DC PROPERTY MANAGEMENT LICENSE QUESTIONS AND CORRECT ANSWERS| LATEST UPDATE

DC PROPERTY MANAGEMENT LICENSE QUESTIONS AND CORRECT ANSWERS| LATEST UPDATE “Management Plan - CORRECT ANSWER Assists the owner in meeting their goals while maximizing the property's value and return. The plan describes in detail the subject property's current use along with it's physical condition, fiscal projections, and operational issues (includes an analysis of the market regional & neighborhood)." "Organizational and educational programs available to assist in enhancing the property manager's knowledge, identifying resources to resolve issues, and expanding their business network. - CORRECT ANSWER Institute of Real Estate Management (IREM), National Association of Realtors (NAR), Greater Capital Area Association of Realtors (GCARR), building Owners & Managers Association (BOMA), National Association of Real Estate Brokers, International Council of Shopping Centers (ICSC), and National Property Management Association." "Reasons for termination of Management Agreement - CORRECT ANSWER Sale or transfer of the property, improper financial reporting, stealing funds, negligence, taking kickbacks or benefiting directly from discounts from vendors, commingling funds." "Comparison Analysis - CORRECT ANSWER Helps determine if the subject property's rental rates are appropriate for the market." "A Comparison Analysis should include: - CORRECT ANSWER Locational advantages/Accessibility, Curb Appeal, Interior conditions, quality of finishes, Amenities, Rents per square foot, Operating expenses per square foot" "The purpose of a Budget is to................ - CORRECT ANSWER Develop a means to track the property's performance & and to organize various types of income." "Gross Potential Rent - CORRECT ANSWER The maximum amount of income that a property can generate from all sources." "Percentage Lease - CORRECT ANSWER A lease, that requires tenant to pay rent based on a calculation that relates directly to the tenant's gross sales. Usually stipulates a base monthly rental plus a percentage of any gross sales above a certain amount." "The rights of a property owner include........ - CORRECT ANSWER The right of possession, the right of control, the right of exclusion, the right of enjoyment, the right to sell." "What is a Leasehold Interest? - CORRECT ANSWER When the owner leases a property, it temporarily transfers to the tenant a portion of the right of possession." "Escalator Clause - CORRECT ANSWER When multi-year leases contain a provision for the owner to increase the rent on the lease's anniversary date." "Separation of Funds - CORRECT ANSWER Funds must be kept separate from property manager's accounts. Funds that the property generates belong to the owner and should be deposited into owner's account." "Primary objectives to consider prior to any property inspection - CORRECT ANSWER What will be inspected, what is the frequency of inspection, who will conduct the inspection, how will results be reported." "Routine Maintenance - CORRECT ANSWER relates to cleaning and upkeep that is needed everyday." "General Liability - CORRECT ANSWER Insurance coverage that can protect the property owner from a variety of claims including bodily injury, property damage, and personal injury." "Excess Liability - CORRECT ANSWER an umbrella policy is issued to provide coverage limits in excess of an underlying General Liability policy." "Marketing Plan - CORRECT ANSWER Is necessary for every property to find new residents or tenants primary goals is to identify as many qualified prospects as possible." "A Management Plan is made up of how many what 7 components? - CORRECT ANSWER Regional Analysis, Neighborhood Analysis, Property Analysis, Market Analysis, Analysis of Alternatives, Proposed Property Analysis, Investment Analysis." "Functional Obsolescence can directly imapact - CORRECT ANSWER Attainable rents at a building." "Deferred Maintenance - CORRECT ANSWER Involves delaying needed repairs and maintenance to save money." "Examples of Deferred Maintenace - CORRECT ANSWER Painting a corridor, sealing a leaky roof or repairing cracks." "Preventative Maintenance can be defined as - CORRECT ANSWER Preplanned, routine, and systematic schedule of inspecting, maintaining and repairing a facility and its equipment." "Examples of Preventative Maintenance include - CORRECT ANSWER Inspecting a roof every six months for damage membrane and flashing, inspection hoist cables." "Types of Property Insurance include - CORRECT ANSWER Fire & extended coverage, Theft/Crime, Boiler & Machinery, Rent Loss, & Catastrophe, Earthquake, Plate Glass, Liability, Excess Liability." "Another name for Tenants - CORRECT ANSWER Lessee" " - CORRECT ANSWER " "Return On Investment - CORRECT ANSWER Is one measure used by investors to determine if a potential investment is worth purchasing." "What are the advantages of the Return On Investment calculation - CORRECT ANSWER It enables an investor to compare different types of investments, in order to decide which one to choose." "Net Lease - CORRECT ANSWER The tenant pays for all Operating