What type of funds are Limited Licensees prohibited from managing or investing for clients?

Limited Licensees are prohibited from managing or investing client funds that fall under the category of Reserve Fund. The Reserve Fund is a critical financial pool set aside by a condominium corporation to cover major repairs, replacements, and capital expenditures. This fund is essential for the long-term sustainability and maintenance of the property, ensuring that sufficient resources are available for future needs such as roof replacement, major HVAC repairs, or other significant projects.

The rationale behind this prohibition is to protect the integrity and intended use of the Reserve Fund. Management of these funds requires a higher level of expertise and fiduciary responsibility, often necessitating the oversight of licensed professionals who are equipped to handle such complexities. By restricting Limited Licensees from engaging with the Reserve Fund, the regulation aims to ensure that these crucial funds are managed appropriately and in accordance with the interests of the condominium owners.

In contrast, other types of funds, such as operating funds or contingency funds, may not carry the same level of scrutiny or necessity for specialized management that the Reserve Fund does. Therefore, this specific prohibition helps maintain the financial health and accountability of the condominium corporation.