Property Management and Leasing

Question 1

All but one of the following should be included as fixed operating expenses in the budget for property management:

A) Property manager’s fees
B) Ceiling replacement
C) Fuel costs
D) Maintenance

Answer 1

B) Ceiling replacement

This item might be handled by a special account called reserves for replacement.

Question 2

A property management contract should contain:
I. A description of the property
II. The terms and conditions of the employment

A) I only
B) II only
C) Both I and II
D) Neither I nor II

Answer 2

C) Both I and II
I. A description of the property
II. The terms and conditions of the employment

Need not be legal description

Question 3

In addition to providing the owner with a good income, one of the most effective ways for a property manager to advertise his management abilities is through a well-run building with has:

A) As high or higher rents than other similar buildings
B) Satisfied tenants served by competent employees
C) The most complete and up-to-date accounting reports
D) The lowest paid employees

Answer 3

B) Satisfied tenants served by competent employees

High rents may not produce good net income if there are unnecessary expenses.

Question 4

Included in the property management butted as operating expenses are costs:
I. To extend the plumbing system
II. To pay for the property management fee

A) I only
B) II only
C) Both I and II
D) Neither I nor II

Answer 4

B) II only

II. To pay for the property management fee

Question 5

A property manager, to secure the best return for the investment would establish rental income by:

A) Long term rental at high present economic period
B) Long term contract with middle of present day rentals
C) Long term rental with a built-in escalation clause
D) Month to month rental

Answer 5

C) Long term rental with a built-in escalation clause

Question 6

A lease is:

A) Contract
B) A conveyance
C) Neither a contract nor a conveyance but a separate thing in itself
D) Both a contract and a conveyance

Answer 6

D) Both a contract and a conveyance

Question 7

Which lease provides for certain adjustments in rent:

A) Ground lease
B) Net lease
C) Graduated lease
D) Long term lease

Answer 7

C) Graduated lease

Another type is a step-up lease

Question 8

The conveyance of an estate chiefly by a lease is a:

A) Devise
B) Demise
C) Deed
D) Decree

Answer 8

B) Demise

Demise is a transfer of real property by lease.

Question 9

If a landlord wants to regain possession of the leased premises, he gives notice to:

A) Evict
B) Attach
C) Quit
D) Relinquish

Answer 9

C) Quit

Evicition notice is only used in a formal eviction proceeding whereas notice to quit could be used to terminate a periodic tenancy

Question 10

Some features of a tenancy at will are as follows:
I. It terminates with proper notice by either party
II. It has no definite duration

A) I only
B) II only
C) Both I and II
D) Neither I nor II

Answer 10

C) Both I and II
I. It terminates with proper notice by either party
II. It has no definite duration

It will terminate upon either’s death or sale of property

Question 11

Which of the following is true?

I. The Hawaii Landlord-Tenant Code provides that a landlord cannot charge a security deposit equal to more than one month’s rent unless the tenant has agreed to a larger deposit in a written rental agreement
II. The Landlord-Tenant Code requires the landlord to return the deposit within ten days of tenant vacating the premises, or specify reasons for withholding all or part of deposit

A) I only
B) II only
C) Both I and II
D) Neither I nor II

Answer 11

D) Neither I nor II

The parties can’t agree to a higher security deposit than that allowed by law.

Question 12

A lessee who fails to renew his lease but who remains in possession with the permission of the landlord is called a:

A) Tenant at sufferance
B) Tenant at will
C) Tenant for years
D) Tenant in common

Answer 12

B) Tenant at will

A tenant at sufferance is there without the landlords consent

Question 13

On a percentage lease:
I. The owner has the right to examine the lessee books
II. There will typically be a minimum rent besides the percentage

A) I only
B) II only
C) Both I and II
D) Neither I nor II

Answer 13

C) Both I and II
I. The owner has the right to examine the lessee books
II. There will typically be a minimum rent besides the percentage

It is only the percentage of the gross

Question 14

A lease of land alone in which the tenant agrees to construct a residence is best called a:

A) Ground lease
B) Gross lease
C) Net lease
D) Percentage lease

Answer 14

A) Ground lease

Question 15

In the event the landlord in a Hawaii residential month-to-month lease wishes to raise the rent, he must give the tenant how many consecutive days notice.

A) 72
B) 30
C) 28
D) 45

Answer 15

D) 45

Question 16

Upon foreclosure against the landlord by a prior mortgagee, a subsequent tenant’s lease:

I. Remains unaffected
II. May be terminated at the election of the mortgagee

A) I only
B) II only
C) Both I and II
D) Neither I nor II

Answer 16

B) II only
II. May be terminated at the election of the mortgagee

Lease is subject to prior mortgage

Question 17

Which of the following statements is true in respect to the assignment of a lease?

A) The original lessee is the sole party liable for the payment of rent
B) It is the same as a sublease
C) The original lessee would still retain a right to sue the property for a limited time
D) The entire leasehold is transferred

Answer 17

D) The entire leasehold is transferred

Question 18

In which case is the tenant relieved of his obligation to pay the rent?

I. Upon abandonment
II. Upon constructive eviction

A) I only
B) II only
C) Both I and II
D) Neither I nor II

Answer 18

B) II only
II. Upon constructive eviction

Tenant must move out

Question 19

The right of first refusal gives the tenant:

I. The first choice to bid on the property upon foreclosure
II. The right to terminate the lease upon 28 days notice

A) I only
B) II only
C) Both I and II
D) Neither I nor II

Answer 19

D) Neither I nor II

It could give him the right to match any offer to buy the leased premises.

Question 20

What is not needed for a valid lease?

A) Renewal option
B) Lessor’s signature
C) Amount of rent
D) Term of lease

Answer 20

A) Renewal option

Question 21

Under Hawaii’s landlord tenant code, regarding provisions covering the security deposit:

A) The landlord can collect the first and last month’s rent plus a reasonable cleaning deposit
B) The landlord must return the deposit within 7 business days of lease termination
C) The deposit can be applied agains damages, failure to pay rent, and lost keys
D) The landlord can collect a security deposit and cleaning deposit

Answer 21

C) The deposit can be applied agains damages, failure to pay rent, and lost keys

Question 22

Under Hawaii’s Landlord Tenant Code, the landlord can do which of the following:

A) Enter the leased premises at any time to check for damage
B) Increase the monthly rent with 30 days notice
C) Give 60 days notice to terminate upon converting the building to a condominium
D) Require a lease signed by the tenant that prohibits assignment and subletting

Answer 22

D) Require a lease signed by the tenant that prohibits assignment and subletting

Question 23

A landlord under short term rentals of residential property is obligated to pay all of the following kinds of taxes except:

A) Transient accommodation tax
B) Income tax
C) General excise tax
D) Capital gains tax

Answer 23

D) Capital gains tax