Vacancy Rates

QUESTION 1

A property manager needs a bad debt and vacancy factor for a residential property’s annual operating budget. She is most likely to:

a.check the MSA website to see projected average vacancy rates for her area

b.evaluate the property’s actual rent collection record in previous years

c.base it on changes in the Consumer Price Index

d.use the figure agreed to in the management agreement  

QUESTION 2

A property manager rejected a rental application for a retail space because of the applicant’s race. Was this legal or illegal?

a.Legal, because this is commercial property and the Fair Housing Act applies only to residential property

b.Legal, because anti-discrimination laws apply to real estate sales transactions, not lease transactions

c.Illegal, because any discrimination by a property manager is a violation of the manager’s fiduciary duties

d.Illegal, because the Civil Rights Act of 1866 prohibits discrimination based on race or color in all real estate transactions  

QUESTION 3

A property manager records rents collected from tenants when they are actually paid (not merely owed), but he records certain operating expenses as they accrue (as opposed to when they’re paid). This manager is using the:

a.payment point accounting method

b.certified accounting method

c.modified cash-basis accounting method

d.triple-entry accounting method  

QUESTION 4

A property manager should not give “welcome to the building” gifts to new tenants:

a.that cost more than $25, the legal limit

b.because such gifts are a form of illegal kickback

c.unless all tenants receive exactly the same gift

d.without the property owner’s prior authorization