Property Management

Ch 9
The managers office should be on the building premises when
most of the management operations are conducted there
Most property managers divide their office records into how many general categories for filing purposes
Five: lease, general correspondence, work estimates, financial and permanent
The permanent property file should include
the management contract
Which of the following should be considered when purchasing a computer system?
One the spot maintenance and repairs
What is an example of a direct cost
Payroll for the management personnel at the building
If management operations are too limited to justify hiring a comptroller, the comptrollers tasks should be assumed by the
executive property manager
Who performs the general admin and daily ops of the property
field manager
Managment fees may be computed on a percentage basis or
by the per unit cost method
Total cost 2,500/month
Gross income 50,000/month
30% of direct costs to cover overhead
What percentage fee?
6.5%

Monthly management fee / gross income
2500 + 2500*.3 / 50,000

Direct costs 35000
Indirect costs 20000
750 units
20% profit
Minimum per unit fee?
35,000+20,000 / 750 *.20

$88

50 units
Gross income $300,000
Vacancy 6%
Per unit fee $300
Percentage management fee?
300 * 50 = 15,000

300,000*.06 = 282,000

15/282 = 5%

The most important operating record kept by the property manager is
monthly report on cash flow
Which of the following is a nonrecurring variable expense?
An addition to the building
For the final quarter of the year, all of the following tax forms concerning employees must be filed by the manager except
Form 1099
Which statement accurately described income tax withholding forms
Form W-4 is filled out by the employee, but the responsibility for obtaining it is on the employer
A manager would MOST likely want a percentage of the collected rents in which of the following situations?
Upscale apartment building with high demand
Unemployment taxes are levied and must be paid when filing
FUTA
A commercial prop containing 35,000 sq. ft. is rented at 6$ per foot. Actual collected only $168,000. What occupancy rate should be used in budget forecast for next year
80%
An apartment building has fixed costs of $75,000 per year and a variable cost ratio of 25%. What is the breakeven point?
100,000
What is the cap rate?
A method to convert future income to present value
A property manager had two vacancies. When a single parent and her child inquired about an apartment they were told that the building was 100% occupied. This is…
Steering
According to the Fair Credit REporting Act, a loan applicant may
Seek to correct errors on the report
Ch 10
Jones v Mayer reaffirmed the CRA of 1866 by prohibiting
All racial discrimination
Under the federal ECOA the property manager who requires a credit report on a prospective tenant can do which of the following
Evaluate the tenant based on income and debt ratios
The resident manager has decided to shop other properties in order to determine if her rental rates are competitive. She calls the magers of a nearby property, and finds out that the second manager is thinking about raising raters. The two of them decide to raise rates at the same time. This might be construed as an example of
the illegal practice of price-fixing
Which of the following acts are permitted under the federal Fair Housing Law
Refuse to rent to an Asian American man because he has a poor credit history
If someone is found guilt of violating the Fair Housing Act of 1968, he or she may be liable for actual damages and max punitive damages of
an unlimited amount
If a person feels that she or he has been discriminated against by a property manager, a complaint may be filed with
the Department of Housing and Urban Development
Which of the following laws requires credit bureaus to supply information to a person who has been denied credit
Fair Credit Reporting Act
Lead-based paint disclosure forms must be retained for
three years
Generally if the tenant and landlord do not agree on the term of the tenancy, then the tenant is a
periodic tenancy
When the tenant makes a complaint to a government agency about a housing code violation, the landlord can
correct the problem
Usually, if a fire destroys part of a residential property, the tenant may
prorate the rent deducting the portion he cannot use
The Landlord Tenant Act establishes
the owner’s responsibilities
How would a parent discover that a child has lead poisoning
blood test
The lead-based paint disclosures must be made on a house that was built
any time before 1978
Which law requires that sex offenders register their address with the police
Megans Law
The Uniform Landlord Tenant Act generally covers all of the following except
removal of structural barriers
Which of the following requests may a property manager ask on the tenant application
Other Landlord references
All of the following may be required by the ADA except
someone to assist a wheelchair user in the restroom
Ch 11
Which of the following types of apartment community is MOST likely to be located in downtown urban area
High-Rise luxury property
A tenant receiving minimal services MOST likely lives in
Walkup apartment
WHich of the following are generally less profitable because they require more management time?
Scattered site housing
Which is a special consideration when managing duplexes and triplexes
Tenants should have a high degree of compatability
Neighborhood boundaries are important in a residential market analysis because
Economic conditions in the neighborhood may affect the rental schedule
On which factor of the market anaylsis should rents be based?
Comparable value to other properties
What is the basis for sound tenant relations
