100 question test in Cal real estate property management need help asap

 

 

1. A client wants to reduce the property’s hazard insurance coverage substantially, in order to save money on the premiums. If the property manager tries to arrange this, the insurance company might:

   	a.	terminate coverage based on a charge of fraud
   	b.	keep the policy in force, but lower the client’s credit rating
   	c.	agree to reduce the coverage only if the deductible is increased by a corresponding amount
   	d.	refuse to reduce the coverage, because insurers generally require that property be insured to at least 80% of its value

1 points 

QUESTION 2

1. A continuous operation provision in a lease is most likely to apply to:

   	a.	an anchor tenant in a shopping center
   	b.	the landlord of a stand-alone retail property
   	c.	a tenant leasing Class C office space
   	d.	the owners association in a condominium or other CID

1 points 

QUESTION 3

1. A conversion ratio measures:

   	a.	how much of the multi-family housing stock in this market has been converted to condominiums
   	b.	how many prospects it takes to get a signed lease for a rental space
   	c.	what percentage of a property’s tenants have occupied their spaces for over one year
   	d.	what percentage of a property’s tenants renew their leases if offered the opportunity

1 points 

QUESTION 4

1. A developer builds a large office tower in a city where there is a shortage of office space and rents are high. This will:

   	a.	increase demand, which will tend to lower rents
   	b.	increase demand, which will tend to increase rents
   	c.	increase supply, which will tend to lower rents
   	d.	increase supply, which will tend to increase rents

1 points 

QUESTION 5

1. A difficult and tight-fisted client is making it just about impossible for Serena to maintain and operate the property in compliance with landlord-tenant laws and other legal requirements. Assuming that their management agreement is typical, which of the following is correct?

   	a.	The client’s failure to keep the property in compliance with legal requirements is a breach of the management agreement
   	b.	The contract requires Serena to use her own funds to prevent legal violations if the client fails to do so
   	c.	Serena is contractually liable for any fines, damages, or other penalties that result from legal noncompliance
   	d.	Serena is contractually obligated to report the legal violations to the appropriate authorities

1 points 

QUESTION 6

1. A lease in which all of the operating expenses are passed through to the tenant is called a:

   	a.	triple net lease
   	b.	CAM lease
   	c.	gross lease
   	d.	shadow lease

1 points 

QUESTION 7

1. A maintenance employee assaulted one of the tenants in a building that Clive manages. Clive hired and supervised the employee. Regarding Clive’s potential liability in connection with this incident, which of the following is correct?

   	a.	Clive can’t be held liable because he didn’t authorize the employee’s action
   	b.	Clive’s liability is likely to depend on whether he was negligent in his hiring, supervision, or retention of the employee
   	c.	Clive can be held liable only if he failed to do a criminal background check when the employee was hired
   	d.	Clive can be held liable only if he participated in the incident, benefited from it in some way, or assisted the employee after the fact

1 points 

QUESTION 8

1. A maintenance request form for tenants to fill out should include:

   	a.	an estimate of how long the work is likely to take
   	b.	a hold harmless clause, protecting the manager against liability for work negligently performed
   	c.	work order and purchase order numbers, if applicable
   	d.	an authorization for entry into the tenant’s rental space or unit, to be signed by the tenant

1 points 

QUESTION 9

1. A new client who just inherited a commercial building has told her property manager that she doesn’t plan to sell the property, but her primary financial goal is a quick, high return. In this situation, the manager should:

   	a.	persuade the client to sell the property, even if that isn’t in the manager’s self-interest
   	b.	realize that the client will probably be reluctant to authorize any expenditures unless they’re necessary to maintain or increase the property’s net income in the short term
   	c.	explain the income tax consequences of that choice to the client
   	d.	tell the client that his fiduciary duties do not allow him to represent her on those terms

1 points 

QUESTION 10

1. A new commercial tenant is requesting build-out work that will cost more than the agreed improvement allowance. The property manager should:

   	a.	notify the tenant that the requested improvements will have to be scaled back
   	b.	remind the tenant that any construction costs in excess of the allowance will be the tenant’s responsibility
   	c.	increase the allowance to cover the additional work, as long as the changes will increase the value of the property as a whole
   	d.	consult with the client before agreeing to increase the tenant’s improvement allowance

