Hawaii Pre-Licensing National Practice Exam

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Prepare for the Hawaii Pre-Licensing National Exam. Study with flashcards and multiple choice questions, each question provides hints and explanations. Get ready for success!

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If a company defaults on a lease, what should the property manager do?

Re-rent the space immediately
Notify that the company is responsible for remaining lease payments
Cancel the lease
Seek legal action against the company

The correct answer is: Notify that the company is responsible for remaining lease payments

When a company defaults on a lease, it is essential for the property manager to inform the tenant that they remain responsible for the lease payments for the duration specified in the lease agreement. This is founded on the legal principle that leases are binding contracts, obligating the tenant to fulfill their financial commitments even if they are not occupying the space. By notifying the company of their responsibility for the remaining lease payments, the property manager preserves the property owner's rights and may also aid in recovering any lost income due to the default. This communication serves to formally document the situation and may also be necessary for potential legal proceedings if the situation escalates. Re-renting the space immediately could be a valid course of action, but it does not address the financial responsibilities of the company that defaulted. Canceling the lease without notifying the tenant about their obligations may leave the property owner vulnerable to potential losses and legal complications. Seeking legal action might be necessary later, but initially informing the company of their ongoing financial obligations is a crucial step in managing the situation effectively.