Financial Planning - Chapter 11 Quiz

Major repair and replacement

What other Fund could be considered a Reserve Fund?

A contingency fund could be considered a reserve fund if used for the purpose of major repair and replacement

How frequently must a Reserve Fund Study be updated, and what must those updates consist of?

A Reserve Fund Study must be updated every 3 years. Alternating between a Class2 (update based on a site inspection) and a Class 3 (update not based on a site inspection).

What is the timing of communicating a Reserve Fund Study or Update to the Owners? (3)

1. The Board must approve the Funding Plan within 120 days of receiving a draft of the Study or Update.2. Within 15 days of a Funding Plan being approved, the corporation must mail out a Notice of Future Funding to all owners.3. The Plan must be implemented 30 days after mailing out the NOFF.

What are the two main components of a Reserve Fund Study?

Physical analysis and financial analysis

If, after preparing the Reserve Fund Budget, the manager determines there is a significant shortfall, what options are available to the corporation?

Contact the planner to determine if it is significant. If it is significant, then the manager should advise the board to either a) adjust the operating budget to correct the shortfall or; b) advise the board to order an update to the study.

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