Property manager in charge shall
Adequately supervise employees or associated licensee to ensure their compliance with this chapter; review and approve all forms of leases contact addendum; maintain adequate, reasonable and regular contact with associated licenses engaged in real estate
Associated Licensee may/ may not...
May not Receive compensation from an activity requiring a real estate license from an entity or a person other than the one for which the licensee is issued
May form a business entity allowing the licensee property manager In charge to pay fees or commiss
Property manager in charge office rules
Establish and maintain a specific office location which must be accessible by the public investigators and inspectors during reasonable business hours; may maintain one or more offices at different locations has to be in writing acknowledging duties respo
PMIC required to keep these documents and time length
5 years to keep and it included lease property management agreement. This can be maintained electronically but has to be kept off site in the cloud etc.
A licensee shall reveal license
In a personal transaction involving the purchase sale exchange rental lease or auction of real estate at first substantive contact with a consumer in advertising or marketing in any media
Trust funds received for personal real estate transaction
Be deposited into licensee personal trust account and may not be deposited in the real estate brokerage firm trust account unless the real property is managed listed or owed by the real estate brokerage firm
What is an Agent
one authorized and empowered by a written agency agreement to perform actions for a client
What is an Associated Licensee
Licensee affiliated with and under the supervision of a broker-in-charge or a property manger-in-charge
what is a client
a person who enters a written agreement establishing an agency relationship with a real estate brokerage firm through its broker-in-charge a property manager-in-charge or an associated licensee
Conversion
To use trust funds for a purpose other than the purpose for which they are held; is a breach of trust and is a crime by law.
Employer Identification Number
EIN; business identification number given by the IRS
Employee Withholding Allowance Certificate
W4; Employees fill out for Federal Withholding
Employment Eligibility Verification
I9; Lawfully able to work in the United States
Variable Cost Ratio
VCR usually express ratio to total rents and change according to the unity rented; VCR=variable costs/ annual income
EX. mangement fee maintenance expenses utility costs
if annual income is $140,000 and Variable cost is $28,000 then VCR is .20 or 20%
Break Even Analysis
Expenses equal income is the break even point
-Expenses higher than income is a deficit
-Epenses lower than income is a surplus
BE=FC/100%-VCR (BE=break even, FC= fixed costs, VCR=variable cost ratio)
Basic Files of Property Managers
At least 5:
-Leases; contains current leases and tenant information
-Correspondence; All communications with tenants
-WorkBids; service contracts etc
-Financial; usually retained 10 yrs budgets monthly expenses reciepts etc.
-Permanent Files; Deeds work d
Indirect Costs
incurred when a management dept shares facilities and expenses with other divisions of the parent company or real estate agency
Direct Costs
all costs incurred by an individual manager or management firm
ex. payroll depreciation of office furniture and equipment
Deferred Maintenance
maintenance lack of: Curable VS. Incurable, has to make economic sense
Routine Maintenace
done daily
Preventive Maintenance
done to avoid corrective maintenance
Corrective Maintenance
involves actual repairs
New Construction Maintenance
often performed at the request and expense of tenant
What is a Lease
Evidence of what you legally possess; what you possess is your estate
What is an Estate
the amount and type of interest a person has in a property
Not Tangible
What is a Leasehold Estate
Is of limited duration and is created when property manager or owner grants tenant the right to use the property in exchange for some form of consideration; has enforceable rights and duties for both parties
Freehold VS Non Freehold
Freehold Estate: you own property and can do whatever
NonFreehold: Someone else owns but you have right to use it
What is an Estate for Years
Leasehold that has a start and end date not terminated by death or sale of property
What is an estate period to period
Week to week month to month an autorenew unless either party gives notice; not terminated by death or sale of property
What is tenancy at will
similar to period to period continues as long as both parties wish to continue
What is tenancy at sufferance
tenant once had right to use property but remains on property after leasehold; also known as a holdover tenant
What is a gross lease
-straight lease
-typical residential lease tenant
-fixed amount
-owner pays all other expenses
What is a NET Lease and the variations
-typical industrial
-tenant pays some or all expenses including rent
-net lease double net lease and triple net leases the more nets the more expenses tenant pays
Percentage LEase
-Overage Lease
-Tenant pays rent and percentage of gross sales; rise in rent
-typically in retail property
Basic Elements of a Lease
-Complete and legal name signatures of both parties
-description of the property
-term of the lease
-consideration or amount of rent
-time and method of payment
-use of premises
-rights and obligations of both parties
-possession of the premises
Statue of Frauds
Prevents fraud or disputes over oral agreements; If contract is not in writing it is not legally enforceable; exception is a lease for a year or less that is oral is still legally enforceable
What are the Essential Elements of Contract
-Legal Capacity
-Mutual Accord
-Objectives of Lease
-Provide Valid Consideration; valuable or good consideration
What is a valid contract?
