CALIFORNIA REAL ESTATE – Chapter 9 (Leasing and Property Management) – Questions

#1. Under California Civil Code §1946.2 (AB 1482), which of the following is TRUE about rent increase limitations?

There are no rent increase limitations in California

Rent increases are limited to 3% per year for all properties

Annual rent increases are limited to 5% plus local CPI or 10%, whichever is lower, for covered properties

Rent increases require DRE approval

#2. A gross lease in commercial real estate means:

The tenant pays rent plus all operating expenses

The tenant pays a percentage of gross sales as rent

The rent increases annually by a fixed percentage

The tenant pays a fixed rent and the landlord pays all operating expenses including taxes, insurance, and maintenance

#3. Under California law, which of the following is required for a valid residential lease of more than one year?

A verbal lease is sufficient

Only a handshake agreement is needed

The lease must be in writing under the Statute of Frauds

The lease must be notarized

#4. A commercial tenant signs a triple net (NNN) lease. The tenant is responsible for paying:

Rent only

Rent plus property taxes, insurance, and maintenance/operating expenses

Rent and property taxes only

Rent and insurance only

#5. Under California’s just cause eviction provisions (AB 1482), a landlord may NOT evict a tenant after 12 months of occupancy unless:

The landlord simply wants to find a tenant who will pay higher rent

The landlord dislikes the tenant’s lifestyle

The landlord has a valid just cause, such as nonpayment of rent, breach of lease terms, or owner move-in

The landlord wants to convert to a short-term rental

#6. Which of the following lease types bases the tenant’s rent on the tenant’s business revenue?

Gross lease

Percentage lease

Net lease

Ground lease

#7. Under California law, a residential security deposit for an unfurnished unit is limited to:

One month’s rent

Three months’ rent

Two months’ rent

There is no limit on security deposits

#8. A commercial property manager must deposit client trust funds into a trust account within:

Five business days of receipt

Three business days of receipt, per DRE Regulation 2832

10 business days of receipt

24 hours of receipt

#9. Under California Civil Code §1950.5, a landlord must return a residential security deposit within:

30 calendar days

14 calendar days

21 calendar days after the tenant vacates

60 calendar days

#10. A percentage lease typically includes which of the following provisions?

A base minimum rent plus a percentage of the tenant’s gross sales above a specified breakpoint

Only a percentage of gross sales with no base rent

A fixed rent that decreases as sales increase

A percentage of net profits instead of gross sales

#11. Under California law, which of the following is TRUE about a month-to-month tenancy?

Either party may terminate with 30 days’ written notice if the tenant has occupied for less than one year, or 60 days’ notice if more than one year

Neither party can terminate without cause

Only the landlord can terminate with 30 days’ notice

The tenant must give 90 days’ notice to terminate

#12. A property manager who commingles a tenant’s security deposit with the management company’s operating funds has violated:

Trust fund handling requirements under DRE Regulation 2832 and California Civil Code

No law, because security deposits are not trust funds

Only ethical guidelines

Only federal banking regulations

#13. Under the Fair Employment and Housing Act (FEHA), a landlord who refuses to rent to a family with children is:

Acting within their rights as a property owner

Only violating federal law, not state law

Violating fair housing laws only if the family has more than 3 children

Violating California fair housing laws unless the property qualifies as senior housing

#14. A ground lease in commercial real estate typically involves:

The landlord providing a fully improved building

Short-term residential tenancy

Leasing only the airspace above the property

The tenant leasing only the land and constructing improvements at their own expense

#15. Under California law, a landlord must provide which of the following before entering a tenant’s dwelling for non-emergency purposes?

48 hours’ advance verbal notice

No notice is required

24 hours’ advance written notice

72 hours’ advance written notice

#16. A property manager who uses a portion of a tenant’s security deposit for repairs must:

Notify the tenant within 60 days

Only provide a verbal explanation

Provide an itemized statement of deductions with receipts within 21 days of the tenant vacating

Deduct without documentation if repairs are under $500

#17. Under the Americans with Disabilities Act (ADA), a commercial property owner must:

Only provide wheelchair ramps at the main entrance

Comply with ADA only if the building was constructed after 1990

Provide accessibility features only if requested in writing by a tenant

Make reasonable accommodations and modifications to ensure accessibility for individuals with disabilities

#18. Which of the following is TRUE about constructive eviction in California?

Constructive eviction requires the landlord to physically remove the tenant

Constructive eviction only applies to commercial properties

A tenant can claim constructive eviction while continuing to occupy the property

A tenant may claim constructive eviction when the landlord’s actions or inactions make the property uninhabitable, allowing the tenant to terminate the lease

#19. Under California’s warranty of habitability, a residential landlord must:

Only maintain the exterior of the property

Maintain the property in a condition fit for human habitation, including working plumbing, heating, and electrical systems

Provide luxury amenities

Renovate the property every 5 years

#20. A tenant in a commercial NNN lease pays $5,000 per month base rent. Annual property taxes are $12,000, insurance is $3,600, and maintenance costs are $6,000. What is the tenant’s total monthly payment?

$5,000

$7,800

$5,500

$6,800

#21. Under California law, which of the following is a valid ground for unlawful detainer (eviction)?

Nonpayment of rent after a 3-day notice to pay rent or quit

The landlord wants to increase rent by more than 10%

The tenant refused to sign a lease renewal

The landlord found a tenant willing to pay more

#22. A property manager who earns a commission for referring tenants to insurance companies must:

Disclose the referral fee to the property owner and tenants

Keep the fee confidential as it is the manager’s personal income

Only disclose if the fee exceeds $500

Share the fee equally with the property owner

#23. Under California Civil Code §1942, a tenant may exercise the ‘repair and deduct’ remedy when:

The tenant wants any improvement to the property

The landlord refuses to upgrade appliances

The tenant wants to repaint the unit

The landlord fails to make necessary repairs within 30 days of written notice and the repair cost does not exceed one month’s rent

#24. A step-up lease (graduated lease) is characterized by:

Rent that remains fixed for the entire lease term

Rent based on a percentage of the tenant’s sales

Rent that decreases as the tenant’s business grows

Predetermined rent increases at specified intervals during the lease term

#25. Under California law, a landlord who retaliates against a tenant for complaining to code enforcement is:

Acting within their rights

Only violating federal fair housing law

Subject to a warning but no legal penalty

Violating California’s anti-retaliation statute, which prohibits retaliatory eviction, rent increases, or service reductions

#26. A property manager’s management agreement should include all of the following EXCEPT:

A guarantee of a specific occupancy rate

The scope of the manager’s authority

The fee structure and compensation

The term of the management agreement

#27. Under California law, which notice period is required for a landlord to terminate a month-to-month tenancy when the tenant has occupied for more than one year?

