Property Management – 5th Edition
Walt Huber, Arlette Lyons and William Pivar, JD
© May 2010, Educational Textbook Company
Final Exam A
1. The first practical elevator powered by electricity was the:
a. Otis elevator.
b. Whitney lift.
c. Chaney elevator.
d. Macintosh riser.
2. Advertising the sale or lease of properties in the newspaper classified section is rapidly being replaced by placing ads on:
a. television.
b. Matchlist.
c. AOL.
d. Craigslist.
3. To which of the following sites would you most likely upload your business profile?
a. Blog.com
b. LinkedIn.com
c. Twitter.com
d. None of the above
4. An owner who hires a property manager benefits from:
a. increased rents.
b. reduced vacancy factor.
c. reduced repair costs.
d. all of the above.
5. ADR refers to:
a. absolute decision resolution.
b. administrative dispute resolution.
c. alternative discussion responsibility.
d. alternative dispute resolution.
6. Generally, renting or leasing real property in an agency capacity requires a(n):
a. appraiser’s license.
b. real estate broker’s license.
c. DRE permit.
d. none of the above.
7. Which of the following is the most prestigious and widely recognized designation for professional property management?
a. CPM
b. IPPF
c. AAPC
d. PMCP
8. “Cash flow” is:
a. the amount paid for business expenses.
b. the cash left over after cash expenses.
c. the amount paid for non-cash expenses.
d. none of the above.
9. What owners want is:
a. secondary to the recommendations of the property manager.
b. based on inexperienced opinions.
c. an integral part of a good management plan.
d. based on profit only.
10. Your management plan should show:
a. how you will arrive at a desired rent schedule.
b. your one-year goals for the property.
c. your five-year goals for the property.
d. all of the above.
11. National and local economic conditions will affect which aspect(s) of your management plan?
a. Rents
b. Vacancy factors
c. Costs
d. All of the above
12. The length of a property management contract should be related to:
a. the condition of the property.
b. the number of units managed.
c. the relationship of the property manager and owner.
d. the services provided and the owner reimbursement.
13. Which of the following is generally true of a residential property management contract?
a. The owner is not required to pay for advertising costs.
b. It can be terminated by the owner any time.
c. The residential manager always sets rental fees.
d. The owner must approve all costs for repairs, no matter how small the amount.
14. Any amendment to the original management agreement:
a. voids all the original agreement.
b. must be approved by a third (arbitrator) party.
c. can be communicated verbally between the parties.
d. must be in writing.
15. A lease contract requires which of the following contractual requirements?
a. Capacity
b. Legal purpose
c. Consideration
d. All of the above
16. The “statute of frauds” in place in every state determines, among other things,:
a. what documents must be in writing.
b. who must be licensed to manage property.
c. what limits are placed on rental amounts.
d. what property falls under rent control.
17. Which of the following is the most common type of periodic tenancy?
a. Day-to-day
b. Week-to-week
c. Month-to-month
d. Year-to-year
18. “Net leases” are generally for:
a. industrial property.
b. commercial property.
c. a and b.
d. none of the above.
19. “Ground leases” are usually:
a. for residential property.
b. for buildings (improvements) only.
c. short-term leases.
d. long-term leases.
20. It is best to qualify a tenant:
a. when you receive the first rent check.
b. before the lease is signed and possession given.
c. at the time you hand him or her the key.
d. no real qualification is required if the are financially sound.
21. With residential leases, you want the lease to expire:
a. on the 30th of the month.
b. in June for college rentals.
c. during the month of December.
d. when rentals are in most demand in your area.
22. There is NO lease until:
a. the lease has been agreed to.
b. the lessee pays a deposit.
c. the lessor accepts a deposit.
d. none of the above.
23. When preparing for lease negotiations with a potential lessee, the property manager must determine:
a. what he or she wants.
b. what he or she must have.
c. what he or she can do without.
d. all of the above.
24. A rent acceleration clause in a residential lease is:
a. acceptable for agreements of less than one year.
b. acceptable for agreements of one year or more.
c. unenforceable in most states.
d. acceptable for condominium rentals.
