Ch.3 Flashcards
(31 cards)
agent
anyone who has a real estate license.
broker
Key player, primarily responsible for various activities on behalf of the public.
*responsible for the actions of salespeople/agent
salesperson
can do all the activities that the state requires a license for . However, a salesperson cannot work indipendently; must work under a broker.
associate broker
person has a broker license but chooses to work under another broker.
broker/salesperson get paid
check is made out to the broker, the broker then pays the salesperson. The split between the two is entirely negotiable; depending on experience.
financial responsibilities of a property manager
- creating an annual operating budget
- collecting rents
- setting rents
- paying bills
- preparing periodic financial reports
physical responsibilities of a property manager
- analysis of the building
- preparation of capital and repairs budgets
- maintenance
CART
controlling
avoiding
retaining
transferring
boiler and machinery insurance
because of how expensive heating and a/c systems are in large buildings, this type of insurance covers the replacement and repair of this machinery.
casualty insurance
covers losses caused by theft, vandalism, and burglary.
co-insurance
owner takes on part of the risk by self-insuring for a portion of the risk. Incorporating a large deductible before insurance starts to pay off.
errors and omissions insurance
covers property managers against any errors they make in the performance of their duties. *does not cover fraud/stupidity
fire and hazard insurance
also called all-risk, all-peril policy basically covers loss of property caused by fire, storms, and other types of damaging conditions with the exception of flooding and earthquakes.
liability insurance
covers losses caused by injuries at the result of negligence on the part of the landlord.
rent loss insurance
also called business interruption insurance or consequential loss insurance. It pays the owner of the building for the loss of rent from tenants if destroyed by fire.
surety bond
provides payment whenever something is not done within an agreed period of time.
property management agreement
- who;property owner and property manager
- where;property to be managed
- how long-term of length
- what;managers duties need to be clearly defined
- what;manager’s authority as an agent
- what info and when; reporting
- who pays what; allocation of expenses
- how much; the fee
- what the landlord wants
independent contractor vs. employee
- IC are responsible for paying their own taxes and social security.
- They can deduct certain business expenses from their pretax pay that an employee can’t deduct.
- IC can work their own hours and do the job their own way, employees must work certain hrs.
Sherman Antitrust Act
federal law that prohibits activities that are considered to be in restraint of trade and therefore against costumer interests, *forbids any type of price fixing in any industry.
example: Martha Stewart
United States vs Foley
the result of this case determined that even if no actual consultation occurred between individuals about price fixing, the mere discussing fees between brokers is illegal unless working together on the same deal.
Market allocation
agreement among competitors to divide the market in some way.
Group boycotts
when competitors get together and agree not to do business with someone- violates the SAA.
Tie-in arrangement / Tying agreement
any requirement to buy one product or service on condition that you buy another product or service.
special agent
agent who is hired by someone to represent that person in one transaction.
*a real estate agent who represents someone in the sale or purchase of a house.
