CCS Condominium Document Review & Due Diligence 2

Question 1

Which of the following is a key element a buyer should examine in condominium meeting minutes during due diligence?

Accepted Answer

Discussions of pending special assessments, litigation, or major repair projects

Answer

Meeting minutes often reveal discussions about financial difficulties, disputes, upcoming major repairs, or proposed special assessments that significantly affect a buyer's decision.

Question 2

What does the term 'percent funded' refer to when reviewing a condominium's reserve study?

Accepted Answer

The ratio of current reserve fund balance to the fully funded reserve amount

Answer

Percent funded compares actual reserve balances to the ideal fully funded amount, indicating whether the association has sufficient savings for anticipated future repairs.

Question 3

What is a 'right of first refusal' that may appear in condominium governing documents?

Accepted Answer

The association's or existing owners' right to purchase a unit before it can be sold to an outside buyer

Answer

A right of first refusal gives the association or other owners the opportunity to match a buyer's offer and purchase the unit themselves before it is sold to a third party.

Question 4

In condominium due diligence, what is the significance of reviewing the association's unit owner delinquency rate?

Accepted Answer

A high delinquency rate indicates financial stress that may increase fees or trigger special assessments for paying owners

Answer

A high delinquency rate means fewer owners are paying dues, creating a revenue shortfall the association may cover by raising fees or levying special assessments on paying owners.

Question 5

Which of the following best describes the purpose of condominium bylaws in relation to the Declaration?

Accepted Answer

Bylaws establish operational procedures for the association, including elections and meeting rules

Answer

Bylaws govern how the association operates internally, including how directors are elected, how meetings are conducted, and what powers the board holds, supplementing the Declaration.

(CCS) Certified Condominium Specialist Practice Test

(CCS) Certified Condominium Specialist Practice Test

CCS Condominium Document Review & Due Diligence 2