Expenses in addition to Base Rent." "Triple Net Lease - CORRECT ANSWER Tenant will pay including all Operating Expenses including real estate taxes, insurance, roof maintenance, etc." "Leasehold Interest - CORRECT ANSWER When the owner leases a property, it temporarily transfers to the tenant a portion of right of possession or when a property is sold the new owner's rights are transferred." "Leesee - CORRECT ANSWER A person who holds the lease of a property; a tenant" "Lessor - CORRECT ANSWER A person who leases or lets a property to another; a landlord." "Property Manager's are entrusted to look after other people's money this includes: - CORRECT ANSWER Opening Bank Accounts, promptly depositing all receipts, and paying vendors when all services are completed." "Physical Inspections - CORRECT ANSWER Is a method used to evaluate the property's condition & equipment as well as being the first step to develop a plan to address any issues." "When should an inspection be performed after a resident has moved out? - CORRECT ANSWER Ideally the same day." "Some areas to regular inspect include - CORRECT ANSWER Roofs- look for pondering water, holes, and debris; Parking Lots- look for pavement alligator, loose graveling, potholes Front Entrance- look for trip hazards, cracked windows; Exterior Facades- failed caulking, loose concrete, crack windows." "Each owner should install smoke detectors an comply with the requirements of - CORRECT ANSWER The Smoke Detector Act of 1978." "Smoke detectors should be directly wired to - CORRECT ANSWER The power supply of the building." "The owner shall post in conspicuous places - CORRECT ANSWER Instructions on the operation of the fire alarm, whether the apartment building fire alarm is separate from or connected to detectors in the individual unit or building, connected to Fire, Medical Services, and a warning that in the event of a fire call 911." "No owner shall place in the lease or rental agreement a provision - CORRECT ANSWER Waiving the right of a tenant to a jury trail or that the tenant pay the owner's court cost or legal fees" "Every employer shall pay all wages earned to his employees - CORRECT ANSWER at lease twice during each calendar month" "Employee must receive compensation at a rate of - CORRECT ANSWER 1 1/2 times the regular rate at which the employee is employed." "In accordance with the D.C. Human Right Act of 1977 - CORRECT ANSWER DC does not discriminate on the basis factual or perceived." "The Office of Human Rights was established - CORRECT ANSWER In 1999" "An owner asks the property manager to submit an Offer of Sale under DOPA. The property manager should submit the offer to: - CORRECT ANSWER The District of Columbia Department of Housing and Community & Development (DHCD)." "DOPA - CORRECT ANSWER promotes affordable rental housing by maintaining the affordable status of existing affordable rental units. Consist of 5 or more rental units, provided that 25% or more of the rental units are"Affordable Units"" "TOPA Tenant Opportunity to Purchase Act - CORRECT ANSWER Landlord must provide the tenant(s) with the opportunity to acquire a residence." "The Condominium Act - CORRECT ANSWER Regulates condominium formation and registration." "The owner must provide tenants of a housing accommodation how many days notice of intent to convert to a cooperative or condo - CORRECT ANSWER 120 days" "The owner should pay relocation expenses within - CORRECT ANSWER 7 days of receiving request for payment." "The owner will a minimum of $125 up to a maximum of $500 for - CORRECT ANSWER Relocation expenses." "What do you have to do to qualify for a license - CORRECT ANSWER A. Attained the age of 21 for PMIC B. Age of 18 for PM C. Pass credit report D. Graduated from high school or GED E. Submit proof of education requirements F. Pass the applicable exam" "Is there an educational requirement for the property manager license - CORRECT ANSWER No" "What is required to be a PMIC - CORRECT ANSWER Has an owner interest in the applicants company or actively engaged in the operation or management of the company" "How soon must the department be notified if a PM becomes disassociated with the PMIC? - CORRECT ANSWER The PMIC must notify the department immediately by letter and furnish a forwarding address" "How long do you have to wait and what do you have to do if your license gets revoked and you want it back? - CORRECT ANSWER A year 1. Submit proof you are trustworthy and honest 2. Submit proof of educational requirements if file is more than 5 years old 3. Meet any other qualifications and conditions which apply to someone who has never been licensed" "How can you put your license on inactive status and for how long ? - CORRECT ANSWER Notify the department in writing and pay your renewal fees each year. Can be inactive indefinitely" "If your license has lapsed his king do you have to pay your renewal dues before you have to reapply and test again ? - CORRECT ANSWER 6-months plus all penalties and fees" "How often do you have to renew? - CORRECT ANSWER Bi- annually on June 30th" "What are the duties of a PMIC? - CORRECT ANSWER 1. Adequately