Unit 19 Exam Flashcards
Match the management opportunity with the description: Leasing agent, Concierge services, Community association management, Corporate property manager, Asset management, Housing for seniors
A)
Company employee who manages property owned by the company
B)
Monitors a portfolio of properties, analyzing performance and making recommendations to owners
C)
Works on commission basis to secure tenants for the building’s owner
D)
Responsible for managing housing for people over 55
E)
Work in office building and responsible for arranging taxi rides and setting up conferences
F)
Assist in providing management services to volunteer boards responsible for multi-unit complexes
Leasing agent = C Concierge services = E Community association management = F Corporate property manager = A Asset management = B Housing for seniors = D
Typically, a corporate property manager is an employee of the corporation and NOT an independent contractor.
True
Homes built in factories and meeting HUD specifications are technically identified as manufactured homes.
True
The management agreement should be in writing and clearly specify the duties and responsibilities of the parties. Match each point in the agreement with its description:
Liability, Compensation, Definition of manager’s responsibilities, Statement of owner’s purpose, Reporting, Allocation of costs, Antitrust provisions, Equal opportunity statement.
A)
Management fee and how it is to be calculated
B)
Requires that the manager be included on the property insurance liability policy
C)
The way the owner monitors the manager’s work
D)
Property will be shown, rented, and made available to all persons
E)
Statement of which management expenses will be paid by the manager
F)
What the manager is to accomplish for the owner
G)
Management fees must be negotiated between the agent and principal; cannot be standardized
H)
All the manager’s duties should be specifically stated here
Liability = B
Compensation = A
Definition of manager’s responsibilities = H
Statement of owner’s purpose = F
Reporting = C
Allocation of costs = E
Antitrust provisions = G
Equal opportunity statement = D
The property management agreement should be in writing and include compensation provisions that comply with antitrust laws.
True
The property manager under the management agreement is usually considered a general agent.
True
One of the primary responsibilities of the property manager is to maintain financial reports. Match the financial report with its description:
Budget comparison treatment, Operating budget, Profit and loss statement, Cash flow report
A)
Monthly statement that details the financial status of the property
B)
Picture of revenues and expenses to determine if the property made money
C)
Compares actual results with the original budget
D)
Projection of income and expense
Budget comparison treatment = C
Operating budget = D
Profit and loss statement = B
Cash flow report = A
Net operating income (NOI) is the income that remains after all expenses and the debt service have been deducted.
False
Representing a property’s gross operating income, minus its operating expenses.
Tenant improvements are also called add-ons.
False
The property manager is responsible for adhering to any federal law that regulates housing, such as the Americans with Disabilities Act (ADA), the Equal Credit Opportunity Act (ECOA), and the Fair Housing Act. Indicate the most appropriate law for each issue: ADA, Fair Housing Act, ECOA
A)
Plan for retrofitting a building not in compliance required
B)
Discrimination in lending prohibited
C)
Full and equal access to commercial properties and public accommodations required
D)
Discrimination in the sale, rental or financing of housing prohibited
E)
Lenders must use a consistent financial evaluation
ADA = A,C
Fair Housing Act = D
ECOA = B,E
The Equal Credit Opportunity Act (ECOA) does not prohibit a landlord from denying a rental application based on a person’s receipt of public assistance.
False
The property manager typically is responsible for determining whether a building meets the accessibility requirements of the Americans with Disabilities Act (ADA).
True
Match each insurance coverage with the correct definition: Consequential loss of use and occupancy, Surety bond, Renter’s insurance (HO-4), Multi-peril insurance
A)
Coverage for personal property and contents
B)
Includes standard types of commercial coverage such as fire, hazard, public liability, and casualty
C)
Coverage to an owner against financial losses resulting from an employee’s criminal acts or negligence while performing assigned duties
D)
Coverage for damages resulting from a disaster
Consequential loss of use and occupancy = D
Surety bond = C
Renter’s insurance (HO-4) = A
Multi-peril insurance = B
Property managers may want to carry errors and omissions (E&O) insurance to protect against any financial management mistakes.
True
Commercial tenants need an HO-4 or renter’s policy to insure their personal property.
False
An insurance policy package that includes standard commercial property coverage such as fire, hazard, public liability, and casualty is called what kind of policy?
A) Multiperil B) Coinsurance C) Universal D) Surety
Explanation
The answer is multiperil. Because such insurance addresses several sources of financial loss, it is called a multiperil policy.
A property manager renting residential property may
A)
require handicapped tenants to restore the premises at the end of a lease.
B)
properly charge families higher security deposits than single renters.
C)
designate adult and family sections in an apartment complex.
D)
refuse to rent to pregnant persons.
Explanation
The answer is require handicapped tenants to restore the premises at the end of a lease. Property managers must allow handicapped tenants to make reversible changes. The other answers are all examples of illegal discrimination.
Many states now require at LEAST a real estate license or an association management license for those who specialize in managing
A) shopping centers. B) mobile home parks. C) homeowners and condominium associations. D) medical buildings.
Explanation
The answer is homeowners and condominium associations. Many states now require at least a real estate license or an association management license for those who specialize in managing homeowners and condominium associations.
The scope of a property manager’s work depends on the terms of
A) the listing agreement B) the management agreement. C) the transactional agreement. D) the rental agreement.
Explanation
The answer is the management agreement. The management agreement defines the manager’s authority and responsibilities.
The owner’s objectives, the regional and neighborhood market, and the specific property are all factored into the property manager’s
A) management plan. B) authority. C) compensation. D) allocation of costs.
Explanation
The answer is management plan. The plan will also include a budgetary section on sources of revenue and anticipated expenses.
Leasing agents are usually
A) employees of the broker. B) independent contractors working on a commission basis. C) independent contractors working on a salary basis. D) employees of the property owner.
Explanation
The answer is independent contractors working on a commission basis. Leasing agents are usually independent contractors working on a commission basis.
If premises of 2,500 square feet are to be leased at a cost of $3.50 per square foot per month, what will be the annual rental cost of the space?
A) $30,000 B) $105,000 C) $95,750 D) $10,500
Explanation
The answer is $105,000. 2,500 × $3.50 = $8,750 per month and $8,750 × 12 = $105,000 per year
A property manager’s primary obligation is to
A) the tenant. B) the owner. C) the banker. D) the government authority.
Explanation
The answer is the owner. The management agreement creates the agency relationship between the property manager and the owner in which the fiduciary relationship that is established requires the duty of the property manager’s loyalty to the owner.
What is the purpose of an operating budget for a property manager?
A)
It is a guide for the property’s financial performance in the future.
B)
It lists the assets, liabilities, and equity of the investment property.
C)
It presents the current cash flows in a standardized format.
D)
It documents the month’s actual income and expenses.
Explanation
The answer is it is a guide for the property’s financial performance in the future. The budget is a forward-looking plan that guides and provides expectations. The cash flow report is a monthly statement that details the financial status of the property. The profit and loss statement documents the actual income and expenses.
