Mastering Real Estate Principles, Eighth Edition - Unit 24

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What clause is included in most homeowner insurance policies?

Coinsurance clause

Defeasance clause

Alienation clause

Escalator clause

If a homeowner’s insurance policy provides for coverage that is less than 80 percent of the property’s replacement cost, then a loss on the property would be settled for

the property’s market value.

the total replacement cost.

either the actual cash value or the prorated cost of repair.

the cost of repair from the lowest bidder.

A property manager works in the best interest of the

bank holding the mortgage on the property.

the local government.

the property’s owner.

the property’s tenants.

What reason would LEAST likely be the cause of a high vacancy rate in an apartment building?

A highly visible advertising campaign

High rent

Poor location of the property

Incompetent property management

A property management agreement typically includes a

statement of the owner’s supervisory responsibilities.

statement of the owner’s objectives for the property.

statement of the manager’s qualifications.

list of the property’s current tenants.

A property manager’s compensation is most likely to be based on a percentage of

the operating expenses.

the standard management fee for the area.

gross income.

net income.

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