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Property Management EXAM TEST BANK WITH
ALL VERSIONS OF THE EXAM WITH
ALLMODULES COVERED | ACCURATE AND
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Duplexes are a type of ____________ A. multifamily properties B. single family rentals C. retail properties D. commercial properties Correct Answer: B. single family rentals Rationale: Duplexes typically house two families but are often considered single-family rentals due to ownership and rental structure. Triplexes are a type of ______________ A. Multifamily property B. Single family rental C. Retail property D. Commercial property Correct Answer: B. Single family rental Rationale: Despite having three units, triplexes are usually categorized under single-family rental management types due to ownership and use. Which type of property requires harmonious cooperation among occupants? A. Single family houses B. Large apartment complexes C. Duplexes with common areas D. Small apartment complexes Correct Answer: C. Duplexes with common areas Rationale: Shared spaces in duplexes necessitate cooperation and compatibility between tenants. Which type of property requires the tenants be compatible? A. Single family houses B. Large apartment complexes C. Duplexes with common areas D. Small apartment complexes Correct Answer: C. Duplexes with common areas
Rationale: Shared amenities and walls mean incompatible tenants could create frequent disputes. Multifamily properties are commonly defined as apartment buildings with how many units? A. Two or more units B. Three or more units C. Four or more units D. Five or more units Correct Answer: D. Five or more units Rationale: Properties with five or more units are generally considered multifamily from an investment and lending perspective. How can a manager gauge the property's viability as an income producing investment? A. Market surveys of comparable residential properties B. Market surveys of comparable commercial properties C. Market surveys of the home buying market D. Market surveys of interest rates Correct Answer: A. Market surveys of comparable residential properties Rationale: Residential market comparisons help assess rental income potential and occupancy trends. Which property projects have unique ownership structures and management requirements and are built in order to gain tax credits for the owners? A. Subsidized housing B. Condos C. Duplexes D. REO Correct Answer: A. Subsidized housing Rationale: Subsidized housing is often developed under government programs that offer tax incentives in exchange for affordability. How are cooperatives and condominiums different than other types of housing? A. Occupants have a vested interest in the building B. They are more expensive C. Occupants can buy the units D. They're located in downtown neighborhoods Correct Answer: A. Occupants have a vested interest in the building Rationale: Owners in condos and co-ops share legal ownership or vested rights in the property or corporation. Which buildings are constructed to gain tax credits for anonymous, absentee owners? A. Subsidized housing B. Condos C. Duplexes D. REO
C. Cooperative D. Industrial park Correct Answer: C. Cooperative Rationale: In cooperatives, shareholders typically find their own buyers or subletters; the manager may not actively lease units. The number of square feet that have historically been leased in the market area is called the
A. Occupancy B. Cap rate C. Absorption rate D. Housing affordability rate Correct Answer: C. Absorption rate Rationale: This reflects leasing trends over time, useful for investment analysis. What is the contract under which a tenant goes into possession of a property or unit of space for a certain period of time in return for payments to the landlord? A. Lease B. Note C. Lien D. Earnest money contract Correct Answer: A. Lease Rationale: A lease is a binding legal agreement between a landlord and tenant regarding use and payment. Landlord is to tenant as ____________ A. Lessor is to lessee B. Lessee is to lessor C. Owner is to lessor D. Lessee is to owner Correct Answer: A. Lessor is to lessee Rationale: In leasing terms, the lessor grants possession rights to the lessee. Which of the following statements is TRUE about the power of eminent domain? A. Tenants have the power of eminent domain B. Only HUD has the power of eminent domain C. Federal, state or municipal governments have the power of eminent domain D. Landlords have the power of eminent domain Correct Answer: C. Federal, state or municipal governments have the power of eminent domain Rationale: Eminent domain is a government power to take private property for public use, with compensation. What is the correct term for the time that the tenant may hold possession? A. Title
B. Term C. Reversion period D. Equitable period Correct Answer: B. Term Rationale: The lease "term" specifies how long a tenant may occupy the premises. In which lease is the rental rate periodically adjusted to reflect changes in the appraised value of the leased property? A. Lease purchase B. Net lease C. Index lease D. Graduated lease Correct Answer: D. Graduated lease Rationale: A graduated lease allows for rent adjustments based on property value or cost changes. Which lease agreement ends when the tenant purchases the premises? A. Gross lease B. Sale-leaseback C. Lease purchase D. Index lease Correct Answer: C. Lease purchase Rationale: A lease purchase includes an option or requirement to buy the property at the end of the lease. What are the funds set aside from the adjusted gross rental income to replace structural components or make repairs to the property as needed? A. Gross annual rent B. Basic rental property expenses C. Replacement reserves D. Capital reserves Correct Answer: C. Replacement reserves Rationale: These funds are earmarked for future repairs or replacements of major components. The right to quiet enjoyment refers specifically to _____________ A. Tenant's right to control the rented premises without undue interference from the owner or other parties B. Tenant's right to a safe, livable dwelling C. Tenant's right to occupy the rented premises for the term of the lease agreement D. Tenant's right to use grounds and common areas in a given property Correct Answer: A. Tenant's right to control the rented premises without undue interference from the owner or other parties Rationale: This legal right ensures the tenant can use the property peacefully without landlord interference.
