Unit 5 - 8 Flashcards
The principal-agent relationship in property management is created by
Answer Choices:
a. Management agreement
b. Listing agreement
c. Employment contract
d. Equitable title
Correct Answer: a. Management agreement
A property manager, who is authorized to obligate the principal in a contractual manner, is a
Answer Choices:
a. Trustee
b. Trustor
c. Special agent
d. General agent
Correct Answer: d. General agent
The relationship that a property manager, who is an agent, has with the owner, who is a principal, is
Answer Choices:
a. Confidential
b. Ethical
c. Fiduciary
d. Power of attorney
Correct Answer: c. Fiduciary
If a property manager is negotiating with a property owner to manage a large property, the term of the management contract should be at LEAST
Answer Choices:
a. Six months
b. One year
c. Three years
d. Five years
Correct Answer: b. One year
Mixing owners’ funds with personal funds is an illegal activity called
Answer Choices:
a. Redlining
b. Commingling
c. Steering
d. Conversion
Correct Answer: b. Commingling
How are management fees determined?
Answer Choices:
a. Agreement of participating property managers
b. Average of local rates charged
c. Set by state law
d. Negotiated between the parties
Correct Answer: d. Negotiated between the parties
Which type of fee is a wonderful incentive when the owner wants the manager to generate more income?
Answer Choices:
a. Per-unit fee
b. Flat fee
c. Percentage fee
d. Cost plus fee
Correct Answer: c. Percentage fee
To ensure a smooth takeover of a property, the manager should do everything EXCEPT
Answer Choices:
a. Provide all necessary documents to the owner
b. Use a takeover checklist
c. Is not required to personally inspect the entire property
d. Should offer the tenants an opportunity to terminate their leases
Correct Answer: d. Should offer the tenants an opportunity to terminate their leases
Security deposit balances and accounting are an essential part of a property takeover. How should the new property manager handle security deposits?
Answer Choices:
a. Follow the owner’s instructions
b. Handle the deposits in the same manner as the previous manager
c. Adhere to state laws
d. Create a new system
Correct Answer: c. Adhere to state laws
To maintain an on-going satisfactory relationship with the owner, the manager should
Answer Choices:
a. Send the owner reports only upon written request from the owner
b. Send monthly earnings report and a personal letter
c. Contact the owner only in an emergency
d. Send quarterly written reports and monthly phone calls
Correct Answer: b. Send monthly earnings report and a personal letter
A property manager is usually a special agent.
Answer Choices:
True
False
Correct Answer: False
If the principal asks the manager to violate the law, the agent must do so under the fiduciary duty of obedience.
Answer Choices:
True
False
Correct Answer: False
A property manager may commingle client funds with the regular office funds.
Answer Choices:
True
False
Correct Answer: False
Most managers will ask for at least a one-year management agreement.
Answer Choices:
True
False
Correct Answer: True
The owner and the manager should be named as coinsureds on liability and workers’ compensation insurance policies.
Answer Choices:
True
False
Correct Answer: True
Fees charged to owners may be freely discussed by competing property management companies.
Answer Choices:
True
False
Correct Answer: False
Most owners do NOT wish to be disturbed so annual reporting is generally sufficient.
Answer Choices:
True
False
Correct Answer: False
Banks, colleges, and large corporations usually enter into an employer-employee relationship with the property manager.
Answer Choices:
True
False
Correct Answer: True
Question 19:
The management agreement should indicate if the agent is permitted to sign binding leases.
Answer Choices:
True
False
Correct Answer: True
The written agreement between the owner and the agent is called the listing agreement.
Answer Choices:
True
False
Correct Answer: False
A condominium owner holds a proprietary lease.
Answer Choices:
True
False
Correct Answer: False
Managing a multiple-ownership building is usually a simple matter since there are so many owners interested in the outcome.
Answer Choices:
True
False
Correct Answer: False
Condominium ownership is more popular than cooperative ownership because the financial default of one does not jeopardize the rest of the development.
Answer Choices:
True
False
Correct Answer: True
Sorting out insurance liability is one of the pitfalls of condominium ownership.
Answer Choices:
True
False
Correct Answer: True
The PUD property manager is expected to increase fees regularly.
Answer Choices:
True
False
Correct Answer: False
Reserve funds can be useful in preventing surprise special assessments.
Answer Choices:
True
False
Correct Answer: True
A factor against manufactured homes is that they are very expensive.
Answer Choices:
True
False
Correct Answer: False
One challenge of managing subsidized properties is the amount of paperwork involved.
