PSI New Jersey Real Estate State Practice Exam

Which of the following is a violation of a property manager's fiduciary obligations to an owner?

1. Accepting a signed lease on the owner's behalf

2. Collecting excessive fees from tenants

3. Neglecting maintenance requests

4. Failing to report crimes on the property

The correct answer is: Accepting a signed lease on the owner's behalf

The correct answer highlights the importance of a property manager's duty to act in the best interests of the property owner. A property manager has a fiduciary responsibility, which requires them to prioritize the owner's interests above their own and to act with loyalty, care, and full disclosure. Accepting a signed lease on the owner's behalf can be seen as overstepping authority unless explicitly permitted by the owner. This action could lead to decisions that do not align with the owner's expectations or interests, such as entering into unfavorable lease terms without full consultation or consent. On the other hand, the collection of excessive fees from tenants, neglecting maintenance requests, and failing to report crimes all contribute to poor property management practices and can harm the reputation or profitability of the property. However, they do not directly relate to the fiduciary duties since they also reflect on the overall management approach rather than a specific breach of trust or authority concerning the owner's explicit instructions. Thus, accepting a signed lease without the owner's consent is a clear violation of fiduciary obligations, as it undermines the trust essential in the property manager-owner relationship.