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ARM (IREM) practice questions

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Question 1Residential Property Management Operations

Which phrase may a residential manager properly include in a rental advertisement under the Fair Housing Act?

  1. Stating that units are perfect for young singles
  2. Requiring applicants to speak only English
  3. Including the Equal Housing Opportunity logo Correct answer.
  4. Advertising that no children are allowed

Explanation

Fair housing law prohibits advertisements that indicate a preference or limitation based on protected characteristics such as familial status or national origin. Including the Equal Housing Opportunity logo signals compliance and does not exclude any protected group.

Question 2Residential Property Management Operations

A lease states that rent is due on the first and a late fee applies after the fifth. A resident pays in full on the fourth. What is the correct outcome?

  1. The lease is automatically terminated
  2. No late fee is charged Correct answer.
  3. A late fee is charged on the third
  4. Rent is treated as unpaid from the first

Explanation

The lease gives the resident until the fifth to pay before a late fee applies. Payment on the fourth is timely under the lease terms, so no late fee is owed.

Question 3Residential Property Management Operations

A resident reports the smell of gas inside an apartment. What is the most appropriate immediate response by the management team?

  1. Log the request and wait for a second report
  2. Schedule a routine work order for the next business day
  3. Ask the resident to air out the unit
  4. Treat it as an emergency and dispatch staff now Correct answer.

Explanation

A gas smell is a potential life-safety emergency that requires immediate action, including dispatch of qualified staff and notification of emergency services if needed. Routine scheduling or waiting for more reports risks serious harm.

Question 4Residential Property Management Operations

When a landlord provides a written itemization of security deposit deductions after move-out, the deadline is generally:

  1. Only after the resident submits a written request
  2. Within the period set by state statute Correct answer.
  3. At the time the lease is signed
  4. Within 24 hours in every state without exception

Explanation

Security deposit return and accounting deadlines are governed by state law, which varies by jurisdiction. The manager must follow the specific statutory deadline for that property's location.

Question 5Residential Property Management Operations

Which expense in a residential operating budget is generally considered controllable by property management?

  1. Mortgage interest payment
  2. Property insurance premium
  3. Property tax bill
  4. Landscaping contract Correct answer.

Explanation

Controllable expenses are those management can influence through operating decisions, such as service contracts and supplies. Taxes, insurance premiums, and mortgage interest are typically set by outside authorities or financing terms.

Question 6Residential Property Management Operations

What is the primary purpose of obtaining a certificate of insurance from a vendor?

  1. Shows the vendor's liability coverage and limits Correct answer.
  2. Sets the vendor's hourly rate
  3. Guarantees the vendor's workmanship
  4. Transfers ownership of all vendor tools to the property

Explanation

A certificate of insurance documents the vendor's coverage types, limits, and effective dates so the property can verify risk transfer before work begins. It does not guarantee quality or set pricing.

Question 7Residential Property Management Operations

A resident complains about noise from a neighboring unit. What should the manager do first?

  1. Send an eviction notice to the neighbor
  2. Tell the resident to call the police only
  3. Document it and follow the disturbance procedure Correct answer.
  4. Ignore it until several other residents complain

Explanation

The manager should document the complaint and follow the community's established disturbance procedure, which may include contacting the other resident and issuing warnings. Eviction is a later remedy, and ignoring complaints allows the problem to continue.

Question 8Residential Property Management Operations

What is the main purpose of a preventive maintenance schedule?

  1. To increase the number of emergency repairs
  2. To respond to work orders faster
  3. To service equipment before failure occurs Correct answer.
  4. To replace all equipment every year

Explanation

Preventive maintenance schedules service equipment on a planned basis to reduce breakdowns, extend useful life, and control costs. It is not intended to increase emergencies or require blanket annual replacement.

Question 9Residential Property Management Operations

Which task is part of the unit turnover process?