25. By agreeing to binding arbitration, the parties:
a. still have the right to appeal.
b. give up the right to sue in a court of law.
c. can look forward to higher litigation costs.
d. can still seek legal recourse if the outcome is negative.
26. Which of the following would generally not be accepted by the property manager for payment of rent?
a. Government checks
b. Social security checks
c. Third-party checks
d. Money orders
27. A “competition clause” in a commercial lease is also known as a:
a. restricted area clause.
b. diameter clause.
c. circumference clause.
d. radius clause.
28. Commercial leases generally include a requirement that any contractors used by the tenant:
a. must be licensed.
b. must be selected by the property manager.
c. must answer a questionnaire provided by the property manager.
d. none of the above.
29. For commercial and industrial tenants, “fixtures” are usually regarded as:
a. business fixtures.
b. commercial fixtures.
c. retail fixtures.
d. trade fixtures.
30. Lead-based paint has NOT been used in residential property since:
a. 1978.
b. 1980.
c. 1982.
d. 1985.
31. The general rule of HUD limits occupancy to:
a. five persons per bedroom.
b. four persons per bedroom.
c. three persons per bedroom.
d. two persons per bedroom.
32. In many states, the failure of the lessor to post a “notice of nonresponsibility” within how many days after he or she has knowledge of a tenant authorizing construction work on the premises would make the property subject to mechanics’ liens?
a. 30
b. 20
c. 15
d. 10
33. Which of the following is true with regards to rent control?
a. It shifts the society burden of providing reasonably priced housing to the landlords
b. It restricts new housing supply
c. It creates deteriorating structures
d. All of the above
34. Residential property management agreements should NOT be for a period of:
a. less than 6 months.
b. less than 1 year.
c. less than 18 months.
d. less than 2 years.
35. Security deposits CANNOT be applied to:
a. damage to the unit.
b. damage to the common area.
c. normal wear and tear.
d. unpaid rent.
36. The right of a handicapped person to have a seeing-eye dog or support animal CANNOT be refused by a landlord under:
a. the Americans with Disabilities Act.
b. Title 12.
c. the Unruh Act.
d. the Fairness Act.
37. When it comes right down to it, what determines rents?
a. Rental laws
b. The opinion of the lessor
c. The location
d. Supply and demand
38. An appraisal can best be described as:
a. an exact measurement of value.
b. a general consensus of value.
c. one person’s educated opinion of value.
d. an unreliable source of true value.
39. A landlord must account for deposits within how many days of the termination of the tenancy?
a. 7
b. 14
c. 21
d. 30
40. In a pedestrian shopping street, which location commands the highest rent?
a. Mid-block
b. Corner
c. North side of the street
d. East side of the street
41. Mega-malls are in direct competition with:
a. neighborhood shopping centers.
b. mini-malls.
c. factory outlet malls.
d. none of the above.
42. Warehouses with large office areas are ideal for:
a. wholesalers.
b. retailers.
c. discounters.
d. manufacturing.
43. The major reason(s) a business fails is because of:
a. under-capitalization.
b. lack of knowledge about the business.
c. neither a nor b.
d. both a and b.
44. Which of the following would be a quality of a “Class A” building?
a. Architecturally distinctive
b. Commanding higher rents for office space
c. Usually newer buildings
d. All of the above
45. In a high-rise building, the lower floors are the least desirable because they:
a. are noisier.
b. lack views.
c. let in more pollution if they have widows that open.
d. all of the above.
46. Industrial property includes which of the following facilities?
a. Retailers
b. Wholesalers
c. Manufacturing
d. All of the above
47. In property management, “SRO” stands for:
a. Standing Room Only.
b. Standard Rental Option.
c. Single-Room Occupancy.
d. Single-Renter Only.
48. Property managers should avoid managing which of the following?
a. Trailer parks
b. Co-ops
c. Restaurants
d. Apartment buildings more than 30 years old
49. With regards to resort management:
a. the shorter the rental period, the higher the rent and management fee.
b. the shorter the rental period, the lower the rent and management fee.
c. the longer the rental period, the higher the rent and management fee.
d. the management fee is not determined by the rental period.
