Legal & Ethical Considerations Flashcards

IREM's Code of Professional Ethics requires members to handle all client funds in which manner?

Answer: Kept in separate trust or escrow accounts distinct from personal and operating funds

IREM ethics require strict separation of client funds into trust or escrow accounts to prevent commingling and protect client assets.

A property manager receives a kickback from a maintenance vendor for referring work. Under IREM's Code of Ethics, this is:

Answer: A violation unless fully disclosed to and approved by the client

Undisclosed kickbacks from vendors violate the property manager's fiduciary duty of loyalty; they are only permissible with full client disclosure and consent.

Under the Fair Debt Collection Practices Act (FDCPA), which of the following applies to residential property managers collecting rent?

Answer: FDCPA typically applies to third-party collectors, not landlords collecting their own rents

The FDCPA primarily applies to third-party debt collectors; landlords collecting their own rents are generally not covered, though state laws may impose similar requirements.

A certified residential manager discovers that the property owner is asking the manager to falsify inspection records. The ethical response is to:

Answer: Refuse and advise the owner of the legal and ethical implications

Managers must refuse to participate in illegal or unethical acts and should advise the client of the consequences, even at the risk of losing the management contract.

Which federal regulation requires property managers to implement a written program to protect tenant information under certain electronic data circumstances?

Answer: The Gramm-Leach-Bliley Act if financial products are offered

Managers who offer financial services like insurance or credit products may fall under GLB Act requirements to protect consumers' nonpublic personal financial information.

A property manager must comply with the Servicemembers Civil Relief Act (SCRA) when a tenant with a month-to-month lease receives deployment orders. The SCRA requires that the manager:

Answer: Allow the tenant to terminate the lease with 30 days' written notice plus a copy of deployment orders

Under the SCRA, an active-duty service member may terminate a month-to-month lease by providing written notice and a copy of orders, effective 30 days after the next rent due date.

A property manager is aware that a competing property is advertising units exclusively in English-language media, which largely excludes non-English speakers. This practice may violate the Fair Housing Act because:

Answer: Exclusive use of media that reaches only one linguistic group can constitute discriminatory advertising

HUD guidelines hold that advertising exclusively in media that reaches only certain national-origin or language groups can constitute discriminatory advertising under the FHA.