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Property Management Exam EXAM 2025 AND
PRACTICE QUESTIONS |ACCURATE ANSWERS|
VERIFIED FOR GUARANTEED PASS |GRADED A
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A business that locates near suppliers or raw materials necessary for its operations A. Market-oriented industry B. Resource-oriented industry C. Retail-based enterprise D. Consumer-oriented industry Correct Answer: B. Resource-oriented industry Rationale: This type of industry locates near natural resources to reduce transportation costs and enhance operational efficiency. A clause in a deed or lease that limits the way that the real estate ownership or possession may be used A. Easement Clause B. Habendum Clause C. Restrictive Clause D. Option Clause Correct Answer: C. Restrictive Clause Rationale: A restrictive clause limits how a property may be used to preserve value or comply with legal requirements. Commercial property from which goods are sold A. Industrial Property B. Warehouse Property C. Office Space D. Retail Property Correct Answer: D. Retail Property Rationale: Retail property is designed for the sale of goods and services directly to consumers. Under the uniform landlord tenant law, landlords are not permitted to get even with a tenant who files a complaint with a government agency A. Retaliation B. Eviction C. Termination D. Trespass Correct Answer: A. Retaliation
Rationale: Retaliatory actions against tenants for exercising their rights are prohibited under landlord-tenant laws. An energy-saving program that calls for replacing or upgrading heating and air conditioning equipment, often at a great expense A. Downsizing B. Restructuring C. Retrofitting D. Rebalancing Correct Answer: C. Retrofitting Rationale: Retrofitting involves modifying existing systems to improve energy efficiency. A measure of profitability of a property, computed either before or after income taxes A. Return on Investment B. Capital Gains C. Amortization Rate D. Appreciation Value Correct Answer: A. Return on Investment Rationale: ROI measures how effectively income-generating property returns profit relative to its cost. The lowest point, or nadir, of the business cycle; the point at which demand equals and begins to surpass supply A. Recovery B. Expansion C. Revival D. Peak Correct Answer: C. Revival Rationale: Revival marks the transition from downturn to growth in the business cycle. That portion of property management that deals with minimizing or allocating risk of damage, such as utilizing insurance policies to transfer the risk of loss to a third party A. Facility Management B. Cost Control C. Risk Management D. Security Services Correct Answer: C. Risk Management Rationale: Risk management helps mitigate potential losses through proactive planning and insurance. Regular upkeep aimed at finding structural and mechanical problems owned and used by a business and then leases it back once a year A. Deferred Maintenance B. Corrective Maintenance C. Emergency Maintenance
A payment by a tenant, held by a landlord during the lease term A. Damage Fee B. Rent Advance C. Security Deposit D. Holding Fee Correct Answer: C. Security Deposit Rationale: This deposit protects the landlord against damages or unpaid rent. When permitted by local utilities, building management can provide telephone and data transmission services to two or more unrelated tenants A. Cooperative Utilities B. Shared Tenant Services C. Franchise Networking D. Local Exchange Systems Correct Answer: B. Shared Tenant Services Rationale: These services allow tenants to share telecommunications infrastructure for efficiency. A short list of up to three available apartments ready for inspection at any given time A. Vacancy List B. Ready List C. Show List D. Unit Availability Chart Correct Answer: C. Show List Rationale: A show list helps leasing agents manage and display currently available units. A physical condition caused by substances within a building that causes symptoms that disappear when the occupant leaves the building A. Building-Related Illness B. Sick Building Syndrome (SBS) C. Asbestos Exposure D. Indoor Air Contamination Correct Answer: B. Sick Building Syndrome (SBS) Rationale: SBS refers to health symptoms linked to time spent in a specific building. A wavelike movement, similar to the business cycle, that occurs in certain sectors of the general economy A. Business Oscillation B. Economic Spiral C. Specific Cycle D. Demand Shift Correct Answer: C. Specific Cycle Rationale: Specific cycles describe fluctuations tied to particular industries or markets.
