This concludes Chapter 25. Below is a brief summary which you can review before you take your chapter quiz. 

A property manager preserves the value of an investment property while generating income as an agent for the owners. Parts of a Management Agreement: A property manager becomes a fiduciary when a management agreement is signed with an owner.

A property management agreement would contain:

• Property Description; Term of Agreement; Definition of Responsibilities; Extent of Authority; Reporting Requirements; Management Fee and Allocation of Costs.

The owner’s objectives will be the deciding factor in an adoption of management plans. A property manager would not want his/her job dependent on the Allowable Vacancy Rate.

The property management escrow account is for security deposits; the property management account is for current rents and management.

A property manager could be paid a percentage of income, a salary, or a flat fee. 

Escalator clause: A contract provision permitting an adjustment of certain payments either up or down to cover certain contingencies. Functions of a Property Manager:

• Budgeting Expenses; Renting the Property; Maintaining Good Relations with the Tenants; Maintaining the Property; Handling Environmental Concerns; Adjusting rates and Showing units.

A property manager is usually a general agent because of the authority vested by the principal. The Property Manager's first responsibility is to realize the Maximum Profit on the property that is consistent with the owner's instructions.

Duties to the landlord include:

• Advertising Property; Evaluating the rental market; Obtain tenants; Screening Applicants Tenant Complaints and Conflicts among tenants and Fiduciary Responsibility to Owner 

An Estate for Years is the most commonly used commercial lease. It is for a definite time period. No need to give notice to the landlord.

An Estate from Period to Period, or a Periodic Tenancy is a lease that continues for a specific period of time or until proper notice is given by the tenant to cancel. The difference between this lease and an Estate for Years is that the tenant must give notice to vacate. 

Income, Expenses, and Rate of Return for the Owner: A good property manager will always work to achieve the highest possible rate of return for the owner.

The federal and state fair housing laws must be followed at all times. 

Maintenance programs:

1. Preventative Maintenance System: Routine schedule of tasks that keeps the l systems in the best working order;
2. Routine Maintenance System: it is necessary to make repairs as tenants call into the office to report problems.

Another primary responsibility of a property manager is the proper handling of the owner's money, including fees, security deposits, and rent collection. 

Services to Tenants: Honesty; Accuracy and Disclosure of Material Facts.

Americans with Disabilities Act is designed to eliminate discrimination against individuals with disabilities.

Property management information:

• STATUTE OF FRAUDS states that leases for more than one year must be in writing.
• A property manager should report to the owner immediately if a tenant is involved in illegal drug trafficking.
• A property manager should report a change in zoning to the owner immediately.
• While an OFF-SITE property manager MUST hold a real estate broker's license, an ON-SITE manager is not required to be a real estate licensee.

In California, any apartment building that has 16 OR MORE rental units MUST have an onsite manager, also known as a residential manager.