CCS Property Management & Condominium Law 2 — Questions and Answers
Question 1: Under the Condominium Act, what is the primary legal document that creates a condominium and must be recorded with the county?
- Declaration of Condominium (Correct answer)
- Bylaws
- Rules and Regulations
- Management Agreement
Correct answer: Declaration of Condominium
The Declaration of Condominium (also called Master Deed) is the foundational legal document that legally creates the condominium and must be recorded in the public records of the county where the property is located.
Question 2: A condominium unit owner refuses to pay a special assessment levied for roof replacement. What is the association's strongest legal remedy?
- File a lien against the unit (Correct answer)
- Sue only in small claims court
- Terminate the owner's voting rights permanently
- Seek criminal charges for non-payment
Correct answer: File a lien against the unit
Most state condominium acts authorize the association to place a lien on the unit for unpaid assessments, which can ultimately lead to foreclosure if the debt remains unsatisfied.
Question 3: Which fiduciary duty requires a condo board member to act in the best interest of all unit owners rather than their personal interest?
- Duty of Loyalty (Correct answer)
- Duty of Disclosure
- Duty of Indemnification
- Duty of Confidentiality
Correct answer: Duty of Loyalty
The duty of loyalty requires board members to subordinate personal interests to the collective interests of all unit owners when making decisions on behalf of the association.
Question 4: A prospective buyer requests condominium documents under a state resale disclosure statute. The seller typically has how many days to provide these materials?
- 3 days
- 10 days (Correct answer)
- 30 days
- 60 days
Correct answer: 10 days
Most state statutes require sellers to provide condominium documents (declaration, bylaws, financials, meeting minutes) within 10 days of a written request, though this varies by jurisdiction.
Question 5: The 'business judgment rule' protects condo board members from personal liability when they:
- Act in good faith, within their authority, and on an informed basis (Correct answer)
- Always hire professional management companies
- Never vote against the majority of unit owners
- Consult an attorney before every decision
Correct answer: Act in good faith, within their authority, and on an informed basis
The business judgment rule shields directors from liability for decisions made in good faith, with due care, and within the scope of their authority, even if those decisions turn out to be wrong.
Question 6: What does 'common surplus' in a condominium association's financial statements represent?
- Excess of revenues over expenses accumulated over time (Correct answer)
- The total value of common elements
- Funds collected but not yet spent in the current fiscal year
- Reserve fund contributions only
Correct answer: Excess of revenues over expenses accumulated over time
Common surplus represents the accumulated excess of total revenues over total expenses in the association's operating and reserve funds, shown on the balance sheet.
Question 7: Under the Fair Housing Act, a condominium association CANNOT deny a reasonable accommodation request from a resident with a disability to:
- Keep an assistance animal despite a no-pets rule (Correct answer)
- Install a swimming pool for exclusive use
- Park in any spot regardless of fire lane laws
- Waive all monthly maintenance fees indefinitely
Correct answer: Keep an assistance animal despite a no-pets rule
The Fair Housing Act requires associations to grant reasonable accommodations for persons with disabilities, including allowing assistance animals even when the community has a no-pets policy.
CCS Property Management & Condominium Law 2
Under the Condominium Act, what is the primary legal document that creates a condominium and must be recorded with the county?