© 2013 All rights reserved.Chapter 8 Property Management

New York Real Estate for Brokers, 5th e

By Marcia Darvin SpadaCengage Learning

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Chapter 8 Property

Management

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Chapter 8 Key termsActual evictionAnchor storesCapital expenseCapital reserve budgetConstructive evictionCorrective

maintenanceEvictionFixed expenseLessee

LessorManagement

agreementManagement proposalOperating budget Planned unit

development (PUD)Preventative

maintenance

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Chapter 8 Key Terms (continued)

Property managementProperty management

reportProperty managerResident managerRisk managementStabilized budgetTenancy for yearsVariable expense

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Leasehold Estates Possession of Leased Property

Estate for Years a fixed term

Periodic Estaterenews after

a period of time

Estate at Will terminated by informal agreement

Estate at Sufferancepossession after agreement has terminated

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Definition of a LeaseA lease is a contract

For a consideration (usually rent), a landlord transfers to the tenant a property interest, or possession, for a prescribed time

The landlord is the lessor

The tenant is the lessee

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Standard Residential Lease Provisions

The Lease

Capacity to contract

Demising clause

Description of premises

Competent, sane adults

Transfer ofpossession

Term of lease

No requiredlimit

Specification of

rent/paymentIn writing

Statute ofFrauds

Quietenjoyment

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Lease Requirements

Apartment Sharing

Assignment and Subletting

Improvement

Possession and Habitability

Security Deposit

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Termination of a LeaseReason Explanation

Abandonment Tenant leaves

Death of property owner

Lease stays in effect

Actual eviction(Self-help)

Illegal forced eviction

Constructiveeviction

Withholding of rent if services not provided

Eviction Legal proceedingto evict

Lease Expiration

Periodic or estate for years

Mutual agreement

Both parties agree

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Death of Landlord or Sale of Property Death or Sale by the

Landlord A lease agreement

does not terminate upon the death of the landlord or the tenant

Death of the Tenant Succession Rights

to an Apartment

Succession Rights for Other Types of Properties Generally, there is

no “succession” in cooperatives and condominiums

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Functions of the Property ManagerGreatest possible

return for owner

Agent and fiduciary

Protect and

increase value of

investment

Managing, leasing,

renting, and

selling

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When is a license required?

A company or an individual who works for more than one owner should have a real estate license

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Duties of the Property Manager

Rental Schedule

Budget

OperatingStatement

Marketing

Reporting

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Management Proposal and Agreement

Proposal

Sets forth the

commitments of

manager if employed

Property manager

is the agent for the

purposes specified in

the agreement

Agreement

Creates an agency

relationship

between owner

and manager

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Property Insurance Coverage

Prevents financial loss from

Fire, winds,hail, tornado, vandalism, etc.

Theft of personal property

Someone injured onproperty

from negligence

Damage by insured to

someone else’sproperty dueto negligence

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Obligations to the Owner

Report to owner

Create a Marketing

plan

TrackIncome and

expense

Define maintenance

criteria

Create a budget

Goals of property manager

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Maintenance CriteriaPreventive maintenance

Periodic check of mechanical systems

Corrective maintenance

Fix a nonfunctioning item

One of the most important functions is to supervise physical maintenance

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Budget

Capital expenses

Variable expenseOperating budget

Capital reserve budget

Stabilized budget

Budget

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ReportingProperty Management Report

The property manager should

provide a periodic (usually monthly)

accounting of all funds received and

disbursed

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Differences Between the Markets Office building management

Retail property management

Residential property management

Condominium, Cooperative, Townhouse, and PUD management

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Operation of a Property Management OfficeNew property

acquisition

Servicing existing

clients

Negotiating

agreements

Owner-tenant relations

Public relations

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Future of the Project-Business TrendsBuilding types and amenities

availableNumber of occupants per unitTransportation volume Local industrial growthPopulation growthNational economic indicesCommunity growthProperty taxesZoning

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How does one become a Property Manager?

Education and certification for Property Managers

The Institute of Real Estate Managementhttp://www.irem.org

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