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DC PROPERTY MANAGEMENT LICENSE QUESTIONS
AND CORRECT ANSWERS| LATEST UPDATE
“Management Plan - CORRECT ANSWER Assists the owner in meeting their goals while
maximizing the property's value and return. The plan describes in detail the subject property's current use along with it's physical condition, fiscal projections, and operational issues (includes an analysis of the market regional & neighborhood)." "Organizational and educational programs available to assist in enhancing the property manager's knowledge, identifying resources to resolve issues, and expanding their business
network. - CORRECT ANSWER Institute of Real Estate Management (IREM), National
Association of Realtors (NAR), Greater Capital Area Association of Realtors (GCARR), building Owners & Managers Association (BOMA), National Association of Real Estate Brokers, International Council of Shopping Centers (ICSC), and National Property Management Association."
"Reasons for termination of Management Agreement - CORRECT ANSWER Sale or transfer
of the property, improper financial reporting, stealing funds, negligence, taking kickbacks or benefiting directly from discounts from vendors, commingling funds."
"Comparison Analysis - CORRECT ANSWER Helps determine if the subject property's rental
rates are appropriate for the market."
"A Comparison Analysis should include: - CORRECT ANSWER Locational
advantages/Accessibility, Curb Appeal, Interior conditions, quality of finishes, Amenities, Rents per square foot, Operating expenses per square foot"
"The purpose of a Budget is to................ - CORRECT ANSWER Develop a means to track the
property's performance & and to organize various types of income."
"Gross Potential Rent - CORRECT ANSWER The maximum amount of income that a property
can generate from all sources."
"Percentage Lease - CORRECT ANSWER A lease, that requires tenant to pay rent based on a
calculation that relates directly to the tenant's gross sales. Usually stipulates a base monthly rental plus a percentage of any gross sales above a certain amount."
"The rights of a property owner include........ - CORRECT ANSWER The right of possession, the
right of control, the right of exclusion, the right of enjoyment, the right to sell."
"What is a Leasehold Interest? - CORRECT ANSWER When the owner leases a property, it
temporarily transfers to the tenant a portion of the right of possession."
"Escalator Clause - CORRECT ANSWER When multi-year leases contain a provision for the
owner to increase the rent on the lease's anniversary date."
"Separation of Funds - CORRECT ANSWER Funds must be kept separate from property
manager's accounts. Funds that the property generates belong to the owner and should be deposited into owner's account."
"Primary objectives to consider prior to any property inspection - CORRECT ANSWER What
will be inspected, what is the frequency of inspection, who will conduct the inspection, how will results be reported."
"Routine Maintenance - CORRECT ANSWER relates to cleaning and upkeep that is needed
everyday."
"General Liability - CORRECT ANSWER Insurance coverage that can protect the property
owner from a variety of claims including bodily injury, property damage, and personal injury."
"Excess Liability - CORRECT ANSWER an umbrella policy is issued to provide coverage limits
in excess of an underlying General Liability policy."
"Marketing Plan - CORRECT ANSWER Is necessary for every property to find new residents
or tenants primary goals is to identify as many qualified prospects as possible."
"A Management Plan is made up of how many what 7 components? - CORRECT ANSWER
Regional Analysis, Neighborhood Analysis, Property Analysis, Market Analysis, Analysis of Alternatives, Proposed Property Analysis, Investment Analysis."
"Functional Obsolescence can directly imapact - CORRECT ANSWER Attainable rents at a
building."
"Deferred Maintenance - CORRECT ANSWER Involves delaying needed repairs and
maintenance to save money."
"Examples of Deferred Maintenace - CORRECT ANSWER Painting a corridor, sealing a leaky
roof or repairing cracks."
"Physical Inspections - CORRECT ANSWER Is a method used to evaluate the property's
condition & equipment as well as being the first step to develop a plan to address any issues."
"When should an inspection be performed after a resident has moved out? - CORRECT
ANSWER Ideally the same day."