supervise employees or sssociated licensees to ensure compliance 2. Review and approve all forms of rental agreements 3. Maintain regular contact with licensees 4. Instruct in the handling of the trust account 5. Be available to the public during normal business hours to discuss complaints and disputes 6. Ensure accurate and complete records 7. Ensure backup copies are maintained for trust account 8. Establish and maintain a written office policy" "How long do you have to deposit monies into the trust or escrow account l? - CORRECT ANSWER Within 48 hours or receipt excluding Saturday sundays and bank holidays" "What monies remain in the trust account? - CORRECT ANSWER All monies that do not belong to the company owener profits, resident security deposits, advance rents, etc." "What can a unlicensed employee of a multi unit real estate owner not do? - CORRECT ANSWER a. discuss or negotiate contracts b. vary or deviate from the rental price c. indicate to the public that the unlicensed individual is in a position of authority over the property d. conduct or host an open house or manage an onsite sales office e. show real property f. answer questions regarding anything other than public info g. discuss negotiate or explain a contract h. be paid soley on the basis of real estate activity" "What does a licensee not have to disclose to a potential renter? - CORRECT ANSWER 1. sickness that is not likely to be transferred 2. death or manner of death 3. location of registered sex offenders 4. offsite condition or hazard that does not directly impact property 5. any psychological impact like ghosts 6. UNLESS ASKED DIRECTLY" "Acting like a PM without a licensee is a ____________ and can get you a $______ fine or inprisoned not more than ______ months or both. - CORRECT ANSWER Misdemeanor $500 6 months" "Those not required to have a license to conduct real estate transactions: - CORRECT ANSWER a. owner of the property b. attorney at law acting within duties c. state and federal agencies d. court appointed receivers and trustees" "The Civil rights act of ______ states that all persons born in the US have the right to own property and who upholds this act? - CORRECT ANSWER 1866 Department of Justice" "What Supreme Court Decision upheld the civil rights act of 1866? - CORRECT ANSWER Jones vs. Mayer bc of this discrimination still illegal today" "The fair housing act protects what seven classes? - CORRECT ANSWER Race, Color, Religion, National Origin, Sex, Familial Status, and Handicap" "Blockbusting - CORRECT ANSWER frightening people into renting or selling their property by manipulating their prejudices" "Steering - CORRECT ANSWER Licensee shows white clients homes in white areas and minority clients minority areas- everyone has the right to live anywhere they can afford" "Redlining - CORRECT ANSWER Being denied or subjected to stricter conditions on a loan or insurance due to a property being in a certain area" "race - CORRECT ANSWER Identity with a group of people descended from a common ancestor." "Creed/Religion - CORRECT ANSWER formal statement of religious belief" "Familial Status - CORRECT ANSWER One of the protected classes under Fair Housing referring to families with children under 18." "What are the exemptions to Fair Housing? - CORRECT ANSWER Religious organizations that own property private club that owns property housing for older persons Sale by owner if they have less than 3 single family houses" "What is required for a property to be considered housing for older persons? - CORRECT ANSWER 80% of units must be occupied by someone age 55 or older" "Who enforces Federal Fair housing laws? - CORRECT ANSWER HUD" "Who enforces state Fair Housing Laws? - CORRECT ANSWER SC Human Affairs Commission" "What is the time limit on federal fair housing complaints? - CORRECT ANSWER must be FILED within 1 year of the event and 2 years to file action in court" "What is the time limit for State fair housing complaints? - CORRECT ANSWER Must be filed within 6 months and court action filed within 1 year" "SC Landlord-Tenant Act - CORRECT ANSWER The act applies only to rights, obligations, and remedies under a rental agreement or a dwelling unit located with South Carolina" "True or False: an agent must be a resident in S.C. to be authorized to do business in SC - CORRECT ANSWER True" "action - CORRECT ANSWER Is a court proceeding in which rights are determined including an action of possession" "Building & house codes - CORRECT ANSWER Includes any law, ordinance, or government regulations concerning fitness or habitation, or the construction, Maintance, operation, occupancy, use, or appearance of any premises or dwelling unit" "Dwelling Unit - CORRECT ANSWER A structure that is used as a residence or sleeping place by someone who maintains a household." "Abandonment - CORRECT ANSWER Utilities off, 15-days after, you are able to take possession of the apartment" "When do you send over the SC disclosure of real estate brokerage relations paper? - CORRECT ANSWER Right after the first serious inquiry" "How many elected members are in the DC REAL ESTATE COMMISIONS ? - CORRECT