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Real Estate Contracts > Property Mgmt & Leasehold > Flashcards

Property Mgmt & Leasehold Flashcards

1
Q

Property manager is defined as one who preserves the value of an investment property while generating income as an agent for the owners.

**The property managers first responsibility is to realize the maximum profit on the property that is consistent with the owners instructions.

If you take a commission or negotiate a contract and you have to be licensed.

A

More specifically, duties to the landlord include; advertising the property evaluating the rental market and screening applicants in obtaining tenants (in conjunction with the Federal Fair Housing laws), inspections & rent collection, maintenance.

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2
Q

What is the property managers first responsibility?

A

The property managers first responsibility is to realize the maximum profit on the property that is consistent with the owners instructions

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3
Q

How often is the property manager required to provide a report of income and expenses to the owner

A

The property manager should send the owner a monthly report of income and expenses but is ONLY REQUIRED TO PROVIDE A REPORT ANNUALLY.

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4
Q

If a landlord has wrongfully withheld all or part of the security deposit, the tenant may sue to recover up to how much of the amount that was wrongfully withheld?

A

Twice the amount that was wrongfully withheld

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5
Q

What are the three types of maintenance for property management

A

Preventative maintenance; A program of regularly scheduled activities and routine inspections conducted with the goal of reducing future costly repairs. example: replacement of furnace filters annually-this maintenance is usually the most ignored and cost the most because it was ignored.
(trimming this week I’m tree branches away from the building to prevent damage to the building siding)

Routine maintenance; regular chores that must be done to maintain the aesthetics of the property. Ex: vacuuming of the elevators daily mowing the grass weekly.
(Raking of gumballs daily from sweetgum trees to prevent the tenant from falling and or twisting and ankle)

Corrective maintenance; is the actual repairs of the property to avoid upset tenants. Ex: repairing a broken air conditioner or after a severe storm immediately change song and removing this week I’m tree that was blocking the doorway

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6
Q

Preventative maintenance examples

A

Cleaning and lubricating the heating equipment and draining the pool and resealing the bottom

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7
Q

Corrective maintenance examples

A

Changing burned-out lightbulbs and repairing a water main break

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8
Q

Routine maintenance examples

A

Cleaning the carpets in the buildings hallways and painting the lobby

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9
Q

True or false?

And preparing the operating budget, the property manager would take into consideration the owners long range plan for the property

A

True

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10
Q

True or false?

It is probable that the manager of a large office building is license either as a property manager or a broker

A

True

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11
Q

True or false?

Probably the most important function performed by a property manager is selecting tenants

A

True

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12
Q

Property managers are usually agents of the owners. True or false?

A

True

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13
Q

The property manager usually is responsible for making sure the property conforms to the fair housing laws. True or false?

A

True

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14
Q

The owners overall goals for the property are critical in developing the management plan, budgeting, and making management decisions. True or false?

A

True

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15
Q

The written agreement between the landlord and the agent that specifies the duties of each is known as a?

A

Management contract

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16
Q

A property manager acting as an agent

A. Has, at a minimum, verbal authorization to sign agreements on behalf of the owner

B. Must, if directed by the owner, never disclose any material facts regarding the property

C. I was fiduciary duty’s to the principles such as care, loyalty, obedience, accounting and disclosure

D. Does not require licensure unless the principle requires it as part of the agreement

A

C. I was fiduciary duty’s to the principal so just care, loyalty, obedience, accounting and disclosure

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17
Q

True or false? In a principle-agent relationship, the property manager is usually a general agent of the owner?

A

True

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18
Q

Under the law of agency, the property manager is required to do what?

A

Maintain confidentiality and loyalty to the owner’s best interest

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19
Q

When responsible for maintaining a clients property and maximizing return on the clients investment, a broker is serving as a

A. Rental agent
B. Building maintenance specialist
C. Property manager
D. Investment counselor

A

C. Property manager

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20
Q

Leasehold

A

Leasehold rents in freehold bones. Leasehold is also known as less than freehold estates.
The landlord owns the property in freehold that rents it to the tenant in leasehold.
Leasehold estate; I rent the property, is what we think of as renting or leasing. There is usually a definite ending date and referred to as less than freehold estates.
Once negotiated, the landlord must give the tenant exclusive possession of the property.
A valid lease must contain a revisionary right or interest.
The right of quiet enjoyment is the right of a leasee (tenant) legally in possession of the property to uninterrupted use of the property without interference from a lessor (owner)

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21
Q

What is the right of a tenant to the undisturbed possession of the property?

A

Quiet enjoyment

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22
Q

What are the four main types of leasehold estate?

