Chapter 3

Question 1

What is the main source of revenue for a Contingency Reserve Fund (CRF) ?

Answer 1

The Portion of the strata fee designated for the CRF

Question 2

Other source of Revenue for the CRF are:

Answer 2

• Interest earned by investment of the CRF
• Surplus funds from the previous year’s operating fund
• Surplus funds from a special levy (if the amount owing to each strata is $100 or less); and
• Recoveries with respect to expenses charged to the CRF.

Question 3

Explain the steps to prepare a capital cost budget for carpet replacement in the main lobby and the hallway of 10 storey condominium.

Answer 3

• The estimated cost for the work required, including the cost of contractors, trades people, architects, and consultant.
• The amount and cost of any financing required
• The length of time that it will take to complete the work
• The estimated life expectancy of the carpet - how long before it needs replacing again.
• Will there be any increases to the assessed values of the units after the work is done? Will it impact the property taxes?
• Will the market value of the units increase after the work is completed?

Question 4

What is the most widely used accounting tool for well-managed organizations?

Answer 4

A Budget