ANSWER 10 members: 7- are professionally engaged and active in the practice of real estate 2- represents the public who are not engaged in real edge and each are appointment by the governor with the advice and consent of the senate" "What is a unlicensed employee of a multi-family unit rental property able to perform? - CORRECT ANSWER •Maintance •clerical or admin support •collection of rent •showing rental units •furnishing published info • receive applications and leases •provide applications and lease forms" "Agent duties to clients - CORRECT ANSWER C- confidentially (care) O-obedience A-accounting L-loyalty D-disclosure" "What's the three basic goals of a property manager - CORRECT ANSWER 1. Achieve the objective of the properties owener 2. Generate income for owners 3. Preserve and/or increase the value of the investment property" "Real Property - CORRECT ANSWER land and anything attached to it" "residential - CORRECT ANSWER single-family housing and apartment buildings" "BOMA - CORRECT ANSWER Building Owners and Managers Association- oldest organization" When a broker or property manager signs a contract to manage an owner's property he becomes a - CORRECT ANSWER Fiduciary" "In establishing a client's trust account, a property manager must do all of the following - CORRECT ANSWER -control the receipts and disbursements on the account -use pre-numbered checks for the account -be an authorized signer on the account" "An owner of real estate who engages a property manager to manage his property must receive a copy of the signed property management agreement.... when? - CORRECT ANSWER PROMPTLY" "If a tenant's termination of tenancy occurs at the same time as the property manager's termination of the applicable property management agreement... - CORRECT ANSWER the property manager must complete a final accounting procedure involving the tenant's security deposit unless the owner directs otherwise." "A licensed real estate property manager may authorize...? I. another licensed property manager to supervise his property activity in his absence II. an unlicensed bookkeeper to supervise in his absence - CORRECT ANSWER I only" "Oregon law requires that checks used to disburse funds deposited into a clients's trust account be - CORRECT ANSWER pre-numbered" "When evaluating the data in a neighborhood market survey, a residential property manager will be most concerned with - CORRECT ANSWER trends in population composition" "Property managers are responsible for... - CORRECT ANSWER I. protecting the condition of real estate II. maximizing income from real property" "A person licensed as a real estate property manager may accept a finder's fee from a principal real estate broker for activity involving - CORRECT ANSWER the rental of real property" "A property manager should be aware of the break-even point to any buildings he manages. The BREAK-EVEN Point is: - CORRECT ANSWER The occupancy level at which gross income for a property equals total fixed and variable operating costs" "Which of the following statements concerning property management accounting are TRUE? a. Posting to the owner's ledger account must be done at least once every three months b. Reports to the owner must be given only upon request by the owner c. Property managers may transfer funds between owners' accounts of two or more different owners with written authorization by the owners. d. The available credit balance in an owner's account includes tenants' security deposits. - CORRECT ANSWER c. Property managers may transfer funds between owners' accounts of two or more different owners with written authorization by the owners." "In property management, an operating budget - CORRECT ANSWER is a projection of anticipated costs for the annual operation of a building." "Which of the following would NOT be a consideration in selecting a tenant? a. Racial and ethnic backgrounds of the tenants b. The size of space versus the tenant's requirements c. Compatibility of the business to the other tenants d. The tenant's ability to pay - CORRECT ANSWER a. Racial and ethnic backgrounds of the tenants" "A percentage lease is a lease - CORRECT ANSWER "which covers the lending of money and interest charged thereon."" "The manager of an apartment complex that falls within the requirements of federal fair housing laws may legally do which of the following? I. Segregate the families with children in specific portions of the complex II. Charge families with children higher rents than for tenants without children - CORRECT ANSWER Neither" "Under the Oregon Landlord and Tenant Act, landlords are responsible to provide - CORRECT ANSWER -adequate trash and garbage receptacles. -weatherproof and waterproof roofs and exteriors" "The client's trust account for a property manager must - CORRECT ANSWER Bear the words "Clients' Trust account" on the face of the checks used for the account." "According to the Oregon Landlord and Tenant Act, a tenant must receive a notice of which of the following when a rental agreement is signed: - CORRECT ANSWER I. Utilities paid by the tenant which benefit other tenants. II. Any pending legal