1 points 

QUESTION 11

1. A property manager has a legal obligation to protect and promote her client’s interests. This is because the manager:

   	a.	is the client’s agent and owes the client fiduciary duties
   	b.	is a member of a professional association with a code of ethics that specifically requires this
   	c.	is subject to the Uniform Standards of Professional Property Management
   	d.	has signed a contract (the management agreement) that expressly requires this

1 points 

QUESTION 12

1. A property manager is preparing a management plan for a new client’s property. The manager’s property analysis:

   	a.	should focus primarily on the property’s physical condition at this stage
   	b.	should include an evaluation of the property’s current operations, leasing, management, and financial condition, as well as its physical condition
   	c.	should be performed after the market analysis, for most types of property
   	d.	must be based on an appraisal performed by a state-licensed or -certified appraiser within the previous six months

1 points 

QUESTION 13

1. A property manager is deciding on a marketing plan for a vacant retail space. How much advertising will be needed in order to find the next tenant for the space is most likely to be affected by:

   	a.	branding
   	b.	the target market
   	c.	the property’s location
   	d.	the cost per prospect

1 points 

QUESTION 14

1. A property manager is doing a preliminary study in order to prepare a management plan. As usual, the preliminary study will involve five main categories of analysis. These categories include all of the following, except:

   	a.	analysis of alternatives
   	b.	analysis of demographics
   	c.	regional analysis
   	d.	neighborhood analysis

1 points 

QUESTION 15

1. A property manager may suggest physical changes to a client’s property in order to correct or address different forms of depreciation. Which of the following is true?

   	a.	Correcting curable external obsolescence is called remodeling
   	b.	Correcting curable physical deterioration is called remodeling
   	c.	Correcting curable functional obsolescence is called rehabilitation
   	d.	Correcting deferred maintenance is called rehabilitation

1 points 

QUESTION 16

1. A property manager needs a bad debt and vacancy factor for a residential property’s annual operating budget. She is most likely to:

   	a.	check the MSA website to see projected average vacancy rates for her area
   	b.	evaluate the property’s actual rent collection record in previous years
   	c.	base it on changes in the Consumer Price Index
   	d.	use the figure agreed to in the management agreement

1 points 

QUESTION 17

1. A property manager rejected a rental application for a retail space because of the applicant’s race. Was this legal or illegal?

   	a.	Legal, because this is commercial property and the Fair Housing Act applies only to residential property
   	b.	Legal, because antidiscrimination laws apply to real estate sales transactions, not lease transactions
   	c.	Illegal, because any discrimination by a property manager is a violation of the manager’s fiduciary duties
   	d.	Illegal, because the Civil Rights Act of 1866 prohibits discrimination based on race or color in all real estate transactions

1 points 

QUESTION 18

1. A property manager records rents collected from tenants when they are actually paid (not merely owed), but he records certain operating expenses as they accrue (as opposed to when they’re paid). This manager is using the:

   	a.	payment point accounting method
   	b.	certified accounting method
   	c.	modified cash-basis accounting method
   	d.	triple-entry accounting method

1 points 

QUESTION 19

1. A property manager should not give “welcome to the building” gifts to new tenants:

   	a.	that cost more than $25, the legal limit
   	b.	because such gifts are a form of illegal kickback
   	c.	unless all tenants receive exactly the same gift
   	d.	without the property owner’s prior authorization

1 points 

QUESTION 20

1. A property manager’s rent collection records should include:

   	a.	both a rental ledger and a rent roll
   	b.	either a rental ledger or a rent roll
   	c.	a rental ledger rather than a rent roll
   	d.	a rent roll rather than a rental ledger

1 points 

QUESTION 21

1. A rental application form or packet should include:

   	a.	an inquiry regarding race, ethnic background, familial status, and disability, to enable the manager to demonstrate Fair Housing Act compliance
   	b.	an authorization for a citizenship status check, signed by the applicant, for Patriot Act compliance
   	c.	an authorization for a credit check (and a criminal background check, if desired), signed by the applicant, for FCRA compliance
   	d.	an authorization for entry without notice in emergencies, signed by the applicant, for URLTA compliance

1 points 

QUESTION 22

1. A residential lease should be signed by:

   	a.	everyone who will occupy the unit
   	b.	all competent adults who will occupy the unit
   	c.	only one competent adult, as the fully liable representative of all other occupants
   	d.	only the occupant(s) who have accepted joint and several liability for the rent, at least one of whom must be a competent adult

1 points 

QUESTION 23

1. A residential property manager looking for new tenants for a single-family rental house rejects an application from two men because she thinks they are gay. Which of the following is true?

