Unit 18: Property Management (copy)

Which type of insurance coverage insures an employer against MOST claims for job-related injuries?

A) Consequential loss

B) Workers’ compensation

C) Casualty

D) Surety bond

B) Workers’ compensation

Residential leases are usually expressed as:

A) an annual or monthly rate per square foot.

B) a percentage of total space available.

C) an annual rate per room.

D) a monthly rate per unit.

D) a monthly rate per unit.

Avoid, control, transfer, or retain are the four alternative techniques of:

A) tenant relations.

B) acquiring insurance.

C) risk management.

D) property management.

C) risk management.

From a management point of view, apartment building occupancy that reaches as high as 98% would tend to indicate that:

A) the building is poorly managed.

B) the building has reached its maximum potential.

C) rent could be raised.

D) the building is a desirable place to live.

C) rent could be raised.

A guest slips on an icy stair at an apartment building and is hospitalized. A claim against the building owner for medical expenses may be paid under which of these policies held by the owner?

A) Workers’ compensation

B) Liability

C) Casualty

D) Fire and hazard

B) Liability

When a property manager is establishing a budget for the building, what should be included as an operating expense?

A) Utilities

B) Replacement reserves

C) Debt service

D) Depreciation

A) Utilities

A property manager is offered a choice of three insurance policies with different deductibles. If the property manager selects the policy with the highest deductible, which risk management technique is being used?

A) Avoiding risk

B) Retaining risk

C) Controlling risk

D) Transferring risk

B) Retaining risk

Contaminated groundwater, toxic fumes from paint and carpeting, and lack of proper ventilation are all examples of:

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

B) problems faced only in newly constructed properties.

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

D) issues that arise under the Americans with Disabilities Act.

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

Tenant improvements are:

A) always construed to be fixtures.

B) removable by the tenant.

C) paid for by the landlord.

D) adaptations of space to suit tenants’ needs.

D) adaptations of space to suit tenants’ needs.

When a manager develops an operating budget, which of these is considered a variable expense?

A) Employee wages

B) Utilities

C) Building repairs

D) Basic operating costs

C) Building repairs

In MOST market areas, rents are determined by:

A) supply-and-demand factors.

B) the local apartment owners’ association.

C) HUD’s annually published rental guidelines.

D) a tenants’ union.

A) supply-and-demand factors.

A highrise apartment building burns to the ground. What type of insurance covers the landlord against the resulting loss of rent?

A) Fire and hazard

B) Liability

C) Casualty

D) Consequential loss, use, and occupancy

D) Consequential loss, use, and occupancy

A property manager hires a full-time maintenance person. While repairing a faucet in one of the apartments, the maintenance person steals a television set, and the tenant sues the owner. The property manager could protect the owner against this type of loss by purchasing:

A) a surety bond.

B) liability insurance.

C) workers’ compensation insurance.

D) casualty insurance.

A) a surety bond.

Which of these might indicate that rents are too low?

A) A poorly maintained building

B) High building occupancy

C) Many For Lease signs in the area

D) High tenant turnover rates

B) High building occupancy

A property manager repairs a malfunctioning boiler in the building. This is classified as which type of maintenance?

A) Preventive

B) Routine

C) Corrective

D) Construction

C) Corrective

A property manager who enters into a management agreement with an owner is usually a:

A) special agent.

B) universal agent.

C) general agent.

D) designated agent.

C) general agent.

Which law requires removing existing barriers when readily achievable in public buildings and adding Braille markings to elevator buttons?

A) Fair Housing Act

B) Americans with Disabilities Act

C) Equal Credit Opportunity Act

D) Regulation Z

B) Americans with Disabilities Act

Which action by a property manager is a breach of her fiduciary relationship to the owner?

A) Generating a high net operating income by maintaining the property

B) Maintaining good relations with the tenants

C) Checking the credit history of minority applicants only

D) Scrutinizing property expenses

C) Checking the credit history of minority applicants only

A property manager’s total compensation consists of a monthly salary, a 12% commission based on annual rental for each vacant unit the property manager fills, and the free use of one of the apartments as the property manager’s personal primary residence. Based on these facts, is the property manager required by Illinois law to obtain a real estate broker or managing broker license?

A) Yes. Any person who is compensated for performing real estate activities for a commission must have a broker or managing broker license, regardless of any other form of compensation.

B) Yes. Because the property manager’s compensation is based in part on recruiting new tenants rather than simply collecting rents, the property manager must have a broker or managing broker license.

C) No. Property managers are not required to have real estate licenses in Illinois.

D) No. Persons acting as resident managers, who live in the managed property, are specifically exempt from the general licensing requirements.

D) No. Persons acting as resident managers, who live in the managed property, are specifically exempt from the general licensing requirements.

The property manager of a small, 20-unit apartment building requires a security deposit. In this case, the property manager:

A) must pay interest on the security deposit.

B) is not required to deposit the security deposit into an escrow account.

C) is not required to pay interest on the security deposit.

D) may deposit the security deposit into the general operating fund.

C) is not required to pay interest on the security deposit.