  1. Painting and cleaning the vacant unit Correct answer.
  2. Setting the property's rent growth cap
  3. Renewing the property insurance policy
  4. Preparing the annual tax return

Explanation

Turnover work focuses on restoring a vacated unit to rent-ready condition, including painting, cleaning, repairs, and final inspection. Insurance renewal, tax preparation, and rent policy are separate property-level functions.

Question 10Residential Property Management Operations

A prospective resident's application is denied based on a credit report. What should the manager provide to the applicant?

  1. No information is required
  2. The applicant's full credit report sent to neighbors
  3. A verbal refusal with no written record
  4. A written adverse action notice naming the credit bureau Correct answer.

Explanation

When an application is denied based in whole or in part on a consumer credit report, the applicant should receive an adverse action notice identifying the reporting agency and explaining the right to dispute. This supports compliance with consumer reporting rules.

Question 11Residential Property Management Operations

A resident submits a partial rent payment. How should the manager record it in the rent ledger?

  1. As full payment of rent
  2. As a maintenance charge
  3. As a refundable security deposit held in trust
  4. As a partial payment with a balance still due Correct answer.

Explanation

Partial payments reduce the outstanding rent balance but do not satisfy the full obligation. The ledger should show the amount received and the remaining balance so collection and delinquency tracking stay accurate.

Question 12Residential Property Management Operations

Actual maintenance expense exceeds the budget by 12 percent. What is the most useful management response?

  1. Ignore it because budgets are only estimates
  2. Cut all maintenance spending immediately
  3. Investigate which line items caused the gap Correct answer.
  4. Raise next year's budget by 12 percent

Explanation

A variance should be analyzed by line item to determine whether it reflects a one-time event, a pricing change, or an ongoing trend. That analysis supports corrective action and realistic future budgeting.

Question 13Residential Property Management Operations

Which elements are essential to a multifamily property's written emergency plan?

  1. Verbal instructions given only to new staff
  2. A posted list of every resident's Social Security number
  3. Written evacuation routes and resident notification steps Correct answer.
  4. A guarantee that no emergency will ever occur

Explanation

An emergency plan should document evacuation routes, communication methods, staff roles, and resident notification procedures. It must be accessible and practiced, not limited to verbal instructions for new staff.

Question 14Residential Property Management Operations

A resident with a disability requests an assigned parking space near the building entrance. How should the manager respond?

  1. Charge a higher monthly rent for the reserved space
  2. Evaluate it as a reasonable accommodation promptly Correct answer.
  3. Require the resident to move to another unit
  4. Deny it because spaces are assigned by lottery

Explanation

A request for an accommodation related to a disability should be evaluated promptly under fair housing rules, with attention to whether it is reasonable and necessary. The manager should not impose discriminatory conditions or automatically deny it.

Question 15Residential Property Management Operations

In purchasing controls, segregation of duties means that:

  1. The person who orders does not approve payment Correct answer.
  2. One person handles all purchasing and payments
  3. Vendors approve their own invoices
  4. Purchases are made without documentation

Explanation

Segregation of duties separates authorization, purchasing, and payment approval so that no single person controls an entire transaction. This reduces the risk of error and fraud.

Question 16Residential Property Management Operations

A resident slips on ice in the parking lot. What should management do first?

  1. Post a warning sign and wait for warmer weather to arrive
  2. Secure the area, document it, notify the insurer Correct answer.
  3. Pay the resident's medical bills without review
  4. Deny responsibility and refuse to discuss it

Explanation

The immediate priorities are to prevent further injury, preserve evidence, and report the incident to the insurer according to the property's risk management procedure. Liability and payment decisions should not be made informally at the scene.

Question 17Residential Property Management Operations

A resident asks to add a roommate who is not on the lease. What is the proper management step?

  1. Charge a pet fee for the additional occupant
  2. Require the roommate to apply and be added by amendment Correct answer.
  3. Terminate the lease immediately without notice
  4. Allow the roommate to move in with no paperwork or screening

Explanation

All adult occupants should be screened and documented under the community's occupancy policy, and the lease should be amended to add approved occupants. This preserves enforceability and fair application of screening standards.

