Legal and Risk Management Flashcards

What is 'general liability insurance' designed to protect against in property management?

Answer: Claims for bodily injury or property damage caused to third parties on the premises

General liability insurance covers third-party claims for bodily injury or property damage occurring on or related to the managed property.

What is 'errors and omissions' (E&O) insurance for property managers?

Answer: Professional liability coverage for claims arising from mistakes or negligence in professional services

E&O (professional liability) insurance protects property managers from claims that their professional advice or actions caused a client financial harm.

Under most US state laws, how must a landlord handle a tenant's security deposit?

Answer: Hold it in a separate trust or escrow account

Most states require security deposits to be held in a separate trust or escrow account, segregated from the landlord's personal or operating funds.

What is 'subrogation' in insurance?

Answer: The insurer's right to recover from a negligent third party after paying a claim

Subrogation allows an insurer who has paid a claim to step into the insured's shoes and pursue recovery from the responsible third party.

What is the legal purpose of an 'unlawful detainer' action?

Answer: To formally evict a tenant who refuses to vacate after proper notice

An unlawful detainer (eviction) lawsuit is the formal court process to remove a tenant who remains in possession without legal right after proper notice.

Which federal law governs the disposal of hazardous waste and can impose liability on property owners for contamination cleanup?

Answer: CERCLA (Superfund)

CERCLA (Comprehensive Environmental Response, Compensation, and Liability Act) can impose strict, joint and several liability on property owners for hazardous waste cleanup.