   	a.	Sexual orientation is not one of the protected classes in the federal Fair Housing Act
   	b.	The federal Fair Housing Act does not apply to the rental of single-family homes
   	c.	The property manager did not personally violate the law if the property owner gave her written instructions not to rent to homosexuals
   	d.	The property manager has violated the federal Fair Housing Act

1 points 

QUESTION 24

1. A retail space that is separate from a mall’s main shopping area but still within the boundaries of the parking lot is called:

   	a.	an island
   	b.	a satellite space
   	c.	an outparcel
   	d.	a magnet store

1 points 

QUESTION 25

1. A tenant who pays rent on a monthly basis has abandoned the leased space when there are still six months remaining in the lease term. In this situation:

   	a.	the space cannot be leased to a new tenant until the former tenant’s lease term expires
   	b.	the former tenant can be held responsible for no more than three months of additional rental payments
   	c.	the former tenant is still liable for the rent for six more months, even if a new tenant is found right away
   	d.	the former tenant could still be liable for the rent for six more months, but the landlord or manager must make an effort to find a new tenant promptly

1 points 

QUESTION 26

1. Administrative regulations:

   	a.	are merely guidelines, without the force of law
   	b.	may be federal, state, or local
   	c.	are enacted by a legislative body
   	d.	apply only in a particular city or county

1 points 

QUESTION 27

1. After an apartment building’s operating expenses and mortgage payment have been paid, the amount of money left over from the rents collected that month is called the:

   	a.	equity
   	b.	leverage
   	c.	appreciation
   	d.	cash flow

1 points 

QUESTION 28

1. All of the following statements about industrial parks are correct, except:

   	a.	Industrial parks are also called business parks
   	b.	They typically have single-story shell buildings with high ceilings
   	c.	They may be developed as condominiums
   	d.	They usually allow only manufacturing uses, so that business offices and warehouses must be located elsewhere

1 points 

QUESTION 29

1. All of the following investor-owners would be likely to hire a professional property manager, except:

   	a.	Mary Ann, a surgeon who owns a residential duplex and rents both units to tenants
   	b.	Paul, a commercial fisherman who owns 20 acres of undeveloped land that he’s holding for appreciation
   	c.	the Cartwright Group, a partnership that recently purchased and renovated an 80-unit apartment building constructed in the 1920s
   	d.	Ernesto, a retiree who owns a small office building and lives in another state

1 points 

QUESTION 30

1. An R/U ratio is often used to determine:

   	a.	the maximum number of people that can legally occupy a residential unit
   	b.	the optimum number of smaller stores for a shopping center with a particular type of anchor store
   	c.	how much a commercial tenant will have to pay toward the building’s common area expenses
   	d.	how many parking spaces a retail building will need in order to accommodate customers and employees

1 points 

QUESTION 31

1. An asset manager’s services would include:

   	a.	paying the property taxes and insurance premiums for a client’s property when due
   	b.	evaluation of whether a client’s property is serving its highest and best use
   	c.	hiring and supervising the staff for a client’s property
   	d.	heading the leasing team for a client’s property

1 points 

QUESTION 32

1. “Any allocation of funds that is expected to generate a profit for the owner” is a definition of:

   	a.	appreciation
   	b.	dividend
   	c.	investment
   	d.	security

1 points 

QUESTION 33

1. Anya is preparing a management plan for an office building. In her regional analysis, Anya is likely to be especially interested in data concerning:

   	a.	average family size
   	b.	HVAC alternatives
   	c.	consumer trends
   	d.	future employment growth

1 points 

QUESTION 34

1. As a general rule, and without reference to specific provisions in the lease agreement, notice of termination is required:

   	a.	only when a landlord (or his property manager) wants to end a tenant’s periodic tenancy
   	b.	when a tenant wants to end a term tenancy
   	c.	when either the landlord or the tenant wants to end a periodic tenancy
   	d.	when either the landlord or the tenant wants to end a term tenancy

1 points 

QUESTION 35

1. As a general rule, employees who work under a property manager need to be bonded only if:

   	a.	the property owner requests it
   	b.	they handle money as part of their job
   	c.	they have a criminal record
   	d.	the property’s hazard insurance does not cover them

