Real Estate Test Unit 19 Flashcards
budget comparison statement
compares actual results with the original budget, often giving either percentages or a numerical variance of actual versus projected income and expenses
building-related illness (BRI)
an illness due to air quality problems, typically toxic substances or pathogens; a clinically diagnosed condition. symptoms include asthma, allergies, and hypersensitivity
cash flow
the net spendable income from an investment, determined by deducting all operating and fixed expenses from the gross income when expenses exceed income, a negative cash flow results
cash flow report
a monthly statement that details the financial status of the property
commingling
the illegal act by a real estate professional of placing client or customer funds with personal funds. by law, real estate professionals are required to maintain a separate trust or escrow account for other parties’ funds held temporarily by the real estate professional
community association management
provides a team of property managers, accounting staff, office staff, and property consultants to manage property
corrective maintenance
correction of problems after they have occurred
management agreement
a contract between the owner of income property and a management firm or individual property manager that outlines the scope of the manager’s authority
management plan
a highly detailed plan that lays out the owner’s objectives for a property, as well as what the property manager wants to accomplish and how, including all budgetary information
multiperil policies
insurance policies that offer protection from a range of potential perils, such as fire, hazard, public liability, and casualty
operating budget
a property’s anticipated financial performance in the present and future. it gives the owner a sense of expected profit
profit and loss statement
a general financial picture based on the monthly cash flow reports; does not include itemized information
property manager
someone who manages real estate for another person for compensation. duties include collecting rents, maintaining the property, and keeping up all accounting
preventive maintenance
small repairs that help prevent bigger problems and expenses
risk management
evaluation and selection of appropriate property and other insurance
routine maintenance
day-to-day duties such as cleaning common areas, performing minor carpentry and plumbing adjustments, and providing regularly scheduled upkeep of heating, air-conditioning, and landscaping
sick building syndrome (SBS)
an illness caused by poor air quality, typically in large commercial buildings. symptoms include fatigue, nausea, headache, and sensitivity to odors
surety bonds
an agreement by an insurance or bonding company to be responsible for certain possible defaults, debts, or obligations incurred by an insured party; in essence, a policy insuring one’s personal and/or financial integrity. in the real estate business, a surety bond is generally used to ensure that a particular project will be completed at a certain date or that a contract will be performed as stated
tenant’s insurance
insurance on the personal belongings of tenants
tenant improvements
alterations to the interior of a building to meet the functional demands of the tenant. also known as build-outs
workers’ compensation acts
state laws that require an employer to obtain insurance coverage to protect employees who are injured in the course of their employment
