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IREM Certified Accredited Residential Manager
(ARM®) Exam | Latest Verified Questions and
Detailed Answers
OVERVIEW DESCRIPTION:
The Certified Accredited Residential Manager (ARM®) exam, offered by the Institute of
Real Estate Management (IREM), is a professional certification designed for residential
property managers who oversee apartments, condominiums, and other rental
communities. The exam tests candidates on key competencies including financial
management (budgeting, rent collection, net operating income), operational maintenance
(preventive and emergency repairs), legal compliance (Fair Housing Act, landlord-tenant
laws, risk management), and human resources (staff supervision, conflict resolution,
ethical conduct). Passing the ARM exam demonstrates a manager's ability to maximize
property value while adhering to fiduciary duties, fair housing regulations, and IREM’s
strict code of professional ethics.
QUESTION 1
What is the primary fiduciary duty of a property manager to the property owner?
A) To maximize rental income at all costs
B) To minimize tenant turnover regardless of expenses
C) To act in the best interests of the property owner with loyalty and care
D) To ensure the property manager's company makes the highest profit
CORRECT ANSWER: C
EXPERT RATIONALE: A fiduciary duty legally requires the manager to act in the owner's
best interests, prioritizing the owner's financial goals above the manager's personal
gain.
QUESTION 2
Which financial metric represents the property's income before debt service and
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depreciation?
A) Cash Flow
B) Net Operating Income (NOI)
C) Gross Potential Rent
D) Capitalization Rate
CORRECT ANSWER: B
EXPERT RATIONALE: NOI is calculated by subtracting operating expenses from gross
income, showing the property's operational profitability before financing.
QUESTION 3
Under Fair Housing laws, which of the following is NOT a protected class?
A) Religion
B) Familial status
C) Source of income (in most federal cases)
D) National origin
CORRECT ANSWER: C
EXPERT RATIONALE: Federal Fair Housing Act protects race, color, religion, sex,
disability, familial status, and national origin. Source of income is protected only in
specific state/local laws.
QUESTION 4
What is the purpose of a "reserve fund" in a property operating budget?
A) To pay for monthly landscaping services
B) To cover unexpected capital expenditures or emergencies
C) To distribute profits to the owner monthly
D) To fund the property manager's bonus
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CORRECT ANSWER: B
EXPERT RATIONALE: Reserves are set aside for major repairs (roof, HVAC) or
emergencies, preventing the need for special assessments or debt.
QUESTION 5
Which lease clause allows a landlord to enter the unit for inspections or repairs with
proper notice?
A) Subordination clause
B) Right of entry clause
C) Assignment clause
D) Acceleration clause
CORRECT ANSWER: B
EXPERT RATIONALE: The right of entry clause balances tenant privacy rights with the
owner's need to maintain the property.
QUESTION 6
When a property manager accepts kickbacks from a vendor without owner consent,
what ethical violation has occurred?
A) Commingling
B) Conflict of interest
C) Self-dealing
D) Both B and C
CORRECT ANSWER: D
EXPERT RATIONALE: This creates a conflict of interest where manager profits at owner's
expense, and is self-dealing by prioritizing vendor payments over quality.
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QUESTION 7
What is the primary purpose of a "rent roll" report?
A) To track the property's stock market performance
B) To summarize tenant names, unit numbers, lease terms, and rent amounts
C) To list all maintenance requests for the month
D) To record the owner's personal expenses
CORRECT ANSWER: B
EXPERT RATIONALE: The rent roll is a critical financial tool showing current occupancy,
lease expirations, and rental income.
QUESTION 8
Which type of maintenance is scheduled based on time intervals (e.g., changing HVAC
filters every 3 months)?
A) Reactive maintenance
B) Preventive maintenance
C) Deferred maintenance
D) Emergency maintenance
CORRECT ANSWER: B
EXPERT RATIONALE: Preventive maintenance extends asset life and reduces long-term
costs by addressing wear before failure.
QUESTION 9
Under the Americans with Disabilities Act (ADA), what is required of most residential
common areas?