30 days’ written notice

90 days’ written notice

60 days’ written notice

15 days’ written notice

#28. A commercial tenant subleases a portion of their space to another business. Under a standard commercial lease:

The original tenant remains liable to the landlord unless the landlord specifically releases them through a novation

The subtenant assumes all obligations and the original tenant is released

Subleasing is always prohibited in commercial leases

The landlord must approve the sublease only if the rent changes

#29. Under California’s AB 1482 (Tenant Protection Act), which of the following properties is EXEMPT from the rent cap provisions?

All apartments built before 2000

All properties in cities with local rent control

All commercially zoned properties

Single-family homes and condominiums not owned by corporations, REITs, or LLCs (with proper notice to tenant)

#30. A property manager must reconcile trust accounts:

At least monthly, comparing the ledger with bank statements to identify discrepancies

Annually during tax season

Only when the DRE requests an audit

Every six months

#31. Under California law, a landlord who fails to maintain habitable conditions may face which of the following from a tenant?

Only a polite request for repairs

Rent withholding, repair and deduct remedy, or constructive eviction claim

An automatic reduction of 50% in rent

A mandatory inspection by the DRE

#32. Which of the following best describes a sale-leaseback arrangement?

A tenant purchases the property they are leasing

A landlord leases the property to a buyer before closing

Two tenants exchange leases on different properties

A property owner sells the property and simultaneously leases it back from the new owner

#33. Under California law, the maximum security deposit for a furnished residential unit is:

Two months’ rent

One month’s rent

Three months’ rent

There is no maximum

#34. A property manager discovers that the property’s HVAC system needs replacement costing $15,000. The management agreement authorizes expenditures up to $5,000 without owner approval. The manager should:

Proceed with the replacement and bill the owner

Wait until the HVAC completely fails before acting

Use the tenant’s security deposit to pay for the replacement

Contact the property owner for authorization before proceeding with the replacement

#35. Under California Civil Code §1950.7, a commercial landlord must return a security deposit within:

21 days after the tenant vacates

60 days after the tenant vacates

90 days after the tenant vacates

30 days after the tenant vacates, unless the lease specifies otherwise

#36. A property manager who manages 10 rental units for a single owner must hold:

A property management certification only

A California real estate license (broker or salesperson under a broker)

No license if managing fewer than 16 units

A general business license only

#37. Under California law, a 3-day notice to pay rent or quit must:

Only state ‘pay rent or leave’

State the exact amount of rent due, the name of the person to whom rent should be paid, and the address for payment

Include a 10-day grace period

Be delivered by certified mail only

#38. A tenant who has been in a residential unit for 14 months gives 30 days’ notice to terminate a month-to-month tenancy. Under California law:

The tenant must give 60 days’ notice after 12 months of occupancy

The tenant must give 90 days’ notice

The tenant’s 30-day notice is sufficient regardless of how long they have occupied the unit

The tenant cannot terminate without the landlord’s consent

#39. Under the Unruh Civil Rights Act, a landlord who refuses to rent to a tenant based on their source of income (such as Section 8 vouchers) may be:

Violating California fair housing laws, as source of income is a protected class under FEHA

Acting within their rights because Section 8 is a federal program

Only violating federal law

Subject to a fine but not a lawsuit

#40. A property manager receives a maintenance request from a tenant regarding a gas leak. The manager’s FIRST action should be:

Schedule a maintenance appointment for the next business day

Investigate the leak personally before calling anyone

Ensure the tenant evacuates and contact the gas company and emergency services immediately

Notify the property owner and await instructions

#41. Under California law, a lease that automatically renews for successive periods unless either party gives notice is called:

A periodic tenancy

A tenancy at will

A tenancy at sufferance

A fixed-term tenancy

#42. A property manager who allows a tenant to remain after the lease expires without signing a new lease has created a:

New fixed-term lease

Trespassing situation requiring immediate eviction

Holdover tenancy (tenancy at sufferance) that may convert to a month-to-month tenancy if rent is accepted

Sublease arrangement

#43. Under California Civil Code §1942.5, a landlord may NOT retaliate against a tenant for:

Requesting luxury upgrades to the unit

Exercising legal rights such as reporting health and safety violations to code enforcement

Demanding a rent reduction below market rate

Hosting excessive numbers of guests

#44. A property manager is responsible for selecting tenants. Under fair housing laws, the manager may NOT:

Apply different screening criteria based on a prospective tenant’s race, religion, or familial status

Require a credit check from all applicants

Verify employment and income for all applicants equally

Require references from all applicants

#45. Under California law, a landlord must provide a receipt for any cash rent payment:

Only for payments over $500

Only if the tenant requests a receipt

Always, for every cash payment received

Only for the first month’s rent

#46. A commercial lease contains a Common Area Maintenance (CAM) charge provision. CAM charges typically cover:

Only the tenant’s interior maintenance

Maintenance, repair, and upkeep of shared areas such as parking lots, lobbies, and landscaping

Only the landlord’s mortgage payments

Only property taxes

#47. Under California law, which of the following is TRUE about a tenant’s right to withhold rent?

A tenant may withhold rent when the landlord fails to maintain habitable conditions after reasonable notice

A tenant can withhold rent for any reason at any time

Rent withholding is prohibited in California

A tenant may withhold rent only with DRE approval

#48. A property manager discovers that a tenant is running an illegal business from the rental unit. The manager should:

Notify the property owner and initiate the appropriate lease violation and eviction process

Ignore it because the tenant is paying rent on time

Report directly to the police without notifying the owner

Increase the tenant’s rent as a penalty

#49. Under California’s just cause eviction requirements (AB 1482), a landlord who evicts a tenant for ‘no-fault’ reasons such as owner move-in must:

Provide relocation assistance equal to one month’s rent or waive the final month’s rent

Give the tenant 30 days to find new housing with no assistance

Only provide a written notice

Pay the tenant’s moving expenses up to $5,000

#50. A property manager’s fiduciary duties to the property owner include all of the following EXCEPT:

Guaranteeing a specific return on the owner’s investment

Loyalty to the owner’s interests

Proper accounting of all funds

Full disclosure of material information

#51. Under California law, which of the following is TRUE about a tenant improvement (TI) allowance in a commercial lease?

TI allowances are prohibited in California commercial leases

The tenant must pay for all improvements regardless of lease terms

The landlord provides a specified dollar amount for the tenant to customize the space for their business needs

TI allowances are only available for residential tenants

#52. A landlord serves a 3-day notice to quit for lease violations other than nonpayment. The tenant has:

30 days to cure the violation

No opportunity to cure; the tenant must vacate immediately

3 days to cure the violation or vacate the premises, unless the violation is incurable

10 days to respond to the notice

#53. Under California law, the implied warranty of habitability applies to:

Only properties built after 2000

Only properties with written leases

All residential rental properties, regardless of what the lease states

Only properties managed by licensed property managers

#54. A property manager who uses automated screening software to evaluate tenant applications must ensure:

The software favors tenants with the highest income

The software automatically rejects applicants with credit scores below 700

The software does not have a discriminatory disparate impact on protected classes

The software is approved by the DRE

#55. Under California Civil Code §1946.2 (AB 1482), the maximum allowable annual rent increase for covered properties is:

5% flat

10% flat

5% plus the local Consumer Price Index (CPI) increase, or 10%, whichever is LOWER

The landlord determines the maximum increase

#56. A property management company terminates a management agreement. Within how many days must the company transfer trust funds to the property owner or new manager?