Question 18Residential Property Management Operations

Which financial statement reports income and expenses over a period of time?

  1. Balance sheet
  2. Income statement Correct answer.
  3. Aged receivables report
  4. Rent roll

Explanation

The income statement summarizes revenues and expenses for a defined period, producing net income or loss. The balance sheet shows financial position at a point in time, while the rent roll and aged receivables support leasing and collection analysis.

Question 19Residential Property Management Operations

When is the best time for a manager to begin discussing lease renewal with a resident?

  1. Only when the resident gives notice
  2. Several months before the lease expires Correct answer.
  3. At the move-out inspection
  4. After the lease has already expired

Explanation

Starting renewal discussions several months before expiration gives time to address concerns, adjust terms, and reduce vacancy risk. Waiting until expiration or move-out removes the opportunity to retain the resident.

Question 20Residential Property Management Operations

Which sequence best describes a standard make-ready process?

  1. Advertise, then repair, then move out
  2. Collect deposit, then paint, then schedule
  3. Inspect, repair, clean, then final inspect Correct answer.
  4. Show, then clean, then inspect

Explanation

A make-ready usually begins with an inspection to identify needed work, followed by repairs, cleaning, and a final quality inspection before the unit is shown or leased. This order prevents cleaning from being undone by repairs.

Question 21Residential Property Management Operations

A community applies an occupancy limit of two persons per bedroom. Under fair housing principles, the policy is generally defensible when it is:

  1. Applied uniformly and tied to health or safety codes Correct answer.
  2. Applied only to families with children
  3. Announced only to applicants of one national origin
  4. Waived for residents who pay higher rent

Explanation

Occupancy standards are more defensible when they are applied consistently to all applicants and are supported by legitimate factors such as building codes, health, and safety. Policies that single out families with children or particular national origins raise serious fair housing concerns.

Question 22Residential Property Management Operations

A property has effective gross income of $1,200,000, operating expenses of $480,000, and debt service of $300,000. What is net operating income (NOI)?

  1. $720,000 Correct answer.
  2. $900,000
  3. $1,020,000
  4. $420,000

Explanation

Net operating income equals effective gross income minus operating expenses, before debt service. Here, $1,200,000 minus $480,000 equals $720,000.

Question 23Residential Property Management Operations

What does an indemnification clause in a vendor contract accomplish?

  1. Requires the vendor to hold a license
  2. Sets the length of the contract term
  3. Guarantees that the vendor's price will not change
  4. Allocates responsibility for certain losses Correct answer.

Explanation

An indemnification clause shifts or allocates responsibility for specified losses or claims between the parties. Contract term, licensing, and price stability are addressed by other provisions.

Question 24Residential Property Management Operations

A manager adopts a blanket policy rejecting every applicant with any criminal record. Under HUD fair housing guidance, the greatest legal concern is that the policy:

  1. The policy conflicts with state rent control
  2. The policy requires excessive documentation from applicants
  3. The policy may have an unjustified disparate impact Correct answer.
  4. The policy is too lenient on applicants

Explanation

Blanket criminal-history exclusions can create a disparate impact based on race or national origin and may violate fair housing law when not narrowly tailored to legitimate safety concerns. HUD guidance calls for individualized assessment rather than automatic rejection.

Question 25Residential Property Management Operations

A bank reconciliation shows outstanding checks that have not yet cleared. What is the usual effect on the balances?

  1. The difference should be recorded as income
  2. Bank balance exceeds book balance until checks clear Correct answer.
  3. The checks should be voided and reissued
  4. Book balance exceeds bank balance permanently

Explanation

Outstanding checks have been recorded in the books but not yet deducted by the bank, so the bank statement balance is higher than the book balance until the checks clear. They are timing differences, not income or permanent differences.

