Property Management
A NC property manager's 'reserve fund' for a commercial building is maintained to:
ASupplement management fees in slow months
BCover capital expenditures and major repairs without disrupting operating cash flow✓ Correct
CFund tenant improvements on all new leases
DPay property taxes when cash is low
Explanation
A capital reserve fund provides funds for anticipated major repairs and capital replacements (roof, HVAC, parking lot) allowing the property to be properly maintained without emergency cash calls to the owner.
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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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