90 days

The funds should be transferred promptly, typically within 30 days or as specified in the management agreement

6 months

The company may hold the funds until the next audit

#57. Under California law, a landlord who changes the locks on a tenant’s unit without a court order has committed:

An illegal lockout, which is a form of illegal self-help eviction

A legal self-help remedy

An enforceable lease provision

A permissible security measure

#58. A commercial lease grants the tenant an option to renew for an additional 5-year term at a specified rent increase. If the tenant fails to exercise the option by the deadline:

The option automatically renews

The landlord must offer the same terms to the tenant

The option expires and the tenant has no right to renew at the specified terms

The tenant has a 30-day grace period

#59. Under California law, a property manager who manages their own property:

Must hold a valid broker’s license

Does not need a real estate license because they are managing their own property

Must register with the DRE

Needs a property management certification

#60. A tenant in California makes a reasonable accommodation request for a service animal in a no-pets unit. The landlord must:

Allow the service animal as a reasonable accommodation under fair housing laws, with no additional pet deposit

Require a pet deposit for the service animal

Deny the request because the lease prohibits pets

Allow the animal only if it weighs less than 25 pounds

#61. Under California law, which of the following is NOT a valid reason for a landlord to deduct from a security deposit?

Normal wear and tear

Unpaid rent

Repair of damage beyond normal wear and tear

Cleaning costs to return the unit to move-in condition

#62. A property manager creates a capital improvement budget for the coming year. Capital improvements typically include:

Routine maintenance such as replacing light bulbs

Cosmetic touch-ups such as repainting a single room

Pest control treatments

Major upgrades that extend the property’s useful life, such as a new roof or HVAC system

#63. Under California Civil Code §827, a landlord who wants to increase rent on a month-to-month tenant must give:

30 days’ notice for increases of 10% or less; 90 days’ notice for increases greater than 10%

15 days’ notice for all increases

60 days’ notice for all increases

No notice is required for rent increases

#64. A property manager receives a complaint from a tenant that another tenant is engaging in excessive noise. The manager should:

Ignore the complaint because tenant disputes are private

Immediately evict the noisy tenant

Document the complaint, investigate, and if warranted, issue a lease violation notice to the offending tenant

Tell the complaining tenant to call the police

#65. Under California law, a lease provision that waives the tenant’s right to the implied warranty of habitability is:

Valid if both parties initial the provision

Void and unenforceable as a matter of public policy

Enforceable only in commercial leases

Valid if the tenant signs a separate waiver

#66. A property manager who earns a percentage of collected rents as their management fee must:

Disclose this compensation arrangement to the property owner in the management agreement

Keep the fee percentage confidential

Only disclose if the fee exceeds 10%

Share the fee structure with tenants

#67. Under California law, a tenancy at will:

Requires 6 months’ notice for termination

Can be terminated by either party at any time with reasonable notice

Cannot be terminated by the tenant

Must be in writing to be valid

#68. A commercial property owner wants to convert rental units to condominiums. Under California law:

No special requirements apply to conversions

Only cities with rent control regulate conversions

The owner must comply with state and local conversion requirements, including tenant notification and relocation provisions

The DRE must approve all conversions

#69. Under California’s accessibility requirements, new multi-family residential construction must:

Only meet federal ADA standards

Provide wheelchair access only to ground floor units

Comply with both ADA and California Building Code accessibility standards, including accessible routes and adaptable units

Install elevators in all buildings regardless of height

#70. A property manager discovers that a maintenance contractor has been overcharging for services. The manager’s fiduciary duty to the owner requires:

Ignoring the overcharges because the contractor does quality work

Splitting the overcharge with the contractor

Reporting the overcharges to the owner and renegotiating or terminating the contractor relationship

Only reporting if the overcharges exceed $10,000

#71. Under California law, a sublease differs from an assignment in that:

In a sublease, the original tenant retains a reversionary interest and remains liable to the landlord; in an assignment, all rights are transferred

A sublease transfers all tenant rights; an assignment retains some rights

There is no legal difference between the two

Subleases are always prohibited in California

#72. A property manager receives notice that a tenant has filed for bankruptcy. The manager should:

Immediately evict the tenant before the court intervenes

Consult with the property owner and legal counsel, as the bankruptcy automatic stay may affect eviction proceedings

Continue collecting rent as if nothing has changed

Change the locks to secure the property

#73. Under California law, a lease that is signed by only one party is:

Not yet a valid lease because both parties must sign for mutual consent

A valid lease that binds the signing party

An option to lease

A month-to-month agreement

#74. A property manager marketing a vacant unit advertises ‘Great family neighborhood!’ Under fair housing laws, this language:

May be considered discriminatory because it implies a preference for families and may discourage single individuals or other protected groups

Is always acceptable because it is complimentary

Violates fair housing only if accompanied by images of families

Is required under truth-in-advertising laws

#75. Under California law, a landlord’s duty to mitigate damages when a tenant breaks a lease means:

The landlord has no obligation to re-rent

The landlord must reduce the rent to attract a new tenant within 24 hours

The landlord must make reasonable efforts to re-rent the unit and cannot simply let it sit vacant while charging the former tenant full rent

The landlord must pay the tenant’s moving costs

#76. A commercial lease contains an escalation clause tied to the Consumer Price Index (CPI). This means:

The rent decreases when the CPI falls

The tenant’s rent is fixed regardless of CPI changes

The CPI escalation only applies to CAM charges

The rent increases annually based on changes in the CPI, providing inflation protection for the landlord

#77. Under California law, which of the following is TRUE about the Property Manager’s obligations regarding fair housing?

Fair housing laws do not apply to property managers, only landlords

The property manager must comply with all federal, state, and local fair housing laws and apply screening criteria uniformly to all applicants

Property managers may use different criteria for different applicants if approved by the owner

Fair housing compliance is optional for properties with fewer than 4 units

#78. A property manager who fails to properly maintain a property and a tenant is injured may face:

No liability because the property owner is always responsible

Civil liability for negligence, potential personal injury claims, and possible loss of the management contract

Liability only if the injury results in death

Only a fine from the DRE

#79. Under California Civil Code §1940.2, a landlord may NOT require a tenant to:

Pay rent exclusively by electronic transfer

Pay the first month’s rent in advance

Pay a security deposit at move-in

Pay rent only in cash unless the tenant has previously bounced a check or paid with a stopped payment

#80. A property manager preparing an annual operating budget for a rental property should include:

Only projected rent income

Projected income (rent, laundry, parking), operating expenses, reserves for replacements, and property management fees

Only maintenance costs

Only the mortgage payment and property taxes

#81. Under California’s AB 1482, the term ‘just cause’ for eviction includes all of the following EXCEPT:

Nonpayment of rent

The landlord’s desire to increase rent above the allowable cap by finding a new tenant

Violation of a material term of the lease

Criminal activity on the premises

#82. A property manager is negotiating a new commercial lease. Which of the following lease provisions would most benefit the landlord?

