Certified Manager of Community Associations (CMCA) Exam — Questions and Answers

Question 1: A unit owner with a disability requests a reserved parking space closer to their unit as a reasonable accommodation. The board should:

Require the owner to obtain a doctor's note and then vote to amend the parking rules
Deny the request because parking rules apply equally to all owners
Refer the owner to the local government for disability parking permits only
Grant the accommodation unless it causes an undue hardship to the association (Correct answer)

Correct answer: Grant the accommodation unless it causes an undue hardship to the association

The Fair Housing Act requires associations to grant reasonable accommodations for persons with disabilities unless doing so creates an undue hardship.

Question 2: For emergency repairs such as a burst main, a board typically may:

Require unanimous owner consent
Authorize immediate work without competitive bids as allowed by governing documents (Correct answer)
Defer work until three bids arrive
Wait for the next annual meeting

Correct answer: Authorize immediate work without competitive bids as allowed by governing documents

Governing documents and law usually allow boards to act quickly in emergencies to prevent further damage.

Question 3: What is the main purpose of a resale (estoppel) certificate?

To transfer the deed to the new owner
To state the seller's account balance and assessment status for the buyer (Correct answer)
To approve architectural changes
To register the buyer to vote

Correct answer: To state the seller's account balance and assessment status for the buyer

The certificate tells buyers and lenders what assessments are owed and gives other required disclosures.

Question 4: The 'open meeting' requirement in many states means that:

Board meetings must be held in locations accessible to all owners, with homeowners allowed to observe (Correct answer)
Board members must leave the room during any member comment period
All deliberations must be broadcast on local television
Any member of the public may attend and vote at board meetings

Correct answer: Board meetings must be held in locations accessible to all owners, with homeowners allowed to observe

Open meeting laws generally require board meetings to be accessible to owners as observers, though the board may hold certain sensitive matters in executive session.

Question 5: A 'statute of limitations' is relevant to community association governance because:

It restricts how long an association can retain financial records
It defines the maximum term length for board members under state law
It limits how many rules a board can adopt in a single year
It sets the time period within which the association or an owner must file a legal claim (Correct answer)

Correct answer: It sets the time period within which the association or an owner must file a legal claim

Statutes of limitations establish deadlines for filing lawsuits; missing these deadlines can permanently bar the association or a member from pursuing a legal claim.

Question 6: What is the key difference between a compilation and a review engagement for HOA financial statements?

A compilation is performed by the board; a review by an outside CPA
A compilation includes an audit opinion; a review does not
A review provides limited assurance; a compilation provides no assurance (Correct answer)
A review only covers reserve funds; a compilation covers operating funds

Correct answer: A review provides limited assurance; a compilation provides no assurance

A review provides limited (negative) assurance through analytical procedures, while a compilation simply presents management's numbers with no assurance.

Question 7: Which is the best first step when a homeowner submits a written complaint about a neighbor's violation?

Fine the neighbor right away
Confirm the violation through inspection or documentation (Correct answer)
Ignore it unless more complaints come in
Forward the complaint to the police

Correct answer: Confirm the violation through inspection or documentation

Fair enforcement starts with confirming the facts before any notice or fine.

Question 8: When a community association employs on-site staff directly, who is legally the employer of record?

The individual board members who hired the staff
The community association as a legal entity (Correct answer)
The management company
The state homeowners association registry

Correct answer: The community association as a legal entity

When staff are direct employees, the association as a legal entity is the employer of record and bears all employer obligations including payroll taxes, workers' compensation, and compliance with labor law.

Question 9: When an association board enters executive session, the primary purpose is to:

Conduct a vote on the annual budget in private to avoid homeowner interference
Discuss sensitive matters such as litigation, contract negotiations, or personnel issues outside of the open meeting (Correct answer)
Exclude board members with a conflict of interest from routine business discussions
Permanently seal the minutes from that portion of the meeting from all homeowners

Correct answer: Discuss sensitive matters such as litigation, contract negotiations, or personnel issues outside of the open meeting

Executive session allows the board to discuss legally sensitive topics — including pending litigation, personnel matters, and contract negotiations — without those discussions becoming part of the public record. Most statutes require that executive session minutes still be recorded and maintained, though access may be restricted.

Question 10: Which of the following best describes 'loss assessment coverage' available to individual unit owners?

Coverage for the owner's share of the master policy deductible only
Coverage that pays a special assessment levied by the association due to an uninsured loss (Correct answer)
Coverage for loss of rental income when a unit is uninhabitable
Coverage for damage to the owner's unit caused by a neighbor

Correct answer: Coverage that pays a special assessment levied by the association due to an uninsured loss

Loss assessment coverage in an HO-6 policy pays the unit owner's share of a special assessment the association levies because its insurance was insufficient to cover a covered loss.

Question 11: Which of the following best describes 'component useful life' in a reserve study?

The number of years until the community association dissolves
The total estimated lifespan of a physical component before replacement is needed (Correct answer)
The warranty period provided by the original contractor
The period covered by the current reserve study

Correct answer: The total estimated lifespan of a physical component before replacement is needed

Useful life is the estimated total lifespan of a component, used to project when replacement funding will be needed.

Question 12: A director owns the landscaping company bidding on the association's contract. What is the most appropriate action?

The board automatically disqualifies the company from bidding
The director discloses the interest and abstains from discussion and voting on the contract (Correct answer)
The manager awards the contract without board involvement to avoid the conflict
The director votes but notes the interest in the minutes afterward

Correct answer: The director discloses the interest and abstains from discussion and voting on the contract

Disclosure and abstention are the standard ways to handle a director's conflict of interest and preserve the decision's validity.

Question 13: An association's treasurer embezzles reserve funds. Which coverage most directly reimburses the association?

Fidelity/crime insurance (Correct answer)
Property insurance
Errors and omissions insurance
Directors and officers liability

Correct answer: Fidelity/crime insurance

Fidelity or crime insurance covers loss of association funds caused by employee or volunteer dishonesty.

Question 14: Which best practice should a manager follow when managing multiple active vendor contracts simultaneously?

Maintain a contract management calendar tracking key dates and renewal deadlines (Correct answer)
Allow contracts to expire and renegotiate only upon complaint
Delegate all vendor contact to homeowners
Rely on vendors to self-report compliance issues

Correct answer: Maintain a contract management calendar tracking key dates and renewal deadlines

A contract management calendar prevents missed renewal windows, expirations, and compliance deadlines across multiple active agreements.

Question 15: A bylaw provision conflicts with a provision in the recorded declaration (CC&Rs). Absent a statute saying otherwise, which generally controls?

The board resolution interpreting both documents
The bylaws, because they were adopted more recently
The declaration, because it ranks higher in the hierarchy of governing documents (Correct answer)
Whichever provision the majority of owners prefer at the next meeting

Correct answer: The declaration, because it ranks higher in the hierarchy of governing documents

The usual hierarchy is federal/state law, then the recorded declaration, articles of incorporation, bylaws, and finally rules and board resolutions.