Open lines of communication
Maintaining litter-free grounds and well-trimmed lawns are examples of
curb appeal
An apartment building consists of 10 one-bedroom apartments renting for $180, 10 two-bedroom $210, and 10 three-bedroom for $240. All of the unites are rented except for four-three bedroom units. The vacancy rate of the three-bedrooms can be expected to decrease by 10% with a $10 rental cut. THe prop manager should establish which of the following rental schedules
$190, $220, $230
The show list of apartments to be rented
is designed for use by the manager
What tol can the manager use as a control for marketing and as a source of feedback on marketing success or failure?
Show list
Which is most effective method of renting apartments
Classified Ads
A manager who assumes maintenance responsibilities because there is no on-site help is most likely found in
small walkup apartments
Which of the following should be carefully explained to tenants
When and where rent must be paid
Of the following, which is most likely to be prepared by the resident manager
Property condition, work performed, and jobs anticipated in the following weeks
Responsibility for condtrolling the daily operations of an apartment building rests with the
resident manager
Preventative and corrective maintenance of residential units is generally coordinated by the
resident manager
Specialists who can most effectively market the property are
leasing agents
All of the following could be used as an additional revenue stream except
deposits per child
Although cash flow projections appear to be complex
they are based on figures from the data already gathered
12
Unlike a manager of an inverstor-owned apartment building, the manager of a cooperative or condominium has no responsibility for maintaining
occupancy levels
A PUD is similar in management to a
condo
In managing condos and cooperatives emphasis is on managing for
value
The condo legal structure has been more popular than the cooperative because
condominium owners do not risk losing their units in event of default of the owning association
Generally property taxes are assessed separately on each unit in a
condo
When managing a manufactured home park, income can come from all of the following sources except
providing nursing homes
Developing a sense of community spirit is often useful in encouraging referrals in
manufactured home parks
In MOST states, the articles of Incorporation
establish owners associations under most state laws
When a manager is concerned with the physical design of the property and who may have to handle social events and medical emergencies, he or she may be managing a
housing for the elderly
the initial agreement for management of a new condominium is usually between the manager and the
developer of the project
Condo and cooperative managers generally use the same financial reporting system as that used by
managers of apartment buildings
With regard to insurance, the condo owner must
purchase an HO-6 condo policy
The management fee for a condo generally is
prorated among the occupants according to their interests in the property
The initial sellout of cooperative and condo properties is
usually accomplished through display and classified ads
Fannie mae regulates condos
by prescribing standards for condo mortgages that it purchases in the secondary market
Public housing projects for low income families
have traditionally been the responsibility of local government
THe manager of low-cost housing should consider employing a person to handle tenant relations because
this person can provide extra service to the tenants and gain their cooperation
under HUD Section 8 housing
housing is rented on a subsidized basis
Collection of rent from tenants in subsidized units
should follow the same firm policy as in privately owned housing
HUD contracts with property managers of subsidized housing
are generally for a term of years
CHAPTER 13
All of the following are useful when marketing office property except
classified ads
While longer lease terms are most desirable, to protect the owner from missing out on rising market rates, the lease should contains
An escalation clause
An employee of an office building tenant who is responsible for the internal arrangement and furnishing of the leased space is…
facilities manager
One of the most effective methods to locate a new tenant for an office property is
canvassing a list of qualified prospects
The absorption rate is determined
by calculating the number of square feet that have historically been leased per year
Which of the following factors was most important in the selection of office facilities, according to one survey
Cost
Office space is designated Class A,B,C, or D on the basis of guidelines
based on age, location and market position
The base rate for an office building
Should reflect the amenities of the space and competition of the area
An older building, recently completely renovated is located in a popular area amid several prestigious brand new buildings. By BOMA standards, the older building would be classified as
Class B
According to BOMA method of measuring office space,
construction area is determined by a procedure similar to the New York method
The New York method has NOt achieved wide acceptance because
It accounts for all of the construction area of a building and is difficult to sell to prospects
The ratio of rentable space to usable space is
loss factor
When preparing a market analysis on an office property, the manager should pay close attention to present market conditions and
Current economic trends
Open or closed work spaces for more than one person are referred to as
Multipersonnel areas