proceeding against the landlord which involves the rented property if the rented property includes no more than 4 dwelling units. III. Name and address of the property owner or the person authorized by the owner to manage the property." "Which of the following is NOT a common characteristic of property management agreements? A. Provision for monthly report B. Long-Term contract period C. Specification of management fees D. Names of parties to the agreement - CORRECT ANSWER B. Long-Term contract period" "Market Analysis - CORRECT ANSWER Focuses on regional and neighborhood evaluations. Includes demographic conditions, geographic features, governmental prospective, existing real estate supply, future developments, and tenant/resident demand" "Market Analysis & Competitive Property Analysis helps to..... - CORRECT ANSWER Identify the subject property's strengths and weaknesses" "The Highest & Best Use - CORRECT ANSWER When the property manager considers alternatives to improve the property's weaknesses or further enhance its strengths to improve overall economic performance." "Analysis of Alternative - CORRECT ANSWER Looks at the theoretical costs and corresponding increase in rents by making different improvements, even property's redevelopment." "When determining the best use of property, alternatives to consider are......... - CORRECT ANSWER Rehabilitate without altering its existing use, Modernize by updating finishes (more efficient equipment), Change the Use of building (including conversion), or Conversion to a condominium m ownership structure." "Capital Expenditures - CORRECT ANSWER Projects that help extend the property's life." "Physical Obsolescene - CORRECT ANSWER is characterized as a condition of aging (i.e. wear & tear) or deferred maintenance. Examples are worn carpet, peeling paint, a leaking roof, or dead landscaping" "Functional Obsolescene - CORRECT ANSWER is characterized by old or outdated designs or building systems." "Economic Obsolesence - CORRECT ANSWER Represents a loss in value due to outside forces (i.e. location, market conditions). Examples would be an office building, locates in a small town, where the major employer closes." "Investment Value - CORRECT ANSWER A value generally used by investors" "Assessed Value - CORRECT ANSWER The value used by government tax assessment offices" "Market Value - CORRECT ANSWER The value that is agreed to between a buyer & seller" "Rules of Ethics for Property Manager - CORRECT ANSWER Loyalty to client, confidentiality, accurate accounting & reporting, protection of owner's funds, conflicts of interest, and compliance with law regulations." "An owner can be directly affected by manager's..... - CORRECT ANSWER Improper handling of evictions, unlawful rent collections, failure to return security deposits, not maintaining proper compliance with the Rental Accommodations Division (RAD)" "The Management Agreement - CORRECT ANSWER is a formal and binding contract that establishes the authority and responsibilities that a manager has on behalf of the owner." "Name of the owner & manager, term of agreement, describes the property, describes services provided by manager, identifies who collects rental payments, identifies whose name all service contracts are to be made, when funds are disbursed, whose employees work at the property, bank accounts, fidelity bonds, identifies building licenses, insurance requirements/ who secures policies, and management fees compensation - CORRECT ANSWER Some provisions outlined in the Management Agreement include:" "Pass-Through Income, Expense Reimbursement, or Recoveries - CORRECT ANSWER Commercial leases tenants can be billed for some or all of the property's operating expenses, real estate taxes and insurance." "Vacancy & Credit Loss - CORRECT ANSWER When actual income collected is less than Gross Potential Rental Income (typically a commercial lease)" "Effective Gross Income equation - CORRECT ANSWER is the net effective of Gross Potential plus (+) Expense Reimbursements minus (-) Vacancy Credit Loss plus (+) Miscellaneous Income." "Net Operating Income (NOI) - CORRECT ANSWER Represents the money that remains after the Operating Expenses are subtracted from Effective Gross Income." "Debt Service - CORRECT ANSWER includes both interest and principal reduction and is subtracted from Net Operating Income." "Examples of Capital Expenditures include...... - CORRECT ANSWER Improvements to a property that update appearance, replacement of major mechanical equipment (boilers), replacement of major building system (roof), renovating space, replacing old appliances." "Escrow Accounts & Reserves - CORRECT ANSWER In order for the owner to prepare for significant Capital Expenditures, it is common to establish an" "Gross Lease - CORRECT ANSWER The property owner pays all Operating Expenses up to a certain amount. Commonly found in office spaces." "What does the term "Net Lease" mean when referring to commercial leases? - CORRECT ANSWER The tenant pays for some or all Operating Expenses in addition to base rent. Derivatives of this structure are Net-Net & Triple Net Leases." " - CORRECT