Question 26Residential Property Management Operations

Which advertisement wording may violate fair housing law?

  1. Walk to shopping and public transit
  2. Professionally managed one-bedroom apartments
  3. Quiet community for adults; no children Correct answer.
  4. Pet-friendly with breed restrictions

Explanation

Fair housing law protects familial status, so advertising that excludes children is discriminatory. Neutral descriptions of unit size, location, and pet policy do not exclude a protected class on their face.

Question 27Residential Property Management Operations

A manager needs to enter an occupied unit to inspect a non-emergency plumbing issue. Unless the lease or law says otherwise, the manager should:

  1. Enter immediately using the master key
  2. Wait until the next rent payment is received
  3. Ask a neighboring resident to accompany the manager
  4. Give advance notice as the lease or law requires Correct answer.

Explanation

Non-emergency entry generally requires advance notice to the resident under the lease and applicable state law. Entry without notice is reserved for emergencies or other legally permitted situations.

Question 28Residential Property Management Operations

Which practice best protects a community's master keys?

  1. Replace master keys only at unit turnover
  2. Let all maintenance staff carry master keys home
  3. Keep master keys in an unlocked office drawer
  4. Log each key issuance and signed return Correct answer.

Explanation

A key log with signed issuance and return creates accountability and helps detect loss or misuse. Unrestricted access or uncontrolled key removal weakens security.

Question 29Residential Property Management Operations

A resident provides reliable documentation that a dog is a service animal. The manager should:

  1. Require a certified trainer for the animal
  2. Deny the request under the no-pet policy
  3. Charge the standard pet deposit plus monthly pet rent
  4. Waive pet fees; use assistance-animal policy Correct answer.

Explanation

A service animal is not a pet under fair housing rules, so pet deposits and pet rent generally may not be charged. The manager should process the request under the assistance-animal policy and allow the animal as a reasonable accommodation.

Question 30Residential Property Management Operations

After a resident moves out, the manager completes an itemized deduction list. The security deposit refund must generally be sent:

  1. By the state deadline, with itemized deductions Correct answer.
  2. Within 24 hours of move-out in every state
  3. Whenever the unit is re-rented
  4. Only after the owner approves the annual budget

Explanation

State law sets the deadline for returning a security deposit and generally requires an itemized statement of any deductions. The timing is not tied to re-renting the unit or the owner's budget cycle.

Question 31Residential Property Management Operations

For a residential unit built before 1978, federal law requires the manager to:

  1. Disclose only if a child under six will live there
  2. Put a lead warning only in the renewal lease
  3. Test every unit and remove all lead paint
  4. Provide the EPA pamphlet and signed disclosure Correct answer.

Explanation

Federal lead-based paint disclosure rules apply to pre-1978 housing and require providing the EPA pamphlet and disclosure of known lead hazards, with acknowledgment from the resident. Disclosure is not limited to households with young children or to renewal leases.

Question 32Residential Property Management Operations

Before paying a new vendor for services, the manager should obtain:

  1. A verbal assurance of insurance coverage
  2. The vendor's marketing brochure
  3. A copy of the vendor's personal tax return
  4. A completed IRS Form W-9 Correct answer.

Explanation

A completed Form W-9 collects the vendor's taxpayer identification information needed for reporting and payment records. Verbal insurance assurances and marketing materials do not satisfy tax reporting requirements.

Question 33Residential Property Management Operations

During a move-out inspection, the manager finds small nail holes and worn carpet in a high-traffic path. These are best classified as:

  1. A safety hazard requiring immediate evacuation
  2. A maintenance emergency to fix before showing
  3. Normal wear and tear, not chargeable Correct answer.
  4. Tenant damage requiring full carpet replacement

Explanation

Small nail holes and traffic-pattern carpet wear are commonly treated as normal wear and tear rather than chargeable damage. Charges should be based on actual damage beyond ordinary use and applicable law.

