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| 1. A relationship between a property owner and a property manager is established by a written contract. |
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| 2. Leases are non-contractual agreements. |
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| 3. If Bob rents a duplex to Lisa for a one year period, they most likely have a bilateral agreement. |
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| 4. A signed management agreement gives the property manager legal authority to guide the operation of the rental property. |
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| 5. An example of a fiduciary relationship is one formed between a tenant and a property manager. |
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| 6. Principals and agents are the sole players in a fiduciary relationship. |
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| 7. The named parties, principal and tenant, are usually the parties to a lease agreement. |
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| 8. In a lease agreement, the parties are called landlord and tenant. |
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| 9. A “gross lease” is used in commercial real estate when parties are required to pay a portion of operating expenses for the building in which they lease space. |
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| 10. Net lease – a common industrial lease requiring the tenant to pay rent plus certain costs incurred in the operation of the property. |
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| 11. Lead based paint disclosures must be provided for all tenants renting in a building currently under construction. |
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| 12. Residential buildings constructed before 1978 require lead based paint disclosures. |
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| 13. Apartment buildings with more than 10 units do not require lead based paint disclosures. |
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| 14. Lead based paint disclosures are required for all commercial properties. |
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| 15. “Estate for Years” means that the lessor is agreeing to a lease that continues for a specific period of time. |
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| 16. ”Estate for Years” means that the lessor is in a lease that is nonrenewable after the expiration of the original lease. |
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| 17. A tenant is referred to as the “Lessor” in all legal documents. |
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| 18. A “ground lease” is one which refers to bare land and lasts for at least 100 years. |
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| 19. Property Managers commonly receive their commissions from tenants. |
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| 20. A market analysis does not establish vacancy rates for a certain area of the market. |
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| 21. The day to day upkeep of a property is called preventative maintenance. |
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| 22. The term cash flow means: net operating income minus debt service. |
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| 23. The term cash flow means: gross income minus free rent. |
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| 24. The maximum amount of rent a property can produce is called gross possible income. |
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| 25. An asset manager usually lives on-site at the property and manages the day to day activities of the property. |
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| 26. Corrective maintenance and deferred maintenance are the same. |
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| 27. Apartment buildings constructed in 1977 or older require lead based paint disclosures. |
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| 28. Employee dishonesty is usually covered by boiler insurance. |
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Term
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| 29. For a Commercial Lease, when executed, the maximum term is 1 year. |
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Term
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| 30. Failure to provide Landlord with a forwarding address will relieve Landlord of the obligation to return the security. |
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| 31. Landlord may enter the Premises at any reasonable time to make sure Tenant is repairing and maintaining the Premises in good condition. |
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| 32. Agency relationship is usually established between property manager and owner by written contract. |
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| 33. A “meeting of the minds” is usually first accomplished when there is a mutual agreement. |
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| 34. Principal and Tenant is an example of a “fiduciary” relationship. T |
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| 35. When the tenant is required to pay a share of specific operating expenses in addition to the base rent this is a ground lease. |
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Term
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Definition
| 36. A lease that continues for a specific period of time is a lease for years. |
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| 37. “Tenancy at Will” is when a lease is up and the tenant stays against the landlords wishes. |
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| 38. The 3 requirements of a valid lease include: Offer and acceptance, Valid Consideration and Capacity to Contract. |
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| 39. A market analysis establishes vacancy rates. |
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| 40. The following are not components of a market analysis: expense report, one year operating statement, and five year focus. |
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| 41. Preventative maintenance is the day to day upkeep to reduce corrective maintenance costs. |
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| 42. The following are items found as operating expenses on a financial statement: management fees, utilities and insurance. |
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| 43. Budgeting, accounting and collections should be classified as “fiscal responsibilities.” |
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| 44. The maximum amount of rent a property can produce is called the Gross Potential Income. |
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| 45. A site manager is a person who oversees the day to day affairs of a single operation. |
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| 46. An “asset manager” is one who manages the financial affairs of the owners of a sizable number of investment properties. |
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| 47. A program of regular inspection and care designed to detect and resolve potential problems before major repairs are needed is called “preventative maintenance.” |
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| 48. The goals of a property manager are to maintain the property, control costs, maximize revenue and provide services to the tenants. |
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| 49. A property manager’s compensation is based on whatever is agreed to in the management agreement. |
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50. When an owner says he wants to do the hiring and firing for properties, you should run from the deal.
51. Tenancy at Sufferance is when a tenant is staying in possession beyond the terms of the tenant’s rental agreement. |
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