1 points 

QUESTION 36

1. At one of the properties Tyree manages, rent is due by the fifth of the month; if payment is received after 5:00 PM on the fifth, a flat $50 late fee is imposed. The biggest disadvantage of this policy is that:

   	a.	most tenants will wait until the fifth to pay, instead of paying on the first of the month
   	b.	once tenants have incurred the late fee in a given month, they have no incentive to get the rent paid sooner rather than later
   	c.	imposing a late fee gives tenants the impression that late payment is acceptable
   	d.	adding a late fee only makes it more difficult for delinquent tenants to pay the overdue rent

1 points 

QUESTION 37

1. Ava and Benjamin are organizing an investment syndicate to purchase an income property. They’re planning to invite various business associates and acquaintances to participate. All of the following are true, except:

   	a.	the syndicators may manage the property themselves or hire a professional property manager
   	b.	federal and state securities laws may apply when the syndicators offer interests in the syndicate to others
   	c.	the syndicators must have unlimited liability, although the other participants may have limited liability
   	d.	collaborating with other investors will enable them to purchase a larger, more expensive property than they could on their own

1 points 

QUESTION 38

1. Banks generally won’t finance development of a new shopping center:

   	a.	unless there will be at least four anchor tenants
   	b.	until the developer has signed lease agreement(s) with the anchor tenant(s)
   	c.	until the land has been purchased and the site infrastructure prepared
   	d.	if there is already another shopping center of similar size and character within a ten-mile radius

1 points 

QUESTION 39

1. Breakpoints are a feature of:

   	a.	percentage leases
   	b.	industrial leases
   	c.	high-rise buildings
   	d.	annual operating budgets

1 points 

QUESTION 40

1. Buying real estate as an investment has some disadvantages compared to various other types of investments. One disadvantage is that:

   	a.	no tax deductions apply to real estate owned as an investment (as opposed to personal use property)
   	b.	a real estate purchase generally requires a larger cash outlay than other investments
   	c.	real estate can’t be expected to depreciate as quickly as other investments
   	d.	real estate provides a return to the investor only when the asset is sold

1 points 

QUESTION 41

1. Byron keeps trust funds for all of his property management clients in a single pooled account. It’s an interest-bearing account, specifically designated as a trust account, in a financial institution whose accounts are insured by the Federal Deposit Insurance Corporation (FDIC). The pooled account’s balance is $380,000, and the FDIC’s coverage limit is currently $250,000. Which of the following is correct?

   	a.	Because the pooled account’s balance exceeds the coverage limit, none of the client funds in the account are insured
   	b.	Because the pooled account’s balance exceeds the coverage limit, the excess funds are uninsured
   	c.	The FDIC’s coverage limit is applied to each client separately, even when their funds are pooled together in a single trust account, so all of the funds may be insured
   	d.	The FDIC will not insure a client’s funds in a pooled trust account if that client has any other money deposited at the same financial institution

1 points 

QUESTION 42

1. Do Not Call laws:

   	a.	do not apply to property managers who are licensed real estate agents
   	b.	prohibit cold calls to people who have listed their phone numbers in the FTC’s Do Not Call Registry
   	c.	prohibit cold calling altogether
   	d.	prohibit cold calling, and also prohibit returning calls from people who don’t already have an established relationship (as client or tenant) with the manager

1 points 

QUESTION 43

1. Edie is evaluating applicants for a vacant apartment in a client’s building. Using a written checklist of minimum standards, Edie eliminates one applicant because he’s been employed at his current job for less than a year, and another because she declared bankruptcy less than five years ago. What is the source (or the most likely source) of the minimum standards that Edie is applying?

   	a.	They were probably set by Edie herself, perhaps in consultation with the client
   	b.	They were probably imposed by the client’s mortgage lender, as a condition for financing the purchase of the building
   	c.	They probably come from the state’s real estate license law, which regulates the business practices of property managers
   	d.	They were established by federal regulations, to help prevent housing discrimination

1 points 

QUESTION 44

1. Eileen is a professional property manager. She currently works as a full-time employee for a corporation, managing the office building that the corporation owns and occupies as its main business location. In this capacity, Eileen would be referred to as a/an:

   	a.	institutional manager
   	b.	comptroller
   	c.	facilities manager
   	d.	asset manager

1 points 

QUESTION 45

1. For an office building, the property manager’s accounting and reports to the owner should usually:

   	a.	treat overdue pass-through charges as passive losses
   	b.	include CAM charges and other pass-through charges in the rent figure rather than listing them separately
   	c.	show separate figures for CAM charges and other pass-through charges as well as rent figures
   	d.	list only pass-through charges, since the base rent and CAM charges are already known

