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Dc Property Managers Study Guide Final Exam 200
Questions & Correct Answers with Rationales (Well
Verified)
Management Plan - CORRECT ANSWER >>> Assists the owner in meeting their goals while maximizing the property's value and return. The plan describes in detail the subject property's current use along with it's physical condition, fiscal projections, and operational issues (includes an analysis of the market regional & neighborhood). Organizational and educational programs available to assist in enhancing the property manager's knowledge, identifying resources to resolve issues, and expanding their business network. - CORRECT ANSWER >>> Institute of Real Estate Management (IREM), National Association of Realtors (NAR), Greater Capital Area Association of Realtors (GCARR), building Owners & Managers Association (BOMA), National Association of Real Estate Brokers, International Council of Shopping Centers (ICSC), and National Property Management Association. Market Analysis - CORRECT ANSWER >>> Focuses on regional and neighborhood evaluations. Includes demographic conditions, geographic features, governmental prospective, existing real estate supply, future developments, and tenant/resident demand Market Analysis & Competitive Property Analysis helps to..... - CORRECT ANSWER >>> Identify the subject property's strengths and weaknesses The Highest & Best Use - CORRECT ANSWER >>> When the property manager considers alternatives to improve the property's weaknesses or further enhance its strengths to improve overall economic performance. Analysis of Alternative - CORRECT ANSWER >>> Looks at the theoretical costs and corresponding increase in rents by making different improvements, even property's redevelopment.
When determining the best use of property, alternatives to consider are......... - CORRECT ANSWER >>> Rehabilitate without altering its existing use, Modernize by updating finishes (more efficient equipment), Change the Use of building (including conversion), or Conversion to a condominium m ownership structure. Capital Expenditures - CORRECT ANSWER >>> Projects that help extend the property's life. Physical Obsolescene - CORRECT ANSWER >>> is characterized as a condition of aging (i.e. wear & tear) or deferred maintenance. Examples are worn carpet, peeling paint, a leaking roof, or dead landscaping Functional Obsolescene - CORRECT ANSWER >>> is characterized by old or outdated designs or building systems. Economic Obsolesence - CORRECT ANSWER >>> Represents a loss in value due to outside forces (i.e. location, market conditions). Examples would be an office building, locates in a small town, where the major employer closes. Investment Value - CORRECT ANSWER >>> A value generally used by investors Assessed Value - CORRECT ANSWER >>> The value used by government tax assessment offices Market Value - CORRECT ANSWER >>> The value that is agreed to between a buyer & seller Rules of Ethics for Property Manager - CORRECT ANSWER >>> Loyalty to client, confidentiality, accurate accounting & reporting, protection of owner's funds, conflicts of interest, and compliance with law regulations. An owner can be directly affected by manager's..... - CORRECT ANSWER >>> Improper handling of evictions, unlawful rent collections, failure to return security deposits, not maintaining proper compliance with the Rental Accommodations Division (RAD)
Vacancy & Credit Loss - CORRECT ANSWER >>> When actual income collected is less than Gross Potential Rental Income (typically a commercial lease) Effective Gross Income equation - CORRECT ANSWER >>> is the net effective of Gross Potential plus (+) Expense Reimbursements minus (-) Vacancy Credit Loss plus (+) Miscellaneous Income. Net Operating Income (NOI) - CORRECT ANSWER >>> Represents the money that remains after the Operating Expenses are subtracted from Effective Gross Income. Debt Service - CORRECT ANSWER >>> includes both interest and principal reduction and is subtracted from Net Operating Income. Examples of Capital Expenditures include...... - CORRECT ANSWER >>> Improvements to a property that update appearance, replacement of major mechanical equipment (boilers), replacement of major building system (roof), renovating space, replacing old appliances. Escrow Accounts & Reserves - CORRECT ANSWER >>> In order for the owner to prepare for significant Capital Expenditures, it is common to establish an Gross Lease - CORRECT ANSWER >>> The property owner pays all Operating Expenses up to a certain amount. Commonly found in office spaces. What does the term "Net Lease" mean when referring to commercial leases? - CORRECT ANSWER >>> The tenant pays for some or all Operating Expenses in addition to base rent. Derivatives of this structure are Net-Net & Triple Net Leases. What does the term "Triple Net" mean when referring to commercial leases - CORRECT ANSWER >>> refers to commercial tenant paying ALL Operating Expenses including real estate