"Some areas to regular inspect include - CORRECT ANSWER Roofs- look for pondering water,
holes, and debris; Parking Lots- look for pavement alligator, loose graveling, potholes Front Entrance- look for trip hazards, cracked windows; Exterior Facades- failed caulking, loose concrete, crack windows."
"Each owner should install smoke detectors an comply with the requirements of - CORRECT
ANSWER The Smoke Detector Act of 1978."
"Smoke detectors should be directly wired to - CORRECT ANSWER The power supply of the
building."
"The owner shall post in conspicuous places - CORRECT ANSWER Instructions on the
operation of the fire alarm, whether the apartment building fire alarm is separate from or connected to detectors in the individual unit or building, connected to Fire, Medical Services, and a warning that in the event of a fire call 911."
"No owner shall place in the lease or rental agreement a provision - CORRECT ANSWER
Waiving the right of a tenant to a jury trail or that the tenant pay the owner's court cost or legal fees"
"Every employer shall pay all wages earned to his employees - CORRECT ANSWER at lease
twice during each calendar month"
"Employee must receive compensation at a rate of - CORRECT ANSWER 1 1/2 times the
regular rate at which the employee is employed."
"In accordance with the D.C. Human Right Act of 1977 - CORRECT ANSWER DC does not
discriminate on the basis factual or perceived."
"The Office of Human Rights was established - CORRECT ANSWER In 1999"
"An owner asks the property manager to submit an Offer of Sale under DOPA. The property
manager should submit the offer to: - CORRECT ANSWER The District of Columbia
Department of Housing and Community & Development (DHCD)."
"DOPA - CORRECT ANSWER promotes affordable rental housing by maintaining the
affordable status of existing affordable rental units. Consist of 5 or more rental units, provided that 25% or more of the rental units are"Affordable Units""
"TOPA Tenant Opportunity to Purchase Act - CORRECT ANSWER Landlord must provide the
tenant(s) with the opportunity to acquire a residence."
"The Condominium Act - CORRECT ANSWER Regulates condominium formation and
registration." "The owner must provide tenants of a housing accommodation how many days notice of intent to
convert to a cooperative or condo - CORRECT ANSWER 120 days"
"The owner should pay relocation expenses within - CORRECT ANSWER 7 days of receiving
request for payment."
"The owner will a minimum of $125 up to a maximum of $500 for - CORRECT ANSWER
Relocation expenses."
"What do you have to do to qualify for a license - CORRECT ANSWER A. Attained the age of 21
for PMIC B. Age of 18 for PM C. Pass credit report D. Graduated from high school or GED E. Submit proof of education requirements F. Pass the applicable exam"
"Is there an educational requirement for the property manager license - CORRECT ANSWER
No"
"What is required to be a PMIC - CORRECT ANSWER Has an owner interest in the applicants
company or actively engaged in the operation or management of the company"
"How soon must the department be notified if a PM becomes disassociated with the PMIC? -
CORRECT ANSWER The PMIC must notify the department immediately by letter and furnish
a forwarding address"
d. conduct or host an open house or manage an onsite sales office e. show real property f. answer questions regarding anything other than public info g. discuss negotiate or explain a contract h. be paid soley on the basis of real estate activity"
"What does a licensee not have to disclose to a potential renter? - CORRECT ANSWER 1.