Water flow system designed to discharge water to put out a fire A. Hydrant Network B. Suppression Line C. Sprinkler System D. Water Main Correct Answer: C. Sprinkler System Rationale: Sprinkler systems are built-in fire suppression tools activated by heat. Part of a five-year projected budget, arrived at by averaging income and expense items over a five-year period A. Operational Budget B. Static Budget C. Stabilized Budget D. Rolling Forecast Correct Answer: C. Stabilized Budget Rationale: A stabilized budget provides a consistent forecast by smoothing out fluctuations. A basic form of insurance protecting a property against direct loss or damage A. Liability Insurance B. Standard Fire Insurance C. Property Casualty Insurance D. Builder’s Risk Insurance Correct Answer: B. Standard Fire Insurance Rationale: This policy covers damage from fire and is fundamental in property protection. The part of state law that requires certain instruments, such as deeds, real estate contracts, and certain leases, to be in writing to be legally enforceable A. Doctrine of Laches B. Statute of Liberty C. Statute of Frauds D. Law of Conveyance Correct Answer: C. Statute of Frauds Rationale: The Statute of Frauds ensures important real estate agreements are legally documented The directing of members of protected classes to buildings or neighborhoods that are already occupied primarily by members of those same classes or away from buildings and neighborhoods occupied primarily by members of other classes A. Blockbusting B. Redlining C. Steering D. Channeling Correct Answer: C. Steering Rationale: Steering is illegal discrimination that limits housing choice for protected classes.
Partial transfer of a tenant's right in a rental property to a third party A. Assignment B. Transfer C. Delegation D. Subletting Correct Answer: D. Subletting Rationale: Subletting involves leasing part or all of a rental to another person. Residential developments for low-income families that are insured or (indirectly) financed in part by a government agency A. Cooperative Housing B. Rent-Controlled Apartments C. Subsidized Housing D. Low-Rise Condos Correct Answer: C. Subsidized Housing Rationale: These developments reduce housing costs for low-income families via government support. The umbrella title given to various amendments to CERCLA A. Clean Water Act B. Superfund Amendments and Reauthorization Act of 1986 (SARA) C. RCRA Expansion Law D. Brownfield Initiative Correct Answer: B. Superfund Amendments and Reauthorization Act of 1986 (SARA) Rationale: SARA amended and expanded CERCLA to increase funding and enforcement for hazardous waste cleanup. Largest type of shopping center, housing as much as 1.5 million square feet of shops and appurtenant areas A. Mega Mall B. Regional Center C. Lifestyle Center D. Superregional Shopping Center Correct Answer: D. Superregional Shopping Center Rationale: These centers serve broad geographic areas and offer extensive retail space. The principle that follows the interrelationship of the supply of and the demand for real estate A. Competition B. Progression C. Supply and Demand D. Conformity Correct Answer: C. Supply and Demand Rationale: This fundamental economic principle determines real estate prices and availability.
Inducements by states and cities to encourage companies to locate in their areas A. Tax Deferment B. Economic Zoning C. Tax Incentives D. Rebate Programs Correct Answer: C. Tax Incentives Rationale: These incentives are designed to attract investment and job creation. A lease provision requiring the tenant to pay a pro rata share of any increase in real estate taxes A. Escalation Clause B. Participation Clause C. Tax Participation Clause D. Adjustment Clause Correct Answer: C. Tax Participation Clause Rationale: This clause passes on property tax increases to the tenant. A market condition in which available rental space exceeds tenant demand A. Market Recession B. Vacancy Surge C. Technical Oversupply D. Inventory Surplus Correct Answer: C. Technical Oversupply Rationale: Technical oversupply indicates an imbalance where supply exceeds demand. A rental situation in which a tenant who originally obtained possession legally continues to occupy the property after the lease ends without the owner’s consent A. Tenancy at Will B. Periodic Tenancy C. Tenancy at Sufferance D. Holdover Lease Correct Answer: C. Tenancy at Sufferance Rationale: This occurs when the tenant overstays without landlord approval. An estate that gives the tenant possession for an indefinite period until terminated by either party or upon death A. Periodic Tenancy B. Tenancy at Will C. Tenancy at Sufferance D. Leasehold Estate Correct Answer: B. Tenancy at Will Rationale: Tenancy at will allows occupancy with flexible termination by either party. Construction, remodeling, and alteration expenses for work needed to make the premises usable by the tenant