Question 16: A scope of work in a service contract primarily defines:

The specific tasks, standards, and deliverables the vendor is expected to provide (Correct answer)
The dispute resolution process
The association's right to terminate the contract
The vendor's payment terms

Correct answer: The specific tasks, standards, and deliverables the vendor is expected to provide

The scope of work specifies exactly what the vendor will do, to what standard, how often, and any exclusions, forming the basis for performance evaluation.

Question 17: An annual members' meeting for a 150-unit condominium association requires a quorum of 51% of the voting interests to conduct business. On the day of the meeting, only 65 members are present in person. However, the association has received 15 valid proxies. Has the quorum been met?

Yes, because the total of members present and proxies exceeds the required quorum. (Correct answer)
No, because the number of members present in person is less than 51%.
Yes, but only if the proxies are directed proxies.
No, because proxies cannot be used to establish a quorum.

Correct answer: Yes, because the total of members present and proxies exceeds the required quorum.

Quorum is the minimum number of owners required to be present, either in person or by proxy, to conduct business at a meeting. In this scenario, the required quorum is 51% of 150 units, which is 77 voting interests (150 * 0.51). The total number of voting interests represented is 65 (in person) + 15 (by proxy) = 80. Since 80 is greater than the required 77, the quorum has been met.

Question 18: In associations where assessments are allocated by percentage interest, what usually determines each unit's share?

The unit's current market value as set by the manager
The board's annual vote on each owner's ability to pay
The allocation formula stated in the governing documents (Correct answer)
The number of occupants in each unit

Correct answer: The allocation formula stated in the governing documents

Assessment allocation is set by the declaration, often based on unit size, value at creation, or equal shares.

Question 19: A community association wants to borrow from reserves to cover an operating deficit. What must the board typically do to remain in compliance with governing documents and state law?

Obtain homeowner approval and establish a repayment plan (Correct answer)
Simply transfer funds and document it in board minutes
Increase the management fee to cover the shortfall
Defer the transfer until the next fiscal year

Correct answer: Obtain homeowner approval and establish a repayment plan

Most state laws and governing documents require membership approval and a formal repayment schedule for inter-fund borrowing.

Question 20: A condominium association's budget shows a projected shortfall mid-year. What type of assessment would the board most likely levy to cover the gap?

Capital improvement assessment
Regular monthly assessment increase
Reserve contribution assessment
Special assessment (Correct answer)

Correct answer: Special assessment

A special assessment is levied for a specific, often unforeseen expense or shortfall that cannot be covered by the current operating budget without additional owner contributions.

Question 21: An association's property is insured on an 'actual cash value' (ACV) basis. After a hail storm destroys the roof, the insurer pays $40,000 instead of the $60,000 replacement cost. The $20,000 difference most likely represents:

The insurer's profit margin on the claim
The policy deductible applied to the claim
A coinsurance penalty for underinsurance
Depreciation subtracted from the replacement cost to arrive at ACV (Correct answer)

Correct answer: Depreciation subtracted from the replacement cost to arrive at ACV

ACV equals replacement cost minus depreciation; the $20,000 gap reflects the age and wear-related depreciation the insurer deducted from the replacement cost.

Question 22: A community association's Declaration (CC&Rs) prohibits all pets. A resident with a documented disability requests to keep an assistance animal as a reasonable accommodation. According to the Fair Housing Act, what is the association's obligation?

To grant the request, as it is a change to a rule or policy necessary for the person to have equal opportunity to use and enjoy their dwelling. (Correct answer)
To require the resident to pay a pet deposit to cover any potential damages.
To deny the request because the Declaration is a legally binding document that supersedes federal law.
To grant the request only if the resident agrees to move to a designated pet-friendly section of the community.

Correct answer: To grant the request, as it is a change to a rule or policy necessary for the person to have equal opportunity to use and enjoy their dwelling.

The Fair Housing Act requires housing providers, including community associations, to make reasonable accommodations in rules, policies, practices, or services when necessary to afford a person with a disability the equal opportunity to use and enjoy a dwelling. A waiver of a 'no pets' policy for an assistance animal is a common example of a reasonable accommodation. The association cannot charge a pet deposit for an assistance animal, as it is not considered a pet.

Question 23: A reserve component inventory in a reserve study typically includes:

All personal property owned by homeowners
Every consumable supply used by the association
All association-owned common area components with significant replacement costs and predictable useful lives (Correct answer)
The names of all vendors currently under contract

Correct answer: All association-owned common area components with significant replacement costs and predictable useful lives

A reserve component inventory lists association-owned assets such as roofs, pools, pavement, and HVAC systems that have significant replacement costs and predictable lifespans, forming the basis of the reserve funding plan.

Question 24: What is the ethical implication of a manager signing contracts on behalf of the association without board authorization?

It is acceptable if the contract is below the association's reserve threshold
It creates personal liability for the manager only if the contract is unfavorable
It violates the manager's authority and the board's fiduciary duty to control association commitments (Correct answer)
It is permitted if the management agreement grants general contract authority

Correct answer: It violates the manager's authority and the board's fiduciary duty to control association commitments

Signing contracts without board authorization exceeds the manager's delegated authority and undermines the board's fiduciary responsibility to approve significant association commitments.

Question 25: Which document in a common interest community typically holds the highest legal authority after state law?

Board resolutions
Rules and regulations
Declaration (CC&Rs) (Correct answer)
Bylaws

Correct answer: Declaration (CC&Rs)

The Declaration, or CC&Rs, is recorded with the county and holds supreme authority within the community's governing document hierarchy, superseding bylaws and rules.

Question 26: An association's property insurance policy includes a "waiver of subrogation" clause. What is the primary function of this clause?

It waives the association's responsibility to pay the policy deductible.
It prevents the insurance company from suing a negligent homeowner to recover funds paid for a claim. (Correct answer)
It requires disputes between the association and the insurer to be settled by arbitration instead of in court.
It prevents the insurance company from increasing premiums after a claim is filed.

Correct answer: It prevents the insurance company from suing a negligent homeowner to recover funds paid for a claim.

Subrogation is a legal right that allows an insurance company, after paying a claim, to "step into the shoes" of the insured (the association) and sue the party responsible for the loss to recover the payment. A waiver of subrogation clause prevents the insurer from exercising this right against the association's members, protecting homeowners from being sued by their own association's insurance carrier.

Question 27: A community manager receives a written request from an owner to inspect the association's financial records. Under most state laws, this request must be honored within:

10 business days (Correct answer)
60 calendar days
5 business days
30 calendar days

Correct answer: 10 business days

Most state statutes require associations to make financial records available to members within 10 business days of a written request.