A

Estate (tenancy) for years
Estate (tenancy) from period to period
Estate (tenancy) at Will
Estate (tenancy) at Sufference

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23
Q

Estate for years

A

Example is a hotel. It is the most commonly used lease. The key characteristics are that this type of lease has a definite beginning and ending date. It can’t be for years, months, weeks or even days-any amount of time. Notice is not given to terminate it just happens. Renewal is not automatic-when it’s over it’s over. A one day lease to rent a hotel room has a beginning date and an ending date so would be considered in the state for years.

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24
Q

Estate from period to period

AKA: Periodic Tenancy

A

An example would be an apartment. This is also known as periodic tenancy, or month to month lease. No definite ending date. Proper notice is required to terminate whatever is agreed-upon in the lease. Automatically renews itself for same time as the original lease. Most apartment leases are states from. To. If the tenant is required to give notice to terminate.

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25
Q

Estate at will

A

The landlord let you stay without a lease. Notice can be given by either party without warning. Death or either party immediately terminate an estate at will.

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26
Q

Estate at sufferance

A

The tenants days past the term of the lease. Tenant is known as a hold over tenancy. Tenant is unlawfully in possession of the unit. Must evict tenant through the courts.

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27
Q

Example of the four main types of leasehold estates:

A

Karen signed a lease for an apartment for one year-this is an example of an estate for years; at the end of that year, they decided to go month to month-this is an example of estate from period to period or periodic tenancy or month-to-month. The landlord was trying to sell the property, and decided to let her stay there until he sold the property-this is an example of a state at will. Lastly, the landlord gave notice for Karen that her lease was expired, and had to vacate, she stayed longer than the term of her lease, and this is an example of an estate at sufferance

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28
Q

Estate for years

A

A fixed one year lease

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29
Q

What is a state at sufferance also called?

A

A hold over tenancy

30
Q

The tenant rents month the month and the lease automatically renews. What kind of lease is this?

A

Periodic tenancy which is the same as estate from period to Period

31
Q

What is constructive eviction?

A

This is the tenets remedy if the property is not habitable.

  • The tenant must vacate the property.
  • Send notice to the landlord telling him of the problem.
  • Put the rent money in escrow until the issue can be resolved.

If a property is for closed upon, typically there is a protection for the tenant they could not be affected until the lease actually expires.

32
Q

What is a tenants remedy to inhabitable living conditions?

A

Constructive evection

33
Q

Death of either party terminates this is state. Which one is it?

A

Estate at will

34
Q

Leasehold estate is also known as what?

A

Less than freehold

35
Q

On interrupted use without interference refers to what?

A

Right to quiet enjoyment

36
Q

What is the law that requires real estate contracts to be in writing to be enforceable?

A

Statute of frauds

37
Q

Is a notice required to terminate the lease with a tendency for years?

A

No a notice is not required to terminate the lease

38
Q

An individual rent an apartment for one year. The landlord sells the building during the one year lease term. What effect does the sale have on the lease?

A

The sale does not affect the lease.

39
Q

A tenant agrees to rent on a month-to-month basis after the termination of the original lease. This is known as what estate?

A

Estate from period to Period

40
Q

A church pastor rented and entertainment hall for group meetings from November 28 to December 15. What type of leaseholders the church pastor have?

A

Estate for years

41
Q

Jacob signed a lease that contained an automatic renewal clause. Wha type of lease did Jacob most likely sign?

A

Periodic tenancy

42
Q

The Thompson’s apartment lease has expired, but their landlord has indicated to them that they may remain on the premises until a sale of the building is closed. They will be charge their normal monthly rental during this period. The right held by the Thompson’s is called a?

A

Tenancy at will

43
Q

Generally, and oral lease for five years is

A

Unenforceable

44
Q

The tenant leases a heated apartment, but the landlord fails to provide heat because of a defective central heating plant. The tenant vacates the premises and refuses to pay any more rent to the landlord. This is an example of what?

A

Constructive eviction

45
Q

Gross lease-full service lease

A

Tenants pay a flat fee-landlord pays property charges such as taxes repairs insurance etc.

46
Q

Net lease

A

Tenant pays a fee plus some of the expenses such as a prorated share of insurance, taxes, parking lot lighting, exterior maintenance and upkeep, etc.

47
Q

Percentage lease

A

Tenants pay rent and a percentage of gross sales. Landlord pays a greed upon expenses, if not all. Like a store in the mall

48
Q

Ground lease

A

Long-term lease, usually 99 years. Tenant may build on a property with a ground lease but the property is still the landlords. Example Cracker Barrel or a hospital

49
Q

Graduated lease

A

Costco is up at regular intervals. Example-a doctor just starting out, the rent is lower at the beginning, Goes up as the practice expands

50
Q

Lease-option

A

Where a tenant can purchase the property either during the lease or at its end.

51
Q

Lease-purchase

A

Usually a long-term lease which ends with the tenant purchasing the property. Typically long term for tax or financing reasons.

