Property Management
A Mississippi property manager's 'reserve fund' is used for:
AThe property manager's emergency personal expenses
BMajor capital expenditures and unexpected large repairs, funded by setting aside monthly contributions✓ Correct
CPayment of the owner's mortgage
DSecurity deposits collected from tenants
Explanation
A reserve fund (capital reserve) is money set aside over time to fund major repairs or replacements (roof, HVAC, parking lot) when they become necessary, avoiding large unexpected cash outlays.
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Key Terms to Know
Earnest Money
A 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.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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