Property Management

A Texas property manager discovers the building's HVAC system needs emergency repair costing $4,500. The management agreement authorizes emergency expenditures up to $3,000 without owner approval. The manager should:

AProceed with the repair without authorization
BContact the owner immediately for authorization since the cost exceeds the agreed limit✓ Correct
CDelay the repair until the monthly budget cycle
DPay the difference out of pocket

Explanation

When an expense exceeds the property manager's authorized limit under the management agreement, the manager must contact the owner for approval before proceeding, unless true emergency circumstances make prior approval impossible.

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