52
Q

Sale leaseback

A

The owner sells his or her improved property and at the same time, signed a long-term lease with the new owner. The property is sold on the condition that the new owners lease it back to the seller at the time title passes. Grantor becomes the lessee and the grantee becomes the lessor.

53
Q

Assignment of lease

A

When a tenant transfers all his or her lease held interest to another person. The lease has been signed

54
Q

Sublease\Sublett property

A

When a tenant transfers less than all the leasehold interest by leasing them to a new tenant. The original tenant is still ultimately responsible.

55
Q 
An option to purchase binds which of the following parties?
A. The buyer only
B. The seller only
C. Neither the buyer nor the seller
D. Both the buyer and the seller
A

B. The seller only.

Page 51

56
Q 
And option contract is signed by BART the seller, and Bonita the buyer. What is the status of the contract?
A. Unilateral contract 
B. Bilateral contract
C. Executory bilateral contract
D. Executory unilateral contract
A

D. Executory unilateral contract

57
Q

In option binds the option or for a specified time. True or false

A

True

58
Q 
Which type of lease includes three categories of expenses-rent, maintenance expenses and taxes and insurance?
A. Gross lease
B. Net Lease
C. Triple net lease
D. Graduates lease
A

C. Triple net lease

59
Q 
Mr. and Mrs. D lease a two bedroom apartment from Kaye management company. Due to the ordinary wear and tear, the dishwasher breaks down. Who must pay for this repair?
A. The lessor
B. The lessee
C. The insurance company
D. The real estate agent
A

A. The lessor

Page 51

60
Q

When a tenant sublets all or any part of the premises rented under a written lease is the original lease on affected?

A

No - the original lease is unaffected unless it contains a provision that prohibits such subletting

61
Q 
A lessee who pays some or all of the lessors property expenses has a?
A. Gross lease
B. Net lease
C. Percentage lease
D. Sublease
A

B. Net lease

62
Q

The covenant implied in the lease that ensures that the landlord will not interfere in the tenants possession or use of the property is what covenant?

A

Of quiet enjoyment

63
Q

Property management insurance coverage.
Property owners usually purchase some type of insurance to protect their investment in their property. There are three categories of risk that need to be considered for insurance. What are they?

(E & O Insurance)?

A
  1. Distruction of property
  2. Injury to others while on the property
  3. Theft of property on the premises

A property manager will usually purchase insurance for the owner that covers the first two categories.

***Individual tenants are responsible for purchasing insurance to cover the theft of their personal possessions.

64
Q 
An option to purchase binds which of the following parties?
A. the buyer only
B. the seller only
C. Neither the buyer nor the seller
D. both the buyer and the seller
A

B. the seller only

65
Q

An option contract is signed by Bart the seller, and Bonita the buyers. What is the status of the contract?

a. unilateral contract
b. bilateral contact
c. executory bilateral contact
d. executory unilater contact

A

d. executory unilateral contract

66
Q

An option…

a. requires the optionee to complete the purchase
b. give the optionee an easement on the property
c. binds the optionor for a specified time
d. makes the seller liable for a comission

A

c. binds the optionor for a specified time

67
Q

Which type of lease includes 3 categories of expenses - rent, maintenance expenses and taxes and insurance?

a. gross lease
b. net lease
c. triple net lease
d. graduated lease

A

c. triple net lease

68
Q

Mr. and mrs. delong lease a two-bedroom apartment from K management company. Due to ordinary wear and tear, the dishwasher breaks down. Who must pay for the repair?

a. the lessor
b. the lessee
c. the insurance company
d. the real estate agent

A

a. the lessor

69
Q

When a tenant sublets all or any part of the premies rented under a written lease….

a. the tenant assigns all rights, title and interests in the rented property to the new lessee.
b. the sublessee becomes primarily responsible to the landlord for the payment of rent and maintenance of the property
c. the orignal lease is automatically canceled and the sublessee takes possession of the property on a month to month basis.
d. the original lease is uanaffected unless it contains a provision that prohibits such subletting.

A

d. the original lease is unaffected unless it contains a provision that prohbits such subletting.

70
Q

A lessee who pays fome or all of the lessor’s property expenses has a …

a. gross lease
b. net lease
c. percentage lease
d. sublease

A

b. net lease

71
Q

In determining rental amounts, a property manager considers the economic principle of:

a. marginal conrtribution
b. supply and demand
c. conformity
d. balance

A

b. supply and demand

72
Q

Property Management Insurance Coverage

A

3 categories of risk that need to be considered for insurance: Destruction of property, injury to others while on the property and theft of property on the premises.
a property manager will usually purchase insurance for the owner that cover the first two but individual tenants are responsible for purchasing insurance to cover the theft of their personal possessions.

Real Estate Contracts (9 decks)

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