sickness that is not likely to be transferred
- death or manner of death
- location of registered sex offenders
- offsite condition or hazard that does not directly impact property
- any psychological impact like ghosts
- UNLESS ASKED DIRECTLY" "Acting like a PM without a licensee is a ____________ and can get you a $______ fine or inprisoned
not more than ______ months or both. - CORRECT ANSWER Misdemeanor
6 months"
"Those not required to have a license to conduct real estate transactions: - CORRECT
ANSWER a. owner of the property
b. attorney at law acting within duties c. state and federal agencies d. court appointed receivers and trustees" "The Civil rights act of ______ states that all persons born in the US have the right to own property
and who upholds this act? - CORRECT ANSWER 1866
Department of Justice"
"What Supreme Court Decision upheld the civil rights act of 1866? - CORRECT ANSWER Jones
vs. Mayer bc of this discrimination still illegal today"
"The fair housing act protects what seven classes? - CORRECT ANSWER Race, Color, Religion,
National Origin, Sex, Familial Status, and Handicap"
"Blockbusting - CORRECT ANSWER frightening people into renting or selling their property
by manipulating their prejudices"
"Steering - CORRECT ANSWER Licensee shows white clients homes in white areas and
minority clients minority areas- everyone has the right to live anywhere they can afford"
"Redlining - CORRECT ANSWER Being denied or subjected to stricter conditions on a loan or
insurance due to a property being in a certain area"
"race - CORRECT ANSWER Identity with a group of people descended from a common
ancestor."
"Creed/Religion - CORRECT ANSWER formal statement of religious belief"
"Familial Status - CORRECT ANSWER One of the protected classes under Fair Housing
referring to families with children under 18."
"What are the exemptions to Fair Housing? - CORRECT ANSWER Religious organizations
that own property private club that owns property housing for older persons Sale by owner if they have less than 3 single family houses"
"What is required for a property to be considered housing for older persons? - CORRECT
ANSWER 80% of units must be occupied by someone age 55 or older"
"Who enforces Federal Fair housing laws? - CORRECT ANSWER HUD"
•collection of rent •showing rental units •furnishing published info
- receive applications and leases •provide applications and lease forms"
"Agent duties to clients - CORRECT ANSWER C- confidentially (care)
O-obedience A-accounting L-loyalty D-disclosure"
"What's the three basic goals of a property manager - CORRECT ANSWER 1. Achieve the
objective of the properties owener
- Generate income for owners
- Preserve and/or increase the value of the investment property"
"Real Property - CORRECT ANSWER land and anything attached to it"
"residential - CORRECT ANSWER single-family housing and apartment buildings"
"BOMA - CORRECT ANSWER Building Owners and Managers Association- oldest
organization" When a broker or property manager signs a contract to manage an owner's property he becomes
a - CORRECT ANSWER Fiduciary"
"In establishing a client's trust account, a property manager must do all of the following -
CORRECT ANSWER -control the receipts and disbursements on the account
-use pre-numbered checks for the account -be an authorized signer on the account" "An owner of real estate who engages a property manager to manage his property must receive a
copy of the signed property management agreement.... when? - CORRECT ANSWER
PROMPTLY"
"If a tenant's termination of tenancy occurs at the same time as the property manager's
termination of the applicable property management agreement... - CORRECT ANSWER the
property manager must complete a final accounting procedure involving the tenant's security deposit unless the owner directs otherwise."
"A licensed real estate property manager may authorize...? I. another licensed property manager to supervise his property activity in his absence
II. an unlicensed bookkeeper to supervise in his absence - CORRECT ANSWER I only"
"Oregon law requires that checks used to disburse funds deposited into a clients's trust account
be - CORRECT ANSWER pre-numbered"
"When evaluating the data in a neighborhood market survey, a residential property manager will
be most concerned with - CORRECT ANSWER trends in population composition"
"Property managers are responsible for... - CORRECT ANSWER I. protecting the condition of
real estate II. maximizing income from real property" "A person licensed as a real estate property manager may accept a finder's fee from a principal
real estate broker for activity involving - CORRECT ANSWER the rental of real property"
"A property manager should be aware of the break-even point to any buildings he manages. The
BREAK-EVEN Point is: - CORRECT ANSWER The occupancy level at which gross income for a
property equals total fixed and variable operating costs" "Which of the following statements concerning property management accounting are TRUE? a. Posting to the owner's ledger account must be done at least once every three months b. Reports to the owner must be given only upon request by the owner c. Property managers may transfer funds between owners' accounts of two or more different owners with written authorization by the owners.
d. The available credit balance in an owner's account includes tenants' security deposits. -
CORRECT ANSWER c. Property managers may transfer funds between owners' accounts of
two or more different owners with written authorization by the owners."
