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Practice of Property Management- Real
Estate Council of Alberta Questions with
Verified Solutions
Types of Properties ✔✔1. Single Family Residential
- Multi Family Residential: Low High, Mid Rise High Rise, Row Housing
- Cooperative
- Condominium
- Commercial
Forms of Ownership ✔✔1. Individual Investors
- Sole Proprietorship
- Partnership
- Limited Partnership
- Syndication
- Commercial
- Government
Types of Property Management Operations ✔✔1. Professional Fee Management Company
2.Asset Management
- In-House Management
- Self- Management
The Role of the Property Manager ✔✔To provide professional management in order to assist the landlord in reaching his or her objectives
Types of Residential Property ✔✔1. Duplexes
- Fourplexes
- Townhouses
- Low-rise/Garden Apartments
- High-rise apartments
Special Residential Projects ✔✔Retirement Homes for Seniors
Personal Care Homes
Student Housing
Public Housing
Mobile Home or Trailer Parks
Duties of Board of Directors ✔✔1. Appoint Auditors, enter into property management agreements and supervise the affairs of the commission
- Approve an annual operating budget for anticipated .e.g. landscaping. exterior painting, expenses
- Allocate funds to the reserve funds for major common areas repairs and replacement
- Enter into contracts for management, provision of other services, leasing of common elements or the provision of recreational or other facilities.
Property Manager Duties in a Condominium ✔✔1. Occupant Duties
- Building/complex Duties
Duties of the Property Manager(Building/Complex Duties) ✔✔1. Prepare the Annual Ops Budget
- Paying Common Area Expenses
- Submitting monthly operating statements
- Maintaining/repairing common property, negotiate contracts, reviewing capital costs
- Purchasing/renewing adequate Insurance coverage and process claims
6.Maintaince of landscaping, de-icing etc
- Provide notice of annual meeting to condominium building owners
- Attend Board of Director meetings, take minutes, present reports and advising the Board as necessary.
- Collecting Condominium fees from unit owners.
Condominium Fee is paid into ✔✔A common expense account
Each Condominium unit is allocated a proportionate share of the common area expenses ✔✔This is based on the size of the unit compared to the size of the total complex. This percentage interest is specified in the condominium plan
The money necessary for the establishment and maintenance of a reserve fund is : ✔✔Collected by the corporation from the condominium fees or by special assessment of the unit owners
Condominium corporations must have a reserve fund study done ✔✔within 2 years of registration and following that must undertake a Reserve Fund study every 5 years.
The method for determining the Reserve Fund is set out in the: ✔✔Condominium Property Act Regulation.
A housing Cooperative is: ✔✔Often Self Managed
Difference between Condominium and Cooperatives ✔✔1. The Cooperative Corporation owns the building and each occupant is a shareholder. By Contrast, the condominium owner has fee simple title to his or her unit with joint ownership of the common areas.
- A condominium owner can sell his or her unit where as a cooperative shareholder cannot sell the occupied unit, instead cooperative occupants can sell the shares that give the right to live in the unit.
Mixed Used Buildings ✔✔Buildings with a retail and/or residential section in conjunction with the main office section
Office Park ✔✔Comprised of one or two-story buildings situated in landscaped areas.
Ownership of Office Parks may be ✔✔Fee Simple(freehold), leasehold, condominium title or a combination of any of these
What Can City Authority use to persuade developers to combine residential and commercial developments in the city core areas ✔✔Density Concessions. It allows more lot coverage and a greater floor space ratio.
Industrial Property ✔✔Any property used for heavy or light manufacturing , storage or distribution of goods.
Types of Industrial Property ✔✔1. Warehouse
- Custom Built manufacturing plants
- Industrial Special use Properties
- Industrial Parks
Shopping Centre vary in sizes from ✔✔30,000 Square feet to over 1,000,000 square feet
Shopping Centre Classification ✔✔1. Neighbourhood Centre; 30,000 to 100,000 quare feet. Trading area or ideal population served is 5,000 to 40,
- Community Centre: 85,000 to 230,00 square feet. Trading population is 40,000 to 150,
- A rooming or boarding house
RTA does not apply to ✔✔1. People who share a landlords living quarters as part of the landlord's family
- Mobile Home Sites
- Premises that are occupied for business purposes that also have living accommodations attached and both are rented under a single lease agreement.
- Hotels, Motels, Trailer Parks if a person lives there for less than six consecutive months.
- Premises rented to a student by an educational institution unless the student has exclusive possession of the self-contained premises
- Most nursing homes, social care facilities, supported living accommodations, government operated senior lodges, correctional institutions, military bases and First nation housing.
