Property Management Fundamentals Flashcards

Which organization awards the Certified Property Manager (CPM) designation in the US?

Answer: Institute of Real Estate Management (IREM)

The CPM designation is awarded by the Institute of Real Estate Management (IREM), a division of NAR.

A property manager's PRIMARY fiduciary duty is owed to whom?

Answer: The owner/client

A property manager acts as an agent for the owner and owes primary fiduciary duties—loyalty, care, and disclosure—to that owner/client.

What is the term for a property management agreement that outlines the scope of authority given to a manager?

Answer: Management contract

The management contract (or management agreement) defines the manager's authority, responsibilities, compensation, and the term of engagement.

Which property type is generally characterized by income-producing residential units rented to multiple tenants?

Answer: Multifamily residential

Multifamily residential properties—such as apartment complexes—consist of multiple dwelling units rented to generate rental income.

What does 'highest and best use' mean in property management context?

Answer: The legally permitted, physically possible, financially feasible use that produces maximum value

Highest and best use is the legally permissible, physically possible, financially feasible, and maximally productive use of a property.

Which of the following best describes 'property management'?

Answer: The process of overseeing real property on behalf of an owner to maximize return

Property management involves operating, controlling, and maintaining real estate on behalf of an owner to achieve defined investment objectives.