1 points 

QUESTION 46

1. From a client’s point of view, setting a property manager’s compensation as a percentage of the property’s gross income has this advantage:

   	a.	it gives the manager a direct incentive to increase the property’s income
   	b.	the client won’t have to pay the manager for any months in which the property has an operating deficit
   	c.	the manager’s compensation will be reduced in a month when operating expenses exceed the budgeted amount
   	d.	the manager’s compensation will be reduced by an appropriate bad debt/vacancy factor

1 points 

QUESTION 47

1. Hal is preparing an annual operating budget for a 30-unit apartment complex. In calculating the property’s potential gross income, Hal will probably:

   	a.	use market rents, except for current vacancies
   	b.	use contract rents, except for current vacancies
   	c.	subtract contract rents from market rents
   	d.	subtract market rents from contract rents

1 points 

QUESTION 48

1. How high a vacancy rate is acceptable for a managed property depends on:

   	a.	the type of property and the owner’s goals
   	b.	supply and demand in the submarket
   	c.	general economic conditions
   	d.	All of the above

1 points 

QUESTION 49

1. How many days a residential landlord or property manager is allowed for fixing a particular type of maintenance problem is most likely to be determined by:

   	a.	the lease or rental agreement
   	b.	the management agreement
   	c.	state and/or local landlord-tenant laws
   	d.	the Americans with Disabilities Act

1 points 

QUESTION 50

1. In a real estate market, a period of prosperity is likely to lead to:

   	a.	overbuilding
   	b.	diversification
   	c.	price stagnation
   	d.	negative cash flow

1 points 

QUESTION 51

1. In an office building, the building standards:

   	a.	dictate uniform construction materials and workmanship for build-out work
   	b.	specify the types of activities that tenants and visitors are and are not allowed to engage in on the premises
   	c.	require tenants to leave the leased space in turnkey condition at the end of the lease
   	d.	should be updated at least every three years, and more frequently if possible

1 points 

QUESTION 52

1. In most states, a property manager is legally required to keep tenants’ security deposits:

   	a.	separate from trust funds
   	b.	separate from non-trust funds
   	c.	in an account that’s in the name of the property owner (the landlord) rather than the name of the property manager
   	d.	in a pooled interest-bearing account, with interest paid to the state treasury

1 points 

QUESTION 53

1. In property management, the term “footloose” is applied to:

   	a.	residential tenants under 30 who don’t have children yet
   	b.	retail outlets located outside the central business district
   	c.	commercial tenants that have moved much more frequently than is typical for the type of business in question
   	d.	industrial businesses that don’t need to choose their location based on utility costs or proximity to resources or transportation points

1 points 

QUESTION 54

1. In regard to an insurance policy covering managed property, the insurable interest requirement generally means that:

   	a.	the policy must be in the name of the client (the property owner), not the property manager
   	b.	it’s better to have the policy issued in the property manager’s name rather than the owner’s name
   	c.	the insurance premiums must be paid by the property owner, not the property manager
   	d.	the policy must name not only the property owner, but also the property manager and the tenant(s)

1 points 

QUESTION 55

1. In the income approach to property valuation, an appraiser translates the property’s net operating income into an estimate of market value by using a/an:

   	a.	income ratio
   	b.	cap rate
   	c.	value factor
   	d.	bad debt/vacancy factor

1 points 

QUESTION 56

1. In the market analysis for a management plan, the property manager must:

   	a.	determine the relevant submarket
   	b.	allow the client to specify the relevant submarket
   	c.	use the submarket categories established by IREM for MSAs with populations over 100,000
   	d.	define the submarket in compliance with IRS accounting rules

1 points 

QUESTION 57

1. Investors are advised to diversify their investments because:

   	a.	it will allow them to draw on cash reserves to offset investment losses
   	b.	only a diverse mix of investments can be considered truly liquid
   	c.	a poor yield from one type of investment may be offset by good yields from other types
   	d.	diversified investments are generally tax-deductible

1 points 

QUESTION 58

1. Jeff has new tenants in the residential buildings he manages fill out a walk-through checklist. This form:

   	a.	limits Jeff’s liability (and his client’s) regarding issues affecting habitability
   	b.	must be filled out while Jeff or an assistant is present, or it will not be legally binding
   	c.	should be signed by the tenant, and any problems noted should be verified by Jeff or an assistant
   	d.	should not be used in determining how much of the tenant’s security deposit to refund at the end of the tenancy