Question 28: The business judgment rule protects board members from personal liability when they:

Make decisions in good faith, on an informed basis, and in what they honestly believe is the association's best interest (Correct answer)
Ignore the CC&Rs in favor of their personal preferences
Vote to waive the association's insurance coverage
Approve self-dealing transactions without disclosure

Correct answer: Make decisions in good faith, on an informed basis, and in what they honestly believe is the association's best interest

Courts will defer to board decisions made in good faith, with reasonable inquiry, and without personal financial interest. This is the business judgment rule and it is the primary liability shield for board members.

Question 29: In a reserve study, the estimated number of years before a component must be replaced is called its:

Remaining useful life (Correct answer)
Replacement cost
Funding threshold
Useful life

Correct answer: Remaining useful life

Remaining useful life is the estimated time left before replacement, while useful life is the total expected lifespan.

Question 30: A new Form I-9 must be completed for each employee to verify:

Identity and employment authorization in the United States (Correct answer)
Federal income tax withholding elections
Health insurance enrollment eligibility
Union membership status

Correct answer: Identity and employment authorization in the United States

Form I-9 is required by federal law (IRCA) to verify that every employee is legally authorized to work in the United States.

Question 31: This is the main management control tool for figuring out if the association needs to maintain a certain property element:

Community asset inventory
Physical inspections
Maintenance responsibility chart (Correct answer)
Association bylaws

Correct answer: Maintenance responsibility chart

A maintenance responsibility chart is a critical management tool for community associations. It clearly outlines which party—whether the association, individual homeowners, or another entity—is responsible for the maintenance, repair, and replacement of specific common elements and individual property components. This chart helps prevent confusion, ensures proper upkeep, and serves as a primary reference for determining maintenance obligations.

Question 32: Which factor most strongly suggests a service provider is an independent contractor rather than an employee?

The provider controls how the work is done and supplies its own tools (Correct answer)
The provider receives association-paid benefits
The association dictates daily work hours and methods
The provider works exclusively for one association

Correct answer: The provider controls how the work is done and supplies its own tools

Control over the means and methods of work and use of one's own equipment point to independent contractor status.

Question 33: A community association's governing documents require a quorum of 30% of total membership. If 250 units exist and 74 owners attend, what is the quorum status?

Quorum is met because 74 exceeds 30% of 250
Quorum is met because proxy votes are always counted
Quorum status cannot be determined without the budget
Quorum is not met because 75 members are required (Correct answer)

Correct answer: Quorum is not met because 75 members are required

30% of 250 units equals 75, so 74 attendees fall one short of the required quorum.

Question 34: An association wants to amend its declaration of covenants. What approval threshold is typically required?

Approval by the local municipality
A supermajority of the membership, often 67% or 75% (Correct answer)
A simple majority of the board
A unanimous vote of all owners

Correct answer: A supermajority of the membership, often 67% or 75%

Amending the declaration typically requires a supermajority vote of the membership because it is the foundational governing document.

Question 35: During the period of declarant (developer) control, which governance principle is most important for the manager to keep in mind?

The declarant-appointed board still owes fiduciary duties to the association (Correct answer)
Owners cannot hold any meetings until turnover
The declarant may ignore the governing documents until turnover
Reserve funding is optional until all units are sold

Correct answer: The declarant-appointed board still owes fiduciary duties to the association

Declarant-appointed directors still owe fiduciary duties to the association and must follow the governing documents and law.

Question 36: A manager receives complaints about a malfunctioning security gate that frequently traps vehicles. The appropriate response is to:

Send a violation notice to the resident who reported it
Wait until the next board meeting to discuss it
Arrange immediate emergency repair and notify the board, documenting the safety hazard (Correct answer)
Post a notice asking residents to avoid using the gate

Correct answer: Arrange immediate emergency repair and notify the board, documenting the safety hazard

A security gate that traps vehicles is an immediate safety hazard requiring emergency repair, prompt board notification, and documentation, not deferred to the normal meeting cycle.

Question 37: What is 'super-priority lien' status for HOA assessments, and which states commonly grant it?

A federal law granting HOAs priority over all creditors nationwide
A lien that supersedes all other debts including federal tax liens in every state
A lien for a limited number of months of assessments that takes priority over a first mortgage in certain states (Correct answer)
A lien that automatically converts unpaid dues into a mortgage

Correct answer: A lien for a limited number of months of assessments that takes priority over a first mortgage in certain states

Approximately 23 states and D.C. grant HOAs a 'super-priority' for a limited months-worth of assessments that sits ahead of the first mortgage lender in a foreclosure proceeding.

Question 38: What does a preventive maintenance schedule primarily help a community association avoid?

Board member term limits
Reserve study updates
Unexpected emergency repairs and premature component failure (Correct answer)
Vendor price increases

Correct answer: Unexpected emergency repairs and premature component failure

Preventive maintenance extends the life of components and reduces the frequency and cost of emergency repairs.

Question 39: An integrated pest management approach emphasizes:

Inspection, prevention, and least-toxic control methods (Correct answer)
Eliminating all landscaping
Routine heavy pesticide spraying
Ignoring pests until owners complain

Correct answer: Inspection, prevention, and least-toxic control methods

IPM focuses on monitoring, prevention, and targeted, least-toxic treatments rather than blanket spraying.

Question 40: Which of the following is an example of proactive community communication?

Updating the community website once per year
Sending a construction notice to affected residents two weeks before work begins (Correct answer)
Publishing financials only when homeowners specifically request them
Responding to homeowner complaints only after they escalate to the board

Correct answer: Sending a construction notice to affected residents two weeks before work begins

Proactive communication anticipates homeowner needs and shares information before issues arise, such as notifying residents in advance of disruptive work.

Question 41: In what order do the basic steps of handling a main motion occur?

Second, vote, debate, motion
Debate, motion, vote, second
Vote, motion, second, debate
Motion, second, chair states the motion, debate, vote (Correct answer)

Correct answer: Motion, second, chair states the motion, debate, vote

A member moves, another seconds, the chair states the question, members debate, and then a vote is taken.

Question 42: A manager gets an urgent repair bid from a company owned by the manager's relative. What should the manager do?

Award the contract quietly because the price is fair
Disclose the relationship to the board and let the board decide (Correct answer)
Have the relative submit it under another company name
Reject the bid without telling anyone

Correct answer: Disclose the relationship to the board and let the board decide

Professional ethics require managers to disclose any conflict of interest to the board.

Question 43: Which of the following describes a special meeting of the membership?

A membership meeting called outside the regular annual meeting schedule to address a specific urgent matter (Correct answer)
Any board meeting that lasts more than two hours
A meeting held only in states that require more than one annual meeting
A closed meeting for board members only

Correct answer: A membership meeting called outside the regular annual meeting schedule to address a specific urgent matter

A special meeting is called between regular annual meetings to address specific matters that cannot wait, such as a major emergency repair vote or recall of a board member.

Question 44: What is 'alternative dispute resolution' (ADR) and why might a board prefer it over litigation?

