MRP Property Management Practices 3 — Questions and Answers
Question 1: Which of the following best describes the role of a Property Management Agreement (PMA) for military relocation clients?
- It sets the BAH rate for the tenant
- It defines the duties, fees, and authority of the property manager on behalf of a landlord client (Correct answer)
- It guarantees rent payments to the landlord
- It waives SCRA protections for military tenants
Correct answer: It defines the duties, fees, and authority of the property manager on behalf of a landlord client
A PMA outlines the scope of management services, fee structure, and the manager's authority to act on the landlord's behalf.
Question 2: A military homeowner receives PCS orders and wants to rent their home rather than sell it. What is the primary tax consideration an MRP should flag?
- Property taxes will be waived during active duty
- Rental income is taxable, but mortgage interest and depreciation may be deductible (Correct answer)
- BAH received by tenants is tax-exempt and reduces rental income
- Capital gains exclusion is permanent once the home is rented
Correct answer: Rental income is taxable, but mortgage interest and depreciation may be deductible
Converting a primary residence to a rental creates taxable income while allowing deductions for expenses like interest and depreciation.
Question 3: Under the Military Homefront guidelines, what is the recommended maximum percentage of gross income a military family should allocate to housing costs?
- 20%
- 28% (Correct answer)
- 35%
- 43%
Correct answer: 28%
The 28% front-end ratio is a standard housing affordability benchmark used in military financial counseling.
Question 4: A property manager accepts rent via allotment directly from a service member's military pay. What is a key risk of this arrangement?
- Allotments are not legally binding payment methods
- Allotments can be cancelled by the service member at any time without notice (Correct answer)
- Allotments are subject to SCRA interest caps
- Allotments require congressional approval for amounts over $2,000
Correct answer: Allotments can be cancelled by the service member at any time without notice
Service members can cancel allotments voluntarily at any time, which can leave landlords without expected payment.
Question 5: When managing a property on behalf of a deployed military landlord, an MRP should have which legal authority to act on emergency repairs?
- Verbal permission from the landlord's spouse
- A power of attorney (POA) or written authorization with a defined spending limit (Correct answer)
- An SCRA waiver signed by the tenant
- A court order allowing emergency maintenance
Correct answer: A power of attorney (POA) or written authorization with a defined spending limit
A POA or written authorization with spending limits protects both the manager and the deployed owner when urgent decisions arise.
Question 6: Which federal fair housing protected class is MOST directly relevant to military relocation property management?
- Familial status, because military families often have children (Correct answer)
- Religion, because military chaplains often relocate
- Color, because military uniforms affect appearance
- Sex, because combat roles are gender-integrated
Correct answer: Familial status, because military families often have children
Military families often have children, making familial status the most frequently relevant protected class in military rental transactions.
Question 7: A landlord instructs a property manager not to rent to families with more than two children. What should the MRP advise?
- Follow the instruction if it matches local occupancy standards
- Refuse the instruction as it violates the Fair Housing Act's familial status protections (Correct answer)
- Follow the instruction only for properties with fewer than 3 bedrooms
- Document the instruction and apply it selectively based on lease terms
Correct answer: Refuse the instruction as it violates the Fair Housing Act's familial status protections
Blanket restrictions based on number of children violate the FHA's familial status protections regardless of occupancy rationale.
MRP Property Management Practices 3
Which of the following best describes the role of a Property Management Agreement (PMA) for military relocation clients?