CRLS CRLS Property Management Operations 2 — Questions and Answers
Question 1: A property manager collects rent on the owner's behalf. How should these funds be handled?
- Held in a separate trust or escrow account, not commingled with personal funds (Correct answer)
- Deposited into the manager's personal business account
- Forwarded directly to the owner before any expenses are paid
- Held in cash until the owner requests a disbursement
Correct answer: Held in a separate trust or escrow account, not commingled with personal funds
Funds collected on behalf of clients must be held in a separate trust account to prevent commingling, which is a serious ethical and legal violation.
Question 2: Which of the following is an example of deferred maintenance?
- Postponing HVAC servicing until the system fails (Correct answer)
- Completing repairs within 24 hours of tenant request
- Performing annual roof inspections
- Replacing appliances before they break down
Correct answer: Postponing HVAC servicing until the system fails
Deferred maintenance occurs when necessary repairs are delayed, often leading to costlier damage and habitability issues.
Question 3: What is the purpose of a property management monthly owner statement?
- To provide a financial summary of income, expenses, and net disbursement to the owner (Correct answer)
- To inform tenants of upcoming rent increases
- To list all maintenance requests for the month
- To document lease renewal offers made to tenants
Correct answer: To provide a financial summary of income, expenses, and net disbursement to the owner
Monthly owner statements give property owners a transparent accounting of all income collected and expenses paid on their behalf.
Question 4: A property manager wants to increase the likelihood of on-time rent payments. Which strategy is most effective?
- Offering an online payment portal with automatic reminders (Correct answer)
- Requiring cash-only payments delivered in person
- Extending the grace period to 30 days
- Waiving late fees for all tenants
Correct answer: Offering an online payment portal with automatic reminders
Online payment portals with automated reminders reduce friction and consistently improve on-time payment rates.
Question 5: Which practice helps a property manager ensure consistent vendor pricing?
- Obtaining at least three competitive bids for major repairs (Correct answer)
- Using only one preferred contractor for all work
- Allowing tenants to hire their own repair contractors
- Paying vendors in cash to avoid paperwork
Correct answer: Obtaining at least three competitive bids for major repairs
Soliciting multiple bids ensures competitive pricing and protects the owner's financial interests while maintaining quality standards.
Question 6: What is the primary legal concern when a property manager self-deals by hiring their own company for repairs?
- Undisclosed conflict of interest and breach of fiduciary duty (Correct answer)
- Violation of fair housing laws
- Improper use of the security deposit
- Unlicensed contracting activity
Correct answer: Undisclosed conflict of interest and breach of fiduciary duty
A property manager who hires a related company without disclosure breaches their fiduciary duty to act in the owner's best interest.
CRLS CRLS Property Management Operations 2
A property manager collects rent on the owner's behalf.
How should these funds be handled?