Strata Management Licensing Practice Exam · Question
What is the primary purpose of a Depreciation Report (BC) or Reserve Fund Study (ON) for a strata/condominium corporation?
Depreciation Reports/Reserve Fund Studies are essential tools used to identify common components, estimate their remaining useful life, and forecast the costs a
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Question: What is the primary purpose of a Depreciation Report (BC) or Reserve Fund Study (ON) for a strata/condominium corporation?
Answer options:
- To assess the market value of individual units. ✅ To forecast expenditures for major repairs and replacements of common property over a long-term period.
- To determine the amount of property tax due annually.
- To evaluate the performance of the property manager.
Correct answer: To forecast expenditures for major repairs and replacements of common property over a long-term period.
Explanation: Depreciation Reports/Reserve Fund Studies are essential tools used to identify common components, estimate their remaining useful life, and forecast the costs and timing of their repair or replacement, informing appropriate reserve fund contributions.
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