C. Percentage lease D. Graduated lease Correct Answer: B. Net lease Rationale: A net lease requires the tenant to pay additional costs like property taxes and insurance, reducing the landlord’s burden. What is the primary goal of a property manager? A. Maintain building aesthetics B. Maximize the property’s income and value C. Screen tenants for criminal history D. Maintain local housing records Correct Answer: B. Maximize the property’s income and value Rationale: Property managers are tasked with ensuring that the property remains profitable and well-maintained to increase its value. A lease in which the rent is based on the tenant’s gross receipts is known as a: A. Net lease B. Percentage lease C. Ground lease D. Gross lease Correct Answer: B. Percentage lease Rationale: In a percentage lease, the tenant pays base rent plus a percentage of business income, common in retail. Which document outlines the duties and authority of a property manager? A. Lease agreement B. Property management agreement C. Sales contract D. Mortgage deed Correct Answer: B. Property management agreement Rationale: This agreement defines the scope of the property manager’s responsibilities and powers on behalf of the owner. What is one primary difference between a condominium and a cooperative? A. Condos are cheaper than co-ops B. Condo owners hold title to their units, while co-op residents own shares in a corporation C. Co-ops are commercial properties; condos are residential D. Condos require unanimous tenant approval for resale Correct Answer: B. Condo owners hold title to their units, while co-op residents own shares in a corporation Rationale: Condo ownership is in real property; co-ops involve owning shares that entitle residents to occupy a unit. If you have more questions you'd like converted to multiple choice with correct answers and rationales, feel free to paste them here, and I’ll continue!
What should a working capital fund for operating expenses be? Three months controllable expenses six months uncontrollable expenses twelve months uncontrollable expenses one months uncontrollable expenses
- Ans - one month's uncontrollable expenses Condominiums, cooperative, and vacation properties are examples of which type of property? commercial residential special use industrial
- Ans - residential Which common hazard can cause respritory problems for tenants? Mold lead based paint hazardous waste electromagnetic fields - Ans - mold What is the best course of action when a risk is certain or very likely
Which properties require some degree of risk management? none industrial all residential - Ans - all What is the first risk management principle identifying the risk avoiding controling transferring - Ans - identifying What is the purpose of federal antitrust laws? promote competition increase homeownership promote equality prevent fraud - Ans - promote competition Which of the following is an exception to the prohibition against discrimination based on familial status? housing for edlerly children under the age 18 prospective tenant who is pregnant
unmarried mother - Ans - housing for the elderly What is the safest way to obtain competitive information? discussing rates with competitors shopping the competition calling the competitor directly all of the above - Ans - shopping the competition How many classes of people are protected under the federal Fair Housing Act four seven six five - Ans - 7 How should you attempt to obtain competitive information? discuss rates with competitors shop the competition call the competitor directly all of the above - Ans - shopping the competition It oculd be a violation of fair housing laws if a property manger asks prospective tenants if they have _________
preventive patch and hope replacement stop gap - Ans - preventive What is one of the levels of maintenance operations? routine temporary quick daily - Ans - routine What is one of the levels of maintenance operations? deferred temporaary quick daily - Ans - deferred What is the most frequently recurring type of maintenace? corrective new construction regular housekeeping deferred - Ans -
regular housekeeping For most multitenant buildings, how often should the common areas and the grounds around the buildings be cleaned and patrolled? weekly monthly daily annually - Ans - daily Who is responsible for security on rental premises? security guards police life safety officers maintenance staff - Ans - Life safety officers Any emergency program is based on which goal? tranferring the responsibly to plice and fire departments containing or confining the damage monitoring the activities of the tenants reducing costs of breaches - Ans - containing or confining the damage Any emergency program is based on which goal
Where should telephones or telephone jacks be located? hallways next to each door in the bathrooms next to each window - Ans - each exit door A good life safety and security program is a three pronged approach. What is one of the approaches? signs alarms personnel tenants - Ans - equipment, personnel, equipment When did the professional property management industry begin? 1960s 1930s 1950s 1970s - Ans - 1930s What is the oldest professional organization of property managers and owners? NAR NAPM
BOMA
HUD - Ans - BOMA Building Owners and Managers Association What professional designations does the Institute of Real Estate Management (IREM) program offer? Certified Property Manger (CPM) Secondary Management Official (SMO) Property Management Professional (PRP) Affiliated Management Organization (AMO) - Ans - Certified Property Manager (CPM) Hospitals, hotels, restaurants, bars, and schools are examples of which type of property? Heavy Industrial Light Industrial Special Use Commercial - Ans - Special Use How are income properties often categorized? Economic Use Business Use Service Use Management use - Ans - economic use Generally, who hires property managers?
What is the order of the business cycle recession expansion contraction revival - Ans - expansion recession contraction revival What will a property manager NOT examine when creating a market analysis Occupancy rates of comparable local properties Availability of utilities in the neighborhood religious practices of the local population Availability and security of transportation in the neighborhood - Ans - religious practices of the local population A competent, professional management plan begins with which of the following things? Improvement plan long-term budget regional and neighborhood analysis projected rental income - Ans - regional and neighborhood analysis In which phase is there less of a demand for products, so fewer products are made?
expansion recession contraction revival - Ans - recession What information is NOT taken into consideration when calculating a property's anticipated annual revenue? The property's market sale price Data on the average duration of leases vacancy losses the Property's rent schedules - Ans - property's market sale price What serves as a blueprint for the direction for the property manager and the basis for evaluation by the owners? Property management agreement lease operating budget management plan - Ans - management plan A lull when vacancies decline occurs between the two ridges of contraction and
expansion recession contraction revival - Ans - expansion What allows a property manager to show an owner that he or she understands the tasks and challenges associated with a property?
