REM - Real Estate Management Ethics in Property Management Questions and Answers

Question 1

A property manager for a large apartment complex requires a new landscaping vendor.
One of the bidding companies is secretly owned by the manager's cousin.
The cousin's bid is competitive but not the lowest.
Which action constitutes an unethical conflict of interest?

Accepted Answer

Advocating for the cousin's company based on a belief in their superior quality, without disclosing the relationship to the owner.

Answer

Disclosing the relationship to the property owner and recusing from the decision-making process.

Answer

Awarding the contract to the lowest bidder, regardless of any personal relationships.

Answer

Disclosing the familial relationship to the owner and recommending the cousin's slightly higher bid based on documented superior service from their references.

Question 2

A prospective tenant for a ground-floor apartment reveals they use a wheelchair and requests the installation of grab bars in the bathroom as a reasonable modification. The property was built in 1990. According to the Fair Housing Act, what is the property manager's obligation?

Accepted Answer

The manager must allow the tenant to make the modification at the tenant's own expense.

Answer

The manager must pay for and install the grab bars at the owner's expense.

Answer

The manager can deny the request because the building predates the Americans with Disabilities Act.

Answer

The manager can charge the tenant an additional "disability fee" to cover potential future removal costs.

Question 3

Which of the following is the most critical ethical and legal practice for a property manager when handling tenant security deposits?

Accepted Answer

Depositing the funds into a separate escrow or trust account, not the general operating account.

Answer

Using the security deposit to cover the last month's rent if the tenant requests it.

Answer

Returning the deposit within 90 days of the tenant vacating the property.

Answer

Investing the security deposits in a low-risk mutual fund to generate interest for the management company.

Question 4

A property owner instructs their real estate manager to implement a new "no pets" policy immediately, even for existing tenants who have pets under their current lease agreements. The manager knows this would violate the terms of the existing leases. What is the manager's primary ethical responsibility in this situation?

Accepted Answer

Refuse to implement the policy and inform the owner that it is a breach of contract, while upholding the terms of the existing leases.

Answer

Immediately implement the policy as instructed to comply with the fiduciary duty of obedience.

Answer

Suggest a compromise by allowing current pets but charging a new monthly pet fee to all tenants with pets.

Answer

Send out eviction notices to all tenants with pets for violating the new policy.

Question 5

During a routine inspection, a property manager notices what appears to be microbial growth on a wall in a tenant's unit, likely due to a slow pipe leak. Ethically, what is the manager's most appropriate immediate course of action?

Accepted Answer

Notify the owner, hire a qualified professional for assessment and remediation, and communicate the plan to the tenant.

Answer

Paint over the affected area to resolve the cosmetic issue quickly.

Answer

Tell the tenant it is just mildew and to clean it with bleach.

Answer

Ignore the issue unless the tenant submits a formal written complaint.

Question 6

A long-standing vendor offers a property manager an all-expenses-paid vacation as a "thank you" for the volume of business sent their way over the year. Accepting this gift would most likely be a violation of the ethical duty to avoid:

Accepted Answer

Undisclosed conflicts of interest and receiving improper compensation.

Answer

Improper handling of hazardous materials.

Answer

Unlawful discrimination.

Answer

Misrepresentation of expertise.

A property manager for a large apartment complex requires a new landscaping vendor.One of the bidding companies is secretly owned by the manager's cousin.The cousin's bid is competitive but not the lowest.Which action constitutes an unethical conflict of interest?

A property manager for a large apartment complex requires a new landscaping vendor.
One of the bidding companies is secretly owned by the manager's cousin.
The cousin's bid is competitive but not the lowest.
Which action constitutes an unethical conflict of interest?