Utah Real Estate School - Brokerage Agreements and Management Practice Exam (Graded A+ actual test)

Which of the following statements is not true concerning security deposits? - The security deposit is landlord property until and unless it must be refunded. What are the three kinds of maintenance a manager has to carry out for a managed property? - Routine, preventive, and corrective. An agent contacted an owner to see if they might want to sell the property. The agent said, "I think I can get you $250,000," which surprised the owner. The owner said, "Ok, and anything over that can be your commission." This is: - a net listing and could be grounds for disciplinary action against the agent. Which of the following risk management strategies involves the purchase of insurance? - Transference. Which of the below listed lease termination procedures is enacted only by the tenant, and leaves the landlord with the option to terminate the lease or seek damages? - Abandonment of the premises. What clause in a lease would you use to increase rent payments over time? - an escalator clause. Procuring Cause - is traceable by an uninterrupted series of casual events. An example of consequential loss would be - Loss of income A consequential loss occurs secondarily to the primary loss. EX: a fire forces the business to close for repairs, thus costing the business a loss of income until the business can reopenIn order for a tenant to legally claim constructive eviction which of the following conditions must apply? - The property becomes uninhabitable. The Americans with Disabilities Act requires property managers to - ensure that disabled employees have the same level of access to facilities that all employees have. How does a constructive eviction occur? - A tenant declares a landlord in default and vacates the leased premises. A basic responsibility of a landlord is to - deliver a habitable property. A transaction broker agreement may have a clause to automatically extend the agreement - if a transaction is underway when the agreement expires. Trust funds to be handled by a property manager are likely to include all of the following except - cash for the management firm's operating expenses. If a landlord fails to maintain a property in livable condition, and the tenants are forced to move out for safety reason, this is called - constructive eviction. The BEST final screening process in selecting tenants is which of the following: - Background and credit check. Which of the following rights does the landlord typically retain when leasing a property? - Disposition. Property managers have a ______ relationship with the property owner. - Fiduciary. Cash flow is more accurately defined by which of the following statements? - The cash available for distribution to owners during any period, after all periodic expenses and obligations are paid.A reserve fund is often included in a management contract to allow the manager to - pay for small repairs on the property. The property manager's principal objective is to: - maximize value. Investors almost always want the highest return on their investment. The property manager's principal objective on behalf of the owner investor, in most cases, is to maximize value Which of the following property rights is not commonly transferred to the tenant under a lease? - Disposition. A property management contract should include each of these items: Property description, term of the contract, the manager's responsibilities, terms of compensation, reporting requirements, and - the manager's authority. Commercial fire and hazard insurance policies usually require coverage to equal at least 80 percent of the property's - replacement value. If a property manager believes that there might be a trip hazard where the floor inside a unit is uneven, they should inform - the owner, and all prospective tenants. Which of the following statements about the property manager's responsibility for security and safety is true? - A court may hold the manager responsible for the physical safety of tenants, employees, and customers in leased remises. When a tenant remains in the property after the lease has expired, they are referred to as a - holdover tenant. Capital expenditures could be best described as: - Expenditures that will extend the life of the property Capital expenditures are expenditures creating future benefits. A capital expenditure is incurred when a business spends money either to buy fixed assets, or to add to the value of an existing fixed asset with a useful life extending beyond the taxable year.Effective gross income is defined as - revenue from all sources minus losses from uncollected rents, vacancies, and evictions. A tenant leases a property "as-is". This means that - the landlord must still maintain the property in livable condition. Which of the following lease types fit the following description: the landlord receives a single monthly lease payment and the tenant has no obligation to pay expenses such as property taxes, property insurance and property maintenance. - Gross lease. Which lease types listed below apply to the following lease scenario: the landlord has transferred the obligation to pay directly the property taxes, property insurance and property maintenance, and the tenant must pay scheduled rent increases. - Net lease combined with a graduated lease. Which thing on the list that follows would NOT be an item addressed in the property management contract between the broker and the owner? - The work schedule of the agents S signs a lease for a strip mall location for their business. They expect that sales will be low at first, and increase as they build a presence in the area. They negotiate lower rent payments at the beginning of the lease, with the rent payments steadily increasing over time. This is called - an escalator clause. A property manager is what type of agent for the owner? - General agent. Indemnification means: - a duty to secure against harm from actions of property manager. A property management contract should include each of these items: Property description, term of the contract, the manager's responsibilities, the manager's authority, reporting requirements, and - terms of compensation. A broker is hired to procure a customer for a client. In order to earn compensation, the agent must procure a customer who - is ready, willing, and able to transact.An agent obtains a listing which ensures compensation for procuring a customer, provided the agent is the procuring cause. This agent has entered into a(n) - open listing. Real estate agents may NOT be paid using which of the following formulas: - any amount dictated solely by the broker. Select from the following the primary reason that a property condition disclosure is completed by the owner. - It discloses to the buyer material facts concerning the property. A client suddenly decides to revoke an exclusive right-to-sell listing midway through the listing term. The reason stated: the client did not like the agent. In this case, - the client may be liable for a commission and marketing expenses. The authority to sign closing documents is created by which of the following contracts? - power of attorney. A landlord promises to compensate a broker for a procuring a tenant, provided the landlord's brother decides not to rent the property within a month. This would be an example of a(n) - exclusive agency agreement. The Exclusive Right to Sell listing gives the agent the right to - find a buyer. Agent G was going to leave XYZ Real Estate and go to ABC Realty. G's great-aunt had listed her house and wanted G to still be her agent. Which of the following answers would accomplish this in accordance with the law? - The broker of XYZ agrees to cancel the listing. A seller may have the power and right to cancel a listing agreement but the seller may want to consider which of the following before doing so? - The seller may still have liability to the agent after cancellation. The amount of a real estate broker's commission is - established through negotiation with clientsThe seller S was agreeable to listing the house and paying a commission if a real estate agent found a buyer. However, S wanted to be able to avoid a commission if a neighbor bought the house. What would accomplish this for S? - An exclusive right to sell contract with an exception. The purpose of the Seller Title and Deed clause is to - forewarn the seller of the buyer's closing requirements. If an agent wants to feel comfortable that the investment they make in marketing the property will be justified, then they should ensure that the listing agreement used is an - Exclusive Right to Sell agreement. The purpose of including a clause on dual agency in the listing agreement is - to obtain prior consent. The special agency listing agreement has a limited scope that includes primarily tasks that will - generate customers and catalyze the transaction. It would be prudent of a broker seeking a listing agreement on a parcel to determine - that the party signing the listing agreement has the authority to do so. Which of the following is intended to protect the agent from losing the rightful commission from the seller due to prospective buyers that were introduced to the property by the agent, but did not decide to buy until after the listing agreement had expired? - protection period. Which of the following is the most accurate concerning the right to discriminate and the broker's duty? - The agent must comply to discrimination law regardless of the seller's desire. Which of the following are listing agent duties? - Find a buyer. The listing agreement identifies the agent/broker and their client on one side of the transaction. On the other side of the transaction is the _______. - customer.