Property Management
An Indiana property manager who makes unauthorized capital improvements to a rental property may be liable for:
ANothing — improvements always benefit the owner
BThe cost of the improvements if they were not authorized, as they acted outside the scope of their management authority✓ Correct
COnly the contractor's fees
DOnly if the improvements reduce property value
Explanation
A property manager acting outside the scope of their authority — such as making capital improvements without authorization — may be personally liable for unauthorized expenditures. Management authority must be expressly granted.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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