ARM (IREM) key terms

A written contract between the owner and the manager that states duties, authority, fees, reporting, term, and termination. It defines what the manager may do without asking the owner.

The limits on what a property manager may decide or spend without the owner's prior approval. These limits usually appear in the management agreement.

The dollar amount above which a manager must obtain owner authorization before committing funds for repairs, purchases, or contracts. It prevents surprise expenses.

A monthly package to the owner showing income, expenses, budget variances, occupancy, and notable issues. It documents manager performance and supports owner decisions.

A written plan for a property covering goals, marketing, budgeting, staffing, maintenance, and capital needs for the coming year. Staff use it to guide daily decisions.

A professional analysis estimating the remaining life and replacement cost of major building components, used to set a funding plan for reserves.

Money set aside from operating income to pay for future major repairs and replacements, such as roofs, paving, or equipment, rather than routine maintenance.

Effective rental income minus operating expenses, before debt service, income taxes, and capital spending. It measures a property's operating performance.

A forecast of expected income and expenses for a property over a set period, usually one year, used to plan and control spending.

The difference between a budgeted amount and the actual amount, stated in dollars and percent. Managers explain large variances to the owner.

Net operating income divided by annual loan payments. Lenders use it to judge whether a property earns enough to cover its mortgage.

A schedule listing each unit, resident, lease dates, market and actual rent, deposits, and balance due. It is the basis for income projections.

Rent or other charges that are past due. Managers track aging, send notices, and follow collection policy and local law.

A plan for major, long-lived improvements and replacements, separate from routine operating costs, usually funded from reserves or a special assessment.

The percentage of units that are rented and occupied, calculated as occupied units divided by total units. Physical occupancy can look strong while collections lag.

The share of potential rent actually collected, after vacancies, concessions, and delinquency. It is a stricter measure than physical occupancy.

The binding contract between landlord and resident that sets rent, term, rules, and each party's responsibilities. Its terms must comply with fair housing and local law.

Property rules covering noise, parking, pets, trash, and common areas that residents agree to follow. They must be reasonable, applied consistently, and included in the lease.

Money held to cover unpaid rent or damage beyond normal wear. Managers must follow state rules on limits, receipts, interest, account handling, and return deadlines.

A documented walk-through with a new resident recording unit condition and defects before occupancy. It supports later deposit decisions and maintenance requests.

A written or electronic request that tracks a maintenance task from report through completion, including priority, assignee, parts, cost, and resident follow-up.

Scheduled, planned servicing of equipment and building systems to prevent failures and extend useful life, such as filter changes and roof inspections.

Needed repairs or replacements postponed for cost or scheduling reasons. It raises future costs and risk and should be disclosed and planned for.

Written procedures for fire, flood, power loss, and other crises, including notification, evacuation, and vendor contacts. Staff should be trained and the plan tested.

A factual record of an accident, injury, crime, or property damage, completed promptly by staff. It supports insurance claims, risk analysis, and legal defense.

Shifting financial loss to another party through insurance, indemnity clauses, or contracts, rather than keeping the exposure in-house.

Proof from a vendor or contractor showing current liability and workers' compensation coverage and limits, collected before work begins on site.

Laws prohibiting discrimination in housing based on protected characteristics such as race, color, religion, sex, disability, familial status, or national origin.

A change in rules, policies, or procedures, or a service, needed so a resident with a disability can use and enjoy the dwelling. Requests are handled case by case.

The rule that marketing must describe the property truthfully and must not discriminate. Ads should state rent, deposits, and restrictions accurately and consistently.

The first impression of a property from the street, shaped by landscaping, paint, signage, lighting, and cleanliness. It drives prospect traffic and resident pride.

The percentage of qualified prospects who visit and then sign a lease. It measures leasing effectiveness and helps set marketing spending.

Planned efforts to keep good residents renewing, such as timely service, renewal offers, and communication. Retention lowers turnover and leasing costs.

The share of units that become vacant and are re-let during a period. High turnover raises costs and should be analyzed by cause.

A written summary of duties, qualifications, reporting lines, and physical requirements for a position. It supports hiring, evaluation, and legal compliance.

A step-by-step response to performance or conduct problems, typically verbal warning, written warning, then stronger action, applied consistently and documented.

A situation where a manager's personal interest, such as a vendor relationship or side business, could improperly influence decisions made for the owner.

The duty to protect owner and resident information, such as financial records and personal data, from unauthorized use or disclosure.

The legal obligation to act in the owner's best interest with loyalty, care, disclosure, and honest accounting. It outranks the manager's own interests.

Unwelcome sexual conduct that affects employment or creates a hostile work environment. Employers must prevent it, take complaints, and investigate promptly.