CRLS CRLS Property Management Operations 1 — Questions and Answers
Question 1: Which document outlines the scope of services a property manager will provide to an owner?
- Property management agreement (Correct answer)
- Lease agreement
- Disclosure form
- Rental application
Correct answer: Property management agreement
The property management agreement defines the duties, fees, and authority granted by the owner to the property manager.
Question 2: A property manager discovers a roof leak causing interior damage. What is the FIRST action they should take?
- Notify the owner and arrange emergency repairs (Correct answer)
- Deduct repair costs from tenant's security deposit
- Wait until the lease ends to address the issue
- Issue the tenant a lease violation notice
Correct answer: Notify the owner and arrange emergency repairs
The property manager must promptly notify the owner and arrange emergency repairs to prevent further damage and protect habitability.
Question 3: What is the primary purpose of a move-in inspection report?
- To document the property's condition before the tenant takes possession (Correct answer)
- To calculate the tenant's first month's rent
- To verify the tenant's employment history
- To set the security deposit amount
Correct answer: To document the property's condition before the tenant takes possession
A move-in inspection report creates a baseline record of property condition to resolve disputes over damages at move-out.
Question 4: Which metric is most commonly used to evaluate a property manager's leasing performance?
- Vacancy rate (Correct answer)
- Gross rent multiplier
- Debt service coverage ratio
- Cap rate
Correct answer: Vacancy rate
Vacancy rate measures the percentage of unoccupied units, directly reflecting how effectively a property manager is leasing available space.
Question 5: Under a typical property management agreement, who is responsible for paying property taxes?
- The property owner (Correct answer)
- The property manager
- The tenants collectively
- The local municipality bills tenants directly
Correct answer: The property owner
Property taxes are the financial obligation of the property owner, though the manager may arrange payment from the owner's operating account.
Question 6: What does 'net operating income' (NOI) represent in residential property management?
- Gross rental income minus operating expenses, before debt service (Correct answer)
- Total rent collected minus tenant security deposits
- Gross income minus mortgage payments only
- Total income after all taxes and financing costs
Correct answer: Gross rental income minus operating expenses, before debt service
NOI equals gross rental income less operating expenses (maintenance, management fees, insurance, taxes) but excludes mortgage payments.
CRLS CRLS Property Management Operations 1
Which document outlines the scope of services a property manager will provide to an owner?