taxes, insurance, roof maintenance, landscaping, etc. This is the most commonly found in industrial leases. Percentage Lease - CORRECT ANSWER >>> A lease, that requires tenant to pay rent based on a calculation that relates directly to the tenant's gross sales. Usually stipulates a base monthly rental plus a percentage of any gross sales above a certain amount. The rights of a property owner include........ - CORRECT ANSWER >>> The right of possession, the right of control, the right of exclusion, the right of enjoyment, the right to sell. What is a Leasehold Interest? - CORRECT ANSWER >>> When the owner leases a property, it temporarily transfers to the tenant a portion of the right of possession. Escalator Clause - CORRECT ANSWER >>> When multi-year leases contain a provision for the owner to increase the rent on the lease's anniversary date. Separation of Funds - CORRECT ANSWER >>> Funds must be kept separate from property manager's accounts. Funds that the property generates belong to the owner and should be deposited into owner's account. Asset Management focuses on - CORRECT ANSWER >>> The property's long term planning, leasing and asking rates, negotiates commercial leases, evaluates mortgages & opportunities to refinance the loan,considers strategies to maximize value and when to market the property for sale. What common method is used to determine a property's Investment Value? - CORRECT ANSWER >>> Net Operating Income is divided by the Capitalization Rate (NOI/Cap Rate= Value) What are the four categories related to Maintenance? - CORRECT ANSWER >>> Curative, Deferred, Routine, & Prevenative
Tenancy at Sufferance - CORRECT ANSWER >>> Occurs after the expiration of lease has expired. Tenant/resident continues to occupy the apartment or space without the landlord's consent. What are the objectives of a Maintenance Plan? - CORRECT ANSWER >>> Implement & accomplish the owner's objectives, increase resident/tenant satisfact rates, reduce operating costs, optimize the property's physical capabilities, increase the property's value, providing safety of tenants, residents, visitors, and employees. Primary objectives to consider prior to any property inspection - CORRECT ANSWER >>> What will be inspected, what is the frequency of inspection, who will conduct the inspection, how will results be reported. Routine Maintenance - CORRECT ANSWER >>> relates to cleaning and upkeep that is needed everyday. General Liability - CORRECT ANSWER >>> Insurance coverage that can protect the property owner from a variety of claims including bodily injury, property damage, and personal injury. Excess Liability - CORRECT ANSWER >>> an umbrella policy is issued to provide coverage limits in excess of an underlying General Liability policy. Marketing Plan - CORRECT ANSWER >>> Is necessary for every property to find new residents or tenants primary goals is to identify as many qualified prospects as possible. A Management Plan is made up of how many what 7 components? **- CORRECT ANSWER
** Regional Analysis, Neighborhood Analysis, Property Analysis, Market Analysis, Analysis of Alternatives, Proposed Property Analysis, Investment Analysis. Functional Obsolescence can directly imapact - CORRECT ANSWER >>> Attainable rents at a building.
Deferred Maintenance - CORRECT ANSWER >>> Involves delaying needed repairs and maintenance to save money. Examples of Deferred Maintenace - CORRECT ANSWER >>> Painting a corridor, sealing a leaky roof or repairing cracks. Preventative Maintenance can be defined as - CORRECT ANSWER >>> Preplanned, routine, and systematic schedule of inspecting, maintaining and repairing a facility and its equipment. Examples of Preventative Maintenance include - CORRECT ANSWER >>> Inspecting a roof every six months for damage membrane and flashing, inspection hoist cables. Types of Property Insurance include - CORRECT ANSWER >>> Fire & extended coverage, Theft/Crime, Boiler & Machinery, Rent Loss, & Catastrophe, Earthquake, Plate Glass, Liability, Excess Liability. Another name for Tenants - CORRECT ANSWER >>> Lessee Name some components of a valid lease - CORRECT ANSWER >>> Names of Lessee, name of owner property or agent w/ authority to lease, legal address of the premises, Statement of rental amount, including time place of payments made, and time periods to which rent applies. What is the designation of the National Association of Real Estate Brokers, Inc (Nareb)? - CORRECT ANSWER >>> Realtist An example of Functional Obsolescence is - CORRECT ANSWER >>> Equipment that can not be repaired because parts are no longer manufactured; single pane window systems that waste energy; outdated bathroom fixtures because of changing design and taste.
Net Operating Income - CORRECT ANSWER >>> is used one of the components often used in calculating a property's investment value. It represents the money that remains after Operating Expenses are subtracted from Effective Gross Income. Return On Investment - CORRECT ANSWER >>> Is one measure used by investors to determine if a potential investment is worth purchasing. What are the advantages of the Return On Investment calculation - CORRECT ANSWER >>> It enables an investor to compare different types of investments, in order to decide which one to choose. Net Lease - CORRECT ANSWER >>> The tenant pays for all Operating Expenses in addition to Base Rent. Triple Net Lease - CORRECT ANSWER >>> Tenant will pay including all Operating Expenses including real estate taxes, insurance, roof maintenance, etc. Leasehold Interest - CORRECT ANSWER >>> When the owner leases a property, it temporarily transfers to the tenant a portion of right of possession or when a property is sold the new owner's rights are transferred. Leesee - CORRECT ANSWER >>> A person who holds the lease of a property; a tenant Lessor - CORRECT ANSWER >>> A person who leases or lets a property to another; a landlord. Property Manager's are entrusted to look after other people's money this includes: - CORRECT ANSWER >>> Opening Bank Accounts, promptly depositing all receipts, and paying vendors when all services are completed.
