unit 8

Question 1

How is commercial space rental typically stated?

Answer 1

On a monthly rate per square-foot basis

Question 2

Joe is a commercial property manager. Which of the following might Joe have to consider in managing the property to meet a tenant’s particular space needs?

Answer 2

Tenant improvements

Question 3

Clarissa manages an apartment complex. She requires tenants to carry renters insurance. This is an example of what type of risk management?

Answer 3

Transferring the risk

Question 4

What is a growing trend among building owners and property managers (especially in the commercial and retail sections) to reduce liability and insurance costs?

Answer 4

Transferring risk to tenants by requiring them to have their own insurance

Question 5

When Jeffrey, a property manager, and Pete, a property owner, negotiated a property management agreement, which provision of the agreement might have been based on a percentage of gross or net income, a commission on new rentals, a fixed fee, or a combination of methods?

Answer 5

Management fee

Question 6

Agent Alice is a property manager at A-1 apartments. She is creating an operating budget for the following year and should do which of the following to deal with renovation or modernization of the units?

Answer 6

Set a capital expenditures budget

Question 7

A property manager is typically considered what type of agent?

Answer 7

General

Question 8

Which of the following aspects of property management requires a real estate license?

Answer 8

Showing property

Question 9

An owner-manager agreement between Jeffrey, a property manager, and Pete, a property owner, should include all of the followingEXCEPT

a. a statement of Pete’s purpose for the building.
b. the portion of Jeffrey’s personal operating expenses that will be paid by Pete.
c. a clear definition of Jeffrey’s authority.
d. a listing of previous owners of the property.

Answer 9

d. a listing of previous owners of the property.

Question 10

If there are high vacancy rates in a managed retail or office property, the property manager should

Answer 10

determine if management has been ineffective or the property has deteriorated.

Question 11

Standardized property management fees are which of the following?

Answer 11

Illegal price-fixing

Question 12

Property manager Frieda hires Albert as the full-time janitor for one of the buildings she manages. While repairing a faucet in one of the apartments, Albert steals a television set. Frieda could protect the owner against liability for this type of loss by purchasing which of the following?

Answer 12

A surety bond

Question 13

To minimize the liability risk associated with the property’s swimming pool, the manager could hire lifeguards, restrict the hours of operation, or both. This is an example of

Answer 13

controlling the risk.

Question 14

What is the primary focus in property management?

Answer 14

The bottom line

Question 15

Which of the following is a legitimate reason for rejecting a residential tenant?

Answer 15

The tenant has too many debts.

Question 16

In setting an operating budget, which of the following is not a fixed expense?

Answer 16

Repairs

Question 17

Reba manages a commercial office building in downtown El Paso. The occupancy level is 98%. What should Reba consider in determining the rent for office space?

Answer 17

She should raise the rent.

Question 18

The property manager acts as a general agent to

Answer 18

the property owner.

Question 19

What is an example of the types of damages covered by business interruption insurance?

a. Claims paid for loss of revenue income after a tornado hits a grocery store
b. Claims paid for building damages after a fire in an office building.
c. Medical bills paid for a slip and fall accident by a patron at a theater
d. Medical bills paid for a back injury in an accident by an employee on the job

Answer 19

a. Claims paid for loss of revenue income after a tornado hits a grocery store

Question 20

Janet is a property manager for a large mixed-use space. She wishes to purchase insurance coverage for her negligence and innocent mistakes. What type of insurance should she purchase?

Answer 20

Errors and omissions

Question 21

Mary Ellen, a single mother of two children, is applying to lease an apartment. Which of the following wouldNOTbe a legitimate reason for rejecting her application?

a. Mary Ellen is a smoker.
b. Mary Ellen’s children are both under age five.
c. Mary Ellen moved into her current apartment unit four months ago and she has lived in five different apartment complexes within the past three years.
d. Mary Ellen and her children have two small dogs.

Answer 21

b. Mary Ellen’s children are both under age five.

Question 22

Jane is a property manager for a large commercial office building in Dallas that was constructed in 1936. Which of the following isNOTa consideration for Jane in attracting new tenants?

a. Renovation
b. External obsolescence
c. Modernization
d. Physical obsolescence

Answer 22

b. External obsolescence

Question 23

Alice is the property manager at an apartment complex. Her late-rent collection policy should include all contingenciesEXCEPT

a. Alice should make every attempt to collect back rent without resorting to legal action.
b. Alice should consider the personal situation of each renter when deciding whether to send late-payment notices.
c. Alice must consistently charge a late fee if one is provided for in the lease.
d. Alice should initiate and follow through with eviction proceedings in conjunction with legal counsel for the owner or the management firm.

Answer 23

b. Alice should consider the personal situation of each renter when deciding whether to send late-payment notices.

Question 24

A real estate license isNOTrequired for those who, for a fee, rent or lease or procure tenants for a property unless they

a. prepare billing statements or make maintenance arrangements.
b. collect or deposit rent for a single-family residence.
c. are employees of owners of property being leased.
d. are onsite apartment managers.

Answer 24

b. collect or deposit rent for a single-family residence.

Question 25

Phillip is moving out of town to take a new job and has advertised his home for lease. As a landlord, which of the following isNOTa part of the required tenant-approval process?

a. Phillip must provide a copy of an applicant’s credit report to any applicant rejected based on a credit report.
b. Phillip must provide an applicant with a printed or online notice of his tenant selection criteria at or before he gives the applicant an application form.
c. Phillip may not reject an applicant based on a criminal screening if all applicants are not being screened.
d. Phillip must provide an applicant with a list of the grounds for which he may deny the application.

Answer 25

a. Phillip must provide a copy of an applicant’s credit report to any applicant rejected based on a credit report.

Question 26

How are the duties of a property manager similar to the responsibilities of a real estate listing agent?

Answer 26

They are responsible for accounting, loyalty, and disclosure.

Question 27

Jeffrey, a property manager, and Pete, a property owner, negotiate a property management agreement. That agreement should include

Answer 27

a description of the property to be managed.

Question 28

What is an example of the types of damages covered by casualty insurance?

Answer 28

Claims paid to cover costs of a burglary of a 7-11

Question 29

A property manager for warehouses is considered

Answer 29

an industrial property manager.

Question 30

What is a property manager required to do if the manager rejects an applicant on the basis of a credit report?

Answer 30

Give the name of the credit-reporting agency to the applicant