CCS Property Management Practices 3 — Questions and Answers
Question 1: A condominium association's insurance policy does not cover a water damage loss caused by a unit owner's negligent act. Which concept describes the coverage gap between association and owner policies?
- Exclusion clause
- Loss assessment coverage gap
- The 'bare walls-in' versus 'all-in' distinction (Correct answer)
- Deductible offset
Correct answer: The 'bare walls-in' versus 'all-in' distinction
The 'bare walls-in' policy covers only the structure while 'all-in' covers fixtures and improvements, and the difference determines what the unit owner's policy must cover.
Question 2: Which type of meeting requires proper notice to all unit owners and is used to conduct the annual election of board members?
- Executive session
- Annual membership meeting (Correct answer)
- Emergency board meeting
- Committee caucus
Correct answer: Annual membership meeting
Annual membership meetings are formal gatherings requiring advance notice where owners elect board members and address major association business.
Question 3: A property manager notices that the association has been paying a vendor without a written contract for three years. The best course of action is to:
- Continue the arrangement since it has worked so far
- Execute a written vendor agreement that defines scope, price, and terms (Correct answer)
- Terminate the vendor relationship immediately
- Have the board verbally approve the arrangement at the next meeting
Correct answer: Execute a written vendor agreement that defines scope, price, and terms
Written contracts protect the association by clearly defining deliverables, pricing, liability, and termination rights.
Question 4: Under the Americans with Disabilities Act (ADA), which condominium buildings are most likely to have public accommodation obligations?
- All residential condominium buildings regardless of size
- Condominiums with commercial units or amenities open to the public (Correct answer)
- Only buildings constructed before 1991
- Buildings with more than 50 units exclusively
Correct answer: Condominiums with commercial units or amenities open to the public
ADA public accommodation requirements apply to commercial portions and publicly accessible amenities within condominium developments, not typically to residential-only areas.
Question 5: What does 'quorum' mean in the context of a condominium association meeting?
- A unanimous vote of all board members
- The minimum number of members needed to conduct official business (Correct answer)
- The majority vote threshold required to pass any resolution
- The required number of days' notice before a meeting
Correct answer: The minimum number of members needed to conduct official business
A quorum is the minimum attendance threshold set in the bylaws that must be present for the meeting to legally conduct business and votes to be valid.
Question 6: A condominium association wants to prohibit short-term rentals (e.g., Airbnb). The most legally defensible approach is to:
- Have the manager post a notice without formal action
- Amend the declaration through the required owner vote process (Correct answer)
- Pass a board resolution at any regular meeting
- Send a letter from the property manager to all owners
Correct answer: Amend the declaration through the required owner vote process
Rental restrictions embedded in the declaration carry the strongest legal weight and typically require an owner supermajority vote to adopt or amend.
Question 7: Which financial statement shows a condominium association's assets, liabilities, and equity at a specific point in time?
- Income statement
- Balance sheet (Correct answer)
- Cash flow statement
- Budget variance report
Correct answer: Balance sheet
The balance sheet (statement of financial position) presents the association's assets, liabilities, and fund balances as of a specific date.
CCS Property Management Practices 3
A condominium association's insurance policy does not cover a water damage loss caused by a unit owner's negligent act.
Which concept describes the coverage gap between association and owner policies?