A buyer's salesperson is calculating the net operating income of a small apartment building from the seller's statements. Which of these costs should NOT be deducted in arriving at net operating income?
Correct Answer
A) Payments of mortgage principal and interest
Net operating income is effective gross income minus the operating expenses of the property, such as property taxes, insurance, repairs and management wages. Mortgage principal and interest are financing costs that depend on the buyer, so they are excluded from NOI.
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A buyer's status certificate shows that the corporation received a new reserve fund study two months ago, and the board has not yet sent owners anything about it. What does the Condominium Act, 1998 require of the board?