Direct answer
What does capital improvement mean?
A capital improvement is a major addition or replacement that extends a property's useful life, adds value or adapts it to a new use.
Exam cue: Separate long-term capital work from ordinary recurring repairs and maintenance.
What does it look like in a question?
Example
The owner replaces the entire roof rather than patching a small leak.
Common exam trap
What should you not confuse it with?
Cost alone does not decide whether work is a capital improvement.
Related property management terms
EvictionEviction is a legal process used to recover possession from a tenant under applicable grounds and court procedures.Management agreementA management agreement is a contract authorizing a property manager to perform stated services for an owner.Operating budgetAn operating budget is a plan of expected property income and operating expenses for a future period.Preventive maintenancePreventive maintenance is planned inspection and service intended to reduce breakdowns, hazards and more costly repairs.Reserve fundA reserve fund is money set aside for future major repairs, replacements, emergencies or other planned property needs.Security depositA security deposit is money held to secure a tenant's performance under a lease and governed by the applicable lease and law.
Sources used2 references with section locators
The curriculum citation confirms exam scope. Definition and rule citations support the explanation itself.
- Real Estate Salesperson 77-Hour CurriculumNew York State Department of StateSupports: Exam scopeSection: Subject 19, Property Management
- Real Estate License Law, March 2026New York State Department of StateSupports: DefinitionSection: Department of State reference glossary entry for Capital improvement
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Put the term back into its full subject.
A definition helps with recall. The subject guide shows how the rule interacts with documents, scenarios, calculations and practice questions.