CAM Risk Assessment and Management 3 — Questions and Answers
Question 1: Under the Fair Housing Act, which risk management practice helps prevent discrimination claims during the leasing process?
- Varying income requirements by applicant background
- Applying consistent written screening criteria to all applicants (Correct answer)
- Reserving units for preferred demographics
- Using informal verbal agreements for special terms
Correct answer: Applying consistent written screening criteria to all applicants
Consistent written criteria applied uniformly to all applicants is the cornerstone of Fair Housing compliance in screening.
Question 2: A property manager wants to reduce liability exposure from pool accidents. Which combination of measures is MOST effective?
- Posting pool rules and draining the pool in winter
- Installing fencing, posting rules, and enforcing adult supervision policies (Correct answer)
- Hiring a lifeguard for weekends only
- Requiring residents to sign a waiver before using the pool
Correct answer: Installing fencing, posting rules, and enforcing adult supervision policies
Layered controls—physical barriers, posted rules, and supervision policies—provide the most comprehensive pool risk management.
Question 3: Which document should a property manager maintain to demonstrate due diligence in risk management for a premises liability claim?
- Resident satisfaction surveys
- Inspection logs and maintenance work orders (Correct answer)
- Lease renewal statistics
- Monthly occupancy reports
Correct answer: Inspection logs and maintenance work orders
Inspection logs and completed work orders show the property was regularly monitored and hazards were addressed promptly.
Question 4: What is the primary purpose of business interruption insurance for an apartment community?
- To cover resident relocation costs after a natural disaster
- To replace lost rental income while the property is being repaired (Correct answer)
- To pay for emergency repairs to critical systems
- To cover the cost of temporary management staff
Correct answer: To replace lost rental income while the property is being repaired
Business interruption insurance compensates for rental income lost while the property is uninhabitable due to a covered loss.
Question 5: When a resident reports a carbon monoxide detector is not functioning, how should a property manager respond under a risk management protocol?
- Schedule a routine maintenance visit within 30 days
- Replace the detector within 24 hours and document the action (Correct answer)
- Advise the resident to purchase a replacement detector
- Add it to the next scheduled unit inspection
Correct answer: Replace the detector within 24 hours and document the action
Carbon monoxide is a life-safety issue requiring immediate replacement and documentation to reduce liability.
Question 6: Which risk transfer mechanism requires a contractor performing work on the property to add the property owner as an additional insured?
- Subrogation waiver endorsement
- Additional insured endorsement on the contractor's policy (Correct answer)
- Umbrella liability extension
- Cross-liability clause
Correct answer: Additional insured endorsement on the contractor's policy
An additional insured endorsement extends the contractor's liability coverage to protect the property owner for claims arising from the contractor's work.
Question 7: A fire destroys a storage facility on the property, damaging resident belongings. Who is typically responsible for compensating residents for their personal property losses?
- The property owner's property insurance
- The resident's renter's insurance (Correct answer)
- FEMA disaster assistance
- The property management company's E&O policy
Correct answer: The resident's renter's insurance
Residents' personal property losses are covered by their own renter's insurance, not the property owner's policy.
CAM Risk Assessment and Management 3
Under the Fair Housing Act, which risk management practice helps prevent discrimination claims during the leasing process?