Answer Choices:
True
False
Correct Answer: True
Section 8 is available to help purchase housing for the elderly poor.
Answer Choices:
True
False
Correct Answer: False
Private landlords who accept housing vouchers are permitted to determine their own tenant screening processes.
Answer Choices:
True
False
Correct Answer: True
Single-family housing is usually profitable for a professional property manager.
Answer Choices:
True
False
Correct Answer: False
Larger apartment communities are more likely to offer recreational facilities and other amenities.
Answer Choices:
True
False
Correct Answer: True
Rental centers are profitable and feasible in developments of less than 100 units.
Answer Choices:
True
False
Correct Answer: False
Classified advertising is the most common method of marketing residential apartments.
Answer Choices:
True
False
Correct Answer: True
House rules should be presented to the prospect after the lease is signed.
Answer Choices:
True
False
Correct Answer: False
One way to work with tenant unions is to regularly schedule meetings with tenant representatives.
Answer Choices:
True
False
Correct Answer: True
The most important person in an apartment complex is the resident manager.
Answer Choices:
True
False
Correct Answer: True
Few resident managers are required to be able to perform minor plumbing or electrical repairs.
Answer Choices:
True
False
Correct Answer: False
When someone purchases shares of stock in a corporation that owns title to an entire apartment building, it is properly called a
Answer Choices:
a. Condominium
b. Time-share
c. Cooperative
d. Proprietary lease
Correct Answer: c. Cooperative
Individual ownership in a unit and an undivided interest in the common elements is properly called a
Answer Choices:
a. Condominium
b. Cooperative
c. Time-share
d. Mixed-use development
Correct Answer: a. Condominium
When an individual with a membership certificate is granted the right to occupy a specific unit in a building, the individual obtains a
Answer Choices:
a. Lease
b. Rental agreement
c. Proprietary lease
d. Deed of trust
Correct Answer: c. Proprietary lease
Which of the following establishes condominium ownership?
Answer Choices:
a. CC&R declaration
b. Deed
c. Proprietary lease
d. All of the above
Correct Answer: b. Deed
The property manager of a condominium has fiduciary responsibilities to the
Answer Choices:
a. Tenants
b. Board of directors
c. Owners
d. President of the corporation
Correct Answer: c. Owners
Managers of coop and condo communities usually determine their fees by using a(n)
Answer Choices:
a. Operating budget
b. Income and expense statement
c. Five-year forecast of earnings
d. Management pricing worksheet
Correct Answer: d. Management pricing worksheet
Condominium income is derived primarily from
Answer Choices:
a. Special assessments
b. Reserve funds left by developers
c. The owner’s monthly assessments
d. Auxiliary services such as laundry facilities and vending machines
Correct Answer: c. The owner’s monthly assessments
Which is an example of a federal government suggestion that property managers can use to create drug-free climates in the properties they manage.
Answer Choices:
a. A HUD requirement that public housing occupants should be regularly tested for illegal drugs
b. Rent collection in public housing should be flexible to accommodate low-income people
c. HUD may not require that public housing authorities enforce a drug-free workplace
d. Implementation of new laws that allow police and housing inspectors to inspect certain units under certain conditions
Correct Answer: d. Implementation of new laws that allow police and housing inspectors to inspect certain units under certain conditions
What is(are) the major difference(s) between managing single-family housing and apartment buildings?
Answer Choices:
a. There is no difference
b. Geography and time differ
c. Single-family homes are centralized
d. Repair costs for apartments are less
Correct Answer: b. Geography and time differ
Surveys of comparable properties and economic conditions are part of the
Answer Choices:
a. Building analysis
b. Economic analysis
c. Market analysis
d. Management analysis
Correct Answer: c. Market analysis
A prospective tenant’s first impression of a property is created by the property’s
Answer Choices:
a. Location
b. Parking availability
c. Design
d. Curb appeal
Correct Answer: d. Curb appeal
When a property manager compiles a show list, it should include
Answer Choices:
a. The names of nearby residents
b. At least five apartments of each type
c. General features of the building
d. Specific apartments that are available for inspection
Correct Answer: d. Specific apartments that are available for inspection
The major vehicle for advertising residential properties is
Answer Choices:
a. Television
b. Radio
c. Classified ads
d. Signage
Correct Answer: c. Classified ads
An important fact about apartment journals is that they
Answer Choices:
a. Are published weekly
b. Usually cost more than a newspaper display ad
c. List most rental houses in a local area
d. Are free and are distributed in display stands
Correct Answer: d. Are free and are distributed in display stands
How are MOST leasing agents compensated?
