Certified Apartment Manager (CAM) Practice Test

When dealing with a credit report that shows fraud alerts, which action can a property manager legally take?

1. Lower the security deposit requirement

2. Require a co-signer on the lease

3. Ignore the fraud alerts

4. Offer the tenant a month-to-month lease

The correct answer is: Require a co-signer on the lease

When a credit report indicates fraud alerts, it raises concerns about the applicant's creditworthiness and the legitimacy of their financial history. Requiring a co-signer on the lease is a reasonable action a property manager can take in this situation. The co-signer acts as an additional guarantor for the lease, providing assurance that if the primary tenant cannot meet their financial obligations, the co-signer will be responsible for those obligations. This effectively mitigates the risk associated with the fraud alerts, allowing the property manager to proceed with the lease while ensuring there is a backup source of financial support. The other options are less suitable in the context of addressing fraud alerts. Lowering the security deposit requirement does not directly address the concerns raised by the fraud alerts and may leave the property manager with inadequate financial protection. Ignoring the fraud alerts would be irresponsible, as it could lead to potential financial loss. Offering a month-to-month lease may not provide a strong enough solution to the risk presented and could leave both the property manager and the tenant in a precarious position. Thus, requiring a co-signer serves as a prudent course of action to navigate the situation safely.