50. Hotel and motel operations require specialized knowledge and experience because of which of the following?
a. Housekeeping
b. Accounting
c. Rental policies
d. All of the above
51. Which of the following is true with regards to liability?
a. Landlords are found liable in about 50% of the cases
b. Most states don’t require proof of a landlord’s negligence
c. Without an injury, there can be no recovery
d. None of the above
52. The English Doctrine of Respondeat Superior states that:
a. an employee or agent is, alone, responsible for his or her actions.
b. owners of property can be held responsible for the actions of their employees.
c. one must use real property at his or her own risk.
d. an owner cannot be held liable for actions of contracted real estate agents.
53. A property owner generally does NOT have any liability:
a. inside a tenant’s unit.
b. in well lighted common areas.
c. if warning signs are posted.
d. outside the perimeter of his or her property.
54. Which of the following is most closely related to “DRAM shop liability”?
a. Deep pocket laws
b. Criminal activity
c. Hazardous waste liability
d. Injuries to factory workers liability
55. “Risk management” means:
a. living with risk.
b. reducing risk to an acceptable level.
c. avoiding risk.
d. eliminating risk.
56. An “umbrella” policy is a:
a. rain damage protection policy.
b. primary policy.
c. secondary policy.
d. policy not available in all states.
57. The standard policy of fire insurance covers:
a. fire.
b. lightning.
c. loss from removal of property from the above perils.
d. all of the above.
58. Normal casualty insurance policies:
a. cover earthquakes, but not floods.
b. cover floods, but not earthquakes.
c. do not cover earthquakes or floods.
d. cover both earthquakes and floods.
59. Owners, Landlords, and Tenants Liability (OLT) coverage pays for damage to property and/or persons caused by:
a. ownership.
b. maintenance.
c. use of the property.
d. all of the above.
60. When a property manager is in doubt about what to disclose, he or she should:
a. disclose.
b. consult the owner.
c. consult an attorney.
d. not disclose.
61. The best risk management is:
a. no risk management.
b. risk prevention.
c. risk elimination.
d. perfect security measures.
62. Which type of door provides the greatest security against forced entry?
a. Hollow core
b. Reinforced hollow core
c. Metal-clad, solid core
d. Solid oak
63. Which type of dead bolt lock violates fire ordinances in some areas of the country?
a. Interior surface-mounted dead bolts
b. Double-throw dead bolts
c. Single-action dead bolts
d. Double-cylinder dead bolts
64. The preferred security alarm system is the:
a. open-circuit alarm system.
b. closed-circuit alarm system.
c. peripheral alarm system.
d. solar powered alarm system.
65. Owners must keep records and file reports with OSHA when they have:
a. 1 or more employees.
b. 2 or more employees.
c. 7 or more employees.
d. 30 or more employees.
66. To be cost effective, items that are used in a building, such as faucets and locks, should be:
a. cheap, but effective.
b. standardized.
c. the best and most expensive.
d. it doesn’t matter; over time costs equal out.
67. Maintenance schedules tend to get in a rut when tied to:
a. the manager’s schedule.
b. calendar dates.
c. the tenants’ schedules.
d. the weather.
68. Which type of roof seldom has to be replaced?
a. Built-up roof
b. Asphalt shingles
c. Tile roof
d. Wood shingles
69. When evaluating carpeting, experts will look most closely at the:
a. color.
b. style.
c. padding.
d. backing.
70. A broker’s (property manager’s) trust account must be:
a. interest bearing.
b. non-interest bearing.
c. in a non-FDIC insured saving’s institution.
d. none of the above.
71. In California, it is considered commingling for a broker to fail to deposit designated trust funds into his or her trust account within:
a. three days.
b. eight days.
c. nine days.
d. ten days.
72. A real estate broker must maintain trust records (as well as other records relating to a transaction) for a statutory period. That retention period shall run from the:
a. date of closing of the transaction.
b. date the trust account was opened.
c. first day of the month following the month the transaction closed.
d. none of the above.
73. Whether you advertise on Craigslist or the Yellowpages.com, institutional advertising:
a. is generally not cost effective.
b. sells your name rather than a product.