Question 34Residential Property Management Operations

Rent is due on the 1st with a grace period ending on the 5th. On the 6th, the resident has not paid. The manager's first step should be to:

  1. Deduct the rent from the security deposit
  2. File an eviction immediately without any notice
  3. Start the delinquency process with a late notice Correct answer.
  4. Change the unit locks until rent is paid

Explanation

The manager should follow the written delinquency procedure, which typically begins with a late notice after the grace period. Self-help lockouts, immediate eviction without notice, and taking the deposit are not proper collection steps.

Question 35Residential Property Management Operations

On a winter morning, the manager receives four work orders. Which should be handled first?

  1. No heat in a unit with an infant Correct answer.
  2. A burned-out light in a common hallway
  3. A loose cabinet handle in a kitchen
  4. A dripping bathroom faucet in one unit

Explanation

Loss of heat in winter, especially with a vulnerable occupant, is an emergency because it affects health and safety. Cosmetic and minor plumbing issues can be scheduled after urgent life-safety matters.

Question 36Residential Property Management Operations

A management agreement states the manager will maintain a separate trust account for owner funds. The main reason is to:

  1. Separate owner funds from manager funds Correct answer.
  2. Allow owner funds to be used for other properties
  3. Avoid paying income taxes
  4. Increase the management fee

Explanation

Trust accounting keeps owner money separate from the manager's operating funds and helps prevent commingling. The arrangement is not a fee strategy, tax avoidance plan, or permission to use funds across properties.

Question 37Residential Property Management Operations

A community's written rental criteria require income of three times rent. An applicant just below the threshold asks for an exception. The manager should:

  1. Apply the criteria to all applicants Correct answer.
  2. Approve the exception to fill the vacancy quickly
  3. Apply the exception to everyone who asks
  4. Deny only if the applicant has children

Explanation

Screening criteria must be applied consistently to avoid fair housing liability and disparate treatment. Granting ad hoc exceptions or varying the rule based on familial status creates legal risk.

Question 38Residential Property Management Operations

A property's replacement reserve is funded monthly. The primary purpose of the reserve is to:

  1. Pay the manager's leasing commissions
  2. Fund major capital replacements over time Correct answer.
  3. Cover routine monthly landscaping invoices
  4. Fund resident rent concessions

Explanation

A replacement reserve sets aside funds for major capital items such as roofs, HVAC systems, and paving. Routine operating expenses, leasing commissions, and concessions are handled through the operating budget.

Question 39Residential Property Management Operations

A resident vacates before lease end, leaves belongings, and stops paying. The manager should:

  1. Keep the deposit without any notice to the resident
  2. Discard the belongings and re-rent immediately
  3. Follow state abandoned-property law and document Correct answer.
  4. Re-rent and bill all future rent without mitigation

Explanation

Abandoned property must be handled according to state law, with documentation of the unit's condition and the personal property left behind. Simply discarding belongings or keeping the deposit without notice can create liability.

Question 40Residential Property Management Operations

A pipe breaks and damages three units. The community's general liability policy most directly responds to:

  1. The lost rent from vacated units
  2. Third-party injury or damage claims Correct answer.
  3. The cost of replacing the broken pipe
  4. Routine wear on the building's plumbing

Explanation

General liability insurance covers claims by third parties for bodily injury or property damage for which the insured is legally liable. The cost of repairing the pipe, lost rent, and routine wear are handled through maintenance, rent loss coverage, or reserves rather than general liability.

Question 41Leasing and Marketing

A housing provider advertises a unit as available to 'adults only.' Under the federal Fair Housing Act, this restriction most directly raises concerns about discrimination based on which protected class?

  1. Familial status Correct answer.
  2. Religion
  3. Race
  4. Sex

Explanation

Familial status protects households with children under 18. An adults-only policy that excludes children generally violates the Fair Housing Act unless the property qualifies for the housing for older persons exemption.