1 points 

QUESTION 59

1. Life-cycle costing refers to:

   	a.	taking into account costs and potential savings over time (not just the initial cost) when deciding whether to replace or upgrade building equipment
   	b.	recording expenditures on maintenance as they accrue rather than when they are incurred
   	c.	treating expenditures on preventive maintenance as income rather than operating expenses
   	d.	adjusting the percentage of gross income that will be spent on maintenance to take into account both the actual age and the remaining useful life of the building

1 points 

QUESTION 60

1. Most industrial leases contain an escalation clause, because:

   	a.	the term of an industrial lease is usually at least ten years, and frequently longer
   	b.	market rents are more volatile for industrial property than for other types
   	c.	the property manager’s compensation is tied to the tenant’s gross sales
   	d.	industrial properties are more likely to have environmental issues than other types of commercial properties

1 points 

QUESTION 61

1. On-site staff that a property manager hires for an office building will be:

   	a.	employees of the property owner, not the property manager
   	b.	employees of the property manager (or her management firm), but treated as employees of the property owner for tax purposes
   	c.	independent contractors rather than employees
   	d.	paid out of the building’s operating funds

1 points 

QUESTION 62

1. One of the properties that Terry manages had an operating deficit this month. How should he deal with this?

   	a.	Terry is legally required to notify the client within 24 hours
   	b.	Terry should take the steps specified in the management agreement
   	c.	It’s customary to cover a deficit by deducting the amount of the shortfall from the manager’s compensation
   	d.	The usual practice is to cover the deficit using a credit card, then roll the charge over into the next fiscal year

1 points 

QUESTION 63

1. Pat manages 16 properties owned by ten different clients, all of whom are individual investor-owners. She sets her own schedule, juggling her tasks for all of the properties, and makes management decisions primarily using her own judgment. For tax purposes and various other legal purposes, Pat’s status in relation to her clients is almost certainly that of:

   	a.	a trustee
   	b.	an employee
   	c.	a gratuitous agent
   	d.	an independent contractor

1 points 

QUESTION 64

1. Paying current tenants a fee as an incentive for referring new tenants:

   	a.	is one of the best ways to find prospects that will fit in
   	b.	is unlikely to be cost-effective unless the property is very unusual in some way
   	c.	violates the Fair Housing Act (if the rental property is residential)
   	d.	is illegal in many states

1 points 

QUESTION 65

1. Power washing the exterior of a building is an example of:

   	a.	corrective maintenance
   	b.	preventive maintenance
   	c.	custodial maintenance
   	d.	deferred maintenance

1 points 

QUESTION 66

1. Roger and Marianne are property managers who work for ABC Property Management. Ginny and Louis are property managers who work for XYZ Property Management. Which of the following scenarios describes an antitrust violation?

   	a.	ABC assigns Roger to work exclusively in the West neighborhood and Marianne to work exclusively in the East neighborhood
   	b.	ABC decides to focus only on high-end properties in the West neighborhood
   	c.	ABC and XYZ agree that ABC will focus on the West neighborhood and XYZ will focus on the East neighborhood
   	d.	XYZ assigns both Ginny and Louis to focus on high-end properties in the East neighborhood

1 points 

QUESTION 67

1. Saving the client money is one important reason why a property manager should:

   	a.	encourage tenants to report maintenance issues promptly
   	b.	respond only to complaints that have been submitted in writing
   	c.	wait at least three days before responding to non-emergency complaints, which frequently solve themselves
   	d.	handle complaints in a way that will keep tenants’ maintenance expectations low

1 points 

QUESTION 68

1. Shell space is:

   	a.	unfinished commercial space, ready for a tenant’s build-out
   	b.	partially enclosed retail space in the center of a large mall
   	c.	the per-floor square footage of an office building, minus areas taken up by stairwells, elevator shafts, ductwork, and other equipment necessary to the functioning of the building
   	d.	None of the above

1 points 

QUESTION 69

1. State law and/or the management agreement may require a property manager to be covered by an E&O policy. This type of policy is also called:

   	a.	fidelity bonding
   	b.	professional liability insurance
   	c.	commercial general liability insurance
   	d.	all perils insurance

1 points 

QUESTION 70

1. Subsidized housing:

   	a.	may be either public housing or government-assisted housing
   	b.	is usually housing for the elderly
   	c.	generally must be managed by a licensed community association manager
   	d.	All of the above

