Property Management Exam 2

High tenant turnover means increases for the landlord in
advertising expenses
A record of lease renewal dates should be kept so that the property manager will know when to
contact good tenants in an attempt to retain them
The establishment of good tenant relations begins with
joint inspection of the premises by the manager and tenant before move-in
In which property is inspection of the premises with new tenant the most important?
residential
What is most important in establishing tenant loyalty and friendliness?
the manager’s personal efforts
Tenant relations can be aided by
reviewing rent collection procedures with the tenant in a conference at the beginning of the lease
The basic prerequisite for enlightened property maintenance is
getting the tenant’s service requests to the appropriate parties
What should be done when a tenant makes a service request?
Tenant should be told when it will be taken care of, or why it will not be
What is the foundation of a good landlord and tenant relationship?
Good reputation for maintenance and management
What should the manager do if a good tenant terminated the lease?
Immediately contact the tenant to find out why he is moving and, if possible, correct the situation
The most critical factor in determining whether and how much of a rent increase to make is
the total net increase in income after accounting for move-outs due to the increase
If rents are increased, the manager should
learn the logic behind the increase so he or she can explain it to the tenants
The best way to get prompt payment of rent is to
have a clear-cut understanding of the requirements for payment and provisions for default
The time between the rent due date and the announcement of action for recovery should be
a fixed, determined period
Three copies of an eviction notice should be prepared- one for the tenant, one for the manager’s attorney and a third for the
manager’s file
Upon termination by a tenant, the property manager should
inspect the space after the tenant has removed all personal property
What form should the manager use when inspecting the property after the tenant has vacated?
move-in/move-out checklist
In most states, detailed and stringent security deposit statutes have been passed. What must the landlord do?
He must itemize the deductions in a written statement.
Deductions from the security deposit are authorized by
nonpayment of rent, nonstandard decorating, excessive cleaning charges, and damages to the premises.
Leases should be written to prohibit using security deposits as
last months rent
Jones vs. Mayer reaffirmed the Civil Rights Act of 1866 by prohibiting
all racial discrimination
Telling a potential tenant that there are no vacancies when there are is an example of
steering
According to the Fair Credit Reporting Act, a loan applicant may
seek to correct errors on the report
Under the federal Equal Opportunity Act, the property manager who requires a credit report on a prospective tenant can
evaluate the tenant based on income and debt ratios
When two managers negotiate rental rates it is known as
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 guilty of violating the Fair Housing Act of 1968, he or she may be liable for actual damages and maximum punitive damages of
an unlimited amount
If a person feels that 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 tenancy 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?
Megan’s 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 Americans with Disabilities Act except
someone to assist a wheelchair user in the restroom
Which of the following types of apartment communities is MOST likely to be located in downtown urban areas?
High rise luxury property
A tenant receiving minimal services most likely lives in a
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 compatibility
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 analysis 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
If each type of apartment is priced correctly, the different units should have the same
rate of demand
The show list of apartments to be rented
is designed for use by the manager
What tool can the manager use as a control for marketing and a source of feedback on marketing success or failure?
show list
Which is the 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 walk-up 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 week
Responsibility for controlling the daily operation of an apartment building rests with the
resident manager
Preventive 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
Before agreeing to the lease, the prospective tenant is asking himself all of the following except
Who else is considering the property?
When renting or leasing space, good closing techniques include
summarizing the benefits of the space and explaining how they satisfy the prospect’s needs
The marketing goal has been achieved when the prospect
signs a lease
Qualifying a tenant includes examining the applicant’s
rental history
The property manager of a ten-unit strip shopping center is negotiating with a beauty shop owner. The beauty shop owner does not want the manager to rent to another beauty shop. What concession is the beauty shop owner asking for?
