Property Management
A property manager who discovers the owner is not paying the mortgage while collecting the management fee may face liability if they:
AContinue managing without notifying the tenants
BContinue to collect rent and apply it to management fees while the owner defaults on the mortgage and tenants face displacement✓ Correct
CNotify the owner of their concerns in writing
DResign the management contract with proper notice
Explanation
A property manager who continues to collect fees while knowing the owner is in default (risking displacement of tenants) may face ethical and legal liability. They should address the issue with the owner promptly, and may need to resign the contract if the situation is not corrected.
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