CRM CRM Maintenance & Capital Improvements 2 — Questions and Answers
Question 1: Which metric is most useful for evaluating whether deferred maintenance is accumulating at a residential property?
- Gross rent multiplier
- Maintenance cost as a percentage of property value (Correct answer)
- Net operating income
- Debt service coverage ratio
Correct answer: Maintenance cost as a percentage of property value
Tracking maintenance costs as a percentage of property value over time reveals whether deferred maintenance is growing or being properly addressed.
Question 2: What does the term 'deferred maintenance' mean in property management?
- Maintenance completed ahead of schedule
- Necessary repairs that have been postponed (Correct answer)
- Maintenance funded through reserves
- Routine cleaning and janitorial services
Correct answer: Necessary repairs that have been postponed
Deferred maintenance refers to repairs and upkeep that were needed but deliberately or unintentionally postponed, often increasing future repair costs.
Question 3: Which federal law must property managers consider when planning maintenance work that may disturb paint in pre-1978 housing?
- Americans with Disabilities Act (ADA)
- EPA Lead Renovation, Repair and Painting Rule (RRP) (Correct answer)
- Fair Credit Reporting Act (FCRA)
- Occupational Safety and Health Act (OSHA) noise standards
Correct answer: EPA Lead Renovation, Repair and Painting Rule (RRP)
The EPA's Lead Renovation, Repair and Painting Rule requires certified renovators and specific work practices when disturbing lead-based paint in pre-1978 housing.
Question 4: A property manager is budgeting for the upcoming year. Which approach to maintenance budgeting is considered best practice?
- Using last year's actual costs without adjustment
- Zero-based budgeting that justifies every line item from scratch
- Historical cost analysis combined with property condition assessment (Correct answer)
- Allocating a flat 5% of gross rents regardless of condition
Correct answer: Historical cost analysis combined with property condition assessment
Combining historical maintenance data with a current property condition assessment produces the most accurate and defensible maintenance budget.
Question 5: What is the purpose of a property condition assessment (PCA)?
- To set rental rates for market positioning
- To evaluate the physical condition and identify repair needs of a property (Correct answer)
- To screen tenant applications
- To calculate depreciation for tax purposes
Correct answer: To evaluate the physical condition and identify repair needs of a property
A property condition assessment is a systematic inspection that documents the current physical condition of a property and identifies immediate and long-term repair needs.
Question 6: Which of the following best describes a work order system in residential property management?
- A lease addendum for maintenance responsibilities
- A formal tracking system for maintenance requests from submission to completion (Correct answer)
- A contractor licensing database
- A reserve fund investment account
Correct answer: A formal tracking system for maintenance requests from submission to completion
A work order system provides a documented workflow for receiving, assigning, tracking, and closing maintenance requests, ensuring accountability and record-keeping.
CRM CRM Maintenance & Capital Improvements 2
Which metric is most useful for evaluating whether deferred maintenance is accumulating at a residential property?