A gross lease with no escalation clauses

A month-to-month lease with no security deposit

A lease that permits the tenant to sublease without landlord approval

A NNN lease with CPI escalation and a personal guarantee from the tenant

#83. Under California law, when a tenant has abandoned the property, the landlord must:

Immediately dispose of all personal property left in the unit

Follow California’s abandoned property procedures, including providing notice before disposing of personal property left behind

Keep all personal property as compensation for unpaid rent

Wait one year before disposing of abandoned property

#84. A commercial property manager who collects rents and pays expenses on behalf of the owner must maintain:

A single combined account for all properties and personal funds

Separate trust accounts for each property owner unless owners consent in writing to a common trust account

No trust account if the amounts are under $10,000

A trust account only for security deposits

#85. Under California law, which of the following is TRUE about a tenant’s right to install disability-related modifications?

The landlord must pay for all disability-related modifications

Disability modifications are prohibited in rental properties

Only commercial tenants may make disability modifications

A residential tenant may make reasonable modifications at their own expense, and the landlord may require restoration of the property at the tenant’s expense upon move-out

#86. A property manager notices that a tenant is using the residential unit as an Airbnb rental. Under the lease:

The manager should increase the rent to reflect commercial use

The manager must report the tenant to the IRS

The tenant is automatically evicted

If the lease prohibits subletting or short-term rentals, this constitutes a lease violation and the manager should issue a notice

#87. Under California law, which of the following best describes a tenancy at sufferance?

A tenant who is renting with the landlord’s oral consent

A tenant who remains on the property after the lease expires without the landlord’s permission

A tenant under a valid written lease

A tenant with a month-to-month agreement

#88. A property manager discovers hazardous waste on a managed property. The manager must:

Immediately notify the property owner and appropriate environmental agencies, and take steps to protect tenant safety

Handle the cleanup personally to save the owner money

Ignore the issue if it predates the management agreement

Only report if tenants complain about health issues

#89. Under California Civil Code §1950.5(b)(1), which of the following expenses may a landlord deduct from a residential security deposit?

Any amount the landlord determines is necessary

The cost of upgrading appliances

The landlord’s lost rental income during vacancy

Cleaning costs necessary to restore the unit to the condition at move-in, minus normal wear and tear

#90. A property manager marketing a commercial property should prepare a comprehensive offering package that includes:

Only photographs of the property

Property financials, lease terms, tenant mix, CAP rate analysis, and property condition reports

Only the asking price

A brief email to potential tenants

#91. Under California law, which of the following statements about the Americans with Disabilities Act (ADA) is TRUE for commercial properties?

ADA only applies to government buildings

ADA compliance is voluntary for privately owned commercial properties

Existing commercial buildings must remove barriers to accessibility where readily achievable

ADA requirements apply only to buildings with more than 50 employees

#92. A property manager collects $2,000 first month’s rent and $2,000 security deposit from a new tenant. The security deposit must be:

Combined with the first month’s rent in the operating account

Held in the property manager’s personal savings account

Forwarded directly to the property owner within 24 hours

Deposited into the broker’s trust account and accounted for separately from the operating account

#93. Under California law, a landlord who harasses a tenant to force them to move out may be liable for:

Nothing, because harassment is not illegal if no physical contact occurs

Only a verbal warning from the DRE

Damages for constructive eviction and violation of tenant protection statutes

A fine of $100 per incident

#94. A property manager receives notice from the city that the managed property violates local building codes. The manager must:

Ignore the notice because building codes are the owner’s responsibility

Pay the fines from the trust account without notifying the owner

Only respond if the city threatens condemnation

Notify the property owner immediately and take steps to bring the property into compliance

#95. Under California law, a lease provision requiring the tenant to pay for all structural repairs is:

Enforceable in all lease types

Prohibited in all leases

Only enforceable for properties built before 1978

Generally enforceable in commercial leases if clearly stated but unusual and potentially unconscionable in residential leases

#96. A property manager is evaluating a commercial property’s performance. Which metric best measures the property’s income-producing ability relative to its value?

Gross rent multiplier

Price per square foot

Capitalization rate (cap rate)

Loan-to-value ratio

#97. Under California law, when must a property manager provide a tenant with notice of the manager’s name and address?

Only upon tenant request

At the beginning of the tenancy; the tenant must be informed of who manages the property and how to contact them

Within 90 days of the lease start date

Only when the property manager changes

#98. A commercial tenant’s lease includes a co-tenancy clause. This clause typically provides that:

The tenant must share their space with another business

The tenant’s rent or lease obligations may be adjusted if anchor tenants or a specified occupancy level is not maintained

The tenant and landlord share maintenance responsibilities equally

The tenant may terminate only if all other tenants vacate

#99. Under California law, a property manager who fails to maintain required records for trust fund transactions may face:

DRE disciplinary action including fines, license suspension, or revocation

Only a warning letter

No consequences if accounts are balanced

A penalty only if theft is proven

#100. A tenant requests that the landlord install a grab bar in the bathroom due to a disability. Under California fair housing law:

The landlord must install and pay for the grab bar

The landlord may refuse the modification if the building is older than 30 years

The tenant must obtain a doctor’s prescription for the modification

The tenant may install the grab bar at their own expense, and the landlord must permit this reasonable modification

#101. Under California law, which of the following is TRUE about lease assignments and assumptions?

An assignment releases the original tenant automatically

Assignments are prohibited without a novation

In an assignment, the original tenant transfers all rights but may remain secondarily liable; the assignee assumes primary liability

The landlord cannot restrict assignments in commercial leases

#102. A property manager discovers that the property is in violation of ADA accessibility standards. The manager should:

Report the violation to the property owner and recommend an ADA compliance assessment

Ignore it because ADA compliance is the owner’s responsibility

Only address the issue if a disabled tenant complains

Wait for a government inspection

#103. Under California law, what is the purpose of the rent roll in property management?

