Legal & Regulatory Compliance Flashcards

The business judgment rule generally protects directors who:

Answer: Act in good faith, with reasonable inquiry, and within their authority

Courts defer to board decisions made in good faith, with reasonable care, and within the board's authority.

Which action best reflects compliance with open meeting requirements for a board that must meet in an open session?

Answer: Discussing pending litigation or personnel in executive session while taking final votes in open session where required

Sensitive topics may go to executive session, but notice and open-session action rules still apply under many state statutes.

Before recording a lien for unpaid assessments, the association should confirm:

Answer: That the owner has been notified in the manner required by the governing documents and state law

Lien and foreclosure remedies are strictly construed and require compliance with statutory and document notice procedures.

A 55+ community qualifies for the housing-for-older-persons exemption under HOPA only if, among other requirements, at least what share of occupied units has one resident aged 55 or older?

Answer: 80%

HOPA requires at least 80% of occupied units to have at least one occupant aged 55 or older, plus intent and age verification procedures.

Which federal law requires newly constructed and covered multifamily housing to meet accessibility design standards?

Answer: Fair Housing Act

The FHA's design and construction requirements apply to covered multifamily dwellings first occupied after March 13, 1991.

An association that is a homeowners association may elect to file federal taxes under which Internal Revenue Code section to exclude exempt-function income such as assessments?

Answer: Section 528 or Section 277

Associations can file Form 1120-H under Section 528 (homeowners associations) or use Section 277 for membership organizations.

Which insurance coverage protects board members from claims alleging wrongful acts in their governance role?

Answer: Directors and officers (D&O) liability

D&O insurance covers claims such as breach of duty, wrongful acts, and discrimination allegations against directors and officers.