"In property management, an operating budget - CORRECT ANSWER is a projection of
anticipated costs for the annual operation of a building." "Which of the following would NOT be a consideration in selecting a tenant? a. Racial and ethnic backgrounds of the tenants b. The size of space versus the tenant's requirements c. Compatibility of the business to the other tenants
d. The tenant's ability to pay - CORRECT ANSWER a. Racial and ethnic backgrounds of the
tenants"
"Analysis of Alternative - CORRECT ANSWER Looks at the theoretical costs and
corresponding increase in rents by making different improvements, even property's redevelopment."
"When determining the best use of property, alternatives to consider are......... - CORRECT
ANSWER Rehabilitate without altering its existing use, Modernize by updating finishes (more
efficient equipment), Change the Use of building (including conversion), or Conversion to a condominium m ownership structure."
"Capital Expenditures - CORRECT ANSWER Projects that help extend the property's life."
"Physical Obsolescene - CORRECT ANSWER is characterized as a condition of aging (i.e. wear
& tear) or deferred maintenance. Examples are worn carpet, peeling paint, a leaking roof, or dead landscaping"
"Functional Obsolescene - CORRECT ANSWER is characterized by old or outdated designs or
building systems."
"Economic Obsolesence - CORRECT ANSWER Represents a loss in value due to outside forces
(i.e. location, market conditions). Examples would be an office building, locates in a small town, where the major employer closes."
"Investment Value - CORRECT ANSWER A value generally used by investors"
"Assessed Value - CORRECT ANSWER The value used by government tax assessment offices"
"Market Value - CORRECT ANSWER The value that is agreed to between a buyer & seller"
"Rules of Ethics for Property Manager - CORRECT ANSWER Loyalty to client, confidentiality,
accurate accounting & reporting, protection of owner's funds, conflicts of interest, and compliance with law regulations."
"An owner can be directly affected by manager's..... - CORRECT ANSWER Improper handling
of evictions, unlawful rent collections, failure to return security deposits, not maintaining proper compliance with the Rental Accommodations Division (RAD)"
"The Management Agreement - CORRECT ANSWER is a formal and binding contract that
establishes the authority and responsibilities that a manager has on behalf of the owner."
"Name of the owner & manager, term of agreement, describes the property, describes services provided by manager, identifies who collects rental payments, identifies whose name all service contracts are to be made, when funds are disbursed, whose employees work at the property, bank accounts, fidelity bonds, identifies building licenses, insurance requirements/ who secures
policies, and management fees compensation - CORRECT ANSWER Some provisions outlined
in the Management Agreement include:"
"Pass-Through Income, Expense Reimbursement, or Recoveries - CORRECT ANSWER
Commercial leases tenants can be billed for some or all of the property's operating expenses, real estate taxes and insurance."
"Vacancy & Credit Loss - CORRECT ANSWER When actual income collected is less than Gross
Potential Rental Income (typically a commercial lease)"
"Effective Gross Income equation - CORRECT ANSWER is the net effective of Gross Potential
plus (+) Expense Reimbursements minus (-) Vacancy Credit Loss plus (+) Miscellaneous Income."
"Net Operating Income (NOI) - CORRECT ANSWER Represents the money that remains after
the Operating Expenses are subtracted from Effective Gross Income."
"Debt Service - CORRECT ANSWER includes both interest and principal reduction and is
subtracted from Net Operating Income."
"Examples of Capital Expenditures include...... - CORRECT ANSWER Improvements to a
property that update appearance, replacement of major mechanical equipment (boilers), replacement of major building system (roof), renovating space, replacing old appliances."
