Mixed Deck — All CRM Topics Flashcards

What is the purpose of a 'market survey' in residential property management?

Answer: To compare the property's rents, amenities, and occupancy to competing properties nearby

A market survey benchmarks the property against competitors to inform pricing, amenity upgrades, and marketing strategies.

Under the Fair Debt Collection Practices Act (FDCPA), which action by a third-party rent collector is prohibited?

Answer: Threatening legal action without intent to sue

The FDCPA prohibits debt collectors from making false threats of legal action they do not intend to take or are not authorized to take.

Which of the following statements about reasonable accommodations is correct?

Answer: Landlords must allow necessary modifications if the tenant pays for them

Reasonable modifications must be permitted by the landlord in private housing, with the cost generally borne by the tenant with a disability.

A tenant requests to add a roommate after signing the lease. What should the property manager do?

Answer: Screen the roommate applicant and execute a lease amendment if approved

The new occupant should be screened using consistent criteria, and if approved, a lease amendment should document the added occupant to protect all parties.

If a property's break-even ratio is 85%, what does this indicate?

Answer: 85% of gross income is needed to cover operating expenses and debt service

The break-even ratio shows the percentage of gross income required to cover all operating costs and debt service.

Under which circumstance is a property manager legally permitted to enter a tenant's unit without advance notice?

Answer: In the case of a genuine emergency such as a fire or water leak

Emergency entry without notice is permitted when there is an immediate threat to life or property, such as a fire, flood, or gas leak.

IREM's Code of Professional Ethics requires members to handle all client funds in which manner?

Answer: Kept in separate trust or escrow accounts distinct from personal and operating funds

IREM ethics require strict separation of client funds into trust or escrow accounts to prevent commingling and protect client assets.

What is the purpose of a pro forma statement in residential property management?

Answer: To project future income and expenses for a property

A pro forma statement is a projected financial statement used to forecast a property's income and expenses over a future period.

When creating a staffing plan for a new 200-unit residential community, which factor most directly determines the number of maintenance technicians needed?

Answer: The property's unit count, age, building systems complexity, and service response standards

Staffing ratios for maintenance are driven by the volume and complexity of work required, which depends on unit count, building age, systems, and service standards.

Which appraisal principle states that value is created and maintained when a property conforms to the standards of its neighborhood?

Answer: Principle of conformity

The principle of conformity holds that maximum value is achieved when a property is compatible with surrounding land uses and neighborhood standards.

A property's taxable income differs from its cash flow primarily because of:

Answer: Depreciation deductions allowed by the IRS

Depreciation is a non-cash tax deduction that reduces taxable income without affecting actual cash flow.

When performing a Comparative Market Analysis (CMA) for a residential property, which adjustment is made for a comparable sale that lacks a garage the subject property has?

Answer: Add the garage value to the comparable's sale price

In a CMA, adjustments are made to the comparable sale — adding value for features the comparable lacks that the subject has.

What is the recommended frequency for conducting property safety audits in a well-managed residential community?

Answer: Annually at minimum, with additional inspections after significant events

Annual safety audits, supplemented by inspections after incidents or natural events, ensure hazards are identified and corrected proactively.

Which federal law primarily governs the environmental disclosure of asbestos-containing materials in residential buildings and requires notification before renovation activities?

Answer: The Clean Air Act's NESHAP regulations

EPA's NESHAP regulations under the Clean Air Act require notification and work practice standards before renovating or demolishing buildings with asbestos-containing materials.

A property manager wants to increase net operating income (NOI) without raising rents. Which strategy is most effective?

Answer: Reducing vacancy through improved tenant retention

Improving tenant retention reduces costly vacancies and turnover expenses, directly increasing NOI without a rent increase.

A residential property manager wants to reduce vacancy during slow winter months. Which strategy is MOST appropriate?

Answer: Offer move-in specials such as one month free rent

Move-in specials such as a free month's rent incentivize prospects to lease during slow seasons, helping reduce vacancy.

The age-life method of estimating depreciation requires the appraiser to calculate:

Answer: Effective age divided by total economic life

The age-life method computes depreciation as effective age ÷ total economic life, then applies that percentage to the reproduction or replacement cost.

Under USPAP, what is the appraiser's obligation regarding a 'scope of work' determination?

Answer: The appraiser must identify and perform the scope of work necessary to produce credible assignment results

USPAP's Scope of Work Rule requires the appraiser to identify and complete the research and analysis necessary for credible results, regardless of client preferences.

What is the primary responsibility of a property manager?

Answer: To manage the leasing and maintenance of the property

Property managers are responsible for overseeing the operation, maintenance, and administration of residential properties.

Which analysis technique projects the cumulative financial returns of a property over a multi-year holding period?

Answer: Discounted cash flow analysis

DCF analysis projects all future cash flows and reversion proceeds, then discounts them to present value over a defined holding period.