It tracks the property manager’s personal income

It provides a detailed record of all tenants, lease terms, rents, and payment history for the property

It records only delinquent rent payments

It is a marketing document for prospective tenants

#104. A property manager is preparing a property for lease. The manager discovers that the property contains lead paint. Under federal and California law:

Lead paint disclosure is only required for properties being sold, not leased

The manager must remove all lead paint before leasing

The manager must disclose the lead paint to prospective tenants and provide the EPA pamphlet if the property was built before 1978

Lead paint disclosure is only required if children will occupy the unit

#105. Under California law, a property management agreement that does not specify a termination date:

Is void and unenforceable

May be considered a month-to-month management agreement that can be terminated by either party with reasonable notice

Automatically terminates after 1 year

Continues indefinitely with no right to terminate

#106. Under California law, a landlord who accepts rent from a holdover tenant after the lease expires has likely created:

A new fixed-term lease

A tenancy at sufferance with no obligations

A week-to-week tenancy

A month-to-month tenancy under the same terms as the original lease

#107. A commercial property has a vacancy rate of 15%. The property manager should:

Increase rents to compensate for lost income

Analyze market conditions, adjust marketing strategies, and review rental rates to attract qualified tenants

Stop all maintenance to reduce expenses

Convert the property to residential use

#108. Under California Civil Code §789.3, a landlord may NOT take which of the following actions to force a tenant to vacate?

Shutting off utilities, removing doors or windows, or changing locks without court authorization

Filing an unlawful detainer action

Issuing a 30-day notice to terminate a month-to-month tenancy

Offering cash for keys to the tenant

#109. A property manager receives a request from a prospective tenant who uses a wheelchair. The unit has stairs at the entrance. Under fair housing:

The tenant may request and install a ramp at their own expense as a reasonable modification; the landlord must permit it

The landlord may refuse to rent because the unit is not accessible

The landlord must install the ramp at the landlord’s expense for existing buildings

The tenant is limited to ground-floor units only

#110. Under California law, a commercial landlord’s obligation to maintain the premises:

Depends on the lease terms; commercial leases often shift maintenance responsibilities to the tenant through NNN provisions

Is always the same as residential landlord obligations

Is regulated by the DRE

Is limited to structural components only

#111. A property manager discovers that a tenant has unauthorized occupants living in the unit in violation of the lease. The manager should:

Immediately change the locks

Evict all occupants without notice

Charge the tenant double rent

Issue a notice of lease violation and allow the tenant time to cure the violation

#112. Under California law, the maximum number of days a landlord has to return a commercial security deposit after the tenant vacates is:

21 days

60 days

30 days, unless the lease specifies otherwise

90 days

#113. A property manager is responsible for maintaining a swimming pool at a residential complex. Which of the following is required?

Only posting a ‘swim at your own risk’ sign

Pool maintenance only during summer months

Compliance with California Health and Safety Code pool safety requirements including fencing, gates, and safety equipment

Monthly water testing by the property manager personally

#114. Under California’s fair housing laws, a landlord may NOT ask a prospective tenant about:

Their employment status and income

Their rental history and references

Their religion, national origin, or whether they plan to have children

Whether they have pets (if pets are restricted in the lease)

#115. A property manager enters into a management agreement that grants the manager authority to lease units, collect rent, and make repairs up to $1,000. This authority is:

Implied authority assumed by the manager

Apparent authority perceived by tenants

Express authority granted by the management agreement

Universal authority covering all property decisions

#116. Under California law, a tenant who is a victim of domestic violence may:

Not break a lease under any circumstances

Terminate a lease early with proper documentation and notice under California Civil Code §1946.7

Only terminate if the landlord agrees

Terminate but must pay 6 months’ rent as a penalty

#117. A property manager conducting a move-out inspection with the tenant discovers damage to the kitchen countertop. This damage:

Cannot be deducted from the security deposit because kitchens experience normal wear

Should be documented with photos and noted on the move-out inspection report as potential deduction from the security deposit

Must be reported to the DRE

Should be deducted from the tenant’s last month’s rent

#118. Under California law, a 60-day notice to terminate tenancy must be given when:

The tenant has been in occupancy for less than 6 months

The tenant has been in occupancy for one year or more and the tenancy is month-to-month

The lease is for a fixed term

The tenant is a commercial tenant

#119. A property manager who receives a tenant complaint about mold in the unit should:

Ignore the complaint because mold is cosmetic

Tell the tenant that mold is the tenant’s responsibility

Wait 90 days to see if the mold gets worse

Immediately investigate, document findings, hire a qualified remediation professional if warranted, and notify the property owner

#120. Under California law, a commercial tenant’s operating expense pass-through in a modified gross lease typically includes:

All operating expenses from the first year of the lease

Only property tax increases

No operating expenses because the landlord pays everything

Increases in property taxes, insurance, and operating expenses above a base year amount

#121. A property manager who provides a 3-day notice to pay rent or quit must ensure:

The notice complies with all statutory requirements including exact rent amount, payment methods, and location for payment

The notice only states ‘pay or quit’

The notice is posted on the front door during business hours

The notice includes the tenant’s credit score

#122. Under California law, a tenant who makes improvements to a rental unit without the landlord’s written permission:

Owns the improvements and may remove them

Cannot be required to pay for restoration

Automatically receives a rent reduction for the improvements

May be required to restore the unit to its original condition at the tenant’s expense at the end of the lease

#123. A commercial property manager calculating Net Operating Income (NOI) should subtract which of the following from Effective Gross Income?

Mortgage payments

Capital expenditures

Operating expenses including property taxes, insurance, maintenance, and management fees

The owner’s income tax obligation

#124. Under California Civil Code §1954.535, a landlord must provide tenants with which of the following before leasing a unit?

A background check on all neighbors

A list of all registered sex offenders within 1 mile

A safety rating of the neighborhood

A copy of the notice to all prospective tenants about the existence of the Megan’s Law database

#125. A property manager who represents both the landlord and tenant in a lease transaction without disclosure has:

Violated disclosure requirements because representing both parties creates a conflict of interest that must be disclosed

Done nothing wrong because property managers can represent both parties

Only violated ethics guidelines, not the law

Violated the law only if the tenant pays the manager’s fee

#126. Under California law, which of the following is TRUE about the California Residential Landlord Tenant Act?