ANSWER " "What does the term "Triple Net" mean when referring to commercial leases - CORRECT ANSWER refers to commercial tenant paying ALL Operating Expenses including real estate taxes, insurance, roof maintenance, landscaping, etc. This is the most commonly found in industrial leases." "Asset Management focuses on - CORRECT ANSWER The property's long term planning, leasing and asking rates, negotiates commercial leases, evaluates mortgages & opportunities to refinance the loan,considers strategies to maximize value and when to market the property for sale." "What common method is used to determine a property's Investment Value? - CORRECT ANSWER Net Operating Income is divided by the Capitalization Rate (NOI/Cap Rate= Value)" "What are the four categories related to Maintenance? - CORRECT ANSWER Curative, Deferred, Routine, & Prevenative" "Curative Maintenance involves...... - CORRECT ANSWER Fixing or repairing something after it has already broken. An example would be fixing a broken sink" "Deffered Maintenance - CORRECT ANSWER Involves delaying needed repairs and maintenance to save money.Is an ordinary maintenance item that is not performed at the time when a problem is discovered. An example a manager notices some minor paint peeling in stairwell." "Routine Maintenance - CORRECT ANSWER Relates to the cleaning and upkeep that is needed every day. An example is vacuuming the carpet in the building hallways." "Depreciated Value - CORRECT ANSWER This is used for income tax purposes and affects a property's tax basis" "List Price - CORRECT ANSWER The only price that the owner has offered to sell a property for." "Cash Flow - CORRECT ANSWER is the amount of money that remains after Debt Service is subtracted from Net Operating Income. Is often used by investors to determine the owner's Return On Investment" "Chart of Accounts - CORRECT ANSWER is utilized to classify each of the different types of the income and expenses." "Tenancy at Will - CORRECT ANSWER Usually occurs in the absence of a written lease and can occur after a lease expires. Tenant/resident continues to occupy space and landlord continues to accept payment." "Tenancy at Sufferance - CORRECT ANSWER Occurs after the expiration of lease has expired. Tenant/resident continues to occupy the apartment or space without the landlord's consent." "What are the objectives of a Maintenance Plan? - CORRECT ANSWER Implement & accomplish the owner's objectives, increase resident/tenant satisfact rates, reduce operating costs, optimize the property's physical capabilities, increase the property's value, providing safety of tenants, residents, visitors, and employees." "Name some components of a valid lease - CORRECT ANSWER Names of Lessee, name of owner property or agent w/ authority to lease, legal address of the premises, Statement of rental amount, including time place of payments made, and time periods to which rent applies." "What is the designation of the National Association of Real Estate Brokers, Inc (Nareb)? - CORRECT ANSWER Realtist" "An example of Functional Obsolescence is - CORRECT ANSWER Equipment that can not be repaired because parts are no longer manufactured; single pane window systems that waste energy; outdated bathroom fixtures because of changing design and taste." "Alternatives to consider when making different improvements or when redeveloping a property - CORRECT ANSWER Rehabilitation without altering existing use, Modernize the property by updating finishes, Change the use of building, including converting to another property type, or demolishing for new development, or Conversion to a condo ownership structure." "Actions that could put management company and owner at risk include: - CORRECT ANSWER Improper handling of evictions, unlawful rent collections, failure to return security deposit, not maintaining proper compliance with Rental Accommodations Division (RAD)." "The purpose of the Budget process is to - CORRECT ANSWER Develop a means to track the property's performance and to organize various types of income. By organizing income & expenses is easier to see trends, to determine unusual or non-recurring items." "Gross Potential Rent Income - CORRECT ANSWER Is the maximum amount of income that a property can generate from all sources." "Effective Gross Income - CORRECT ANSWER Is the Net effective of all items listed above equals Gross Potential Rent Income includes Expense reimbursement minus Vacancy and Credit Loss plus Miscellaneous Income." "Net Operating Income - CORRECT ANSWER is used one of the components often used in calculating a property's investment value. It represents the money that remains after Operating Expenses are subtracted from Effective Gross Income." "In order to generate a list of what to be inspected on a property - CORRECT ANSWER A walk-through of the property and all of the areas related to its mechanical, electrical, telephone, and life safety equipment needs to be conducted. Frequency of inspections are determined annually, semi-annually, quarterly, and monthly." "Request For Proposal or RPF - CORRECT ANSWER To develop a clear and thorough