A method of amending governing documents without a member vote
A state agency that adjudicates HOA disputes
Processes like mediation or arbitration that resolve disputes without going to court (Correct answer)
The board's internal grievance committee review process

Correct answer: Processes like mediation or arbitration that resolve disputes without going to court

ADR—including mediation and arbitration—resolves disputes faster and less expensively than litigation while preserving community relationships.

Question 45: Which of the following is an example of a communication that should be sent in writing and retained in association files?

An official notice of a special assessment explaining the amount, purpose, and due date (Correct answer)
A casual conversation with a homeowner at a community event
A verbal reminder to a landscaping crew about grass height
A board member's personal phone call to a neighbor about parking

Correct answer: An official notice of a special assessment explaining the amount, purpose, and due date

Special assessment notices are formal communications with legal and financial implications that require written documentation and proper recordkeeping.

Question 46: A storm damages several roofs, and the association's property policy has a large deductible. Who usually pays the deductible?

The association, or unit owners if the governing documents or statute allocate it to them (Correct answer)
The management company
The insurance company
The municipality

Correct answer: The association, or unit owners if the governing documents or statute allocate it to them

Deductibles are paid by the insured association unless the governing documents or state law shift responsibility to the responsible or affected owners.

Question 47: A manager who has a personal financial interest in a vendor contract should:

Keep the interest private since it does not affect professionalism
Award the contract to the vendor to maximize personal gain
Disclose the interest to the board and recuse themselves from the recommendation and decision (Correct answer)
Ask the vendor to pay the association more to offset the conflict

Correct answer: Disclose the interest to the board and recuse themselves from the recommendation and decision

Full disclosure and recusal are the appropriate responses to a conflict of interest. The manager must be transparent with the board and remove themselves from the decision-making process.

Question 48: An owner is 90 days delinquent. What should the manager do first under a typical collection policy?

Start foreclosure without notice
Shut off the owner's water service
Follow the board-adopted collection policy timeline and its notice steps (Correct answer)
Publish the owner's name in the newsletter

Correct answer: Follow the board-adopted collection policy timeline and its notice steps

Following a written, uniformly applied collection policy, along with any statutory notice requirements, keeps the process fair and defensible.

Question 49: When a community association enters into a contract, it is acting as:

An extension of the local municipality
A governmental entity with sovereign immunity
A real estate brokerage
A legal entity such as a nonprofit corporation with capacity to contract (Correct answer)

Correct answer: A legal entity such as a nonprofit corporation with capacity to contract

Community associations are typically incorporated as nonprofit corporations, giving them legal capacity to enter contracts, sue and be sued, and hold property in their own name.

Question 50: A CMCA manager is aware that the association's insurance policy has lapsed but the board has not disclosed this to homeowners. What is the ethical course of action?

Remain silent since insurance is a board responsibility
Notify homeowners directly without board authorization
Advise the board of the disclosure obligation and recommend immediate corrective action (Correct answer)
Wait until the next scheduled board meeting to raise the issue

Correct answer: Advise the board of the disclosure obligation and recommend immediate corrective action

The manager has an ethical duty to advise the board of material issues affecting the community and the potential legal obligation to disclose material facts to owners.

Question 51: What should the board take into account while reviewing the proposed budget for approval?

The physical condition of the association members
The financial effect on the owners
The economic impact on tenants
The financial position of the association (Correct answer)

Correct answer: The financial position of the association

When reviewing a proposed budget, the board of directors must primarily consider the overall financial position of the association. This involves assessing current assets, liabilities, reserves, and projected income and expenses to ensure the budget is realistic, sustainable, and adequately funds the association's operational and reserve needs. The budget's impact on individual owners is a consequence of the association's financial health, not the primary consideration for the budget itself.

Question 52: A manager who learns of a significant legal threat to the association should first:

Post a notice on the community bulletin board
Wait until the annual meeting to disclose the issue
Immediately notify the board and recommend legal counsel be consulted (Correct answer)
Resolve the matter independently without involving the board

Correct answer: Immediately notify the board and recommend legal counsel be consulted

Significant legal matters must be reported to the board immediately because the board, not the manager, is responsible for governance decisions including whether to engage legal counsel.

Question 53: Before imposing a fine for a rule violation, many governing documents and state statutes require the association to provide:

Notice and an opportunity to be heard (Correct answer)
A court order
Approval from the local zoning board
A unanimous vote of all owners

Correct answer: Notice and an opportunity to be heard

Due process in enforcement usually means written notice of the violation and an opportunity for a hearing before the board.

Question 54: The community's wooden perimeter fence is scheduled to be re-stained every three years to prevent rot and extend its useful life. What type of maintenance does this action represent?

Corrective Maintenance
Emergency Maintenance
Routine Maintenance
Preventive Maintenance (Correct answer)

Correct answer: Preventive Maintenance

Preventive maintenance consists of proactive, scheduled tasks designed to preserve assets and extend their useful life to avoid future failure. Re-staining a fence on a set schedule is a classic example, as it prevents the more costly corrective maintenance of replacing a rotted fence.

Question 55: An association with employees is sued by a former employee alleging wrongful termination. Which coverage is most likely to respond?

Fidelity insurance
Employment practices liability (Correct answer)
Commercial general liability
Property insurance

Correct answer: Employment practices liability

Employment practices liability covers claims such as wrongful termination, discrimination, and harassment.

Question 56: Fidelity insurance (a crime policy or fidelity bond) mainly protects the association against:

Storm damage to common elements
Lawsuits over board decisions
Slip-and-fall injuries
Theft or embezzlement of funds by people who handle money (Correct answer)

Correct answer: Theft or embezzlement of funds by people who handle money

Fidelity coverage reimburses the association for losses from dishonest acts by people who handle its funds.

Question 57: What is the primary legal purpose of recording the association's CC&Rs with the county recorder?

To create an annual filing requirement with the state
To establish the association's nonprofit status
To obtain a tax exemption for the association
To provide constructive notice to all future property owners that the restrictions exist and run with the land (Correct answer)

Correct answer: To provide constructive notice to all future property owners that the restrictions exist and run with the land

Recording CC&Rs with the county gives constructive notice to anyone who purchases property in the community that the restrictions apply, binding future owners even if they were unaware at purchase.

Question 58: What is the MAIN reason a community association should maintain current as-built drawings for its buildings?

As-built drawings replace the need for reserve studies
As-built drawings are required to obtain D&O insurance
They are needed to calculate annual operating budgets
They allow contractors to accurately locate utilities and structural elements during repairs (Correct answer)

Correct answer: They allow contractors to accurately locate utilities and structural elements during repairs

As-built drawings document the actual location of plumbing, electrical, and structural components, which is critical for safe and accurate repair work.

Question 59: Which condition most commonly shortens the life of a flat or low-slope roof?

Ponding water due to poor drainage (Correct answer)
Clean gutters
Proper flashing
Regular inspections

Correct answer: Ponding water due to poor drainage

Standing water accelerates membrane deterioration and leaks on low-slope roofs.