It only applies to properties with 10 or more units

It only applies to tenants with leases longer than 1 year

It establishes rights and obligations for both landlords and tenants in residential rental transactions

It does not apply to mobile home parks

#127. A property manager notices signs of a rodent infestation in a managed residential property. The manager must:

Only address it if the tenant complains in writing

Bill the tenant for pest control because pests are the tenant’s responsibility

Address the infestation promptly as it affects the habitability of the property under the implied warranty of habitability

Wait until the annual inspection to address it

#128. Under California law, a landlord who wishes to demolish a residential building to rebuild must:

Comply with local demolition regulations and provide appropriate notice and relocation assistance under AB 1482 if applicable

Simply give tenants 30 days’ notice

Only notify the city building department

Obtain DRE approval for the demolition

#129. A property manager calculates the debt service coverage ratio (DSCR) for a commercial property. A DSCR of 1.25 means:

The property cannot cover its debt payments

The property is breaking even on debt service

The property needs a 25% rent increase

The property generates 25% more income than needed to cover debt service payments

#130. Under California law, a lease with an option to purchase must:

Be filed with the DRE

Include consideration for the option and clearly state the terms under which the option may be exercised

Be recorded with the county recorder

Be approved by a licensed attorney

#131. A property manager discovers that a tenant is being discriminated against by other tenants in the building based on the tenant’s ethnicity. The manager should:

Ignore it because tenant-to-tenant disputes are private

Only intervene if the tenant formally complains to the DFEH

Tell the victimized tenant to move to another unit

Take immediate action to stop the harassment, document the incidents, and inform the property owner about potential liability

#132. Under California law, a property manager’s authority to execute leases on behalf of the property owner must be:

Assumed by all property managers automatically

Granted by the DRE

Specifically granted in the management agreement or through a separate power of attorney

Limited to leases of 6 months or less

#133. A commercial lease contains a demolition clause. This clause typically provides that:

The landlord may terminate the lease if the landlord decides to demolish the building, usually with specified notice and compensation

The tenant is responsible for demolishing the building at the end of the lease

The tenant must pay for any demolition costs

The clause is unenforceable in California

#134. Under California law, a property manager who fails to provide a habitable dwelling may be subject to:

Only a fine from the health department

Liability for damages, rent withholding by the tenant, or a constructive eviction claim

No liability if the tenant signed an as-is lease

Liability only if the unit is condemned

#135. A tenant requests permission to install a satellite dish on their apartment balcony. Under FCC regulations:

The landlord may prohibit all satellite dishes

The tenant must pay a $500 installation fee to the landlord

The landlord generally cannot prohibit tenants from installing small satellite dishes on leased areas within their exclusive use

Satellite dishes are only permitted on single-family homes

#136. Under California law, which of the following constitutes an illegal retaliatory action by a landlord?

Decreasing services or raising rent within 180 days after a tenant exercises a legal right, such as reporting code violations

Filing a lawful unlawful detainer after nonpayment of rent

Declining to renew a lease that has expired

Conducting a scheduled property inspection

#137. A property manager is marketing a unit and mentions ‘walking distance to a church’ in the advertisement. This language:

Is always acceptable because it describes the neighborhood

Is only problematic if the advertisement also mentions the church’s denomination

Could be interpreted as indicating a preference for a particular religion and may violate fair housing advertising guidelines

Violates fair housing only if the property is within 100 feet of the church

#138. Under California’s Ellis Act, a landlord who wishes to go out of the rental business must:

Simply stop renting the units

Comply with specific notification requirements and provide relocation benefits to displaced tenants

File a notice with the DRE only

Convert all units to condominiums immediately

#139. A property manager calculates that a rental property has a gross rent multiplier (GRM) of 8. If the property generates $100,000 in annual gross rent, the estimated property value is:

$100,000

$800,000

$1,000,000

$12,500

#140. Under California law, a security deposit held by a property manager is considered:

The property manager’s compensation for managing the property

Trust funds belonging to the tenant that must be held in a trust account and cannot be commingled

The landlord’s money that can be used for any property expenses

Non-refundable income for the property management company

#141. A commercial lease provision that requires the tenant to waive their right to sue the landlord for negligence is:

Generally enforceable in commercial leases if clearly stated, though courts may scrutinize unconscionable waivers

Always void as against public policy

Only enforceable if the tenant is represented by an attorney

Prohibited in California

#142. Under California law, a landlord must disclose which of the following to a prospective tenant before signing a lease?

Only the monthly rent amount

Known bed bug infestations (Civil Code §1954.602), proximity to a former military ordnance site, and the existence of the Megan’s Law database

Only the security deposit amount

Nothing, because disclosure requirements only apply to sales

#143. A property manager responsible for collecting rent discovers that a tenant has been consistently late for 3 consecutive months. The manager should:

Immediately file an unlawful detainer action

Accept the late payments without comment

Increase the tenant’s rent as a penalty

Document the late payments, issue appropriate notices per the lease, and inform the property owner about the pattern

#144. Under California law, the Costa-Hawkins Rental Housing Act:

Eliminates all rent control in California

Requires all cities to implement rent control

Only applies to properties built before 1950

Establishes vacancy decontrol, allowing landlords to set rents to market rate when a unit becomes vacant, and exempts certain properties from local rent control

#145. A property manager prepares a comparative market analysis for rental rates. This analysis should include:

Only the most expensive properties in the area

Only vacant properties

Comparable properties in the area with similar features, sizes, and amenities to determine competitive rental rates

Properties from different cities

#146. Under California law, which of the following statements about a property manager’s liability insurance is TRUE?

Property managers are not liable for any claims against managed properties

Property managers should carry errors and omissions (E&O) insurance and may need general liability coverage

Insurance is only required for managers of commercial properties

The property owner’s insurance covers all manager liability

#147. A tenant in a commercial property discovers that the roof leaks after heavy rain. Under a NNN lease:

The tenant is always responsible for all repairs in a NNN lease

The property manager must pay for the repair

The lease terms determine who is responsible; typically, structural repairs such as the roof are the landlord’s responsibility even in NNN leases unless specifically assigned to the tenant

Neither party is responsible if the leak is caused by weather

#148. Under California law, a property manager who receives a subpoena for tenant records must:

Destroy the records to protect tenant privacy

Refuse to comply because tenant records are confidential

Comply with the legal process and produce the requested records, while notifying the property owner

Only comply if the tenant consents

#149. A property manager creates a maintenance schedule for a large apartment complex. Preventive maintenance should include:

Regular inspections of HVAC, plumbing, electrical, roofing, and safety systems on a scheduled basis

Only responding to tenant repair requests

Annual painting of all units regardless of condition

Replacing all appliances every 3 years

#150. Under California law, which of the following best describes the relationship between a property owner and a property manager?

An employer-employee relationship

A partnership with equal authority

A lender-borrower relationship

A principal-agent relationship with fiduciary duties owed by the manager to the owner

#151. A property manager receives a fair housing complaint from a tenant. The manager should:

Ignore the complaint and hope it goes away

Take the complaint seriously, investigate, consult with the property owner and legal counsel, and take corrective action

Terminate the complaining tenant’s lease

Only respond if the DFEH contacts the manager

#152. Under California law, a property manager who charges a tenant a fee for processing a rental application:

May charge any amount they choose

May charge a reasonable fee to cover actual costs of obtaining a credit report and background check, as limited by Civil Code §1950.6

Cannot charge application fees in California

Must refund the fee if the applicant is denied

#153. A commercial lease includes a build-to-suit provision. This means:

The landlord constructs or modifies the space according to the tenant’s specifications before the tenant takes occupancy

The tenant must build the entire structure

The landlord provides an empty lot and the tenant constructs the building

The building is constructed by a third-party developer

#154. Under California law, a property manager must ensure compliance with local rent stabilization ordinances. Which of the following is TRUE?

