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Strata Management Licensing Practice Exam · Question

Under the Strata Property Act, what is the primary purpose of a strata corporation's contingency reserve fund (CRF)?

The Strata Property Act mandates the contingency reserve fund (CRF) specifically for major repairs and replacements that occur less often than once a year. It's

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Question: Under the Strata Property Act, what is the primary purpose of a strata corporation's contingency reserve fund (CRF)?

Answer options: ✅ To cover significant repair and replacement of common property, common assets, and those parts of a strata lot that the strata corporation is responsible to maintain.

  • To fund annual operating expenses such as utilities and landscaping.
  • To provide a financial buffer for unexpected legal fees and judgments.
  • To repay any outstanding mortgages acquired by the strata corporation for amenities.

Correct answer: To cover significant repair and replacement of common property, common assets, and those parts of a strata lot that the strata corporation is responsible to maintain.

Explanation: The Strata Property Act mandates the contingency reserve fund (CRF) specifically for major repairs and replacements that occur less often than once a year. It's not for annual operating costs, legal fees, or mortgage repayments.

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