Question 60: A manager's CMCA credential has lapsed because of missed recertification requirements. How should the manager describe their credentials in a new proposal?

List it as 'CMCA (pending)' without explanation
Keep listing CMCA, since the exam was passed
Leave CMCA off until the credential is reinstated (Correct answer)
List CMCA only for current clients

Correct answer: Leave CMCA off until the credential is reinstated

Misstating professional credentials violates professional conduct standards, so a lapsed designation must not be presented as current.

Question 61: How does the CAMICB address a CMCA designee who is found to have violated the Code of Professional Ethics?

Requires the designee to retake the CMCA examination
May impose sanctions including reprimand, suspension, or revocation of the CMCA designation (Correct answer)
Issues a public warning but takes no action against certification
Refers the matter solely to state licensing authorities

Correct answer: May impose sanctions including reprimand, suspension, or revocation of the CMCA designation

CAMICB has authority to discipline designees who violate the Code of Professional Ethics, with sanctions ranging from formal reprimand to permanent revocation of the CMCA designation.

Question 62: At an annual meeting, owners want to remove a board member. Which vote threshold typically applies to board member removal?

A unanimous vote of all remaining board members
Removal requires a court order and cannot be done by membership vote
A majority vote of the entire membership (not just those present), or the threshold specified in governing documents (Correct answer)
A simple majority of a quorum present at the meeting

Correct answer: A majority vote of the entire membership (not just those present), or the threshold specified in governing documents

Board member removal typically requires a vote of the entire membership or the threshold specified in the governing documents, which is often higher than a quorum-based majority.

Question 63: The doctrine of 'promissory estoppel' could bind an association when:

The association's insurance lapses for 30 days
A manager makes an unauthorized promise that an owner detrimentally relies upon (Correct answer)
The board votes on a resolution without a quorum
An owner fails to pay assessments for more than one year

Correct answer: A manager makes an unauthorized promise that an owner detrimentally relies upon

Promissory estoppel can hold a party liable for an unauthorized promise if the other party reasonably relied on it to their detriment, even without a formal contract.

Question 64: A manager who prepares and distributes accurate meeting minutes within a reasonable time after each board meeting is fulfilling which professional responsibility?

Collections management
Record-keeping and transparency (Correct answer)
Architectural review
Risk management

Correct answer: Record-keeping and transparency

Maintaining accurate, timely meeting minutes is a core record-keeping responsibility that provides the legal record of board actions and supports transparency, accountability, and legal compliance.

Question 65: A community manager discovers that a board member is steering maintenance contracts to a family member's company without disclosure. What is the manager's BEST course of action?

Ignore it as board members are responsible for their own conduct
Approve the contract since the board authorized it
Document the conflict and advise the board member to recuse and disclose per governing documents (Correct answer)
Terminate the contract immediately without board input

Correct answer: Document the conflict and advise the board member to recuse and disclose per governing documents

The manager must document the conflict and advise the board member to disclose the relationship and recuse from the vote, consistent with conflict-of-interest obligations under CAMICB ethics standards.

Question 66: Which governing document takes legal precedence when there is a conflict between the CC&Rs and the association's bylaws?

The CC&Rs, because they are recorded with the county and run with the land (Correct answer)
The bylaws, because they are more specific
The state statute, only if both documents are silent
The rules and regulations, because the board adopted them most recently

Correct answer: The CC&Rs, because they are recorded with the county and run with the land

The hierarchy from highest to lowest authority is state statute, then CC&Rs, then bylaws, then rules and regulations. CC&Rs are recorded land use restrictions that take precedence over bylaws when they conflict.

Question 67: A board member insists on using his brother-in-law's landscaping company without obtaining competing bids. What is the manager's BEST course of action?

Advise the board that competitive bidding is required by governing documents or best practices, and that the conflict of interest must be disclosed (Correct answer)
Hire the vendor but do not document the board member's relationship
Proceed with the hire to avoid conflict with the board member
Reject the vendor without explanation at the next board meeting

Correct answer: Advise the board that competitive bidding is required by governing documents or best practices, and that the conflict of interest must be disclosed

The manager must advise the board of competitive bidding requirements and ensure the conflict of interest is disclosed and handled per governing documents and fiduciary duty standards.

Question 68: When conducting an enforcement hearing, what procedural protection must the association typically provide the accused owner?

A jury of fellow homeowners
Notice of the alleged violation and an opportunity to be heard (Correct answer)
Legal counsel appointed by the association
A unanimous board vote to impose any fine

Correct answer: Notice of the alleged violation and an opportunity to be heard

Due process in association enforcement requires adequate written notice of the violation and a fair opportunity for the owner to present their side before any fine is imposed.

Question 69: A manager is asked to campaign for specific candidates in the association's board election. What is the appropriate stance?

Endorse candidates who support raising the management fee
Stay neutral and run the election impartially under the governing documents and law (Correct answer)
Endorse the candidates the current board prefers
Endorse candidates only in private conversations

Correct answer: Stay neutral and run the election impartially under the governing documents and law

Managers should stay impartial in association elections and administer them fairly.

Question 70: Which practice best reduces the risk that a fidelity loss, such as embezzlement, goes undetected?

Letting one person handle deposits, disbursements, and reconciliations
Separating financial duties and having someone other than the check signer review monthly bank statements (Correct answer)
Approving expenses verbally without documentation
Keeping all funds in a single uninsured account

Correct answer: Separating financial duties and having someone other than the check signer review monthly bank statements

Segregation of duties and independent review of bank statements are key internal controls against theft.

Question 71: What is the primary purpose of requiring a vendor to provide a 'hold harmless agreement' in addition to evidence of insurance?

To limit the vendor's right to collect payment for completed work
To give the association access to the vendor's insurance policy documents
To contractually shift liability for the vendor's negligence away from the association (Correct answer)
To extend the vendor's warranty obligations beyond the statutory period

Correct answer: To contractually shift liability for the vendor's negligence away from the association

A hold harmless (indemnification) agreement is a contractual risk transfer tool that obligates the vendor to defend and indemnify the association for claims arising from the vendor's work.

Question 72: A condominium association receives a claim from a unit owner whose personal property was damaged by a pipe burst in the common area. Which policy should respond first?

The unit owner's umbrella policy
The association's general liability policy
The unit owner's HO-6 policy
The association's master property policy (Correct answer)

Correct answer: The association's master property policy

Damage originating from a common area pipe is typically the association's responsibility, so the master property policy responds first for structural and common-area damage.

Question 73: What is the purpose of a building envelope inspection in a community association?

To audit the reserve fund balance for accuracy
To verify compliance with the association's landscaping standards
To evaluate the condition of exterior walls, roofs, windows, and seals that protect the building from water intrusion (Correct answer)
To assess the condition of interior plumbing systems

Correct answer: To evaluate the condition of exterior walls, roofs, windows, and seals that protect the building from water intrusion

A building envelope inspection assesses all exterior components—roof, walls, windows, doors, and sealants—that form the barrier against moisture and weather damage.