Has all essential elements and parties can be sued if contract is incomplete
What is a Void Contract
Missing at least 1 of the 4 essential elements
What is an Unenforceable Contract
Has all essential elements but not enforceable because it is not in writing
What is a Voidable Contract
Appears to be valid at face value but decided later by courts that it wasn't
What is a Step-Up-Clause
Landlord has the right to increase rent at some point in the future
Index Lease
-Primarily used for office space brokerage houses or financial institutions
-uses certain indexes of economic conditions
-consumer price index
-wholesale index
What is an Escalation Clause
Rental Rate Adjustments Tied to other factors other than economic factors; taxes utility rates operating costs
typically in office service firms etc.
What is a Reappraisal Lease
Set periods when property is reappraised and market rate is new rental payment
What is a Restrictive Clause
Restrictions on how leased property can/should be used within legal manners
wording must be clear and unambiguous
Eminate Domain
Govt. has right to take private property for public good
condemnation
equitable cancellation of lease due to eminate domain by govt
Assignment
All rights of a lease is transferred to a new tenant
Subletting
Some of rights are transferred to a new tenant
Quiet Enjoyment
right to use property for only legal purposes unless stated in lease as prohibited
Actual Eviction
Legal process of landlord eviction
Partial Eviction
Tenant not physically moved out but unable to use part or all of premises
Constructive Eviction
Tenant leaves due to failure to supply essential services; heat water or major defaults
Employer-Employee Relationship
Employee is directly responsible to the officers of the employer; common use in banks and large corporations that require managerial services of properties
Trust or Formal Fiduciary
1 person or institution transfers legal title of ownership of property to someone else to hold or manage
Principle-Agent Relationship
Contract Needed; agreement btw principal and agent where agent can act on behalf of owner
Universal Agent
Can do what the principal can do for self
General Agent
Works with prinicipal make decisions within parameters of contract
Limited Agent
Special Agent; works with principal until task complete; cant make decisions
Equation for Valuing Income Producing Properties
NOI/Capitalization Rate= Value of Property
-when cap. rate goes up value of property goes down and vice versa
Capitalization Rate
Set in market; % rate of return of investors
Equation to Annual Net Operating Income (NOI)
Income-Expenses=annual NOI
Define Business Cycle
Wavelike increase and decrease economic prosperity
What are the phases of business cycle
Expansion, Recession (Peak), Contraction, Revival (Trough)
Sales Comparison Approach
Value based on home in same area; usual single family homes
Cost Approach
Determine Value for unique properties
Income Approach
Valued by property ability to bring in income "capitalization approach
Goal of Property Manager
-Achieve the objectives of owner
-Generate income for owners
-Preserve/increase the value of investment property
what are the 4 types of real property
Residental, commercial, industrial, special-purpose
SC Vacation Rental Act does not cover
Hotels, motels, tourist camps, or campgrounds
what is a vacation rental
Lease of residential property for a period of fewer than 90 days
Rental homes must be equipped with
According to
Smoke detectors; NFPA national fire protection agency
How long does Property owner have to repair deficient smoke dectector
15 days
Electronic smoke detector
Newly constructed or remodling over 50% needs to be equipped with
What is a customer
a buyer, seller, landlord or tenant who uses the services of a real estate licensee but does not establish an agency relationship
The Department is referred to as _______.
Department of Labor licensing and regulation
Licensee
an individual currently licensed in SC Real Estate
Material Adverse Fact
-a condition or occurrence that is recognized as significantly and adversely affecting the value of real estate. significantly reducing the structural integrity of improvements to real estate
-information that indicates that a party to a transaction is no
Office
location where a property manage-in-charge is licensed to conduct a real estate business
What is a Property Manager
an associated licensee who has education requirements passes exam and will for a form of valuable consideration
-negotiates or attempts to negotiate rental or leasing of real estate or improvements of real estate
-lists or offers to list and provide a ser
What is a property manage-in-charge?
Person designated as having the responsibility over the actions of associated licenses and also the responsibility control over and liability for real estate trust accounts
What is real estate
lands building and other appurtenances including all interest in land whether corporeal, incorporeal freehold non freehold whether the real estate is within or outside of the boundaries of the state
Real Estate Brokerage
means the aspect of the real estate business that involves activities relative to property management or a real estate sale exchange purchase or lease
Real Estate Brokerage Firm
means real estate company engaged in the business of real estate brokerage
What is a subagent
agent of an agent
What is a Trust Account
A checking account holding other people's money
What is a trust fund
means funds received on behalf of another person by a licensee in the course of performing a real estate activity
Non-competing restrictions
Grant a tenant an exclusive right to operate without competition
Expansion Options
Usually guarantee that a tenant may lease additional adjacent space in a property after a certain time
Concessions
Benefit to the tenant because the owner agrees to less than the original terms in order to influence prospect to be a tenant
Anti-trust laws
Promote competition in an open marketplace; avoid "price-fixing
1866 Civil Rights Act
Made it illegal to discriminate based on race and color in the sale or rental of housing
Civil Rights Act of 1968
Fair Housing Act if 1968; Made it illegal to discriminate against protected classes when it comes to the sale or not rental housing
Jones v. Mayer Co.