Rent stabilization is uniform throughout California

Rent stabilization requirements vary by jurisdiction and the manager must be familiar with the specific rules in each area

Only the property owner is responsible for compliance

Rent stabilization only applies to commercial properties

#155. A property management company is terminating its management of a property. The company must:

Keep security deposits until the current tenants vacate

Return all trust funds, security deposits, and records to the property owner or new manager and provide an accounting of all funds

Destroy all tenant records for privacy

Retain a portion of the trust funds as a termination fee

#156. Under California law, a property manager who discovers that a managed property has building code violations that create safety hazards must:

Wait for the city to issue a citation before acting

Only address violations that affect common areas

Ignore violations in occupied units to avoid tenant complaints

Immediately notify the property owner and take steps to protect tenant safety, potentially including temporary relocation

#157. A property manager is preparing an income and expense statement for the property owner. This statement should include:

Only the total rent collected

All rental income, other income, operating expenses, and net operating income for the reporting period

Only expenses that exceed $1,000

Only income and expenses related to the current month

#158. Under California law, a lease that requires a tenant to carry renter’s insurance:

Is generally enforceable as a lease condition in both residential and commercial properties

Is prohibited for residential tenants

Is only enforceable if the landlord pays the premium

Requires DRE approval

#159. A property manager receives a request from a tenant to assign the lease to a new tenant. Under the lease terms:

The landlord has absolute discretion to refuse without reason

If the lease requires landlord consent, the landlord may not unreasonably withhold consent in residential tenancies

Assignment is automatic and requires no landlord approval

The property manager may approve the assignment without consulting the owner

#160. Under California law, which of the following is TRUE about emotional support animals in rental housing?

Emotional support animals are treated the same as pets

Landlords may charge a pet deposit for emotional support animals

Emotional support animals are only allowed in properties with 10 or more units

Landlords must make reasonable accommodations for emotional support animals under fair housing laws, even in no-pet units

#161. A property manager fails to conduct regular fire safety inspections at a managed apartment complex. If a tenant is injured in a fire:

Only the local fire department is liable

The property manager and owner may face significant liability for negligent failure to maintain fire safety systems

The tenant is solely responsible for their own safety

The property manager is immune from liability if the fire was accidental

#162. Under California law, a commercial property manager who negotiates lease terms on behalf of the property owner is performing:

An activity that requires a valid California real estate license

An activity that requires no license

An activity that only requires a business license

An activity regulated by the Secretary of State

#163. A property manager receives a request from local law enforcement to access a tenant’s unit for investigation. Without the tenant’s consent or a warrant:

The property manager must allow immediate access

The property manager should not allow access and should direct law enforcement to obtain a warrant

The property manager may allow access if the crime is serious

The property owner can authorize access on behalf of the tenant

#164. Under California law, the operating expense ratio (OER) for a rental property is calculated by:

Dividing net income by the purchase price

Multiplying gross rent by the vacancy rate

Dividing debt service by total income

Dividing total operating expenses by effective gross income

#165. A property manager who uses last-in-first-out accounting for security deposits instead of proper individual tracking is:

Using an acceptable accounting method for security deposits

Following DRE-recommended accounting practices

Potentially violating trust fund handling requirements by not maintaining accurate records for each tenant’s deposit

Only in violation if amounts are over $5,000

#166. A property manager handling tenant evictions in California must follow the unlawful detainer process. The FIRST step is:

Filing the unlawful detainer complaint with the court

Changing the locks on the tenant’s unit

Contacting the sheriff for removal

Serving the appropriate notice (3-day, 30-day, or 60-day) based on the grounds for eviction

#167. Under California law, a landlord who owns a single-family home that is not owned by a corporation and provides proper notice to the tenant may be exempt from:

AB 1482 rent caps and just cause eviction requirements

All California landlord-tenant laws

Security deposit limitations

Fair housing requirements

#168. A property manager who discovers lead paint in a unit built in 1972 that is being offered for lease must:

Only disclose if the tenant has children under 6

Provide the prospective tenant with the Lead-Based Paint Disclosure and EPA pamphlet before the lease is signed

Remove all lead paint before leasing

Only disclose if the tenant asks about lead paint

#169. Under California law, a residential lease that contains a clause requiring the tenant to waive their right to a jury trial in an eviction proceeding is:

Valid and enforceable if initialed by the tenant

Only enforceable in commercial leases

Valid if approved by the DRE

Generally void as against public policy in residential leases

#170. A property manager receives a complaint from a disabled tenant requesting a designated accessible parking space. Under fair housing law:

The landlord may refuse because parking spaces are not covered by ADA

The tenant must pay for the designated space at a premium rate

The landlord must provide the designated parking space as a reasonable accommodation if it is feasible

Only commercial properties must provide accessible parking

#171. Under California law, a month-to-month tenant who received a 30-day notice must vacate by the end of the notice period. If the tenant refuses to leave:

The landlord must file an unlawful detainer action with the court to legally remove the tenant

The landlord may change the locks immediately

The landlord may physically remove the tenant’s belongings

The landlord may shut off utilities to encourage the tenant to leave

#172. A commercial property manager calculating the capitalization rate for an investment property divides:

Gross rent by the purchase price

Total expenses by the gross rent

Mortgage payment by the NOI

Net Operating Income (NOI) by the property’s purchase price or market value

#173. Under California Civil Code §1950.5, which of the following is TRUE about security deposit deductions for residential tenants?

The landlord may deduct any amount without documentation

The landlord must provide an itemized statement of deductions with copies of receipts within 21 days

The landlord must return 100% of the deposit regardless of damage

Deductions are limited to 50% of the deposit amount

#174. A property manager suspects a tenant is manufacturing illegal drugs in the unit. Evidence includes unusual chemical odors and excessive utility usage. The manager should:

Document the evidence, notify the property owner, consult legal counsel, and if appropriate, contact law enforcement

Enter the unit immediately to investigate without notice

Ignore the situation to avoid confrontation

Shut off utilities to the unit

#175. Under California’s Costa-Hawkins Act, vacancy decontrol means:

The landlord must maintain the same rent for the next tenant

When a unit is voluntarily vacated, the landlord may reset rent to market rate regardless of local rent control ordinances

Vacancy rates determine the maximum allowable rent

The city controls all rents during vacancy periods

#176. A property manager’s duty of loyalty to the property owner means:

Referring all decisions to the owner without providing any recommendations

Never communicating with tenants

Maximizing the manager’s commission at all costs

Placing the owner’s interests above the manager’s own interests and avoiding conflicts of interest

#177. Under California law, a tenant who is mobilized for military service may terminate a residential lease:

Only if the landlord consents

Only if the lease has a military clause

Under the Servicemembers Civil Relief Act (SCRA) with proper notice and documentation of military orders

Not until the military service is completed

#178. A property manager receives a habitability complaint about a broken heater during winter. The manager must:

Wait until the next scheduled maintenance visit

Tell the tenant to purchase a space heater

Only repair if the temperature drops below 40 degrees outside

Respond promptly and arrange for repair, as a working heater is required under the implied warranty of habitability

#179. Under California law, a landlord who intends to demolish a building and remove rental units from the market must comply with:

No special requirements beyond a standard 30-day notice

Only local building permit requirements

DRE approval for the demolition

The Ellis Act, which requires specific notice periods and relocation benefits for tenants

#180. A property manager’s marketing plan for a new apartment complex should include all of the following EXCEPT:

Language indicating a preference for tenants of a specific national origin

Professional photography and virtual tours of the units

Online listing on major rental platforms

Market rate analysis of comparable properties

#181. Under California law, which of the following is TRUE about a tenant’s obligation to maintain the rented premises?

