A property management company in Florida manages 15 residential units with an average monthly rent of $1,200 per unit. The management agreement provides for a 8% management fee. If the company maintains a 95% occupancy rate, what is the monthly management fee earned?
Correct Answer
A) $1,368.00
Correct: Total potential rent = 15 units × $1,200 = $18,000. At 95% occupancy = $18,000 × 0.95 = $17,100. Management fee = $17,100 × 0.08 = $1,368. Why not B: This calculates the fee on 100% occupancy instead of the actual 95% occupancy rate. Why not C: This appears to use an incorrect percentage calculation. Why not D: This uses an incorrect base amount or percentage in the calculation.
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Related Topics & Key Terms
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In a cooperative (co-op), the building is owned by a corporation, and residents purchase shares of stock in the corporation that entitle them to a proprietary lease on a specific unit. Residents are shareholders, not property owners.
Fee simple absolute is the highest and most complete form of property ownership, giving the owner unrestricted rights to use, possess, enjoy, and dispose of the property. It is of unlimited duration and fully inheritable.
Community property is a system where property acquired during a marriage is owned equally by both spouses.
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A Florida property management company is preparing lease agreements for a new apartment complex. All of the following clauses are legally permissible in Florida residential leases EXCEPT:
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A Florida property manager discovers that a residential tenant is operating an unlicensed daycare business from their apartment, which violates both the lease terms and local zoning ordinances. The lease contains a clause prohibiting commercial use. What is the most appropriate initial action for the property manager?