1968 Supreme Court case that upheld 1866 Civil Rights Act
7 Protected Classes
race, color, religion, sex, handicap, familial status, national origin
ECOA (Equal Credit Opportunity Act)
1974 sex added as protected class and prohibits denying a person a loan because of protected class
Familia Status
Protection of children under 17 pregnant women family getting legal guardianship or adopting child under 18; added 1988
Exemptions to the Fair Housing Act
Owner occupied buildings with no more than four units
Single family housing sold or rented without the use of a real estate professional
Housing operated by orginizations and private clubs that limit occupancy to members
Housing for senior citizens
Blockbusting
Panic selling; encourage tenants to sell or rent by claiming entry of a protected class and it will have negative impact on property values
Steering
Channeling people to a certain location because they are in a protected class; telling prospects no vacancy when there really is; channeling location based on familia status
Redlining
Refusing to Write insurance or make loans because of a particular protected class lives there
Statue of Limitations
Federal law permits a complaint to be filled with HUD up to 1 year after the alleged violation;
180 days to file complaint after alleged incident in SC state law and filed with SC Human Affairs Commission
ADA Requires
Businesses or other facility open to the public to be accessible by the handicapped, also applies to private entities with facilities open to the public
Americans with Disabilities Act (Protections)
No person may be discriminated against on the basis of disability, requires any business or other facility open to public to be accessible by handicapped or
ADA Coverage
-applies to all private entities with facilities open to public as long as the operation of the facility affects commerce (title 3)
-applies to a management company employing 15 or more employees may not discriminate when hiring (title 1)
Fair Credit Reporting Act (FCRA)
1971, to ensure data contained in credit reports are correct and regulates consumer reporting agencies those who use credit reports and those who provide information to the consumer reporting agencies
Fair and Accurate Credit Transactions Act (FACT Act)
2003, allow consumers access to a free copy of credit reports once a year
Lead-based paint required disclosures
-disclose your tenant presence of any known lead based paint or hazards
-provide tenant with copies of any available records or reports pertaining to the presence of lead-based paint and hazards
-give tenant copy of EPA lead hazard information pamphlet
Copies of lead warning should be retained for
3 years from date of lease
Megan's Law
Requires that information about certain sex offenders be released to the general public
Cooperatives
A type of ownership; you purchase shares of stock not real estate
Uses a proprietary lease
Horizontal Property Acts
State laws that govern the building and development of condominiums
Declaration of Condominium
Outlines what each unit owner owns how much they have to pay yin regime fees and how the regime is set up; records knots at county court house
Condominium
Also apartments and can be office space;financial interest in property you own your unit
Apartment
Multi family housing; you can buy or rent described structure of building
PUD (Planned Unit Development)
Mixed uses in an area; entrance may have office
MUD (mixed use development)
Mixed uses in a vertical building
HUD (Housing and Urban Development)
Provides financial assistance to local housing authorities for low-income families
Absorption Rate
Helps determine if to build more office space in particular area
Basic Purpose of Insurance
To reduce loss caused by unforeseen misfortunes
Risk Management Theories
-Identify and measure the risks
-Avoid the risk; don't have
-Control the risk; rules and regulations
-Retain the risk; take on more liability
-Transferring the risk; purchase insurance
Insurable Insurance
No one can buy insurance on something or even someone unless that person has a reason to be involved with other entity or person
80% Coinsurance
Does not cover full value, you pay for what insurance doesn't cover
Workers' Compensation Insurance
Purpose is to protect employer when employee gets injured or sick on job. More than 4 employees then it's required
General/Employer Liability Insurance
Covers when something is not compensator under workman comp. or if person injured is not employee
Environmental Protection Agency (EPA)
Federal Agency that is most responsible for enforcing environmental protection laws
Comprehensive Environmental Response Compensation & Liability Act of 1980 (CERCLA)
Puts liability to damages to environment
This act makes anyone that touched property can be held responsible, Superfund
Superfunds Amendments and Reauthorization Act of 1968 (SARA)
Added more money for cleanup
If buyer does due diligence when they purchase property and they don't find environmental contamination; gov. won't hold them responsible if property found contaminated
Common Hazardous Substances
-Mold
-Radon
-Carbon Monoxide
-Asbestos
-Lead Based Paint
in absence of written lease agreement the tenant shall pay
fair market rental value for the use and occupancy of dwelling
If the landlord/tenant does not sign and deliver written rental agreement which has been signed and delivered by landlord/tenant the acceptance of rent means
it has same effect as if it was signed by landlord/tenant and if rental agreement is done in this manner it is only for a term of 1 year
if landlord deliberately uses a rental agreement with prohibited provisions the tenant may recover
actual damages an amount not to exceed the security deposit and reasonable attorney fees
if landlord maliciously uses rental agreement with prohibited provisions the tenant may recover
actual damages an amount not to exceed three months periodic rent and reasonable attorney fees
how many days after termination of tenancy does landlord have to return security deposit
30 days
when can landlord enter unit
any time in case of an emergency
between hours of 9am-6pm for routine services
between hours of 8am-8pm for the purpose of providing services requested by tenant
how many days after giving notice does landlord have to remedy a complaint
14 days
personal property belonging to a tenant removed from a premises as a result of an eviction and placed on a public street can only be removed after how long
48 hours
how long after unit found empty is it considered abandonment
15 days