Arkansas Real Estate Practice Exam

What is required of a property manager regarding tenant security deposits?

1. They can use it at their discretion.

2. They may only expend it for expenses allowed by the agreement.

3. They must return it immediately upon request.

4. They must deposit it into their personal account.

The correct answer is: They may only expend it for expenses allowed by the agreement.

A property manager cannot use tenant security deposits at their discretion because it is money that belongs to the tenant and is meant to be held as a security in case of any damages or unpaid rent. Option C is incorrect because a property manager is not required to return the deposit immediately upon request, as they are allowed to use it for specific expenses only. Option D is incorrect because a property manager must deposit the security deposit into a separate account, not their personal account, in order to properly account for and protect the tenant's funds. Option A is also incorrect because, as mentioned before, a property manager cannot use the security deposit at their discretion. The correct answer, B, is the option that best describes the purpose and rules surrounding tenant security deposits.