Question 74: An association's obligation to provide reasonable accommodations under the Fair Housing Act may include:

Selling common area property to an owner with a disability
Exempting owners with disabilities from all association rules
Granting an owner an exemption from paying assessments
Allowing a resident with a disability to install a grab bar in their unit at their own expense (Correct answer)

Correct answer: Allowing a resident with a disability to install a grab bar in their unit at their own expense

Reasonable modifications include allowing residents with disabilities to make necessary physical changes to their unit such as grab bars or ramps at their own expense, even if the modification would otherwise require board approval.

Question 75: Which of the following is the primary purpose of a special meeting of the members?

To provide a forum for committees to present their annual reports to the membership.
To approve the minutes of the previous board of directors' meetings.
To elect the board of directors and review the association's annual financial report.
To address specific, urgent issues that arise between scheduled annual meetings. (Correct answer)

Correct answer: To address specific, urgent issues that arise between scheduled annual meetings.

Special meetings are called to handle specific issues that require a vote of the membership and cannot wait until the next annual meeting. Examples include voting on a special assessment, considering the removal of a director, or amending the governing documents. Annual meetings are for regular business like elections and annual reports.

Question 76: When soliciting bids for a major capital project, an association should send the same specifications to all bidders in order to:

Ensure an apples-to-apples comparison and fair competition (Correct answer)
Comply with federal procurement laws
Satisfy the vendor's marketing requirements
Reduce the number of bids received

Correct answer: Ensure an apples-to-apples comparison and fair competition

Identical specifications ensure that all bids are based on the same scope, materials, and standards, making it possible to compare bids fairly and select the best value.

Question 77: What is the primary legal purpose of meeting minutes?

A place for the manager to note personal opinions
A verbatim transcript of every comment made
An official record of actions taken by the body (Correct answer)
A summary of owner complaints for marketing purposes

Correct answer: An official record of actions taken by the body

Minutes record what was done, such as motions and votes, not everything that was said.

Question 78: The CAMICB professional standards require a manager to maintain competence by:

Relying solely on the association's attorney for all guidance
Delegating all technical tasks to vendors
Participating in ongoing education and staying current with relevant laws and industry practices (Correct answer)
Passing the CMCA exam only once with no further training

Correct answer: Participating in ongoing education and staying current with relevant laws and industry practices

Professional competence requires continuous learning through ongoing education, staying updated on legal changes, and developing management skills, not just the initial certification.

Question 79: A homeowners association hires a property manager who is later sued for discrimination in enforcing community rules. Which insurance policy would most likely cover the association's defense costs?

Professional liability (E&O)
Workers' compensation
Employment practices liability (EPLI) (Correct answer)
Commercial general liability (CGL)

Correct answer: Employment practices liability (EPLI)

EPLI covers claims of discrimination, harassment, and wrongful termination arising from the employment relationship, which includes management decisions about employees.

Question 80: What is the primary benefit of a preventive maintenance program for an association?

It extends component life and lowers long-term costs (Correct answer)
It eliminates the need for a reserve study
It replaces the need for vendor contracts
It removes owner maintenance obligations

Correct answer: It extends component life and lowers long-term costs

Scheduled upkeep catches small problems early, extending component life and reducing costly emergency repairs.

Question 81: In accrual-basis accounting, income is recorded when it is:

Deposited in the bank
Reported to the IRS
Earned or assessed, whatever the date the payment arrives (Correct answer)
Approved by the board

Correct answer: Earned or assessed, whatever the date the payment arrives

Accrual accounting records revenue when earned and expenses when incurred, not when cash moves.

Question 82: A buyer relies on an association-issued estoppel or resale certificate stating no assessments are owed, but the statement was wrong. The association may be:

Exempt because certificates are informational only
Bound by the certificate and unable to collect the misstated amount from the buyer (Correct answer)
Free to collect the full amount from the buyer anyway
Required to dissolve the transaction

Correct answer: Bound by the certificate and unable to collect the misstated amount from the buyer

Under estoppel principles, an association is often bound by amounts it certifies to a purchaser who relies on the statement.

Question 83: Which principle requires that board-adopted rules must be reasonably related to a legitimate purpose of the association and applied uniformly?

The privity of contract doctrine
The doctrine of promissory estoppel
The reasonableness and uniformity standard (Correct answer)
The rule of perpetuities

Correct answer: The reasonableness and uniformity standard

Courts evaluate association rules under a reasonableness standard—rules must serve a legitimate community purpose and be enforced uniformly to be upheld.

Question 84: A fire in the community clubhouse causes $75,000 in damages. The association's property insurance policy has a replacement cost provision and a $5,000 deductible. Assuming the loss is fully covered, how much will the insurance company pay for the claim?

$75,000
$80,000
$5,000
$70,000 (Correct answer)

Correct answer: $70,000

The deductible is the portion of a covered loss that the association is responsible for paying out-of-pocket before insurance coverage begins. The insurance company's payment is calculated by taking the total amount of the covered loss and subtracting the deductible amount ($75,000 - $5,000 = $70,000). The association pays the first $5,000.

Question 85: Which type of insurance protects board members from claims of wrongful acts in their decision-making?

Property insurance
Fidelity insurance
Directors and officers (D&O) liability insurance (Correct answer)
General liability insurance

Correct answer: Directors and officers (D&O) liability insurance

D&O coverage protects directors and officers against claims over their governance decisions.

Question 86: Which of the following is the most accurate statement about assessment obligations during a period when the association fails to maintain common areas properly?

Assessment obligations are suspended whenever a maintenance complaint is filed
Assessments generally remain due and owners must pursue separate legal remedies for the association's failures (Correct answer)
Owners can withhold half their assessments until the issue is remedied
Owners may legally withhold assessments as a set-off for the association's breach of duty

Correct answer: Assessments generally remain due and owners must pursue separate legal remedies for the association's failures

Unlike residential tenants, HOA owners typically cannot withhold assessments as a self-help remedy; they must continue paying and pursue breach of fiduciary duty claims separately.

Question 87: An association's manager prepares a financial report using the accrual basis of accounting. This report will show:

Income when it is earned and expenses when they are incurred, regardless of when cash is exchanged. (Correct answer)
Only the cash transactions that have occurred during the reporting period.
Income only when cash is received and expenses only when cash is paid out.
A modified cash basis that includes reserve contributions as an expense.

Correct answer: Income when it is earned and expenses when they are incurred, regardless of when cash is exchanged.

The accrual basis of accounting provides a more accurate picture of an association's financial health by matching revenues to the period in which they are earned (e.g., when assessments are due) and expenses to the period in which they are incurred (e.g., when a service is provided). This is in contrast to the cash basis (A, B), which only records the movement of cash. Generally Accepted Accounting Principles (GAAP) favor the accrual method for its accuracy.

Question 88: What is the main purpose of a homeowners association?

