Property Management
A NJ property manager who accepts kickbacks from contractors for directing repair work to them is:
AEntitled to extra compensation for managing repairs
BBreaching their fiduciary duty to the owner and may be violating RESPA if related to a federally-backed transaction✓ Correct
CPermitted if the owner is not aware
DAcceptable as industry practice
Explanation
Accepting undisclosed kickbacks from contractors is a serious breach of the property manager's fiduciary duty (loyalty, disclosure, accounting) to the owner and may also violate RESPA's anti-kickback provisions in relevant transactions.
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Key Terms to Know
Fiduciary Duty
The highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
Earnest MoneyA 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.
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