The tenant has no maintenance obligations whatsoever

The tenant must perform all repairs regardless of cause

The tenant must repaint the unit annually

The tenant must keep the unit clean and sanitary, use all fixtures and appliances properly, and not damage the property beyond normal wear and tear

#182. A property manager who manages 50 residential units collects approximately $75,000 in monthly rent. Trust fund management requirements include:

Depositing funds into the manager’s personal account until month-end

Maintaining records only for amounts over $1,000

Maintaining detailed records of all funds received and disbursed, depositing funds into the trust account within 3 business days, and reconciling monthly

Reconciling the trust account annually

#183. Under California law, when a commercial tenant abandons leased premises, the landlord:

Must follow specific legal procedures including proper notice before re-entering and releasing the property, and mitigate damages by attempting to re-let

May immediately dispose of all tenant property without notice

Has no obligation to re-let the property

Must wait 1 year before re-entering

#184. A property manager discovers that the property’s fire alarm system has not been inspected in over 2 years. The manager should:

Immediately schedule a fire alarm inspection and notify the property owner of the compliance failure

Wait until the next scheduled property inspection

Only schedule an inspection if a fire occurs

Ask tenants to test their individual smoke detectors instead

#185. Under California law, a commercial lease that requires the tenant to pay their proportionate share of increases in property taxes above a base year is operating under:

A gross lease with no pass-throughs

A percentage lease

A ground lease

An expense stop or base year expense approach

#186. A property manager receives an application from a prospective tenant who has an eviction on record from 3 years ago. Under fair housing and California law:

The manager must automatically reject the applicant

The manager cannot consider eviction history under any circumstances

The manager must approve the applicant if the eviction was more than 2 years old

The manager may consider the eviction as part of a consistent screening process applied to all applicants equally

#187. Under California law, which of the following is TRUE about pet deposits for residential rentals?

Pet deposits are unlimited and separate from the security deposit

Pet deposits cannot exceed $100

Landlords cannot charge pet deposits in California

There is no separate statutory limit for pet deposits; they are included in the overall security deposit cap (2 months unfurnished, 3 months furnished)

#188. A property manager is considering implementing a no-smoking policy for a residential complex. Under California law:

No-smoking policies are generally permissible and enforceable as a condition of new and renewed leases

No-smoking policies violate tenants’ rights

No-smoking policies require DRE approval

Only commercial properties can implement no-smoking policies

#189. Under California law, a property manager who receives a tenant’s last month’s rent as prepaid rent must:

Treat the prepaid rent as trust funds and properly account for it separately from the manager’s operating funds

Use the prepaid rent for current operating expenses

Combine it with the security deposit

Invest the prepaid rent and keep the interest

#190. A commercial tenant’s lease requires the tenant to maintain liability insurance with the landlord named as additional insured. If the tenant fails to obtain insurance:

The landlord automatically provides coverage

The tenant is exempt from liability for any accidents

The tenant is in breach of the lease, and the landlord may cure the breach by obtaining insurance and charging the tenant

The lease is automatically terminated

#191. Under California law, a property manager’s duty to account for trust funds includes:

Only reporting annually at tax time

Only providing reports when requested by the owner

Providing the property owner with regular financial reports including income received, expenses paid, and trust fund balances

Only accounting for funds over $5,000

#192. A tenant has a lease that expires on December 31 and the tenant continues to occupy the unit on January 1 without a new lease. Under California law, the tenant is:

Automatically in a new 1-year lease

A trespasser subject to immediate removal

Required to pay double rent

A holdover tenant who may become a month-to-month tenant if the landlord accepts rent for January

#193. Under California law, which of the following is TRUE about a property manager’s obligation when a tenant reports a bedbug infestation?

The property manager must promptly investigate and arrange for professional pest treatment, as bedbugs affect habitability

The property manager may refuse treatment because bedbugs are the tenant’s problem

The property manager only needs to treat if more than 5 units are affected

Bedbug treatment is only required in commercial properties

#194. A property manager is asked to manage a property that the manager’s family member owns. This situation:

Requires full disclosure to all parties because it creates a potential conflict of interest

Prohibits the manager from taking the assignment

Is automatically approved by the DRE

Has no ethical implications

#195. Under California law, a residential landlord must allow a tenant to have:

No modifications to locks under any circumstances

Lock changes only if the landlord approves in writing

Additional locks only if the unit is on the ground floor

At least one additional lock installed at the tenant’s expense for security (Civil Code §1941.3)

#196. A property manager receives a rent payment with a check marked ‘payment in full’ for an amount less than what is owed. If the manager cashes the check:

The manager may be deemed to have accepted the lesser amount as full payment under the accord and satisfaction doctrine

The manager can sue for the balance regardless

The check marking has no legal effect

The tenant automatically owes double the difference

#197. Under California law, which of the following is TRUE about a property manager’s responsibility for mold remediation?

Mold remediation is always the tenant’s responsibility

If mold affects habitability, the property manager must arrange for professional remediation promptly and at the owner’s expense

The property manager may simply paint over the mold

Mold remediation is only required if the tenant provides a doctor’s note

#198. A commercial property manager is evaluating potential tenants for a retail space. The manager may legally consider:

The tenant’s race, religion, or national origin

The tenant’s business type, financial strength, credit history, and compatibility with the existing tenant mix

Whether the tenant has a physical disability

The tenant’s political affiliations

#199. Under California law, a property manager who manages vacation rental properties must:

Only comply with federal vacation rental regulations

Ignore local ordinances if the property is on a booking platform

Comply with local short-term rental ordinances, obtain required permits, and collect applicable transient occupancy taxes

Register each rental with the DRE

#200. A property manager notices that the parking lot lighting at a managed apartment complex is broken, creating a safety hazard. The manager should:

Wait until a tenant complains

Only repair during the next scheduled maintenance visit

Immediately arrange for repair and document the hazard, as failure to maintain safe premises creates potential liability

Advise tenants to avoid the parking lot at night

Chapter 9 (Leasing and Property Management)

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