Answer Choices:
a. Hourly rate
b. Number of units rented
c. Biweekly
d. Annual salary
Correct Answer: b. Number of units rented
Whether to hire full-time or contract services for maintenance depends on
Answer Choices:
a. The hourly rates in the area
b. The extent of benefits that must be added to salaries
c. Whatever is most convenient for the manager
d. The services required and cost-effectiveness to the owner
Correct Answer: d. The services required and cost-effectiveness to the owner
When explaining the apartment lease, managers should explain the tenant’s responsibility to
Answer Choices:
a. Obtain tenant insurance
b. Use management vending machines
c. Provide information to be added to the owner’s property insurance
d. Only use laundromat facilities provided by management
Correct Answer: a. Obtain tenant insurance
Whether to subsidize the building, sell out, or make a major improvement is a decision the owner must make after studying the
Answer Choices:
a. Five-year forecast
b. Operating budget
c. Management pricing worksheet
d. Cash flow analysis
Correct Answer: d. Cash flow analysis
A leasehold estate used by MOST residential property managers is a(n)
Answer Choices:
a. Estate by the entireties
b. Estate from period to period
c. Estate for years
d. Tenancy at will
Correct Answer: c. Estate for years
An estate that occurs at the end of a lease term without the consent of the owner is a(n)
Answer Choices:
a. Estate for years
b. Tenancy at will
c. Estate by the entireties
d. Tenancy at sufferance
Correct Answer: d. Tenancy at sufferance
Under no circumstances should a residential lease contain
Answer Choices:
a. A description of the property
b. The names and signatures of lessors and lessees
c. A consideration or amount of rent
d. The racial composition of any tenant
Correct Answer: d. The racial composition of any tenant
An unwritten lease that will be fully performed within one year is permitted by the
Answer Choices:
a. Statute of time and use
b. Statute of limitations
c. Statute of frauds
d. Statute of commonality
Correct Answer: c. Statute of frauds
Options to renew a lease favor
Answer Choices:
a. The tenant
b. The landlord
c. The landlord and the tenant
d. None of these
Correct Answer: a. The tenant
The clause in a lease that could help a new starting business is the
Answer Choices:
a. Index clause
b. Step up clause
c. Pass-through
d. Expense stop
Correct Answer: b. Step up clause
The transfer of a tenant’s rights of all the remaining interest to a third party is called
Answer Choices:
a. An assignment
b. Subletting
c. Subrogation
d. Release of liability
Correct Answer: a. An assignment
The tenant may terminate the lease when the landlord fails to provide essential services by claiming
Answer Choices:
a. Will noncompliance
b. Notice to quit
c. Actual eviction
d. Constructive eviction
Correct Answer: d. Constructive eviction
Which of the following is the only reason that a manager should use a standard lease form?
Answer Choices:
a. Inexpensive
b. May be out of date
c. Often require much revision
d. Manager is familiar with the legal ramifications and provisions
Correct Answer: d. Manager is familiar with the legal ramifications and provisions
Parties to a lease are the owner and the manager.
Answer Choices:
True
False
Correct Answer: False
The option to renew clause favors the tenant.
Answer Choices:
True
False
Correct Answer: True
The most typical residential lease is the estate for years.
Answer Choices:
True
False
Correct Answer: True
All leases must be in writing to be legally enforceable.
Answer Choices:
True
False
Correct Answer: False
Should an owner fail to provide heat in sub-zero weather, the tenant may terminate the lease claiming constructive eviction.
Answer Choices:
True
False
Correct Answer: True
The Uniform Landlord Tenant Act determines the content of residential leases.
Answer Choices:
True
False
Correct Answer: False
A lease that continually renews is called a tenancy at will.
Answer Choices:
True
False
Correct Answer: False
A lease running from April 23 to August 31 is called an estate for years.
Answer Choices:
True
False
Correct Answer: True
The net lease is MOST commonly used for residential leases.
Answer Choices:
True
False
Correct Answer: False
Leases for space in a shopping mall are usually percentage leases.
Answer Choices:
True
False
Correct Answer: True
A lease must be delivered and accepted.
Answer Choices:
True
False
Correct Answer: True
Under a net lease, the tenant pays a fixed amount and the landlord pays expenses.
Answer Choices:
True
False
Correct Answer: False
The owner usually retains the right to accept or reject subletting.
