
The landlord is violating the illinois Human Rights Act regarding the exclusion of children
A woman owns two multiunit apartment buildings: a two flat on oak street and a 12 unit building on Main Street. She lives in an apartment in the Main Street property. Which of her properties, if any, is exempt from the illinois Human Rights act?
- Neither property
- The Oak Street Property Only
- The Main Street Property Only
- Both properties
Neither property
Asbestos in MOST dangerous when it
- is used as insulation
- gets wet
- Crumbles and becomes airborne
- is wrapped around heating and water pipes
crumbles and becomes airborne
The term encapsulation refers to the
- process of sealing a landfill with three to four feet of topsoil
- way in which asbestos insulation is applied to pipes and wiring systems
- way in which asbestos becomes airborne.
- Method of sealing disintegrating asbestos
Method of sealing disintegrating asbestos
A real estate licensee showed a pre world war i house to a prospective buyer. The buyer has two toddlers and is worried about potential health hazards. Which of these is TRUE?
- There is a risk that urea-foam insulation was used in the original construction.
- The licensee is authorized to inspect for lead and remove any lead risks.
- removal of lead based paint and asbestos hazards is covered by standard title insurance policies
- Because the house was built before 1978 lead based paint is likely present
Because the house was built before 1978 lead based paint is likely present
Which of these is TRUE regarding asbestos?
- The removal of asbestos can cause further contamination of a building.
- asbestos causes health problems only when it is eaten
- The level of asbestos in a building is affected by weather conditions
- HUD requires all asbestos containing materials to be removed from all residential buildings
The removal of asbestos can cause further contamination of a building
Which of these BEST describes the water table?
- Level at which underground storage tanks may safely be buried
- Natural level at which the ground is saturated
- measuring device used by specialists to measure groundwater contamination
- always underground
Natural level at which the ground is saturated
Radon poses the greatest potential health risk to humans when it is
- Contained in insulation material used in residential properties during the 1970s
- found in high concentrations in unimproved land
- trapped and concentrates in inadequately ventilated areas
- Emitted by malfunctioning or inadequately ventilated appliances
trapped and concentrates in inadequately ventilated areas
Which of these describes the process of creating a landfill site
- Waste is liquefied, treated, an dumped through pipes to “tombs” under the water table
- waste is compacted and sealed into a container and then placed in a “tomb” designed to last several thousand years.
- Waste is buried in an underground concrete vault
- waste and topsoil are layered in a pit, mounded up, and then covered with dirt and plants
waste and topsoil are layered in a pit, mounded up, and then covered with dirt and plants
Liability under CERLCLA is
- limited to the owner of record
- joint and several and retroactive, but not strict
- voluntary
- strict, joint, and several, and retroactive
strict, joint, and several, and retroactive
Which of these has NOT been proved to pose health hazards?
- Asbestos fibers
- carbon monoxide
- electromagnetic fields
- lead-based paint
electromagnetic fields
Which of these environmental hazards poses a risk due to particles or fibers in the air?
- Carbon Monoxide
- Radon
- UFFI
- Asbestos
Asbestos
The residential lead based paint hazard reduction act establishes procedures for disclosing the presence of lead in
- Residential properties built before 1978
- All residential properties offered for sale.
- new residential construction only
- residential properties built before 1990
Residential properties built before 1978
Which of these is NOT exempt from disclosure regulations of the Residential Lead Based Paint Hazard Reduction Act?
- Studio apartments where the living area is not separated from the sleeping area
- senior-citizen housing
- a duplex built before 1978
- residences for the disabled
A duplex built before 1978
The segment of the population most likely to obtain lead poising from paint is
- The elderly
- teenagers
- all of these
- children
Children
Mod and mildew found in the home fall into which category of pollutants?
- Pesticides
- Biological
- Formaldehyde
- Hazardous Waste
Biological
Which of these is FALSE about underground water contamination?
- It is a minor problem in the United States.
- Any contamination of underground water can threaten the supply of pure, clean water from private wells and public water systems
- Protective state and federal laws concerning water supply have been enacted
- Real estate licensees need to be aware of potential contamination sources
It is a minor problem in the United States
In regulations regarding lead based paint, HUD requires that:
- Homeowners test for its presence.
- know paint hazards to be disclosed
- paint be removed from the surfaces before selling
- only licensed contractors deal with its removal
Known paint hazards be disclosed
A method of sealing off disintegrating asbestos is called
- encapsulation
- capping
- containment
- contamination closure
encapsulation
The agency primarily responsible for protecting Illinois’s natural resources against pollution and other hazards is the
- Pollution Control bard of Illinois (PCB)
- Illinois Department of Environmental Affairs (IDEA)
- Illinois Department of Environmental Regulation (IDER)
- Illinois environment Protection Agency (IEPA)
Illinois environment Protection Agency (IEPA)
Environmental regulations in Illinois are
- All more stringent than federal regulations
- Less restrictive than federal regulations
- substantially equivalent to federal regulations
- not subject to federal regulations
substantially equivalent to federal regulations
Which are exempt from radon disclosure under the Illinois Radon Awareness Act?
- Residential rentals, if radon has been detected and remediated in the past
- properties with six or more units
- Transfers between neighbors
- Transfers between co-owners
Transfers between co-owners
