Property Management
Property management is weighted more heavily on the broker exam than on the salesperson exam because managing others' property and money is a broker-level responsibility. This topic covers the management relationship and agreement, leasehold estates and lease types, handling owner funds, and landlord-tenant duties.
The Management Agreement and Trust Funds
A property manager is typically a general agent hired under a written property management agreement that defines the manager's authority, compensation, and duties to market and lease space, collect rent, maintain the property, budget, keep records, and report to the owner. Rents, security deposits, and other owner money are trust funds that must be held in a trust or property-management account, separate from the broker's own funds; commingling and conversion are prohibited. Regular reconciliation of the trust account is a core management competency the exam expects a broker to know.
Leasehold Estates and Lease Types
Leasehold (non-freehold) estates include the estate for years (a fixed term with definite start and end), the periodic estate (renews automatically, such as month to month), the tenancy at will (continues with both parties' consent, terminable by either), and the tenancy at sufferance (a holdover tenant who stays without permission). Common lease types are gross leases (landlord pays operating expenses), net leases (tenant pays some expenses), and percentage leases (rent tied to the tenant's sales, common in retail). A manager should match the lease structure to the property type and the owner's goals.
Landlord and Tenant Rights
The landlord must generally provide habitable premises (the implied warranty of habitability) and honor the tenant's quiet enjoyment, while the tenant must pay rent and avoid damaging the property. Wrongful, forcible removal can amount to constructive or actual eviction, and lawful eviction follows a statutory process. Security deposits must be handled and returned according to law. Fair housing rules apply fully to rentals, including reasonable accommodations and modifications for tenants with disabilities, and a managing broker is responsible for training staff to apply these rules consistently.