Property Management Licensing Practice Exam · Question
What is the primary role of capital reserve planning for stratas or condominiums?
Capital reserve planning involves setting aside funds over time to pay for significant, non-recurring expenses such as roof replacements, elevator modernization
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Question: What is the primary role of capital reserve planning for stratas or condominiums?
Answer options:
- To cover daily operational expenses of the building. ✅ To fund major future repairs and replacements of common elements.
- To provide a bonus pool for the property management team.
- To pay for individual unit renovations.
Correct answer: To fund major future repairs and replacements of common elements.
Explanation: Capital reserve planning involves setting aside funds over time to pay for significant, non-recurring expenses such as roof replacements, elevator modernizations, or major structural repairs, preventing large special assessments.
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