"Escrow Accounts & Reserves - CORRECT ANSWER In order for the owner to prepare for
significant Capital Expenditures, it is common to establish an"
"Gross Lease - CORRECT ANSWER The property owner pays all Operating Expenses up to a
certain amount. Commonly found in office spaces."
"What does the term "Net Lease" mean when referring to commercial leases? - CORRECT
ANSWER The tenant pays for some or all Operating Expenses in addition to base rent.
Derivatives of this structure are Net-Net & Triple Net Leases."
" - CORRECT ANSWER "
"What does the term "Triple Net" mean when referring to commercial leases - CORRECT
ANSWER refers to commercial tenant paying ALL Operating Expenses including real estate
"Tenancy at Sufferance - CORRECT ANSWER Occurs after the expiration of lease has expired.
Tenant/resident continues to occupy the apartment or space without the landlord's consent."
"What are the objectives of a Maintenance Plan? - CORRECT ANSWER Implement &
accomplish the owner's objectives, increase resident/tenant satisfact rates, reduce operating costs, optimize the property's physical capabilities, increase the property's value, providing safety of tenants, residents, visitors, and employees."
"Name some components of a valid lease - CORRECT ANSWER Names of Lessee, name of
owner property or agent w/ authority to lease, legal address of the premises, Statement of rental amount, including time place of payments made, and time periods to which rent applies."
"What is the designation of the National Association of Real Estate Brokers, Inc (Nareb)? -
CORRECT ANSWER Realtist"
"An example of Functional Obsolescence is - CORRECT ANSWER Equipment that can not be
repaired because parts are no longer manufactured; single pane window systems that waste energy; outdated bathroom fixtures because of changing design and taste." "Alternatives to consider when making different improvements or when redeveloping a property
- CORRECT ANSWER Rehabilitation without altering existing use, Modernize the property by updating finishes, Change the use of building, including converting to another property type, or demolishing for new development, or Conversion to a condo ownership structure."
"Actions that could put management company and owner at risk include: - CORRECT
ANSWER Improper handling of evictions, unlawful rent collections, failure to return security
deposit, not maintaining proper compliance with Rental Accommodations Division (RAD)."
"The purpose of the Budget process is to - CORRECT ANSWER Develop a means to track the
property's performance and to organize various types of income. By organizing income & expenses is easier to see trends, to determine unusual or non-recurring items."
"Gross Potential Rent Income - CORRECT ANSWER Is the maximum amount of income that a
property can generate from all sources."
"Effective Gross Income - CORRECT ANSWER Is the Net effective of all items listed above
equals Gross Potential Rent Income includes Expense reimbursement minus Vacancy and Credit Loss plus Miscellaneous Income."
"Net Operating Income - CORRECT ANSWER is used one of the components often used in
calculating a property's investment value. It represents the money that remains after Operating Expenses are subtracted from Effective Gross Income."
"In order to generate a list of what to be inspected on a property - CORRECT ANSWER A
walk-through of the property and all of the areas related to its mechanical, electrical, telephone, and life safety equipment needs to be conducted. Frequency of inspections are determined annually, semi-annually, quarterly, and monthly."
"Request For Proposal or RPF - CORRECT ANSWER To develop a clear and thorough
specification for contracts to bid on is called"
"What is included in an RPF? - CORRECT ANSWER Scope of work, how is to be performed,
frequency, special requirements, work hours, timetable to complete, insurance requirements, deadline for submission, number of personnel to be provided, warranty, & references."
"Before marketing an available space or unit, - CORRECT ANSWER Be sure that it is clean
and presentable and that the owner has approved all marketing plans."
"What is a legal reason for a landlord to evict a tenant? - CORRECT ANSWER Landlord wants
to occupy the rental unit."
"All evictions except non-payment of rent must be filed with - CORRECT ANSWER Rental
Accommodations Division (RAD)" "A landlord may evict a tenant for only one of ten statutory reasons some of those reasons include
- CORRECT ANSWER Nonpayment of rent, Violation of an obligation of tenancy, of which the tenant failed to correct after notice; Tenant performed as illegal act within the rental unit."