To manage and maintain common areas and enforce community standards for the collective benefit of all owners (Correct answer)
To generate profit for developers
To collect property taxes on behalf of the municipality
To provide legal services to individual homeowners

Correct answer: To manage and maintain common areas and enforce community standards for the collective benefit of all owners

An HOA exists to manage and maintain shared common areas, enforce community standards, and provide services that benefit all owners, funded through assessments.

Question 89: Which of the following is typically covered under a community association's commercial general liability (CGL) policy?

A visitor's bodily injury sustained in a common-area slip-and-fall (Correct answer)
Damage to the association's own buildings caused by fire
A board member's error in approving an inadequate budget
Theft of association funds by a board treasurer

Correct answer: A visitor's bodily injury sustained in a common-area slip-and-fall

CGL policies cover third-party bodily injury and property damage claims that occur on association-controlled premises, such as common-area slip-and-falls.

Question 90: A homeowner submits a written complaint about a neighbor's violation. The board's first step in the enforcement process should be to:

Forward the complaint directly to the association's attorney
Ignore the complaint if the board has not personally observed the violation
Conduct an independent investigation to verify the violation (Correct answer)
Immediately fine the alleged violator

Correct answer: Conduct an independent investigation to verify the violation

The association must independently verify a violation exists before initiating enforcement action to ensure fair and defensible enforcement.

Question 91: A condominium association's bylaws allow amendments by a two-thirds vote of the board. An owner argues that bylaw amendments require a membership vote. Which source controls?

The owner's argument prevails automatically when challenged in writing
The bylaws control because they are more specific than the declaration
State statute controls if it requires a membership vote for bylaw amendments regardless of what the bylaws state (Correct answer)
The board's interpretation always controls internal governance matters

Correct answer: State statute controls if it requires a membership vote for bylaw amendments regardless of what the bylaws state

State statutes that mandate membership approval for bylaw amendments supersede conflicting bylaw provisions, as statutes are the highest source of authority.

Question 92: Which communication method is generally considered most effective for reaching all homeowners in a community association about an urgent matter?

Posting a notice on the community bulletin board
A combination of multiple channels including email, mail, and posted notices (Correct answer)
Sending a mass email blast to all registered residents
Holding an in-person town hall meeting

Correct answer: A combination of multiple channels including email, mail, and posted notices

Using multiple communication channels ensures the message reaches residents who may not monitor any single channel, maximizing reach for urgent matters.

Question 93: An association's multi-year landscaping contract expires in four months, and the board is generally happy with the service. What is the most prudent course of action for the manager to recommend?

Recommend initiating a competitive bidding process by issuing a Request for Proposal (RFP). (Correct answer)
Advise the board to extend the contract on a month-to-month basis indefinitely.
Suggest automatically renewing the contract with the current vendor to ensure service continuity.
Propose seeking a new vendor immediately to try and secure a lower price.

Correct answer: Recommend initiating a competitive bidding process by issuing a Request for Proposal (RFP).

Fulfilling fiduciary duty requires the board to ensure the association receives the best overall value. Best practice is to periodically rebid major contracts, even when satisfied with the current vendor, to test the market and validate pricing and service levels. [5, 30] The current vendor should be encouraged to participate in the RFP process.

Question 94: Regarding electronic voting (e-voting) in community associations, the general rule is:

E-voting requires a notarized digital signature to be valid
E-voting is always permitted under federal law regardless of state law
E-voting is only valid if explicitly authorized by the association's governing documents and/or state law (Correct answer)
E-voting is prohibited for board elections but allowed for budget ratification

Correct answer: E-voting is only valid if explicitly authorized by the association's governing documents and/or state law

Electronic voting is permissible only where state law and/or the governing documents specifically authorize it; otherwise, traditional ballot methods are required.

Question 95: The board adopts a rule that goes beyond the powers granted by the governing documents and state law. Such an action is called:

Res judicata
Estoppel
Ultra vires (Correct answer)
Laches

Correct answer: Ultra vires

An ultra vires act is one taken beyond the legal authority of the association or board and may be invalid.

Question 96: Which topic is typically appropriate for a board executive session rather than an open meeting?

Selecting the pool paint color
Adopting the annual budget
Discussing pending litigation with the association's attorney (Correct answer)
Approving the reserve study

Correct answer: Discussing pending litigation with the association's attorney

Executive sessions are usually reserved for litigation, personnel, contract negotiations, and individual owner delinquency or violation matters.

Question 97: Which of the following actions best demonstrates a community manager upholding their fiduciary duty to the association?

Negotiating a lower price with a vendor for a service, resulting in significant savings for the association's operating budget. (Correct answer)
Approving a friend's architectural request that slightly deviates from the guidelines to maintain a good relationship.
Sharing confidential details from an executive session with a homeowner who is not on the board.
Waiving a late fee for a homeowner who is also a board member, without a formal policy allowing such waivers.

Correct answer: Negotiating a lower price with a vendor for a service, resulting in significant savings for the association's operating budget.

Fiduciary duty requires a manager to act in the best interests of the association, which includes acting with care, loyalty, and diligence. Negotiating a better price for services directly benefits the association financially and is a clear example of the manager acting in the client's best interest. The other options represent breaches of duty through favoritism, unequal application of rules, or breaking confidentiality.

Question 98: In most states, who may attend regular board meetings as observers?

Only vendors under contract
Association members (Correct answer)
Only owners in good standing who pay a fee
Only board members and the manager

Correct answer: Association members

Many state statutes and governing documents give members the right to attend open board meetings, though not necessarily to speak.

Question 99: Which of the following actions would be MOST effective in reducing slip-and-fall liability in common area walkways during winter?

Installing motion-sensor lighting only, without addressing ice removal
Implementing a documented snow and ice removal contract with defined response times (Correct answer)
Posting a sign that residents assume all risk of weather-related falls
Relying on residents to self-report icy conditions before acting

Correct answer: Implementing a documented snow and ice removal contract with defined response times

A documented snow and ice removal contract with defined response times demonstrates reasonable care and reduces the association's liability exposure.

Question 100: Which insurance coverage primarily protects board members against claims of wrongful acts in their decision-making?

Commercial general liability
Property insurance
Directors and officers (D&O) liability (Correct answer)
Fidelity/crime coverage

Correct answer: Directors and officers (D&O) liability

D&O coverage responds to claims alleging wrongful acts, errors, or omissions by directors and officers in their governance role.

Question 101: A proximate cause in a premises liability case against an association means:

The hazard was covered by the association's insurance
The association provided adequate notice of the hazard
The homeowner signed a liability waiver
The association's negligent action or inaction directly caused the plaintiff's injury (Correct answer)

Correct answer: The association's negligent action or inaction directly caused the plaintiff's injury

In negligence cases, the plaintiff must prove that the defendant's breach of duty was the proximate or direct cause of the harm suffered, not just a background condition.

Question 102: A manager learns that a coworker at the management company has been mixing association funds with the company's operating account. What is the appropriate step?