Physical Inspections - CORRECT ANSWER >>> Is a method used to evaluate the property's condition & equipment as well as being the first step to develop a plan to address any issues. When should an inspection be performed after a resident has moved out? **- CORRECT ANSWER
** Ideally the same day. Some areas to regular inspect include - CORRECT ANSWER >>> Roofs- look for pondering water, holes, and debris; Parking Lots- look for pavement alligator, loose graveling, potholes Front ** The tenant pays for all Operating Expenses in addition to Base Rent. Triple Net Lease - CORRECT ANSWER >>> Tenant will pay including all Operating Expenses including real estate taxes, insurance, roof maintenance, etc. Leasehold Interest - CORRECT ANSWER >>> When the owner leases a property, it temporarily transfers to the tenant a portion of right of possession or when a property is sold the new owner's rights are transferred. Leesee - CORRECT ANSWER >>> A person who holds the lease of a property; a tenant Lessor - CORRECT ANSWER >>> A person who leases or lets a property to another; a landlord. Property Manager's are entrusted to look after other people's money this includes: - CORRECT ANSWER >>> Opening Bank Accounts, promptly depositing all receipts, and paying vendors when all services are completed. Physical Inspections - CORRECT ANSWER >>> Is a method used to evaluate the property's condition & equipment as well as being the first step to develop a plan to address any issues. When should an inspection be performed after a resident has moved out? - CORRECT ANSWER >>> Ideally the same day. Some areas to regular inspect include - CORRECT ANSWER >>> Roofs- look for pondering water, holes, and debris; Parking Lots- look for pavement alligator, loose graveling, potholes Front Entrance- look for trip hazards, cracked windows; Exterior Facades- failed caulking, loose concrete, crack windows. In order to generate a list of what to be inspected on a property - CORRECT ANSWER >>> A walk- through of the property and all of the areas related to its mechanical, electrical, telephone, and life safety equipment needs to be conducted. Frequency of inspections are determined annually, semi-annually, quarterly, and monthly. Request For Proposal or RPF - CORRECT ANSWER >>> To develop a clear and thorough specification for contracts to bid on is called What is included in an RPF? - CORRECT ANSWER >>> Scope of work, how is to be performed, frequency, special requirements, work hours, timetable to complete, insurance requirements, deadline for submission, number of personnel to be provided, warranty, & references. Before marketing an available space or unit, - CORRECT ANSWER >>> Be sure that it is clean and presentable and that the owner has approved all marketing plans. What is a legal reason for a landlord to evict a tenant? - CORRECT ANSWER >>> Landlord wants to occupy the rental unit.
connected to detectors in the individual unit or building, connected to Fire, Medical Services, and a warning that in the event of a fire call 911. No owner shall place in the lease or rental agreement a provision **- CORRECT ANSWER
** Waiving the right of a tenant to a jury trail or that the tenant pay the owner's court cost or legal fees Every employer shall pay all wages earned to his employees - CORRECT ANSWER >>> at lease twice during each calendar month Employee must receive compensation at a rate of - CORRECT ANSWER >>> 1 1/2 times the regular rate at which the employee is employed. In accordance with the D.C. Human Right Act of 1977 - CORRECT ANSWER >>> DC does not discriminate on the basis factual or perceived. The Office of Human Rights was established - CORRECT ANSWER >>> In 1999 An owner asks the property manager to submit an Offer of Sale under DOPA. The property manager should submit the offer to: - CORRECT ANSWER >>> The District of Columbia Department of Housing and Community & Development (DHCD). DOPA - CORRECT ANSWER >>> promotes affordable rental housing by maintaining the affordable status of existing affordable rental units. Consist of 5 or more rental units, provided that 25% or more of the rental units are"Affordable Units" TOPA Tenant Opportunity to Purchase Act - CORRECT ANSWER >>> Landlord must provide the tenant(s) with the opportunity to acquire a residence.
The Condominium Act - CORRECT ANSWER >>> Regulates condominium formation and registration. An owner of a housing accommodation who wishes to convert shall each tenant and to the Conversion & Sale Regulatory Office - CORRECT ANSWER >>> A request for election. The Rental Conversion and Sale Division (CASD) administers - CORRECT ANSWER >>> The Rental Housing Conversion & Sale Act of 1980 Zoning Commission - CORRECT ANSWER >>> Regulates land uses through the use of zoning and addresses height limitations, density, floor Area Ratios (FAR), set backs, parking requirements, and green spaces Rent control in the District of Columbia is covered under - CORRECT ANSWER >>> The Rental Housing Act of 1985 The Rental Accommodations Division (RAD), Department of Housing and Community Development (DHCD), & Housing Regulation Administration (HRA) is responsible for - CORRECT ANSWER >>> Administering the Rental Housing Act of 1985. Changes in ownership or management and all housing accommodations or rental unit must be filed to include: rental units built after 1975, federally or District subsidized, rental units that were vacant when the act took effect, a person who owns no more than 4 rental units. - CORRECT ANSWER >>> with RAD, Rental Accommodations Division within 30-days. The District of Columbia Real Estate Commission - CORRECT ANSWER >>> protects consumers by enforcing the laws and regulations applicable to property managers including licensure
Return On Investment Equation - CORRECT ANSWER >>> Cash Flow divided by Initial Investment
