Professional Analysis

Question 1

A new client who just inherited a commercial building has told her property manager that she doesn’t plan to sell the property, but her primary financial goal is a quick, high return. In this situation, the manager should:

a.persuade the client to sell the property, even if that isn’t in the manager’s self-interest

b.realize that the client will probably be reluctant to authorize any expenditures unless they’re necessary to maintain or increase the property’s net income in the short term

c.explain the income tax consequences of that choice to the client

d.tell the client that his fiduciary duties do not allow him to represent her on those terms

Question 2

A new commercial tenant is requesting build-out work that will cost more than the agreed improvement allowance. The property manager should:

a.notify the tenant that the requested improvements will have to be scaled back

b.remind the tenant that any construction costs in excess of the allowance will be the tenant’s responsibility

c.increase the allowance to cover the additional work, as long as the changes will increase the value of the property as a whole

d.consult with the client before agreeing to increase the tenant’s improvement allowance

Question 3

A property manager has a legal obligation to protect and promote her client’s interests. This is because the manager:

a.is the client’s agent and owes the client fiduciary duties

b.is a member of a professional association with a code of ethics that specifically requires this

c.is subject to the Uniform Standards of Professional Property Management

d.has signed a contract (the management agreement) that expressly requires this