"A property's foreclosure in not - CORRECT ANSWER A legal basis to evict tenant. Should an
eviction occur, there is no change in tenant's rights."
"Owners are required to - CORRECT ANSWER File an income tax return, file & maintain
accurate records of all income and expenses."
"Security Deposits - CORRECT ANSWER Owner is required to pay interest on security
deposits."
"Smoke Detectors should be installed - CORRECT ANSWER at least 1 smoke detector per
sleeping area, in the room used for sleeping and outside the bedroom but in the mediated vicinity of the sleeping area."
"A request from an owner or tenant must be made in 15 days of the 30 day expiration period
allowed - CORRECT ANSWER for the tenant organization to set a date for an election after
coordinating the date with the Conversion & Sales Regulatory Office."
"Investment Value Equation - CORRECT ANSWER Net Operating Income divided by Cap
Rate"
"Return On Investment Equation - CORRECT ANSWER Cash Flow divided by Initial
Investment"
Associated Licensee - CORRECT ANSWER licensee who is affiliated with a broker in charge or
a property manager in charge"
"branch office - CORRECT ANSWER A sub office of a company in which full-service real
estate activities are conducted and at which a broker-in-charge or property manager-in-charge is licensed to conduct real estate transactions."
"Broker - CORRECT ANSWER a wholesaler who does not take title to goods and whose
function is to bring buyers and sellers together and assist in negotiation"
"broker-in-charge (BIC) - CORRECT ANSWER Broker who is designed as having
responsibility over all associated licensees and also has the responsibility and control over and liability for any trust accounts"
"client - CORRECT ANSWER A person with who a licensee has established an agency
relationship"
"Real Estate Commission - CORRECT ANSWER A state board that advises and sets policies
regarding real estate licensees and transaction procedures"
"customer - CORRECT ANSWER Person with who a licensee has NOT established a agency
relationship with"
"Department of LLR - CORRECT ANSWER Department of labor licensing and regulations"
"Licensee - CORRECT ANSWER Individual currently under this chapter"
"office - CORRECT ANSWER The principal office location where a BIC or PMIC is licensed to
conduct real estate business"
"Property Manager - CORRECT ANSWER A person or company hired to maintain and
manage property on behalf of the property owner"
"Property manager in charge - CORRECT ANSWER Responsibility over associated Property
Managers and Real Estate Trust Accounts"
"Trust Account - CORRECT ANSWER escrow account maintained by a real estate broker for
the deposit of other peoples money"
"How many members of the real estate commission and who elects them? - CORRECT
ANSWER 6 who actively practice real estate from congressional districts
2 appointed by the governor-non real estate 1 elected by the other 8- real estate member"
"What are the powers and duties of the real estate commission? - CORRECT ANSWER 1.
Determine standards for licensure
- Enforce standards for licensure with disciplinary hearings and etc.
- Establishing fee schedule"
"How many escrow accounts are required? - CORRECT ANSWER Companies with multiple
offices may utilize one central trust account"
"What type of complaint does the REC not handle? - CORRECT ANSWER Commission payout
disputes"
"When do the monies in the escrow/ trust account get disbursed? - CORRECT ANSWER Upon
consummation or termination of the contract at which time money is disbursed and full accounting made to principle"
"How can a dispute over an earnest money deposit be settled? - CORRECT ANSWER If parties
can not agree, an Interpol easer activity n in court"
"Commingling - CORRECT ANSWER Illegally mixing deposits or monies, collected from a
client, with one's personal or business account. Taking money out too soon or putting it into escrow too late (10 banking days)."
"Can the owner of the account collect intrest? - CORRECT ANSWER Yes but only if the clients
rights are waived in writing using conspicuous language"
"How long must financial documents and records be maintained? - CORRECT ANSWER Five
years"
