Unit 20 Flashcards
(40 cards)
Learning Objective: Describe a property manager’s functions and the basic elements of a management agreement.
Answer: A property manager serves as an agent of the owner, handling administration, marketing, and physical management of the property. Functions include supervising maintenance, hiring staff, collecting rents, and managing budgets. The management agreement outlines the manager’s duties and responsibilities, establishes the relationship with the owner, and includes a definite termination date per Texas law.
Learning Objective: Explain the property manager’s role in budgeting, renting, and maintaining property.
Answer: A property manager prepares a budget that accounts for income and expenses, including fixed and variable costs, and planned renovations. They establish rent schedules based on neighborhood conditions and market demand, screen tenants, collect rents, and ensure maintenance of the building’s physical integrity.
Learning Objective: Identify techniques a manager may use to attract, select, and retain quality tenants; the characteristics of an effective rental collection policy; and a property manager’s responsibilities regarding compliance with consumer protection and privacy laws.
Answer: Techniques to attract tenants include marketing and fair treatment of applicants. Managers screen tenants based on financial capability while complying with anti-discrimination laws. Rental collection policies must be firm and consistent. Compliance includes adherence to the Fair Credit Reporting Act when rejecting applicants and maintaining privacy standards.
Learning Objective: Distinguish the property manager’s responsibilities for handling environmental and risk management concerns.
Answer: Property managers address environmental issues like contaminated groundwater or ventilation problems and implement risk management strategies such as securing adequate insurance, including liability, casualty, and workers’ compensation policies.
Key Term: Business Interruption Insurance
Definition: Protects property owners from income losses resulting from events like fires or other disasters that disrupt business operations.
Key Term: Casualty Insurance
Definition: Provides coverage against losses such as theft, vandalism, and destruction of property.
Key Term: Depreciated Cost
Definition: The value of a property or asset after accounting for depreciation over time.
Key Term: Fire and Extended Coverage Insurance
Definition: Covers damage to property caused by fire and other specific hazards.
Key Term: Liability Insurance
Definition: Insures against claims made by individuals injured on the property.
Key Term: Management Agreement
Definition: A contract between a property manager and an owner defining the manager’s duties and responsibilities.
Key Term: Multiple Peril Policies
Definition: Comprehensive insurance policies covering multiple risks, such as fire, theft, and liability.
Key Term: Property Manager
Definition: An individual or firm responsible for managing income-producing properties on behalf of the owner.
Key Term: Replacement Cost
Definition: The amount required to replace a damaged property without considering depreciation.
Key Term: Risk Management
Definition: The process of minimizing potential risks through measures such as insurance and safety protocols.
Key Term: Surety Bond
Definition: A bond that protects against employee dishonesty or non-performance.
Key Term: Workers’ Compensation Insurance
Definition: Insurance covering medical expenses and lost wages for employees injured on the job.
Key Point Question: What is a management agreement, and why is it important?
Answer: A management agreement is a contract that defines the relationship between the owner and the manager, specifying the manager’s duties, responsibilities, and authority.
Key Point Question: What are the primary responsibilities of a property manager?
Answer: Property managers handle administration, marketing, and physical management, which includes collecting rents, maintaining the property, and dealing with tenant issues.
Key Point Question: What is the first step a property manager should take after signing a management agreement?
Answer: The first step is to prepare a budget, accounting for income, expenses, and proposed renovations.
Key Point Question: How does a property manager determine rental rates?
Answer: Rental rates are based on an analysis of building condition, market demand, and neighborhood trends.
Key Point Question: What does routine property maintenance include?
Answer: Maintenance includes cleaning, repairs, and adaptations to meet tenant needs and market demands.
Key Point Question: What are the basic types of insurance a property manager should secure?
Answer: Insurance types include fire and extended coverage, casualty, business interruption, liability, and workers’ compensation.
Key Point Question: When is a real estate license required for property management in Texas?
Answer: A license is required if the manager leases or lists properties for others, unless exemptions apply (e.g., onsite managers or owners).
Key Point Question: What termination requirements apply to property management agreements in Texas?
Answer: The Texas Real Estate License Act requires a definite termination date that is not subject to prior notice.