Question 42Leasing and Marketing

Which statement best describes the purpose of the Equal Housing Opportunity logotype in residential advertising?

  1. It certifies that a property has passed a government inspection and meets all local building codes.
  2. It guarantees that every applicant will be approved.
  3. It replaces the need to include a phone number in the ad.
  4. It states that the property is offered on an equal opportunity basis. Correct answer.

Explanation

The Equal Housing Opportunity logotype is a fair housing statement indicating that the property is offered without discrimination. It is not a certification, an approval guarantee, or a substitute for required contact information.

Question 43Leasing and Marketing

A community recorded 400 prospect visits and signed 80 leases during the same period. What is the conversion ratio?

  1. 5%
  2. 20% Correct answer.
  3. 80%
  4. 16%

Explanation

Conversion ratio is leases signed divided by prospect traffic. Here, 80 divided by 400 equals 20%, meaning one in five prospects became a lease.

Question 44Leasing and Marketing

Which action most directly improves a community's curb appeal?

  1. Reducing the number of staff on site
  2. Changing the property's tax withholding
  3. Increasing the marketing budget for online advertising
  4. Landscaping the entrance and fixing signage Correct answer.

Explanation

Curb appeal is the first impression created by what a prospect sees from the street and upon arrival. Landscaping and visible signage maintenance directly shape that impression.

Question 45Leasing and Marketing

Compared with leasing a vacant unit to a new resident, renewing an existing resident generally...

  1. costs less in marketing and turnover Correct answer.
  2. requires a complete credit check every year
  3. eliminates the need for a lease renewal
  4. reduces the property's rental income

Explanation

Resident retention avoids many costs associated with turnover, including advertising, cleaning, and vacancy loss. Renewals are therefore generally more cost-effective than replacing residents.

Question 46Leasing and Marketing

During a telephone inquiry, the leasing professional's primary objective should be to...

  1. schedule an appointment for a visit Correct answer.
  2. read the entire lease over the phone
  3. collect the application fee by phone
  4. quote the lowest possible rent immediately

Explanation

A telephone inquiry is most valuable when it converts interest into a scheduled property visit. Detailed lease review and payment collection are better handled later in the leasing process.

Question 47Leasing and Marketing

A well-prepared model unit is most useful because it...

  1. proves that every unit is identical
  2. allows the prospect to sign a lease without seeing the actual unit
  3. removes the need for fair housing compliance
  4. helps prospects visualize living in the community Correct answer.

Explanation

A model unit helps prospects imagine themselves in the space and demonstrates finishes, layout, and amenities. It does not replace fair housing obligations or proof of the actual unit being leased.

Question 48Leasing and Marketing

An application fee is best described as a charge that...

  1. must be refunded to every applicant
  2. is the same as a security deposit
  3. covers application processing costs Correct answer.
  4. guarantees approval of the application

Explanation

An application fee is typically charged to cover the cost of processing a rental application, such as screening and administrative work. It is separate from a security deposit and does not guarantee approval.

Question 49Leasing and Marketing

When a rental application is denied based in whole or in part on a consumer credit report, the housing provider must...

  1. send the report to the applicant's employer
  2. refund the application fee automatically
  3. keep the reason for denial confidential
  4. provide an adverse action notice Correct answer.

Explanation

The Fair Credit Reporting Act requires an adverse action notice when a consumer report contributes to a denial. The notice informs the applicant of the denial and the reporting agency involved.

Question 50Leasing and Marketing

An applicant who uses a wheelchair asks to install a grab bar in the bathroom of a unit she will rent. The manager should...

  1. deny the request because bathroom fixtures cannot be altered by anyone
  2. require the applicant to move to a different property
  3. charge a pet deposit for the installation
  4. permit a reasonable modification at the resident's expense Correct answer.

Explanation

Fair housing law allows a resident with a disability to make reasonable modifications at the resident's expense when necessary for full use of the dwelling. The request should be evaluated individually and not automatically denied.