Oregon 30-Hour Real Estate Law Practice Test

In property management, what does the agency relationship refer to?

1. The responsibilities of the manager

2. The relationship between the property manager and owner

3. The duties owed to tenants

4. The legal standard for property management

The correct answer is: The relationship between the property manager and owner

In property management, the agency relationship specifically refers to the formal relationship established between the property manager and the property owner. This relationship is characterized by the property manager acting on behalf of the owner in managing the property. This includes making decisions about marketing, leasing, maintenance, and overall management of the property to achieve the owner's objectives. The agency relationship is built on a fiduciary duty, where the property manager is expected to act in the best interests of the owner, uphold ethical standards, and follow the legal obligations that govern property management practices. It encompasses the responsibilities one party has towards another, ensuring transparency and trust in the management process. While the responsibilities of the manager, duties owed to tenants, and the legal standard for property management are important aspects of property management, they do not encapsulate the core idea of the agency relationship as accurately as the connection between the property manager and the owner does.