Certified Manager of Community Associations (CMCA) Practice Exam

Question: 1 / 400

What does a reserve account provide for in community associations?

Funding for social events

Replacement of major components of common property

A reserve account is specifically designed to provide funding for the replacement of major components of common property within a community association. This account is a critical element of financial planning, ensuring that there are sufficient funds set aside to address large-scale maintenance and replacement needs, such as roofs, elevators, HVAC systems, and other significant infrastructure that might require costly repairs or replacement over time.

Having a well-funded reserve account helps to avoid sudden assessments on homeowners when these major repairs become necessary. Instead, the reserve fund allows the community association to plan for these expenses in advance, ensuring the financial stability and sustainability of the community. This financial strategy is essential in maintaining the property values and overall quality of life for residents in the community.

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Operational expenses for the association

Salaries for management staff

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