1.22 Property Management: Functions, Agreements, and Tenant/Landlord Rights

Vocabulary flashcards covering key terms from the lecture notes on property management.

Property management

The administration and operation of real estate on behalf of owners, including budgeting, leasing, maintenance, and compliance, as outlined in a management agreement.

Individual manager

A property manager who oversees properties for multiple owners.

Building manager

A manager employed to manage a single property.

Resident manager

A manager who lives on site and manages the property.

Fiduciary

A person who acts in the principal's best interests, managing property and funds with loyalty and care.

Management agreement

A contract specifying the manager's duties, authority, budget, reporting, compensation, and other terms of property management.

Reporting

Regular updates of financial and operating information, typically on a monthly, quarterly, and annual basis.

Annual operating budget

A projected year-long plan of income and expenses used to guide property operations.

Cash flow report

A financial statement showing net cash movements in a period.

Profit and loss statement

A financial report summarizing revenues, expenses, and net income over a period.

Budget comparison statement

A report comparing actual results to the operating budget to identify variances.

Operating budget

Budget for daily operations including rent, capital expenditures, reserves, and salaries.

Rental rates

Charges set for renting space or units.

Capital expenditures

Outlays for major renovations, improvements, or construction projects.

Reserves

Funds set aside for future or variable expenses and capital needs.

Salaries and wages

Employee compensation included in operating costs.

Variable expenses

Costs that vary with occupancy or activity (e.g., maintenance, utilities).

Fixed expenses

Costs that remain constant regardless of occupancy (e.g., insurance, taxes).

Cash reserves

Liquid funds kept on hand to cover unexpected costs or shortfalls.

Tenants

Individuals or entities that rent and occupy property.

Fair housing laws

Laws prohibiting discrimination in housing based on protected classes to ensure equal access.

Americans with Disabilities Act (ADA)

Federal law prohibiting discrimination based on disability and requiring reasonable accommodations in housing.

Equal Credit Opportunity Act (ECOA)

Federal law prohibiting discrimination in credit transactions related to housing.

Property maintenance

Activities and costs to keep property in good condition and functioning.

Routine maintenance

Regular, scheduled maintenance tasks to prevent deterioration.

Preventive maintenance

Proactive upkeep designed to prevent failures before they occur.

Corrective maintenance

Repairs performed to fix problems after they arise.

In-house maintenance

Maintenance performed by staff directly employed by the owner/manager.

Contracted-out maintenance

Maintenance services provided by external contractors.

Construction

Activities to alter, renovate, or expand a property.

Tenant alterations

Modifications tenants may make to a unit with permission.

Renovations

Significant upgrades or improvements to a property.

Expansion

Growth of usable space or addition of units.

Environmental remediation

Processes to clean up environmental hazards on the property.

Management agreement components

Parts of the management agreement, including names, description, lease term, owner’s purpose, responsibilities, authority, budget, allocations, reporting, compensation, and Equal Opportunity clause.

Equal Opportunity statement

Clause ensuring non-discrimination in management practices and hiring.

Landlord rights

Legal entitlements such as collecting rent, entering premises, and enforcing lease terms.

Landlord duties

Obligations to provide habitable conditions and maintain essential systems.

Quiet enjoyment

Tenant’s right to use the property without unreasonable interference.

Habitable conditions

A rental unit meeting basic livability standards (heat, water, sanitation, safety).

Notice

Formal communication required to end or modify a lease or tenancy.

Actual eviction

The legal court process to remove a tenant for noncompliance or breach.

Constructive eviction

Tenant vacates due to the landlord’s failure to maintain premises, effectively ending the lease.

Termination of a lease

Ending a lease by expiration, breach, abandonment, or other agreed grounds.

Tenancy at will

A rental arrangement without a fixed term, terminable by either party, often ending upon death.

Life estate

A property interest lasting for a person’s life, after which ownership may revert.

Foreclosure

The legal process by which a lender takes possession of a property due to borrower default.

Security deposit

A refundable sum paid by the tenant to cover damages or unpaid rent, held by the landlord.

Security deposit procedures

Rules governing collection, holding, and return of security deposits.

Liability for trust funds

Responsibility of the manager for funds held in trust and compliance with laws.

Compliance with laws

Requirement to follow applicable federal, state, and local property management regulations.