Real Estate Practice - Chapter 18: Property Management

1. Another name for a property management contract is a management agreement.

True

False

A property management contract and a management agreement are essentially the same thing and can be used interchangeably. Both terms refer to a legal agreement between a property owner and a property management company, outlining the responsibilities and obligations of each party. This contract/agreement typically covers tasks such as rent collection, property maintenance, tenant screening, and lease enforcement. Therefore, the statement that another name for a property management contract is a management agreement is correct.

Explanation

A property management contract and a management agreement are essentially the same thing and can be used interchangeably. Both terms refer to a legal agreement between a property owner and a property management company, outlining the responsibilities and obligations of each party. This contract/agreement typically covers tasks such as rent collection, property maintenance, tenant screening, and lease enforcement. Therefore, the statement that another name for a property management contract is a management agreement is correct.

2. Additional monies should also be put into a reserve account by the property manager and the owner for long-range capital expenses such as roof or heating system replacements.

True

False

The statement suggests that property managers and owners should allocate additional funds to a reserve account for future capital expenses like replacing the roof or heating system. This is a responsible approach as it ensures that there is enough money set aside to cover these significant expenses when they arise. Therefore, the answer is true.

Explanation

The statement suggests that property managers and owners should allocate additional funds to a reserve account for future capital expenses like replacing the roof or heating system. This is a responsible approach as it ensures that there is enough money set aside to cover these significant expenses when they arise. Therefore, the answer is true.

3. All of the following are examples of the routine, annual, fixed operating expenses: real property taxes, insurance, utility bills, and management fees.

True

False

VARIABLE expenses include painting, decorating, occasional deferred maintenance and repairs.

Explanation

VARIABLE expenses include painting, decorating, occasional deferred maintenance and repairs.

4. Anyone with just a Pennsylvania Real Estate Salesperson License can be a property manager.

True

False

According to PA law, only a Licensed Real Estate BROKER can be a property manager.

Explanation

According to PA law, only a Licensed Real Estate BROKER can be a property manager.

5. In Pennsylvania, an employee of an owner of residential multi-family dwellings does NOT need a real estate license to show apartments, transmit information regarding rental amounts, enter into leases with tenants and hold rent money for the owner as long as the employee is performing such action on behalf of the owner and the owner retains the authority to make all decisions.

True

False

In Pennsylvania, an employee of an owner of residential multi-family dwellings does not need a real estate license to perform various actions related to renting apartments. These actions include showing apartments, providing rental information, entering into leases with tenants, and holding rent money for the owner. However, this exemption only applies if the employee is acting on behalf of the owner and the owner retains the authority to make all decisions. Therefore, the statement "True" is correct.

Explanation

In Pennsylvania, an employee of an owner of residential multi-family dwellings does not need a real estate license to perform various actions related to renting apartments. These actions include showing apartments, providing rental information, entering into leases with tenants, and holding rent money for the owner. However, this exemption only applies if the employee is acting on behalf of the owner and the owner retains the authority to make all decisions. Therefore, the statement "True" is correct.

6. The management agreement is a monetary contract between the property manager and the tenants who rent the property. It includes rental fees, commissions and other fiduciary matters involved in the contract.

True

False

The management agreement sets up the rules by which the broker supervises the rental property of the owner.

Explanation

The management agreement sets up the rules by which the broker supervises the rental property of the owner.

7. In Pennsylvania, a licensed salesperson, as a property manager assistant may independently negotiate the terms of a lease on behalf of the lessor.

True

False

The salesperson as an assistant may NOT independently negotiate the terms of a lease nor execute a lease on behalf of a lessor.

Explanation

The salesperson as an assistant may NOT independently negotiate the terms of a lease nor execute a lease on behalf of a lessor.

8. There are many different types of real property that can be managed. The following are examples of Commercial real property: shopping malls, strip centers, condos, and mobile home parks.

True

False

Condos and mobile home parks are considered Residential Real Property NOT Commercial

Explanation

Condos and mobile home parks are considered Residential Real Property NOT Commercial