Answer Choices:
True
False
Correct Answer: True
It is wise to include a clause stating that illegal drug dealing is grounds for immediate termination of the lease.
Answer Choices:
True
False
Correct Answer: True
Standard lease forms off the internet are less expensive and just as valid as one written by the owner’s attorney.
Answer Choices:
True
False
Correct Answer: False
If the general economic trend is inflationary, the manager should attempt to raise rents.
Answer Choices:
True
False
Correct Answer: True
If tenants understand the reason for the rental increase, and it makes sense to them, they are less likely to complain and leave.
Answer Choices:
True
False
Correct Answer: True
A manager is permitted to not renew a lease if the tenant has complained to the health authorities about the building.
Answer Choices:
True
False
Correct Answer: False
Little is gained when the manager inspects the apartment after the tenant leaves.
Answer Choices:
True
False
Correct Answer: False
Landlords should think of the security deposit as an additional rental payment.
Answer Choices:
True
False
Correct Answer: False
Rent is usually paid in arrears, at the end of the month.
Answer Choices:
True
False
Correct Answer: False
The manager can encourage prompt rental payments by hiring a collection agency to collect payments each month.
Answer Choices:
True
False
Correct Answer: False
Increased rent and a decline in service will usually cause tenant unrest and dissatisfaction.
Answer Choices:
True
False
Correct Answer: True
It is of no concern to the manager if a good, stable tenant decides to lease in another property.
Answer Choices:
True
False
Correct Answer: False
Two different forms should be used for move-in and move-out inspections.
Answer Choices:
True
False
Correct Answer: False
Which of the following creates good tenant relations?
Answer Choices:
a. Inconsistent maintenance of the property
b. Little communication with the tenants
c. Lax enforcement of the building rules
d. Reputation for good maintenance of the property
Correct Answer: d. Reputation for good maintenance of the property
Of the following, the BEST tool for good landlord tenant relations is
Answer Choices:
a. Many specific, detailed rules
b. Move-in inspections
c. Vague understanding of lease terms
d. Varying rental rates from the same units
Correct Answer: b. Move-in inspections
How should the manager deal with maintenance requests?
Answer Choices:
a. Ignore them unless repeated three times
b. Process once a week, preferably on Monday mornings
c. Tell the tenant when the repair will be made, or why it won’t be done
d. Procrastinate and evade the issue
Correct Answer: c. Tell the tenant when the repair will be made, or why it won’t be done
What is the benefit of a stable, satisfied tenant population?
Answer Choices:
a. Threatens earning capabilities of the building
b. Improves stability of property income
c. Increases manager’s time showing units
d. Increases renovation costs
Correct Answer: b. Improves stability of property income
How can the manager encourage prompt rental payments?
Answer Choices:
a. Accept valid excuses for late payments if made before the due date
b. Begin with clear-cut understanding as to when and where payments are due
c. Avoid charging late fees
d. Shun offering incentives for early payments
Correct Answer: b. Begin with clear-cut understanding as to when and where payments are due
Which of the following would be the BEST bargaining factor when it comes time to renew the lease?
Answer Choices:
a. Length of new lease term
b. Discussion of the national origin of other tenants
c. Increase of crime in the area
d. Cost of late fees
Correct Answer: a. Length of new lease term
How can a manager avoid tenant protest over a rent increase?
Answer Choices:
a. Short notice, possibly less than 30 days
b. No explanation for the rent increase
c. Decrease services
d. Long notice, three to six months in advance
Correct Answer: d. Long notice, three to six months in advance
When a tenant terminates a lease, the manager
Answer Choices:
a. Does not need to know the reason for the tenant’s move
b. Does not need to inspect the space with the tenant before the tenant moves
c. Expects the tenant to give notice of intent to vacate within a certain period
d. Can dispense with the exit interview
Correct Answer: c. Expects the tenant to give notice of intent to vacate within a certain period
One of the BEST ways for a manager to avoid misunderstandings when a tenant decides to vacate would be to
Answer Choices:
a. Have a long talk with the tenant
b. Have an attorney contact the tenant
c. Write a letter outlining the procedures for moving out
d. Ignore the situation
Correct Answer: c. Write a letter outlining the procedures for moving out
If a landlord intends to keep part or all of a security deposit, the landlord
Answer Choices:
a. Need not give the tenant an itemized statement explaining the withholding of the deposit
b. Should just keep the money with no other obligation
c. May not be able to retain all or part of the deposit because of damages caused by the tenant
d. Should follow state laws in regard to time periods
Correct Answer: d. Should follow state laws in regard to time periods
