Property Management
Which term describes the systematic replacement of building components (roof, HVAC, appliances) using accumulated reserves?
ACapital expenditure planning
BReserve fund management✓ Correct
CDepreciation accounting
DDeferred maintenance
Explanation
Reserve fund management involves setting aside funds regularly to replace major building components at the end of their useful life, preventing large unplanned expenses and maintaining property condition.
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Key Terms to Know
Depreciation
A reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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