DC Property Management License Exam – Law
Section Study Guide & Practice
Management Plan - -- answer --1. Current use
2. Current condition
3. Fiscal projections
4. Operational issues
Owner's Property Rights - -- answer --1. The right of possession - the owner of
the property has title and can occupy of the property.
2.The right of control - within the applicable laws, the owner controls the use of
the property.
3. The right of exclusion - the owner of the property can exclude others from
using or entering.
4. The right of enjoyment - within the applicable laws, the owner can enjoy the
property.
5. The right to sell - the owner can sell, transfer, give-away or will the property
When an owner leases a property, it temporarily transfers to the tenant a portion
of the right of possess.
,Leasehold Interest - -- answer --When an owner leases a property, it temporarily
transfers to the tenant a portion of the right of possession.
Casualty Provision - -- answer --What happens if the property is damaged or
destroyed during the lease term?
Use Provision - -- answer --What the premises will be used for?
Default Provision - -- answer --What happens if the tenant doesn't pay its rent?
Sublease and Assignment Conditions - -- answer --If the tenant can sublease the
premises or assign the lease.
Tenancy at Will - -- answer --A leasehold possession such that either the landlord
or tenant may terminate the leasehold interest at any time by giving reasonable
notice, which is typically 30 days or it may be stated in the lease.
Tenancy at Sufferance - -- answer --Occurs after the lease has expired and
resident/tenant continues to occupancy the apartment or space without the
landlord's consent.
Escalator Clause - -- answer --Typically, multi-year leases contain a provision for
the owner to increase the rent on the lease's anniversary date.
Separation of Funds - -- answer --All of the funds that the property generates
belong to the owner and should be deposited into the owner's account.
,Keys to Asset Management - -- answer --1. Focuses on the property's long term
planning, leasing and asking rental rates
2. Often negotiates commercial leases on behalf of the owner
3. Evaluates the mortgage and opportunities to refinance the loan
4. Considers strategies to maximize value and when to market the property for
sale.
***Collectively these items are focused on ways to maximize the Return on
Investment (ROI)***
Capitalization Rate - -- answer --Determined by the market and depends on
various factors, including the property type, economic conditions, interest rates,
location, and the property's condition. As a result, Capitalization Rates are not
static.
How to Increase Value - -- answer --A property manager can increase a property's
value by operating it more efficiently through lower expenses. Reducing
expenses, while maintaining Effective Gross Income, has a direct relationship to
increasing its Value.
Objectives of Maintenance Program - -- answer --1. Implementing and
accomplishing the owner's objectives
2. Increasing resident/tenant satisfaction and retention rates
3. Reducing operating costs
4. Optimizing the property's physical capabilities
5. Increasing the property's value
6. Providing for the safety of tenants, residents, visitors and employees
, Primary Objectives of An Inspection - -- answer --1. What will be inspected?
2. What is the frequency of the inspection?
3. Who will conduct the inspection?
4. How will the results be reported and implemented?
Payback Period - -- answer --The Payback Period is one of the critical benchmarks
in determining whether to move forward with a specific project. The Payback
Period is the cost to implement the energy saving method divided by the money
saved.
Four Maintenance Categories - -- answer --1. Curative Maintenance involves
fixing or repairing something after it has already broken. An example would be
fixing a broken sink faucet.
2. Deferred Maintenance is an ordinary maintenance item that is not performed
at the time when a problem is discovered. For example, when the manager
notices some minor paint peeling in a stairwell, but delays hiring a painter until
more painting work is needed.
3. Routine Maintenance relates to the cleaning and upkeep that is needed every
day. An example is vacuuming the carpet in the building hallways.
4. Preventive Maintenance is a planned activity that is routinely performed with
the intention of extending the useful life of the building and its equipment.
Included in the Certificate of Insurance - -- answer --1. General Liability - General
liability insurance (GL) coverage can protect the property owner from a variety of
claims including bodily injury, property damage, and personal injury.
2. Excess Liability - Excess liability or an umbrella policy is issued to provide
coverage limits in excess of an underlying General Liability policy.
