DC Property Manager Exam Updated
2025/2026 | Exam Questions with
100% Correct Answers (Verified &
Aligned with DCRA Requirements)
1. Which document creates the agency relationship between a property owner and
a property manager?
A. Lease agreement
B. Management agreement
C. Listing agreement
D. Employment contract
Correct Answer: B
Rationale: The management agreement is the contract that establishes the agency
relationship, defining the manager’s authority and responsibilities. A lease agreement is
between landlord and tenant, a listing agreement is for sales, and an employment
contract may apply to staff but not the principal-agent relationship.
2. A property manager acting on behalf of the owner must place the owner’s
interests above all others. This obligation is known as:
A. Accounting
B. Confidentiality
C. Loyalty
,D. Obedience
Correct Answer: C
Rationale: Loyalty is the fiduciary duty requiring the agent to prioritize the principal’s
interests. Accounting and confidentiality are separate duties, and obedience means
following lawful instructions.
3. Gross potential income minus vacancy and collection losses equals:
A. Net operating income
B. Effective gross income
C. Cash flow before taxes
D. Gross income
Correct Answer: B
Rationale: Effective gross income is calculated by subtracting vacancy and collection
losses from gross potential income. Net operating income further subtracts operating
expenses.
4. The most probable price a property would bring in a competitive and open
market is its:
A. Assessed value
B. Investment value
C. Market value
D. Insurable value
Correct Answer: C
Rationale: Market value is defined as the price a willing buyer and seller would agree
upon under normal conditions. Assessed value is for taxation, investment value is
specific to an investor, and insurable value covers replacement cost less land.
5. Loss in value due to outdated design features, such as a building with no
elevator in a market that demands one, is called:
A. Physical deterioration
B. Functional obsolescence
C. Economic obsolescence
,D. Straight-line depreciation
Correct Answer: B
Rationale: Functional obsolescence results from deficiencies within the property itself,
like poor layout. Physical deterioration is wear and tear, economic obsolescence is
external, and straight-line depreciation is an accounting method.
6. A lease that requires the tenant to pay base rent plus a share of operating
expenses and property taxes is a:
A. Gross lease
B. Net lease
C. Percentage lease
D. Ground lease
Correct Answer: B
Rationale: In a net lease, the tenant pays rent plus some or all operating expenses. A
gross lease includes all costs in the rent, a percentage lease adds a share of sales, and a
ground lease is for land only.
7. Which federal law prohibits discrimination in housing based on race, color,
religion, sex, national origin, familial status, and disability?
A. Americans with Disabilities Act
B. Equal Credit Opportunity Act
C. Fair Housing Act
D. Civil Rights Act of 1866
Correct Answer: C
Rationale: The Fair Housing Act prohibits discrimination in the sale, rental, and
financing of housing based on these protected classes. The ADA addresses disability
access, ECOA covers credit, and the Civil Rights Act of 1866 prohibits racial
discrimination.
8. Which maintenance type is scheduled to avoid failures before they occur?
A. Corrective maintenance
B. Preventive maintenance
, C. Emergency repair
D. Deferred maintenance
Correct Answer: B
Rationale: Preventive maintenance is scheduled to avoid failures. Corrective
maintenance fixes things after they break, emergency repairs are urgent, and deferred
maintenance is postponed work.
9. Under typical trust accounting rules, security deposits collected by a property
manager must be held in a:
A. General operating account
B. Personal savings account
C. Separate trust or escrow account
D. Petty cash fund
Correct Answer: C
Rationale: Security deposits are client funds and must be held in a separate trust or
escrow account to avoid commingling. They cannot be mixed with the manager’s
operating or personal funds.
10. An investor acquires a property with a down payment of $100,000 and receives
an annual pre-tax cash flow of $8,000. The cash-on-cash return is:
A. 8%
B. 12.5%
C. 5%
D. 10%
Correct Answer: A
Rationale: Cash-on-cash return = annual pre-tax cash flow / total cash invested =
$8,000 / $100,000 = 8%.
11. Which duty requires a property manager to keep owner information private
even after the management agreement ends?
