CPM Legal and Risk Management 3

Question 1

What is 'risk transfer' in property risk management?

Accepted Answer

Shifting financial responsibility for a risk to another party, typically through insurance or contract

Answer

Risk transfer shifts the financial consequences of a risk to another party, most commonly through purchasing insurance or including indemnification clauses in contracts.

Question 2

A lease clause requiring the tenant to indemnify the landlord for injuries caused by the tenant's negligence is known as a:

Accepted Answer

Hold harmless agreement

Answer

A hold harmless (indemnification) clause requires one party to protect the other from liability arising from the first party's actions.

Question 3

What does an 'estoppel certificate' confirm in commercial real estate?

Accepted Answer

The current status and terms of a lease as acknowledged by the tenant

Answer

An estoppel certificate is a signed tenant statement confirming the lease terms, rent amounts, and whether the landlord is in default—used in sale or financing transactions.

Question 4

What is the purpose of a 'subordination, non-disturbance, and attornment' (SNDA) agreement?

Accepted Answer

To protect the tenant's lease rights if the lender forecloses on the property

Answer

An SNDA ensures a tenant's lease survives a foreclosure (non-disturbance) in exchange for the tenant recognizing the new owner's authority (attornment).

Question 5

Under the Americans with Disabilities Act, which properties must comply with accessibility requirements for public accommodations?

Accepted Answer

All commercial facilities open to the public regardless of age

Answer

Title III of the ADA requires all places of public accommodation—regardless of age—to remove architectural barriers to the extent readily achievable.

CPM - Certified Property Manager Practice Test

CPM - Certified Property Manager Practice Test

CPM Legal and Risk Management 3