Real Estate Property Management 1 — Questions and Answers
Question 1: A property manager's primary fiduciary duty is to the:
- Tenant
- Local government
- Property owner (principal) (Correct answer)
- Mortgage lender
Correct answer: Property owner (principal)
A property manager acts as an agent for the property owner and owes fiduciary duties of loyalty, care, and obedience to the owner as their principal.
Question 2: In a gross lease, the tenant pays:
- All operating expenses plus base rent
- Base rent only, with the landlord covering most operating expenses (Correct answer)
- Only utilities
- A percentage of sales plus base rent
Correct answer: Base rent only, with the landlord covering most operating expenses
In a gross (full-service) lease, the landlord pays most or all operating expenses from the rent received, simplifying costs for the tenant.
Question 3: In a net lease, operating expenses are paid by the:
- Landlord entirely
- Tenant in addition to base rent (Correct answer)
- Property management company
- Local government
Correct answer: Tenant in addition to base rent
In a net lease, the tenant pays base rent plus some or all of the property's operating costs such as taxes, insurance, and maintenance.
Question 4: Security deposits are typically held in:
- The landlord's personal bank account
- A separate trust or escrow account per state law (Correct answer)
- The tenant's account until move-out
- The property management company's operating account
Correct answer: A separate trust or escrow account per state law
Most states require security deposits to be held in a separate trust account, protecting tenants from commingling and requiring itemized accounting at move-out.
Question 5: The Fair Housing Act of 1968 (and amendments) prohibits discrimination based on:
- Income level and credit score
- Race, color, national origin, religion, sex, familial status, and disability (Correct answer)
- Occupation and marital status
- Age and education level
Correct answer: Race, color, national origin, religion, sex, familial status, and disability
The Fair Housing Act protects seven federally recognized classes from discrimination in the sale, rental, and financing of housing.
Question 6: Familial status as a protected class under the Fair Housing Act protects:
- Unmarried couples
- Families with children under 18 and pregnant women (Correct answer)
- Divorced individuals
- Extended family members only
Correct answer: Families with children under 18 and pregnant women
Familial status protects households with one or more children under 18 in the care of a parent or guardian, as well as pregnant women.
Real Estate Property Management 1
A property manager's primary fiduciary duty is to the: