EXPLANATION OF THE ANSWERS

1. d. Federal, state, and local laws as well as any rules of the condominium association or homeowners' association, as applicable, must be considered when leasing a property.

2. d. At first glance, answer "a" seems appropriate and is probably a safe way to hold the money, but it may not be necessary. As a landlord, you need to know your state's specific rules regarding the holding of security deposits, and therefore "d" is the best answer.

3. d. is the correct answer. You should never discriminate based on race, color, religion, or national origin. You should also add to that basic list sex, sexual preference, and age. The only exception is if your condominium association is organized as a senior citizen community under the laws of the state where the property is located. In such a case, you may not lease to people under the age classified as "senior citizen." Cleanliness is not a protected class of individuals, and you have every right to request that your prospective tenant submit to a credit check. Refusal to do so is grounds for not renting the unit. However, if you only demand credit checks from a certain class of people and that class is protected, you may be in violation of anti-discrimination laws. Therefore, you should be uniform in your rental policies.

4. d is the correct answer. The analysis is the same as in question 3.

5. b is the correct answer. This question is a bit tricky. To create a contract, there must be an offer, an acceptance, and a consideration. Those are the basic elements. The landlord offers the property, the tenant accepts, and the rental amount is the consideration. However, in order for the lease agreement to be valid, those elements must be communicated in the contract. Thus, the contract requires the names of the parties to the agreement and the rental amount. Security is irrelevant, because that is just a term of the agreement; it is not the primary consideration. In addition, in order for a contract to be valid, it must have a specific date of commencement and a specific date of termination. Contracts may be drawn in such a way that the contract renews automatically after a specific time unless one or both of the parties object, but those contracts are still considered as having a termination date.

6. b. A lease is a bilateral contract between the landlord and the tenant.

7. b. While beating up the tenant may be tempting, the lawful method is to first send a notice to the tenant, by certified mail, that he or she is late in the rent and a demand for the rent within a stipulated time, usually three calendar days. However, state law may lengthen that period. Most states require the proof of notice as a condition before going forward with an eviction proceeding.

8. d. As a landlord, you should carry as much insurance as possible. Appliance insurance, a renter's policy, and an inventory of the items left in the apartment or house should always be in the landlord's file.

9. b. While some of the other choices may be tempting, choice b is the best answer because it both is impersonal and creates a record of the issue involved, especially when you are going to deny the demand. Send the response by certified mail so that there will be no issue of whether the tenant received your response.

10. d. You can deduct only items directly involved in the business of renting or maintaining the property. A trip to the Bahamas to recuperate from the ordeal of leasing the unit is clever but not legitimate.

11. d. is the correct answer. Once the tenant elects not to renew the lease, you may begin showing the apartment in accordance with the terms of the lease agreement. After the tenant moves out, you should inspect the property to determine if the security deposit needs to be withheld. While the lease is in effect, the rights of the tenant must be respected, irrespective of the fact that he or she will not renew; therefore choice c is incorrect.

12. a. is the correct answer. Almost all states require a written notification to the tenant from the landlord that he or she intends to withhold the security. Each state has its own rules regarding how soon the landlord must accomplish this.

13. c. is the correct answer. The Law of Remedies is a difficult subject and creates many problems with regard to the landlord's withholding of security deposits. In most cases, the courts will not award the actual cash value or replacement cost but will depreciate the item.

14. c. is the correct answer. A broken window is not considered normal wear and tear. When tenants lease a property, they are expected to use and enjoy the property, which creates wear and tear. Thus, walking on carpets or putting pictures on a wall is part of normal use of the property. The cost of cleaning may be tax deductible as well.

15. c. is the correct answer. This is a harder question. The landlord is not responsible for every injury that occurs on his or her property, only those injuries that result from a defect in the property that the landlord knew or should have known about and failed to correct. If that defect was the immediate cause of injury to the tenant or the tenant's guests while on the property, the landlord may be held liable. But if the proximate cause of the injury to a guest was not a defect on or about the property, but some independent action of the tenant, the landlord is not liable. In this case, the tenant held a party and after serving alcohol to a guest, allowed him to drive drunk. Various states have Dram Shop (Barroom) Acts that hold the host liable if he or she allows a guest to drive drunk. These acts used to apply only to commercial establishments, including bars and restaurants; however, many states have extended the acts to private gatherings. In this case, the tenant held a party, served the drinks, and allowed his guest to drive drunk. The immediate cause of the tenant's injuries had absolutely nothing to do with any defect in the property, and thus the landlord is not liable.

16. c. is the correct answer. In this case, the defect that directly caused the injury to the guest was a roof tile, part of the landlord's property. The law charges the landlord with responsibility for the defect, whether or not the landlord had actual knowledge. If the law imposes knowledge to the landlord where the landlord was not aware of the defect, it is referred to as "constructive knowledge." However, the landlord's insurance policy should cover the loss up to the limit of the policy.

17. d. is the correct answer.

18. b. is the correct answer. Taste is subjective. In this case, beauty is truly in the eyes of the beholder. Therefore, it is best to keep the property as neutral as possible and let the imagination of the prospect take over.

19. b. is the correct answer. In order to value a property, you need to know what other comparable properties in the area are commanding. While launching your investigation, you should consider such factors as location, views, building amenities, and whether the comparable units are furnished or not.

20. c. is the correct answer. The rules of a condominium association may restrict pets in the building. In that case, the tenant may not have a pet. However, the facts presented in the question suggest that the landlord and tenant had agreed on the pet as a condition of the lease. Since it is the landlord who is the owner, he or she is presumed to know the rules of his or her condominium association. The tenant may successfully argue that the pet is part of his family and the landlord knew or should have known that pets weren't allowed. As a consequence, the agreement should be voided because the tenant was wrongfully induced to sign a lease. An alternative legal argument is simply that there was "no meeting of the minds" as to an essential element of the lease, that is, whether or not pets were to be permitted.

CONCLUSION

So, how did you do? If you got 100 percent, you understand the essential elements of becoming a successful landlord. If you made a few mistakes, don't worry. It just means you didn't quite grasp a particular concept. Reviewing the applicable chapters should solve the problem.

Ken Roth (Sunny Isles Beach, FL) has more than 20 years of experience in real estate. He is a lawyer specializing in real estate issues and holds licenses as a realtor and residential property manager in Florida.

Ken graduated Hofstra University School of Law and is admitted to practice in Florida, New York and the District of Columbia. He is also a reserve officer in the United States Air Force and serving as an Assistant Staff Judge Advocate.

From the Author: "Anybody can buy a form lease, throw an ad in the newspaper, and stick a tenant on his or her property. Those are the people who keep real estate lawyers employed and the court system busy. The purpose of this book is to help you understand and appreciate the complexity of the landlord-tenant relationship from the point of view of the landlord.

"It's not the forms that make you successful -- though you'll get plenty of forms in this book -- it's understanding the content of those forms and thinking about the transaction itself and how you progress with each step that will make you a successful landlord.

"No book can substitute for 20 years of experience as an attorney, real estate broker, and landlord, but those experiences are the core of this book and will help you on your way to a better landlord experience. The real issue is if you want to trust (and pay) others, or if you want to understand the process yourself."

Copyright ?2004 by Kenneth M. Roth. All rights reserved. Reprinted here with permission of the publisher, Amacom Books, http://www.amacombooks.org. Please feel free to duplicate or distribute this file, as long as the contents are not changed and this copyright notice is intact.