BC Rental Property Management flashcards
BC Rental Property Management · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Net Operating Income
- Effective gross income minus operating expenses. It excludes debt service, capital expenditures, depreciation, and income tax, so it measures property performance before financing and ownership tax effects.
- Capitalization Rate
- Annual net operating income divided by property value, expressed as a percentage. Rearranged, value equals net operating income divided by the cap rate. Higher risk or required return produces a higher cap rate.
- Cash-on-Cash Return
- Annual pre-tax cash flow divided by the total cash invested by the investor. It measures the return actually earned on equity deployed, unlike cap rate, which ignores financing.
- Debt Service Coverage Ratio
- Net operating income divided by annual debt service. A ratio of 1.20 means income covers debt payments 1.2 times. Lenders use a minimum threshold to size loans.
- Effective Gross Income
- Potential gross rent plus other income, minus vacancy and credit loss. It represents income realistically collectible from the property before operating expenses are deducted.
- Operating Expense Ratio
- Total operating expenses divided by effective gross income. A lower ratio means more income survives to net operating income, indicating tighter cost control relative to revenue.
- Reserve for Replacement
- An annual allowance set aside from operations for future replacement of short-lived building components such as roofs, appliances, and flooring. Underwriters treat it as an operating expense.
- Management Agreement
- A written contract between owner and brokerage stating the manager's authority, fee basis, term, reporting duties, and termination conditions. It defines the scope of the agency relationship.
- Rent Increase Notice
- Written notice in the prescribed form served on the tenant the required minimum period before the effective date, commonly three full months. Increases are limited to once per 12 months.
- Security Deposit Limit
- Where rent is paid monthly, a security deposit may not exceed one half of one month's rent. A separate pet damage deposit may also be capped at one half month.
- Landlord Entry Notice
- Written notice of at least 24 hours, with entry between 8 a.m. and 9 p.m., unless an emergency exists or the tenant consents to earlier entry.
- Condition Inspection Report
- A written, signed record of the unit's condition completed at move-in and move-out by both parties. The signed move-in report is the baseline for assessing damage claims.
- Deposit Return Deadline
- The landlord must return the security deposit, with any required interest, within the prescribed period after the tenancy ends, or file a claim to retain part of it.
- Notice to End Tenancy
- The prescribed form served on the tenant stating the effective date and the ground for ending the tenancy. Defective content or improper service can invalidate it.
- Dispute Resolution Filing
- An application to the residential tenancy branch asking an adjudicator to decide a dispute over rent, deposits, damage, or notices. Monetary orders are enforceable as judgments.
- Rent Control Exemption
- Certain units, such as some new construction or specified housing types, are exempt from the annual rent increase cap. Exempt units may face market increases subject to notice rules.
- Protected Grounds Screening
- Applicant decisions must not rest on protected characteristics such as race, religion, family status, or disability. Consistent, documented, objective criteria applied to all applicants reduce discrimination risk.
- Income-to-Rent Ratio
- A screening benchmark comparing gross monthly income to monthly rent, commonly requiring income of about three times rent. The ratio must be disclosed and applied consistently to all applicants.
- Misleading Advertising Risk
- Advertised rent, unit size, and amenities must match the actual unit. A materially inaccurate listing can support a misrepresentation claim or a regulatory complaint against the brokerage.
- Move-In Inspection
- A joint walkthrough with the tenant documenting existing damage and unit condition in writing and signed by both parties. It establishes the baseline for later damage deductions.
- Maintenance Request Log
- A dated record of each repair request, the action taken, and completion. It demonstrates the landlord responded to habitability issues and supports defence against related claims.
- Tenant Retention Planning
- Reviewing renewal intentions and rent-increase timing before the fixed term expires, so notice periods are met and vacancy loss from avoidable turnover is reduced.
- Reasonable Accommodation
- Adjusting rules, services, or premises to meet a tenant's disability-related needs, unless doing so causes undue hardship. Refusal without justification can breach human rights law.
- Application Documentation
- Keeping each applicant's submitted information, screening results, and the reason for the decision. Records show criteria were applied consistently and support defence of a discrimination complaint.
- Trust Account Requirement
- Client money such as rents and security deposits must be held in a designated trust account at a recognized financial institution, separate from the brokerage's operating funds.
- Trust Reconciliation
- A monthly comparison of the trust bank statement balance to the total of individual trust ledgers. The reconciliation is documented, and any difference must be explained and corrected promptly.
- Individual Trust Ledger
- A separate record for each owner or tenancy showing all trust receipts and disbursements. The sum of all ledger balances must equal the trust bank balance at all times.
- Commingling Prohibition
- Trust funds may not be mixed with brokerage operating money or a licensee's personal funds. Trust cheques require authorized signatories and must be used only for client purposes.
- Record Retention Period
- Transaction and trust records must be kept for the period set by the regulator, commonly at least six years, and produced on request during an audit or investigation.
- Prompt Trust Deposit
- Money received on a client's behalf must be deposited into the trust account within the time limit set by regulation, and a receipt should be issued to the payer.
- Conflict of Interest Disclosure
- Dual agency, referral fees, or personal purchases from a client must be disclosed in writing, and consent obtained where required, before the licensee acts or benefits.
- Commission Under Management Agreement
- The management agreement should state the fee basis, the term, and conditions for early termination. Commission is earned according to those terms, not by verbal understanding.