Property Management
A property manager's 'cap-ex reserve' (capital expenditure reserve) in a commercial building is calculated based on:
AThe monthly rent collected
BThe estimated useful remaining life of major systems (roof, HVAC, parking) and their replacement cost✓ Correct
CThe current market value of the building
DThe owner's tax liability
Explanation
Cap-ex reserves are funded based on the estimated remaining useful life and replacement cost of major building systems, ensuring adequate funds are available when major capital replacements are needed.
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