Written Lease Registration ✔✔A written lease of 3 years or more should be registered on title to protect the tenant. This way, a buyer of the property is aware of the existing lease agreement.
Gross Lease ✔✔To pay a total rent which include all expenses
Net Lease ✔✔To pay a base rent plus applicable expenses.
Gross Lease is also called ✔✔An inclusive Lease
Net Lease ✔✔The tenant pays a base rent plus HVAC, lighting and property tax
net-net lease ✔✔The tenant pays base rent, plus all operating expense but excluding property tax and structural repairs
Triple Net Lease ✔✔The tenant pays a base rent plus all operating expenses including property tax, but excluding structural repairs
A triple Net lease is also called ✔✔A tenant pay all lease or a Net, Net. Net, Lease
Percentage rent is common for ✔✔Retail Stores
Percentage rent requires the tenant to ✔✔pay a percentage of his/her sales volume.
Additional Rent ✔✔All other monetary obligations of the tenant- They are rental obligation other than minimum annual rent and percentage rent.
Additional Rent include ✔✔1. Property, local improvement and business taxes
- Repairs and maintenance to the lease premises and common areas.
- Insurance
- Utilities
- Special Charges e.g. advertising, promotion, costs, security etc.)
Retail Tenants Insure against 3 concerns ✔✔1. Loss of income
- Damage to stock
- Improvements and fixtures.
- Damage to premises
Code of Ethics exist to ✔✔Provide a set of guidelines to ensure that human actions will be morally fair as well as lawful.
When faced with ethical dilemmas, to arrive at an ethical decision you may ask yourself the following questions ✔✔1. Is this the right thing to do? Is it fair? Is it honest?
- How will my decision make me feel? Will my decision make me guilty?
- Should i refuse to act?
Making a Secret Profit is ✔✔contrary to the a property manager's fiduciary duties to the owner under agency law
Example of misrepresentation ✔✔Stating that an Anchor tenant has leased a building when all they did was to make inquiries.
Non-ethical practices ✔✔1. Bribe
- Secret Profit
- Gifts
Risk Management Practices ✔✔1. Know the Relationship
- Watch what you say.
- Defer to experts
- Do everything in writing
5.Follow effective office procedures: Security and back -up for computer record
- Staff Supervision
- Efficient Filing System
Potential Problems Areas in Leasing ✔✔1. Structural Problem
- Measurement Standards
- Environmental Issues
- Non Resident Owners.
- Safety Issues
Which principle makes the property manager liable for the actions of its employees ✔✔The principal of vicarious liability
Types of Insurable Losses ✔✔1. Property Damage
- Personal Injury
- Financial Loss
Fire Protection can be categorized into two ✔✔1. Active Protection
- Passive Protection
A common restriction on payouts is the co-insurance clause. ✔✔It protects the insurance company in instances where a building is insured for less than its full replacement value. if the building owner chooses to underinsure the building, and subsequently make a claim, the full amount of the loss will not be paid.
Contract Law ✔✔Is a binding agreement , enforceable by the courts made between two or more persons, competent at law to enter into such agreement for consideration of value to door refrain from doing some lawful and genuinely intended act
Forms Of contract ✔✔Verbal Contracts
Contracts made by exchanging letters
Drawn up detailed legal documents
Fiduciary Duties to a Principal Include ✔✔1. Loyalty
- Avoid conflicts of interest
- Disclose conflicts
- not make a secret profit
- Not misuse confidential information.
Duties of an agent to third parties ✔✔1.Honesty
- Take care in answering inquiries or giving information
Tort Law ✔✔Deals with civil wrongs for which the court will grant a remedy
Areas of Tort law that property managers are liable for ✔✔1. Trespass
2.Nuisance
- Liability for negligence
Vicarious Liability ✔✔Makes the property manager liable for the negligence or other wrongful acts of a person employed by the property manager.
The Real Estate Assurance Fund is established by ✔✔The Real Estate Act
What is the purpose the Real Estate Assurance Fund ✔✔to provide a source of funds from which a member of the public might be reimbursed should he or she suffer monetary loss due to an industry member committing a fraudulent act or misappropriating trust money
Voluntary Code of Practice ✔✔Is available through the service Alberta website for interpreting and applying the Residential Tenancies Act.
Types of Residential Tenancies ✔✔1. Fixed tenancies
- Periodic Tenancies
A tenant who does not move out of the premises after his lease term expires is an ✔✔Overholding tenant
RTA requires the landlord to give the tenant a copy of the written agreement ✔✔Within 21 days after it is signed
A tenant can withhold rent if ✔✔A copy of the agreement is not received