noncompete restriction
If an outside leasing agent is involved in lease negotiations, coordination of the transaction is the responsibility of the
property manager
The proper role of an attorney in lease negotiations is to
formalize the agreement
The manager can facilitate lease negotiations by
securing agreement on basic terms and conditions before the attorneys are involved
All of the following are factors to decide how far to go in granting concessions except
the prospect’s financial condition
Concessions should always be granted to a prospective tenant
reluctantly, to show how valuable the concession is
When forced to make rental rate concessions during poor market conditions, the manager tries to
grant a temporary rental concession such as a few months’ free rent
A long term lease is generally to the owner’s advantage when
the owner has made significant alterations in the spar to suit the tenant
Before finally agreeing to the lease, the manager must determine that the tenant meets qualifying standards and that the
total value of the lease justifies the cost of the concessions
Tenant alteration costs
are a major negotiating point with commercial and industrial tenants
The property manager should keep in mind that expansion options
are not common with fully tenanted, established properties
In an office building, who is responsible for complying with ADA accessibility requirements in each individual office?
whoever agrees in the lease
Many misunderstandings with tenants can be avoided by
establishing clear guidelines at the beginning of the lease
Alterations to residential property are often
performed by the property manager after being agreed to in writing
What is a building standard?
specific number of outlets, light fixtures, windows, etc., included in the rent
Which type of property should rarely have non-competing tenant restrictions in leases?
a large shopping mall
The hiring and firing of maintenance personnel should be the responsibility of the
a. property manager
To command premium rental rates, a property manager might operate with
d. all possible tenant services
Preventative maintenance is aimed at
b. eliminating corrective maintenance costs
The addition of a sauna to the common area of a multitenant development would be an example of
d. new construction
Loss of building value resulting from postponing repairs, etc., is called
b. deferred maintenance
The MOST critical factor is deciding whether to hire on-site maintenance personnel or contract out for certain services is
d. the relatively cost of each
Which of the following is considered when hitting outside services on a regular basis?
d. whether the cost of the contract service is greater than the cost of using in-house personnel
The first decision confronting the property manager when contracting for construction is to
d. decide whether to act as the general contractor or to hire a prime contractor
Which of the following is TRUE of negotiated contracts?
d. the estimate of cost should be the end result of collaboration among various suppliers and subcontractors
A type of construction that proceeds as plans are being drawn is called
b. fast-track
A contract for construction work typically states
b. percentage of the fee will be held back until all work has been completed
What is the first step in designing a preventive maintenance program?
Make a complete inventory of all equipment
Of the following, which is the MOST important in determining the property manager’s effectiveness as a maintenance administrator?
The thoroughness of routine inspections and the manager’s ability to pinpoint and correct omissions of the maintenance team
when the term retrofit is used in connection with energy management, it encompasses
replacing or upgrading heating and air conditioning equipment
often, the greatest savings come from energy management systems or measures that
are simple and cost little or nothing
life-cycle costing
considers both initial and operating costs over the useful life of equipment
how are computers used in maintenance applications
useful in monitoring, scheduling, controlling, and operating functions
a type of building that is made up of nonspecialized interior floor space is called a(n)
loft
All of the following management situations would most likely have to comply with ADA EXCEPT
single-family dwellings
Which of the following protects the owner from a contract who goes out of business before finishing the contract?
performance bond
The manager’s office should be one 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?
on-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 comptroller’s tasks should be assumed by the
executive property manager
who performs the general administration and daily operation of the property?
field manager
management fees may be computed on a percentage basis or
by the per-unit-cost method
in computing a management fee using the pricing worksheet, a manager determines that the total direct and indirect cost for all management activities for that property is $2,500 per month. If the gross collectible income from the property is $50,000 per month and the manager needs an additional 30% of the direct costs to cover overhead and profit, what percentage fee should be charged?
6.5%
A small management operation has direct costs of $35,000 and indirect costs of $20,000 annually. It can handle about 750 units and wishes to make a 20% profit. What is the minimum per unit fee that should be charged?
$88
An apartment building with 50 units has a gross possible annual income of $300,000 per year and an estimated vacancy rate of 6%. The management firm has computed an adjusted per-unit fee of $300 for this property. What percentage management fee should be charged?
5%
The MOST important operating record kept by the property manager?
monthly report on cash flow
Which of the following is a nonrecurring variable expense?
an addition to the buidling
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 describes 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 apartments building with high demand
unemployment taxes are levied and must be paid when filing
FUTA
A commercial property containing 35,000 square feet is rented at $6 per square foot. However, the actual rental collections over the past year amount to only $168,000. What occupancy rate should be used in the budget forecast for the next year?
80%
An apartment building has fixed costs of $75,000 per year and a variable costs ratio of 25%. What is the break-even point for the property expressed in dollars per year?
$100,000
What is the capitalization rate?
a method to convert future income to present value
A property manager initiated a program of regularly schedule maintenance activities where both the interior and exterior of the premises, including all the equipment and grounds, are regularly inspected. Such a program is called
preventative maintenance
the manager of a large commercial building became preoccupied with paperwork and did not inspect the premises as he should have, which resulted in lots of wear and tear from the tenant. The loss of value due to postponing repairs is called
deferred maintenance
Jones v. Mayer reaffirmed the Civil Rights Act of 1866 by prohibiting
all racial discrimination
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 an example of
Steering
According to the Fair Credit Reporting Act, a loan applicant may
Seek to correct errors on the report
Under the federal Equal Credit Opportunity Act, 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 manager of a nearby property, and finds out that the second manager is thinking about raising rates. 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 guilty of violating the Fair Housing Act of 1968, he or she may be liable for the actual damages and maximum punitive damages of
An unlimited amount.
If a person feels that he or she 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 tenancy 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 disclosure 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?
Megan’s 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 applications?
Other landlord references
All of the following may be acquired by the Americans with Disabilities Act EXCEPT
Someone to assist a wheelchair user in the restroom.
Which of the following laws requires credit bureaus to supply information to a person who has been denied credit?
Fair Credit Reporting Act
Which of the following should be consulted first before making any investment into new technology?
software program
What financial report tells the owner the sources of income and expenses, net operating income, and net cash flow?
budget comparison statement
One of the MOST important things for a manager to keep in mind while preparing an operating budget is to
be conservative in all forecasts
Depreciation is divided into three categories
economic, functional, and physical
The Revenue Reconciliation Act of 1993 modified the 1986 passive loss restrictions by allowing individuals who materially participate in rental real estate to deduct rental losses from other income. To qualify, how much time must a person devote to personal services to real property trades or business during a tax year?
50%
Property #1 has a capitalization rate of 12% and property number #2 has a capitalization rate 14%. Both properties are comparable to each other and have a net operating income of $12,000 per year. Which of the following is TRUE?
Property #1 has a lower value than property #2
Which of the following will be located in a permanent file?
management agree and mortgage information
All the correspondence from tenants should be kept in a
general correspondence file
in a large management organization, the general administration of the daily operation of a property is performed by the
property management executive
An apartment building has fixed costs of $75,000 per year and a variable cost ratio of 25%. What is the break-even analysis point for the property expressed in dollars per year?
$100,000
Which Sunshine Apartments rental policy is considered legal under the Fair Housing Act of 1968?
rentals are refused to prospects who have long hair and ride motercyles
The owners of an apartment complex have given specific instructions to their rental manager is NOT rent to Hispanics or African Americans. Who is liable?
Both the manager and the owners are liable
A property manager may deny a lease to someone because the individual
has insufficient income
Owners and managers of older residential rental properties must
test all paint for lead
Managers must make a lead-based paint disclosure when the property they manage was built before
1978
Of the following, which generally offers a marginal financial return for management?
Time share rentals
Cooperatives
Single family housing
Condominium communities
Lead-based paint disclosure forms must be retained
For three years
The Landlord Tenant Act establishes
the owner’s responsbilities
Jones v. Mayer reaffirmed the Civil Rights Act of 1866 by prohibiting
all racial discrimination
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 an example of
steering