CRM CRM Maintenance & Capital Improvements 1

Question 1

What is the primary purpose of a capital reserve fund in residential property management?

Accepted Answer

To fund long-term major repairs and replacements

Answer

A capital reserve fund is set aside specifically to finance major long-term expenditures such as roof replacement, HVAC systems, and structural repairs.

Question 2

Which document outlines the schedule and estimated costs for major component replacements at a residential property?

Accepted Answer

Reserve study

Answer

A reserve study analyzes property components, estimates their remaining useful life, and projects future replacement costs to guide reserve fund contributions.

Question 3

A property manager notices the HVAC system is 18 years old with an expected lifespan of 20 years. What is the most prudent action?

Accepted Answer

Begin planning and budgeting for replacement in the near term

Answer

Proactive planning for imminent end-of-life equipment avoids emergency expenditures and allows for competitive bidding and proper reserve funding.

Question 4

Which of the following is considered a capital improvement rather than a routine maintenance expense?

Accepted Answer

Installing a new elevator in an existing building

Answer

A capital improvement adds value, extends useful life, or adapts the property to a new use, such as adding an elevator that did not previously exist.

Question 5

What is preventive maintenance in property management?

Accepted Answer

Scheduled inspections and servicing to prevent failures before they occur

Answer

Preventive maintenance involves regularly scheduled servicing of equipment and systems to identify and correct issues before they become costly failures.

(CRM) Certified Residential Manager Practice Test

(CRM) Certified Residential Manager Practice Test

CRM CRM Maintenance & Capital Improvements 1