A. Obedience
B. Accounting
2025/2026 | Exam Questions with
100% Correct Answers (Verified &
Aligned with DCRA Requirements)
1. Which document creates the agency relationship between a property owner and
a property manager?
A. Lease agreement
B. Management agreement
C. Listing agreement
D. Employment contract
Correct Answer: B
Rationale: The management agreement is the contract that establishes the agency
relationship, defining the manager’s authority and responsibilities. A lease agreement is
between landlord and tenant, a listing agreement is for sales, and an employment
contract may apply to staff but not the principal-agent relationship.
2. A property manager acting on behalf of the owner must place the owner’s
interests above all others. This obligation is known as:
A. Accounting
B. Confidentiality
C. Loyalty
,D. Obedience
Correct Answer: C
Rationale: Loyalty is the fiduciary duty requiring the agent to prioritize the principal’s
interests. Accounting and confidentiality are separate duties, and obedience means
following lawful instructions.
3. Gross potential income minus vacancy and collection losses equals:
A. Net operating income
B. Effective gross income
C. Cash flow before taxes
D. Gross income
Correct Answer: B
Rationale: Effective gross income is calculated by subtracting vacancy and collection
losses from gross potential income. Net operating income further subtracts operating
expenses.
4. The most probable price a property would bring in a competitive and open
market is its:
A. Assessed value
B. Investment value
C. Market value
D. Insurable value
Correct Answer: C
Rationale: Market value is defined as the price a willing buyer and seller would agree
upon under normal conditions. Assessed value is for taxation, investment value is
specific to an investor, and insurable value covers replacement cost less land.
5. Loss in value due to outdated design features, such as a building with no
elevator in a market that demands one, is called:
A. Physical deterioration
B. Functional obsolescence
C. Economic obsolescence
,D. Straight-line depreciation
Correct Answer: B
Rationale: Functional obsolescence results from deficiencies within the property itself,
like poor layout. Physical deterioration is wear and tear, economic obsolescence is
external, and straight-line depreciation is an accounting method.
6. A lease that requires the tenant to pay base rent plus a share of operating
expenses and property taxes is a:
A. Gross lease
B. Net lease
C. Percentage lease
D. Ground lease
Correct Answer: B
Rationale: In a net lease, the tenant pays rent plus some or all operating expenses. A
gross lease includes all costs in the rent, a percentage lease adds a share of sales, and a
ground lease is for land only.
7. Which federal law prohibits discrimination in housing based on race, color,
religion, sex, national origin, familial status, and disability?
A. Americans with Disabilities Act
B. Equal Credit Opportunity Act
C. Fair Housing Act
D. Civil Rights Act of 1866
Correct Answer: C
Rationale: The Fair Housing Act prohibits discrimination in the sale, rental, and
financing of housing based on these protected classes. The ADA addresses disability
access, ECOA covers credit, and the Civil Rights Act of 1866 prohibits racial
discrimination.
8. Which maintenance type is scheduled to avoid failures before they occur?
A. Corrective maintenance
B. Preventive maintenance
, C. Emergency repair
D. Deferred maintenance
Correct Answer: B
Rationale: Preventive maintenance is scheduled to avoid failures. Corrective
maintenance fixes things after they break, emergency repairs are urgent, and deferred
maintenance is postponed work.
9. Under typical trust accounting rules, security deposits collected by a property
manager must be held in a:
A. General operating account
B. Personal savings account
C. Separate trust or escrow account
D. Petty cash fund
Correct Answer: C
Rationale: Security deposits are client funds and must be held in a separate trust or
escrow account to avoid commingling. They cannot be mixed with the manager’s
operating or personal funds.
10. An investor acquires a property with a down payment of $100,000 and receives
an annual pre-tax cash flow of $8,000. The cash-on-cash return is:
A. 8%
B. 12.5%
C. 5%
D. 10%
Correct Answer: A
Rationale: Cash-on-cash return = annual pre-tax cash flow / total cash invested =
$8,000 / $100,000 = 8%.
11. Which duty requires a property manager to keep owner information private
even after the management agreement ends?
A. Obedience
B. Accounting