A) All units must be fully wheelchair accessible
B) Reasonable accommodations in policies and physical access in public areas
IREM Certified Accredited Residential Manager
(ARM®) Exam | Latest Verified Questions and
Detailed Answers
OVERVIEW DESCRIPTION:
The Certified Accredited Residential Manager (ARM®) exam, offered by the Institute of
Real Estate Management (IREM), is a professional certification designed for residential
property managers who oversee apartments, condominiums, and other rental
communities. The exam tests candidates on key competencies including financial
management (budgeting, rent collection, net operating income), operational maintenance
(preventive and emergency repairs), legal compliance (Fair Housing Act, landlord-tenant
laws, risk management), and human resources (staff supervision, conflict resolution,
ethical conduct). Passing the ARM exam demonstrates a manager's ability to maximize
property value while adhering to fiduciary duties, fair housing regulations, and IREM’s
strict code of professional ethics.
QUESTION 1
What is the primary fiduciary duty of a property manager to the property owner?
A) To maximize rental income at all costs
B) To minimize tenant turnover regardless of expenses
C) To act in the best interests of the property owner with loyalty and care
D) To ensure the property manager's company makes the highest profit
CORRECT ANSWER: C
EXPERT RATIONALE: A fiduciary duty legally requires the manager to act in the owner's
best interests, prioritizing the owner's financial goals above the manager's personal
gain.
QUESTION 2
Which financial metric represents the property's income before debt service and
,2|Page
depreciation?
A) Cash Flow
B) Net Operating Income (NOI)
C) Gross Potential Rent
D) Capitalization Rate
CORRECT ANSWER: B
EXPERT RATIONALE: NOI is calculated by subtracting operating expenses from gross
income, showing the property's operational profitability before financing.
QUESTION 3
Under Fair Housing laws, which of the following is NOT a protected class?
A) Religion
B) Familial status
C) Source of income (in most federal cases)
D) National origin
CORRECT ANSWER: C
EXPERT RATIONALE: Federal Fair Housing Act protects race, color, religion, sex,
disability, familial status, and national origin. Source of income is protected only in
specific state/local laws.
QUESTION 4
What is the purpose of a "reserve fund" in a property operating budget?
A) To pay for monthly landscaping services
B) To cover unexpected capital expenditures or emergencies
C) To distribute profits to the owner monthly
D) To fund the property manager's bonus
,3|Page
CORRECT ANSWER: B
EXPERT RATIONALE: Reserves are set aside for major repairs (roof, HVAC) or
emergencies, preventing the need for special assessments or debt.
QUESTION 5
Which lease clause allows a landlord to enter the unit for inspections or repairs with
proper notice?
A) Subordination clause
B) Right of entry clause
C) Assignment clause
D) Acceleration clause
CORRECT ANSWER: B
EXPERT RATIONALE: The right of entry clause balances tenant privacy rights with the
owner's need to maintain the property.
QUESTION 6
When a property manager accepts kickbacks from a vendor without owner consent,
what ethical violation has occurred?
A) Commingling
B) Conflict of interest
C) Self-dealing
D) Both B and C
CORRECT ANSWER: D
EXPERT RATIONALE: This creates a conflict of interest where manager profits at owner's
expense, and is self-dealing by prioritizing vendor payments over quality.
, 4|Page
QUESTION 7
What is the primary purpose of a "rent roll" report?
A) To track the property's stock market performance
B) To summarize tenant names, unit numbers, lease terms, and rent amounts
C) To list all maintenance requests for the month
D) To record the owner's personal expenses
CORRECT ANSWER: B
EXPERT RATIONALE: The rent roll is a critical financial tool showing current occupancy,
lease expirations, and rental income.
QUESTION 8
Which type of maintenance is scheduled based on time intervals (e.g., changing HVAC
filters every 3 months)?
A) Reactive maintenance
B) Preventive maintenance
C) Deferred maintenance
D) Emergency maintenance
CORRECT ANSWER: B
EXPERT RATIONALE: Preventive maintenance extends asset life and reduces long-term
costs by addressing wear before failure.
QUESTION 9
Under the Americans with Disabilities Act (ADA), what is required of most residential
common areas?
A) All units must be fully wheelchair accessible
B) Reasonable accommodations in policies and physical access in public areas