1 points 

QUESTION 71

1. The Building Owners and Managers Association (BOMA) developed the widely used system of classifying office buildings as Class A, B, or C properties. BOMA:

   	a.	publishes annual ratings for all the major office buildings located in the CBD of a metropolitan area
   	b.	has standardized the ratings so that a Class B building in one market will be very similar to Class B buildings across the country
   	c.	does not recommend publishing a classification rating for an individual property
   	d.	no longer uses the A, B, C classification system itself and discourages others from using it

1 points 

QUESTION 72

1. The Patriot Act effectively requires a property manager to:

   	a.	check a prospective tenant’s name against the SDN list
   	b.	check a prospective client’s name against the SDN list
   	c.	decline to work for or lease to anyone whose name appears on the SDN list
   	d.	All of the above

1 points 

QUESTION 73

1. The central aim that guides a property manager’s work, no matter what context the manager works in, is managing the property in order to:

   	a.	generate the greatest net income for the owners
   	b.	increase the property’s value as much as possible
   	c.	ensure that the property reaches its highest and best use
   	d.	achieve the owners’ goals for the property

1 points 

QUESTION 74

1. The consideration of tenant mix in leasing is most important for:

   	a.	residential property
   	b.	office property
   	c.	retail property
   	d.	industrial property

1 points 

QUESTION 75

1. The federal Fair Labor Standards Act sets rules concerning:

   	a.	minimum wage and overtime pay
   	b.	vacation and sick leave
   	c.	notice of termination
   	d.	workplace safety

1 points 

QUESTION 76

1. The federal income tax return for the investor-owner of a commercial property would probably show a tax deduction for:

   	a.	capital expenditures
   	b.	the initial basis
   	c.	passive income
   	d.	depreciation of the building(s)

1 points 

QUESTION 77

1. The implied covenant of quiet enjoyment:

   	a.	applies to residential tenancies but not commercial tenancies
   	b.	applies to commercial tenancies but not residential tenancies
   	c.	must be expressly included in any written lease
   	d.	applies to a tenancy even if it is not expressly stated in the lease

1 points 

QUESTION 78

1. The owner of an apartment building is legally required to allow a disabled tenant to make reasonable modifications to his unit, at the tenant’s expense. This is required by:

   	a.	the federal Fair Housing Act
   	b.	the Americans with Disabilities Act
   	c.	Both a) and b)
   	d.	Neither a) nor b); this is a requirement of state law, not federal law

1 points 

QUESTION 79

1. The tenant who’s moving out has kept the unit in decent shape, except that at some point she badly scorched the kitchen countertop with a hot pan. The countertop was in good condition when the tenant moved in a year ago, but it will have to be replaced before the unit can be rented again. Can the property manager make a deduction from the tenant’s security deposit because of the scorched countertop?

   	a.	This counts as normal wear and tear, so a deduction is not allowed
   	b.	This does not affect the habitability of the unit, so a deduction is not allowed
   	c.	Under the “useful life” rule, it would have been necessary to replace the countertop anyway, so a deduction is not allowed
   	d.	This is damage, not normal wear and tear, so a deduction is justified

1 points 

QUESTION 80

1. The tenants in a shopping center are typically required to:

   	a.	advertise their own businesses, but not to participate in marketing the shopping center
   	b.	make monthly contributions to the shopping center’s marketing fund based on their leased square footage
   	c.	pay for marketing the shopping center as part of their CAM charges
   	d.	join the merchant’s association and make an annual contribution to marketing costs based on their gross sales for the previous year

1 points 

QUESTION 81

1. The term “qualification package” refers to:

   	a.	a summary of the property manager’s credentials and experience, with supporting documents, included in a management proposal
   	b.	the requirements for membership in a professional association such as BOMA or IREM, or for a particular designation conferred by such an association
   	c.	orientation materials provided to new tenants in large residential complexes, typically including information about the property’s amenities, a list of neighborhood resources, and an appropriate welcome gift
   	d.	a prospective commercial tenant’s rental application and supporting documents, such as profit and loss statements and income tax returns

1 points 

QUESTION 82

1. There are many differences between residential property and commercial property that affect their management. All of the following statements about the differences are correct, except:

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   	a.	residential leases generally have longer terms
   	b.	residential properties are more likely to require round-the-clock management
   	c.	residential property managers (and/or their staff) typically have to spend a greater proportion of their time on marketing and leasing