Correct Answer: C. Testers Rationale: Testers simulate real housing inquiries to uncover discriminatory practices. Ownership in vacation-area property for a designated time period A. Leasehold B. Cooperative C. Time-share Condo D. Resort Unit Correct Answer: C. Time-share Condo Rationale: Time-shares allow shared use of vacation property during set intervals. An online system developed by HUD to administer subsidized housing A. eHUD B. Rental Manager C. TRACS D. Subsidy Portal Correct Answer: C. TRACS Rationale: TRACS (Tenant Rental Assistance Certification System) tracks compliance in HUD housing. A fixture installed by a commercial tenant and removable before lease expiration A. Permanent Fixture B. Landlord Fixture C. Tenant Fixture D. Security Fixture Correct Answer: C. Tenant Fixture Rationale: Tenant fixtures support business operations and are removable. A three-unit apartment building A. Duplex B. Triplex C. Fourplex D. Triad Correct Answer: B. Triplex Rationale: A triplex contains three separate residential units in one structure. A cooperative in which legal ownership of a building is held by a trust company A. Corporate Coop B. Trust Cooperative C. Syndicated Ownership D. Trustee Housing Correct Answer: B. Trust Cooperative Rationale: In a trust cooperative, ownership is vested in a trust for the residents’ benefit. One or more tanks used to store regulated substances 10% or more underground A. Subsurface Reservoir
B. Underground Storage Tank (UST) C. Below-grade Container D. Subterranean Drum Correct Answer: B. Underground Storage Tank (UST) Rationale: USTs are regulated due to environmental risks of leaks. A model law drafted in 1972 to standardize residential landlord-tenant relationships A. National Housing Code B. Landlord-Tenant Rights Act C. Uniform Residential Landlord and Tenant Act D. Model Rental Law Correct Answer: C. Uniform Residential Landlord and Tenant Act Rationale: This act promotes fair, consistent landlord-tenant laws nationwide. Renovation and redevelopment of substandard urban properties A. City Planning B. Urban Renewal C. Reinvestment Zoning D. Municipal Rehabilitation Correct Answer: B. Urban Renewal Rationale: Urban renewal revitalizes blighted city areas through redevelopment A manager who resides at the managed property who coordinates and executes maintenance operations for the building, and in some cases, interfaces regularly with tenants
- Ans - Resident Manager The type of property where people live
- Ans - Residential Property A govt. agency authorized to construct and provide financial assistance to housing developments for lowincome tenants - Ans - US Dept. of Housing and Urban Development (HUD) Floor area of an office building that can be used for tenant office space - Ans - Usable space A method of expressing variable costs for a property as a percentage of total rental income - Ans
- Variable Costs Ratio
Which type of real estate property utilizes more professional property managers? - Ans - Residential The professional property manager formulates plans to - Ans - Achieve the objectives of the owner, Generate income to the owner, and increase the value of the property The construction of multifamily unit ownership housing has been stimulated by - Ans - Rising land and construction costs Income-producing properties that offer services are known as - Ans - Office property and business parks The ability of a property manager to assess a market and implement sales promotion is MOST critical when dealing with - Ans - Retail property Ministorage, unlike many other types of industrial property, is: - Ans - Not designed to meet the needs of any particular industry Areas that are predominately warehousing, light manufacturing, or assembly zones are that are created under state statutes are called: - Ans - Enterprise zones What are classified as special-purpose property? - Ans - Hotels, motels, theaters, schools, and places of worship Which of the following offers a combination of home ownership and site rental? - Ans - Manufactured home parks Messenger services, taxi services, fax services, and shopping are all services commonly offered by: - Ans - Concierges
Asset managers often have the task of: - Ans - Monitoring the financial performances of a portfolio of properties If a property owner asks a property manager to manage the property in violation of current civil rights laws, the property manager should: - Ans - Terminate the management agreement Ethical conduct refers to: - Ans - Socially or culturally imposed imposed rules of conduct that go above and beyond the letter of the law A commercial property is generally considered to be a ________ _______________ - a private entity that provides goods, services, facilities, or accommodations to the public - Ans - public accommodation Office property is a type of ___________ __________ commercial property from which a particular service is rendered - Ans - income-producing Retail property is a commercial property from which ______ _____ ______ - Ans - goods are sold _____________ ___________ includes all land and facilities that convert raw materials into finished products - Ans - Industrial property What characterizes the expansion phase in the business cycle? - Ans - production increases At or just before the peak of the general business cycle, ______ ______ _________ - Ans - supply surpasses demand Movements of the general economy that usually are measured over 50 years or more are called
- Ans - Long-term movements
Prospective tenants form their initial impression of a rental property based on the - Ans - curb appeal of the property After inspecting and analyzing the comparables, a property manager should be able to estimate the routine operating costs for the subject property and - Ans - provide the owner with an estimate of the capital expenditures required to make the property competitive with similar properties A good management plan is based on - Ans - an operating budget for one year What should a property manager keep in mind when setting goals and objectives? - Ans - A property manager may make a real contribution by assisting in establishing written goals Cash flow from a property is predicted by which of the following formulas? - Ans - Anticipated revenue minus total adjusted operating expenses and minus debt service The determining factor in the acceptance or rejection of the management plan will be the - Ans