Section Study Guide & Practice
Management Plan - -- answer --1. Current use
2. Current condition
3. Fiscal projections
4. Operational issues
Owner's Property Rights - -- answer --1. The right of possession - the owner of
the property has title and can occupy of the property.
2.The right of control - within the applicable laws, the owner controls the use of
the property.
3. The right of exclusion - the owner of the property can exclude others from
using or entering.
4. The right of enjoyment - within the applicable laws, the owner can enjoy the
property.
5. The right to sell - the owner can sell, transfer, give-away or will the property
When an owner leases a property, it temporarily transfers to the tenant a portion
of the right of possess.
,Leasehold Interest - -- answer --When an owner leases a property, it temporarily
transfers to the tenant a portion of the right of possession.
Casualty Provision - -- answer --What happens if the property is damaged or
destroyed during the lease term?
Use Provision - -- answer --What the premises will be used for?
Default Provision - -- answer --What happens if the tenant doesn't pay its rent?
Sublease and Assignment Conditions - -- answer --If the tenant can sublease the
premises or assign the lease.
Tenancy at Will - -- answer --A leasehold possession such that either the landlord
or tenant may terminate the leasehold interest at any time by giving reasonable
notice, which is typically 30 days or it may be stated in the lease.
Tenancy at Sufferance - -- answer --Occurs after the lease has expired and
resident/tenant continues to occupancy the apartment or space without the
landlord's consent.
Escalator Clause - -- answer --Typically, multi-year leases contain a provision for
the owner to increase the rent on the lease's anniversary date.
Separation of Funds - -- answer --All of the funds that the property generates
belong to the owner and should be deposited into the owner's account.
,Keys to Asset Management - -- answer --1. Focuses on the property's long term
planning, leasing and asking rental rates
2. Often negotiates commercial leases on behalf of the owner
3. Evaluates the mortgage and opportunities to refinance the loan
4. Considers strategies to maximize value and when to market the property for
sale.
***Collectively these items are focused on ways to maximize the Return on
Investment (ROI)***
Capitalization Rate - -- answer --Determined by the market and depends on
various factors, including the property type, economic conditions, interest rates,
location, and the property's condition. As a result, Capitalization Rates are not
static.
How to Increase Value - -- answer --A property manager can increase a property's
value by operating it more efficiently through lower expenses. Reducing
expenses, while maintaining Effective Gross Income, has a direct relationship to
increasing its Value.
Objectives of Maintenance Program - -- answer --1. Implementing and
accomplishing the owner's objectives
2. Increasing resident/tenant satisfaction and retention rates
3. Reducing operating costs
4. Optimizing the property's physical capabilities
5. Increasing the property's value
6. Providing for the safety of tenants, residents, visitors and employees
, Primary Objectives of An Inspection - -- answer --1. What will be inspected?
2. What is the frequency of the inspection?
3. Who will conduct the inspection?
4. How will the results be reported and implemented?
Payback Period - -- answer --The Payback Period is one of the critical benchmarks
in determining whether to move forward with a specific project. The Payback
Period is the cost to implement the energy saving method divided by the money
saved.
Four Maintenance Categories - -- answer --1. Curative Maintenance involves
fixing or repairing something after it has already broken. An example would be
fixing a broken sink faucet.
2. Deferred Maintenance is an ordinary maintenance item that is not performed
at the time when a problem is discovered. For example, when the manager
notices some minor paint peeling in a stairwell, but delays hiring a painter until
more painting work is needed.
3. Routine Maintenance relates to the cleaning and upkeep that is needed every
day. An example is vacuuming the carpet in the building hallways.
4. Preventive Maintenance is a planned activity that is routinely performed with
the intention of extending the useful life of the building and its equipment.
Included in the Certificate of Insurance - -- answer --1. General Liability - General
liability insurance (GL) coverage can protect the property owner from a variety of
claims including bodily injury, property damage, and personal injury.
2. Excess Liability - Excess liability or an umbrella policy is issued to provide
coverage limits in excess of an underlying General Liability policy.
