Review 04: Property Management (15-16) Flashcards
Last year your firm managed a 48-unit apartment building. Two units were four-bedroom, penthouse units renting for $1,000 per month. Twenty-five units with three bedrooms and two baths rented for $850 per month. Ten two-bedroom units rented for $750 per month, and 11 one-bedroom apartments with balconies rented for $650 per month. The three-bedroom units carried a 5% vacancy; the two-bedroom units carried a 5% vacancy; the one-bedroom units carried a 10% vacancy. The four-bedroom units were occupied the entire year. The management fee is 12 %. How much commission did your firm gross last year from managing this building?
A. $45,480
B. $50,036
C. $51,476
D. $53,136
C. $51,476
A landlord would be allowed to utilize a tenant’s security deposit for all of the following, EXCEPT:
A. to remove stains on the carpet that are beyond ordinary wear and tear.
B. to repaint due to unauthorized paint colors that were used on the wall.
C. for dirty walls and windows.
D. to cover crayon and permanent marker drawings on a wall.
C. for dirty walls and windows.
(Deductions can only properly be made from a tenant security deposit for damages caused by the negligence of the tenant and not ordinary wear and tear items. The landlord must itemize all deductions)
What is the maximum amount that a lessor can charge a tenant as a monthly fee when rental payments are not made in accordance with the lease provisions?
A. $15.00 or 5% of the monthly rent, whichever is less
B. $5.00 or 15% of the monthly rent, whichever is less
C. $15.00 or 5% of the monthly rent, whichever is greater
D. $5.00 or 15% of the monthly rent, whichever is greater
C. $15.00 or 5% of the monthly rent, whichever is greater
(If the monthly rent is $200, then the lessor could charge $15 since 5% of $200 is $10.00. If the monthly rent is $800, then the landlord could charge $40.00 since that is 5% of $800 and is larger than $15.00)
Which of the following may a tenant use as a defense in an eviction proceeding?
A. Self help eviction
B. Summary ejectment
C. Retaliatory eviction
D. Judgment summation
C. Retaliatory eviction
(Retaliatory eviction occurs when a tenant has made a legitimate complaint or request either to a regulatory agency and in response the lessor has attempted to evict the tenant from the property or the lessor has disproportionately increased the rent. The tenant has a defense to a potential eviction action for 12 months after the complaint by claiming that the eviction is retaliatory)
A residential lessor or landlord must provide an itemized security deposit accounting to a tenant:
A. immediately upon lease termination
B. within 7 days of lease termination
C. within 3 days of lease termination
D. within 30 days of lease termination
D. within 30 days of lease termination
(The lessor or landlord must provide the tenant with an itemized security deposit within 30 days of lease termination. If there are additional invoices or receipts which the lessor needs to obtain the final accounting and distribution of all funds must occur within 60 days)
Joe, a lessor and landlord, has been renting a small apartment to Sally under a written lease. If Joe defaults on his mortgage payment and the bank forecloses on the property, which of the following clauses would best protect the tenant?
A. Survivorship clause
B. Assignment clause
C. Right of first refusal clause
D. Right of quiet enjoyment
D. Right of quiet enjoyment
(The right of quiet enjoyment is not a right to be free of “noisy” neighbors. The covenant of quiet enjoyment which is included in leases means the right not to have the leasehold disturbed by outside parties claiming a superior interest in the property (i.e. the bank))
In performing their duties, which would be a correct action by a Property Manager?
A. Offering concessions approved by the owner to all prospective tenants to induce tenants to fill those vacancies.
B. Analyzing the capital gains and tax advantages of the rental property and providing regular investment reports to the owner.
C. Paying for the capital improvements and repairs that need to be made in order for the premises to be in a fit and habitable condition.
D. Spot checking credit histories for a large enough sample size of tenants to assure all tenants credit histories are in line with the property owner’s credit history criteria.
A. Offering concessions approved by the owner to all prospective tenants to induce tenants to fill those vacancies.
(Concessions are inducements to retain or attract tenants and with the permission and consent of the owner are often offered by property managers)
When a rental property is transferred or sold and there are valid leases for market rents, what is the status of the leases on the property?
A. The leases are void and extinguished at the time of the sale or transfer.
B. The leases are valid and must be honored by the new owner.
C. The new owner must honor the leases for a minimum six-month period.
D. The new owner has the option of honoring or cancelling the leases.
B. The leases are valid and must be honored by the new owner.
(Sale or transfer of a property does not terminate a lease. The leases travel with the property and must be honored by the new owner)
Which of these is a provision of the North Carolina Rental Agreements Act?
A. A fair and equitable security deposit must be charged before a lease is considered valid.
B. Landlords must provide and maintain premises that are fit and habitable.
C. Leases in shopping centers may be cancelled by the tenants if business is poor and the lessor did not provide adequate signage and consumer traffic.
D. Tenants have the right to withhold rent if heat or other basic services are unavailable for more than ten consecutive days.
B. Landlords must provide and maintain premises that are fit and habitable.
(This is an absolute duty of lessors and landlords. A lessor cannot limit or disclaim their obligation to keep the premises fit and habitable)
The obligations of a property manager to the owner are PRIMARILY determined by:
A. drafted lease agreements
B. the Residential Rental Agreements Act
C. the common law of agency
D. the written property management agreement and fiduciary duties
D. the written property management agreement and fiduciary duties
(The property manager works for the owner pursuant to the terms of a written property management agreement which establishes an agency relationship. The property manager owes fiduciary duties to the property owner over the tenants)
What is the BEST way for a property manager to minimize problems with a tenant?
A. To talk with the tenant about the tenant’s conduct
B. To discuss and give a copy of the rules and regulations to the tenant
C. To report the tenant to the appropriate authorities
D. To involve the NCREC in an arbitration hearing with the tenant
B. To discuss and give a copy of the rules and regulations to the tenant
(Providing the tenant with the provisions of the Tenant Security Deposit Act and the Residential Rental Agreements Act is the best approach)
When must tenant security deposits in North Carolina be held in a trust account?
A. Only when the property is managed by a licensed property manager
B. Only if the property is managed or owned by a licensee
C. Only if the tenant demands that the interest on the deposit be paid to the tenant
D. Licensees must hold all security deposits in trust accounts
D. Licensees must hold all security deposits in trust accounts
(The NC Tenant Security Deposit Act requires all tenant security deposits to be held in a trust account whether managed by a licensee or a private invidividuals. Private individuals may also post a bond in lieu of holding the funds in a trust account)
Which of the following is least likely to terminate a lease?
A. The property is taken by eminent domain
B. The lessor sells the property
C. The tenant dies
D. The landlord dies and leaves in the property in their will to their heirs.
B. The lessor sells the property
(Sale of a property does not terminate the lease. The new owner must honor the existing lease agreement)