specification for contracts to bid on is called" "What is included in an RPF? - CORRECT ANSWER Scope of work, how is to be performed, frequency, special requirements, work hours, timetable to complete, insurance requirements, deadline for submission, number of personnel to be provided, warranty, & references." "Before marketing an available space or unit, - CORRECT ANSWER Be sure that it is clean and presentable and that the owner has approved all marketing plans." "What is a legal reason for a landlord to evict a tenant? - CORRECT ANSWER Landlord wants to occupy the rental unit." "All evictions except non-payment of rent must be filed with - CORRECT ANSWER Rental Accommodations Division (RAD)" "A landlord may evict a tenant for only one of ten statutory reasons some of those reasons include - CORRECT ANSWER Nonpayment of rent, Violation of an obligation of tenancy, of which the tenant failed to correct after notice; Tenant performed as illegal act within the rental unit." "A property's foreclosure in not - CORRECT ANSWER A legal basis to evict tenant. Should an eviction occur, there is no change in tenant's rights." "Owners are required to - CORRECT ANSWER File an income tax return, file & maintain accurate records of all income and expenses." "Security Deposits - CORRECT ANSWER Owner is required to pay interest on security deposits." "Smoke Detectors should be installed - CORRECT ANSWER at least 1 smoke detector per sleeping area, in the room used for sleeping and outside the bedroom but in the mediated vicinity of the sleeping area." "An owner of a housing accommodation who wishes to convert shall each tenant and to the Conversion & Sale Regulatory Office - CORRECT ANSWER A request for election." "The Rental Conversion and Sale Division (CASD) administers - CORRECT ANSWER The Rental Housing Conversion & Sale Act of 1980" "Zoning Commission - CORRECT ANSWER Regulates land uses through the use of zoning and addresses height limitations, density, floor Area Ratios (FAR), set backs, parking requirements, and green spaces" "Rent control in the District of Columbia is covered under - CORRECT ANSWER The Rental Housing Act of 1985" "The Rental Accommodations Division (RAD), Department of Housing and Community Development (DHCD), & Housing Regulation Administration (HRA) is responsible for - CORRECT ANSWER Administering the Rental Housing Act of 1985." "Changes in ownership or management and all housing accommodations or rental unit must be filed to include: rental units built after 1975, federally or District subsidized, rental units that were vacant when the act took effect, a person who owns no more than 4 rental units. - CORRECT ANSWER with RAD, Rental Accommodations Division within 30-days." "The District of Columbia Real Estate Commission - CORRECT ANSWER protects consumers by enforcing the laws and regulations applicable to property managers including licensure" "The last increase in rent must have been - CORRECT ANSWER 12 months ago unless the unit is vacant." "The housing provider must give a 30-day notice - CORRECT ANSWER Before increasing rent" "A tenant organization must set a date of election and notify the owner within - CORRECT ANSWER 30-days" "The date of election must be held within - CORRECT ANSWER 60 days" "The Conversion Sale & Regulatory Office shall schedule and conduct an election within - CORRECT ANSWER 45 days" "A request from an owner or tenant must be made in 15 days of the 30 day expiration period allowed - CORRECT ANSWER for the tenant organization to set a date for an election after coordinating the date with the Conversion & Sales Regulatory Office." "Investment Value Equation - CORRECT ANSWER Net Operating Income divided by Cap Rate" "Return On Investment Equation - CORRECT ANSWER Cash Flow divided by Initial Investment" Associated Licensee - CORRECT ANSWER licensee who is affiliated with a broker in charge or a property manager in charge" "branch office - CORRECT ANSWER A sub office of a company in which full-service real estate activities are conducted and at which a broker-in-charge or property manager-in-charge is licensed to conduct real estate transactions." "Broker - CORRECT ANSWER a wholesaler who does not take title to goods and whose function is to bring buyers and sellers together and assist in negotiation" "broker-in-charge (BIC) - CORRECT ANSWER Broker who is designed as having responsibility over all associated licensees and also has the responsibility and control over and liability for any trust accounts" "client - CORRECT ANSWER A person with who a licensee has established an agency relationship" "Real Estate Commission - CORRECT ANSWER A state board that advises and sets policies regarding real estate licensees and transaction procedures" "customer - CORRECT ANSWER Person with who a licensee has NOT established a agency relationship with" "Department of LLR - CORRECT ANSWER Department of labor licensing and regulations" "Licensee - CORRECT ANSWER Individual currently under this chapter" "office - CORRECT ANSWER The principal office location where a BIC or PMIC is licensed to conduct real estate business" "Property Manager - CORRECT ANSWER A person or company hired to maintain and manage property on behalf of the property owner" "Property manager in charge - CORRECT ANSWER Responsibility over associated Property Managers and Real Estate Trust Accounts" "Trust Account - CORRECT ANSWER escrow account maintained by a real estate broker for the deposit of other peoples money" "How many members of the real estate commission and who elects them? - CORRECT ANSWER 6 who actively practice real estate from congressional districts 2 appointed by the governor-non real estate 1 elected by the other 8- real estate member" "What are the powers and duties of the real estate commission? - CORRECT ANSWER 1. Determine standards for licensure 2. Enforce standards for licensure with disciplinary hearings and etc. 3. Establishing fee schedule" "How many escrow accounts are required ? - CORRECT ANSWER Companies with multiple offices may utilize one central trust account" "What type of complaint does the REC not handle ? - CORRECT ANSWER Commission payout disputes" "When do the monies in the escrow/ trust account get disbursed? - CORRECT ANSWER Upon consummation or termination of the contract at which time money is disbursed and full accounting made to principle" "How can a dispute over an earnest money deposit be settled? - CORRECT ANSWER If parties can not agree, an Interpol easer activity n in court" "Commingling - CORRECT ANSWER Illegally mixing deposits or monies, collected from a client, with one's personal or business account. Taking money out too soon or putting it into escrow too late (10 banking days)." "Can the owner of the account collect intrest? - CORRECT ANSWER Yes but only if the clients rights are waived in writing using conspicuous language" "How long must financial documents and records be maintained? - CORRECT ANSWER Five years" "When can a licensee conduct business for an owner? - CORRECT ANSWER When a written contract is signed" "In the event of a personal transaction is the licensee required to disclose their licensee status - CORRECT ANSWER Yes in all personal transactions" "What are the inky duties an unlicensed employee of an owner multi-unit property are allowed to do? - CORRECT ANSWER A. Maintance B. Clerical or admin support C. Collection of rents which are made payable to owner or company D. Showing of rental units to perspective tenates E. Furnishing published information F. Providing applications and lease forms G. Receiving applications and leases for submission to the owner or licensee for approval" "What must be in the management contract between the licensee and client - CORRECT ANSWER Names and signatures of both parties Property identification Terms including expiration dates" "Fair Market Value - CORRECT ANSWER the actual value of an asset, or the price for which it can reasonably be expected to sell in the open market" "good faith - CORRECT ANSWER honesty in fact and the observance of reasonable commercial standards of fair dealing" "landlord - CORRECT ANSWER the person who owns the property that you rent" "organization - CORRECT ANSWER A group of people who work together to achieve some specific purpose" "owner - CORRECT ANSWER Means one or more persons jointly or singly who have the legal title to the property" "Persons - CORRECT ANSWER Individuals, including families, caregivers, teachers, employees, relevant others" "premises - CORRECT ANSWER house or building and its surrounding property" "rent - CORRECT ANSWER payment to resource owners for the use of their natural resources" "rental agreement - CORRECT ANSWER A contract specifying the tenant's and landlord's legal responsibilities" "roomer - CORRECT ANSWER A person living in a unit that doesn't have a toilet or bathtub or shower, sink, all provided by the landlord" "Single family residence - CORRECT ANSWER A housing structure maintained and used as a single dwelling unit. A single family residence may share walls with another dwelling unit, provided it has direct access to a street and does not share an essential facility or service with any other dwelling unit." "tenant - CORRECT ANSWER A person who pays for the right to live in a residence owned by someone else" "wilful - CORRECT ANSWER habitually disposed to disobedience and opposition" "essential services - CORRECT ANSWER water, sewer, elec, gas, hot water and heat" "Comingling - CORRECT ANSWER The mixing of a clients' funds with business operating funds. This is an illegal practice in Massachusetts that can result in revocation of an agent's license." "How long should you keep records? - CORRECT ANSWER 5 years" "What's the main objective of PMIC ? - CORRECT ANSWER To suprivise all employees or associated licensees and Maintain trust accounts" "Unconscionability - CORRECT ANSWER Acts are considered unscrupulous excessive, unreasonable, and not guided by conscience. (Excessive fees)" "When should you renew your license and what happens if you don't - CORRECT ANSWER A licensee who fails to renew and continues to engage in real estate is guilty of a misdemeanor and must be fined no more than 5 hundred dollars or imprisoned no more than 6 months or both"