Certified Apartment Portfolio Supervisor (CAPS) Practice Exam - Module 1

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What is NOT a key component of a Management Agreement?

Budget and Business Plan.
Rental Rate Adjustments.
Obligation to Advance Payments.
Performance of Repairs.

The correct answer is: Rental Rate Adjustments.

The correct answer highlights that rental rate adjustments are generally not considered a key component of a management agreement. A management agreement typically outlines the responsibilities and obligations of the property manager and the property owner, focusing on the management and operational aspects of the property. Key components usually include a budget and business plan, which serve as essential frameworks for the financial operations and strategy of the property. Additionally, the obligation to advance payments is important because it ensures that the manager has the necessary funds to operate the property effectively. Performance of repairs is also a crucial part of the agreement, as it specifies the manager's responsibility for maintaining the property in good condition. In contrast, rental rate adjustments are often determined by market conditions, the property’s performance, or specific lease agreements rather than being a fundamental aspect of the management agreement itself. They may be addressed separately through leasing strategies or other property policies rather than being explicitly required in the management agreement.