CPM Legal and Risk Management 2

Question 1

What is 'general liability insurance' designed to protect against in property management?

Accepted Answer

Claims for bodily injury or property damage caused to third parties on the premises

Answer

Damage to the property itself

Answer

Loss of rental income due to vacancy

Answer

Employee dishonesty and theft

Question 2

What is 'errors and omissions' (E&O) insurance for property managers?

Accepted Answer

Professional liability coverage for claims arising from mistakes or negligence in professional services

Answer

Coverage for physical damage to managed buildings

Answer

Workers' compensation for maintenance staff

Answer

Coverage for tenant property damage

Question 3

Under most US state laws, how must a landlord handle a tenant's security deposit?

Accepted Answer

Hold it in a separate trust or escrow account

Answer

Keep it in the owner's general operating account

Answer

Invest it in securities on the tenant's behalf

Answer

Deposit it into the property's reserve fund

Question 4

What is 'subrogation' in insurance?

Accepted Answer

The insurer's right to recover from a negligent third party after paying a claim

Answer

Adding additional insureds to a policy

Answer

Cancellation of an insurance policy mid-term

Answer

Increasing coverage limits after a loss

Question 5

What is the legal purpose of an 'unlawful detainer' action?

Accepted Answer

To formally evict a tenant who refuses to vacate after proper notice

Answer

To negotiate a lease renewal

Answer

To enforce a property lien

Answer

To dispute a security deposit deduction

Question 6

Which federal law governs the disposal of hazardous waste and can impose liability on property owners for contamination cleanup?

Accepted Answer

CERCLA (Superfund)

Answer

The Clean Water Act

Answer

OSHA

Answer

The Resource Conservation and Recovery Act (RCRA) only