Unit 17: Property Management

Asbestos, sick building syndrome (SBS), and lead paint are all examples of

A)
issues beyond the scope of a property manager’s job description.

B)
environmental concerns that a property manager may have to address.

C)
problems faced only by newly constructed properties.

D)
issues that arise under the American with Disabilities Act (ADA).

The answer is ENVIRONMENTAL CONCERNS THAT A PROPERTY MANAGER MAY HAVE TO ADDRESS. These are all environmental issues that might impact any managed property.
The responsibilities of the property manager, in both building amenities and employment issues have been impacted considerably by the

A)
Fair Housing Act.

B)
Fair Debt Collections Practices Act.

C)
Equal Credit Opportunity Act (ECOA).

D)
Americans with Disabilities Act (ADA).

The answer is AMERICANS WITH DISABILITIES ACT (ADA). The responsibilities of the property manager, in both building amenities and employment issues have been impacted considerably by the Americans with Disabilities Act (ADA).
In determining rental amounts, a property manager considers the economic principle of

A)
marginal contribution.

B)
balance.

C)
supply and demand.

D)
conformity.

The answer is SUPPLY AND DEMAND. Supply and demand in real estate recognizes that the marketplace can influence trends in occupancy and vacancy rates, which in turn affect rental rates.
A guest slips on an icy apartment building stair and is hospitalized. A claim against the building owner for medical expenses may be paid under which of the following policies held by the owner?

A)
Fire and hazard

B)
Liability

C)
Casualty

D)
Workers’ compensation

The answer is LIABILITY. Liability insurance protects an insured who becomes obliged to pay (liable) for damage or injury to others.
All of the following are alternative risk management techniques EXCEPT

A)
avoiding it.

B)
ignoring it.

C)
retaining it.

D)
transferring it.

The answer is IGNORING IT. Risk management attempts to reduce the consequences of unforeseen events that could potentially create financial and personal losses. The four risk management techniques are avoid, control, transfer, and retain.
The scope of a property manager’s work depends on the terms of the

A)
rental agreement.

B)
management agreement.

C)
escrow contract.

D)
tenant rules.

The answer is MANAGEMENT AGREEMENT. The management agreement defines the manager’s authority and responsibilities
A successful property manager has demonstrated that he has the ability to

A)
increase property income over previous levels.

B)
be “tough” on tenants.

C)
be the tenants’ “friend.”

D)
get the cheapest contractors.

The answer is INCREASE PROPERTY INCOME OVER PREVIOUS LEVELS. Successful managers show that they can increase property income over previous levels.
In evaluating rental applications, it is important for the property manager to establish consistent criteria for acceptable debt and income ratios to be in compliance with

A)
the Equal Credit Opportunity Act.

B)
Regulation Z.

C)
the Americans with Disabilities Act.

D)
federal antitrust laws.

The answer is THE EQUAL CREDIT OPPORTUNITY ACT. A lease is an extension of credit, so the property manager must comply with the provisions of the Equal Credit Opportunity Act (ECOA) and be consistent when evaluating the financial information provided on rental applications
An insurance policy package that includes standard commercial property coverage such as fire, hazard, public liability, and casualty is what kind of policy?

A)
Surety

B)
Multiperil

C)
Coinsurance

D)
Universal

The answer is MULTIPERIL. Because such insurance addresses several dangers, it is called a multiperil policy.
All of the following should be included in a management agreement EXCEPT

A)
a description of the property.

B)
the extent of the manager’s authority.

C)
restrictions regarding ages of children.

D)
compensation.

The answer is RESTRICTIONS REGARDING AGES OF CHILDREN. A management agreement should include an adequate description of the property, compensation arrangements, and what the manager’s authority is to be. Restricting occupancy based on ages of children violates the federal Fair Housing Act.
Homes built in factories meeting HUD specifications are called

A)
prefab housing.

B)
trailers.

C)
manufactured homes.

D)
mobile homes.

The answer is MANUFACTURED HOMES. Homes built in factories meeting HUD specifications are called manufactured homes.
A property manager repairs a leaking sink. This is classified as which type of maintenance?

A)
Routine

B)
Construction

C)
Corrective

D)
Preventive

The answer is CORRECTIVE. Fixing something that is not working properly (malfunctioning) is making a corrective repair.
The Equal Credit Opportunity Act prohibits

A)
setting maximum debt-to-income limitations.

B)
discrimination in applying credit-qualifying standards.

C)
requiring a credit report from prospective renters.

D)
discrimination based on the sexual orientation of the prospective tenant.

The answer is DISCRIMINATION IN APPLYING CREDIT-QUALIFYING STANDARDS. The Equal Credit Opportunity Act prohibits discrimination in applying credit-qualifying standards.
A management agreement is to a property manager as a(n)

A)
lease is to a tenant.

B)
deed is to a buyer.

C)
assignment is to an assignee.

D)
listing agreement is to a broker.

The answer is LISTING AGREEMENT IS TO A BROKER. The management contract defines the relationship between the parties. This agreement creates an agency relationship between the owner and the property manager as a listing agreement does between the seller and the broker.
An example of complying with the Americans with Disabilities Act could be

A)
installing auditory signals in elevators.

B)
making exceptions regarding prohibited activities such as smoking in restricted areas.

C)
offering relaxed credit standards for appropriate prospective tenants.

D)
allowing qualified prospective tenants to be considered before any others.

The answer is INSTALLING AUDITORY SIGNALS IN ELEVATORS. An example of complying with the Americans with Disabilities Act could be installing auditory signals in elevators.