- owner's objectives In preparing a management plan for the owner to review, the manager - Ans - should realize the owner's objectives will be the deciding factor in its adoption The law of agency requires the manager to - Ans - Maintain confidentiality and loyalty to the owner's best interests A property manager acting as an agent owes the duties of: - Ans - care, loyalty, obedience, accounting, and disclosure to the principal When analyzing demand for office space, the total number of vacant square feet of office space in the market area divided by the square footage historically leased per year. - Ans - absorption rate
A mandatory method of calculating depreciation for tax purposes passed into law in 1981 and revised in 1986 - Ans - Accelerated Cost Recovery System In the event of a breach of contract, the award of money to compensate for the actual loss caused by the failure of the non-breaching party. - Ans - Actual damages Forcible removal of a tenant from a property by an officer of the court after a judgement decree of possession has been issued in favor of the owner - Ans - Actual eviction Purchased space in a newspaper, magazine, or other medium used to attract public attention to a commodity for sale or lease - Ans - Advertising An individual who is legally empowered to act on behalf of another - Ans - Agent A law that requires that property that is open to the public include features that facilitate access to the building - Ans - Americans with Disabilities Act (ADA) Major department store in a shopping center. Also called key tenant. This tenant is important as it is meant to draw in many customers who may also shop at the smaller stores. - Ans - Anchor store, Anchor tenants Laws designed to preserve free enterprise of the open marketplace by making illegal certain private conspiracies and combinations formed to minimize competition - Ans - Antitrust Laws Most violations of antitrust laws in the real estate business involve either ____ _______ or
______ __ _____ - Ans - Price fixing, Allocation of customers or services A mineral fiber, classified as a carcinogen. It is often found in older properties where it was in insulation, siding, concrete, floor and ceiling tiles, plasters, and more - Ans - Asbestos
An estimate of the spatial requirements of a prospective tenant based on number of employees
- Ans - Building-Employment Density A clinically diagnosed condition that is caused by toxic substances or pathogens that persists when an occupant leaves the building. Symptoms include hypersensitivity, pneumonitis, asthma, and certain allergic reactions - Ans - Building-related Illness (BRI) The specific set of amenities and alterations a landlord is willing to make free of charge for an incoming commercial tenant - Ans - Building Standard A method of cutting operating costs for a property in which supplies are purchased in large quantities and stored for later use. Also called volume buying - Ans - Bulk Purchasing A wavelike movement of increasing and decreasing economic prosperity consisting of four phases: expansion, recession, contraction, and revival - Ans - Business Cycle A development or subdivision allocated to office-warehouse or similar use. Also known as office park. An outgrowth of industrial parks. - Ans - Business Park A lease clause granting the tenant the option to cancel at the end of a predetermined lease - Ans - Cancelation Option A cash expense to the property that increases the value of the property, including tenant alterations, or extends the life of a building component - Ans - Capital Improvement A method of relating a property's value, its net annual income, and rate of return on the owner's investment - Ans - Capitalization Rate
An air pollutant that is a colorless, odorless, poisonous gas that is a by-product of incomplete combustion of burning fossil fuels such a gasoline, kerosene, wood, and oil - Ans - Carbon Monoxide (CO) An item in a property's financial operating reports that represents the net operating income minus all additional disbursements such a debt service and capital improvements - Ans - Cash Flow A financial report showing the property's net operating income minus all additional disbursements such as debt service and capital improvements and the amount remitted to the owner - Ans - Cash Flow Report A family of inert, nontoxic, nonflammable chemicals used in the manufacture of aerosol sprays, blowing agents for foams and packing materials, as solvents, and as refrigerants. They are extremely injurious to the stratospheric atmosphere and their use and disposal is highly regulated - Ans - Chlorofluorocarbons (CFC) A federal law that guarantees that citizens of all races have the same rights as white citizens to inherit, purchase, lease, sell, hold, and convey real and personal property - Ans - Civil Rights Act of 1866 Federal Law, Title VIII, often called Fair Housing Law, prohibits discrimination in the sale, rental, or financing of housing based on race, color, religion, national origin, familial status, and handicap - Ans - Civil Rights Act of 1968 Inexpensive line ads, most widely used when advertising residential property - Ans - Classified Ads The process by which the manager guides the prospect to accepting the space and signing the lease - Ans - Closing Techniques A set of guidelines on good business conduct, which often requires the agent to act beyond the letter of the law - Ans - Code of Ethics