The manager measures all of the space on one floor. Then the manager subtracts the square footage for the restrooms, janitor closets, and elevator. The resulting square footage is called
Usable Area
If an office building lease does not prohibit assignment or subletting, the tenant may assign the space
Generally, the cost of tenant alterations and remodeling expenses above the building standard in an office property is the responsibilty of the
Lessee
The purpose of a building standard is to
List those amenities and alterations that a building owner will provide to an incoming tenant without charge
A recapture provision
Is for the benefit of the landlord
Proper maintenance fo most office building differs from the maintenance of residential buildings in which of the following ways?
nighttime cleaning of tenant spaces
Chapter 14
Retail Property
Before the advent of shopping centers, retail merchants tended to congregate
in a CBD near major public transport junctions
Which of the following is typical of a neighborhood center
Serves an area approximately three miles in diameter
Most regional shopping centers are
dumbbell shaped
Which of the following businesses require the greatest number of parking places?
Restaurant
Which type of shopping center draws customers from a five mile radius?
community
A mixed use development encompasses
A combo of two or more types of uses, such as retail, office, and residential in the same complex
In general, persons looking for retail property to rent
look for signs
Most prospective tenants interested in retail space find it by
Driving through the area in which they wish to locate
The most effective method for finding shopping center tenants is
Personal contact
The prevailing concern in leasing retail space in a shopping center is
mix of tenant types
Large retail properties are promoted through display ads usually placed in
the financial section of metropolitan newspapers
A merchant signs a lease that sets a min of $600, or 6% of gross sales. If rent is computed on a monthly basis, what is the total amount of rent paid in the fourth quarter if gross sales were $8,000 in october, $11,000 in november and $12,000 in december
1,980
Studies of tenant mix with regard to percentage of space allocated to various types of stores, based on their merchandise line have been made by
International council of shopping centers
When evaluating a prospective tenant in terms of tenant mix, the manager should look at a variety of the tenants needs, including the tenants needs for
parking facilities
A variable scale percentage lease sets the monthly rental rate at 6% of gross sales up to and including $15,000 plus 5% of gross sales in excess of $15,000 but not in excess of $30,000. What would the rental payment be if gross monthly sales were $42,000
2,130
A recapture clause in a shopping center lease
Allows the landlord to terminate a percentage lease if a certain level of gross sales has not been achieved
Overlapping obligations of landlords, coowners, and tenants are customarily set forth in
reciprocal easement agreements
Negotiations for tenant improvements are the most complex in
Centers where a long term tenant has vacated
The standard manual of accounting for shopping center operations is published by
Urban Land institute
Accounting statistics of centers may be compared to other centers by referring to the
Dollars and Cents of Shopping Centers
Chapter 16
All of the following are examples of avoiding risk except
managing hazardous properties
Installing fire sprinklers is an example of
controlling the risk
Which of the following would protect the property manager from damages not caused by the managers own negligence of misconduct
Indemnity clause
When the property manager lowers an insurance premium by increasing the deductible, the manager is making an effort to
retain part of the risk
A building has a physically depreciated cash value of $200,000. The property manager must remember that
if coinsurance coverage of $160,000 is taken out, the cost will be about equal to “straigh” insurance of $100,000
What type of insurance protects the owner against loss for damage to other persons or their property?
General liability and workers compensation insurance
Which of the following hazards can generally be greatly reduced through proper ventilation
Radon
Which statement is true concerning the insurance availible to independent property managers?
The manager should be named as an additional insured under the owner’s liability policy
Which of the following is recommended to alleviate mold problems
Decrease humidity
Environmental impact statements for major public and private developments may be required by
The federal government only
In order to survive and thrive, mold requires a food source and
moisture
The CERCLA provided remedies against hazardous substances in the environment and is popularly known as the
Superfund law
Which of the following poisons could result from an incorrectly vented space heater
carbon monoxide
How much of a pertroleum tank must be buried to caused the tank to be classified as underground
10%
The EPA has recognized that the least hazardous way to deal with asbestos that is in place in a building is to
manage it in place
The standard insurance policy will not cover damages from
flooding (separate insurance policy)
How long is the manager required to retain lead based paint disclosure records?
Three years
Which of the following hazards could be leaking from a landfill?
Polychlorinated biphenyls (PCBs)
Federal law now requires that only certified technicians may handle which of the following hazardous materials?
Chlorofluorocarbons (CFCS)
The property manager should insist that the landlord buy all of the following types of insurance except
renters insurance