Ignore it because it is not the manager's account
Move the funds personally to a new account
Confront the coworker privately and give them time to fix it
Report it through proper channels, because commingling association funds is a serious violation (Correct answer)

Correct answer: Report it through proper channels, because commingling association funds is a serious violation

Association funds must be kept separate and held in the association's name, and commingling should be reported because it threatens the association's assets.

Question 103: Before purchasing property insurance, the association should determine the replacement cost value of insured structures. This value represents:

The original construction cost when the community was built
The market value of the property including land
The assessed value used for property tax purposes
The cost to rebuild the structures at current construction prices without depreciation (Correct answer)

Correct answer: The cost to rebuild the structures at current construction prices without depreciation

Replacement cost value is the amount needed to rebuild the insured structure from scratch using current labor and materials, without any deduction for depreciation or market fluctuations.

Question 104: What is the purpose of a fidelity bond (crime policy) for a community association?

To cover directors and officers against lawsuits
To insure the common property against damage
To protect the association from financial loss due to employee dishonesty or theft (Correct answer)
To guarantee homeowner assessment payments

Correct answer: To protect the association from financial loss due to employee dishonesty or theft

A fidelity bond protects the association if an employee or manager steals or misappropriates association funds.

Question 105: Which legal document typically establishes the association's authority to levy special assessments beyond regular monthly dues?

The CC&Rs or declaration of covenants (Correct answer)
Federal Fair Housing Act
State landlord-tenant law
Local municipal zoning ordinance

Correct answer: The CC&Rs or declaration of covenants

The CC&Rs (Covenants, Conditions, and Restrictions) or declaration of covenants is the governing document that grants the association authority to levy both regular and special assessments.

Question 106: When preparing an annual budget, a manager should account for inflation primarily by:

Ignoring inflation since CC&Rs fix assessment amounts
Reducing the reserve contribution to offset higher operating costs
Applying an inflation factor to both operating expenses and reserve component replacement costs (Correct answer)
Deferring capital projects until inflation subsides

Correct answer: Applying an inflation factor to both operating expenses and reserve component replacement costs

Inflation affects both the cost of operating services and the eventual replacement cost of capital components, so prudent budgeting applies an appropriate inflation factor to both categories.

Question 107: A community's parking lot has significant pavement cracking and ponding water. The MOST cost-effective long-term approach is to:

Perform crack sealing and proper drainage correction now to extend pavement life (Correct answer)
Paint over the cracks and monitor for one more year
Repave the entire lot immediately regardless of cost
Apply sealcoating only and defer full repair indefinitely

Correct answer: Perform crack sealing and proper drainage correction now to extend pavement life

Addressing cracks and drainage early prevents water infiltration that accelerates base failure, making timely crack sealing the most cost-effective long-term strategy.

Question 108: What is a 'limited proxy' in the context of community association elections?

A proxy that allows voting on financial matters but not elections
A proxy issued only to board members
A proxy that authorizes the proxy holder to vote only on specific items listed on the form (Correct answer)
A proxy that expires after 30 days regardless of meeting date

Correct answer: A proxy that authorizes the proxy holder to vote only on specific items listed on the form

A limited proxy restricts the proxy holder's authority to cast votes only on the particular agenda items or candidates specified on the proxy form.

Question 109: What is the primary purpose of an indemnification clause, also known as a 'hold harmless' provision, in a service contract between a community association and a vendor?

To ensure the vendor maintains a specific amount of liability insurance.
To define the specific start and end dates of the contract's term.
To transfer the financial risk for certain potential losses from the association to the vendor. (Correct answer)
To guarantee that the vendor will be paid by the association within a specified timeframe.

Correct answer: To transfer the financial risk for certain potential losses from the association to the vendor.

An indemnification or 'hold harmless' clause is a key risk-transfer provision where one party (the vendor/indemnitor) agrees to cover the losses and legal costs of the other party (the association/indemnitee) if a specific event, such as a claim arising from the vendor's negligence, occurs. [2, 8, 24] It protects the association from financial liability resulting from the contractor's actions.

Question 110: The board performs its fiduciary duties by:

Authorizing of a committee to adopt due process procedures.
Voting to eliminate parking rules.
Authorizing the manager to enforce rules.
Establishing internal controls. (Correct answer)

Correct answer: Establishing internal controls.

The board fulfills its fiduciary duties by acting in the best financial and operational interests of the association and its members. Establishing robust internal controls, such as financial policies, approval processes, and oversight mechanisms, is a critical way to meet this duty. These controls safeguard the association's assets, ensure accurate financial reporting, and prevent fraud or mismanagement, demonstrating responsible governance.

Question 111: A board calls an executive session. Which of the following topics is MOST appropriate for executive session?

Review of the community's reserve study
Election of board officers
Approval of the annual budget
Discussion of pending litigation against the association (Correct answer)

Correct answer: Discussion of pending litigation against the association

Executive sessions are typically reserved for sensitive matters such as pending litigation, personnel issues, and member disciplinary hearings.

Question 112: A resident with a disability asks to keep an emotional support animal despite a no-pets rule. Under the Fair Housing Act, the association should:

Charge a pet deposit before reviewing the request
Deny the request because the rules are clear
Evaluate it as a reasonable accommodation request and respond promptly (Correct answer)
Require a membership vote

Correct answer: Evaluate it as a reasonable accommodation request and respond promptly

The FHA requires housing providers to make reasonable accommodations in rules when needed for a person with a disability to have equal use of housing.

Question 113: Immediately after a slip-and-fall on common property, what should the manager do first from a risk management standpoint?

Document the incident and notify the insurance carrier promptly (Correct answer)
Wait for the injured person to file a claim before acting
Repair the area and discard evidence of the hazard
Admit fault to calm the injured person

Correct answer: Document the incident and notify the insurance carrier promptly

Prompt documentation and timely notice to the carrier protect coverage and support the defense.

Question 114: Under IRS Revenue Ruling 70-604, how can an association avoid taxation of excess member income at year end?

Have members vote to apply it to the following year's assessments (Correct answer)
Hold it in a non-interest-bearing account
Distribute it to the board members
Move it into a manager's escrow account

Correct answer: Have members vote to apply it to the following year's assessments

Applying excess membership income to the next year's assessments, as members decide, prevents it from being taxable.

Question 115: Under accrual accounting, assessment revenue is generally recognized when:

The annual audit is completed
The budget is ratified by the owners
The owner's check clears the bank
The assessment is levied for the period, regardless of when cash is received (Correct answer)

Correct answer: The assessment is levied for the period, regardless of when cash is received

Accrual accounting records revenue when earned or assessed, not when cash arrives.

Question 116: A homeowner submits a proxy designating their neighbor to vote on their behalf at an annual meeting. The neighbor arrives but the proxy form is unsigned. What should the meeting chair do?

Reject the proxy and deny the neighbor voting rights for that owner (Correct answer)
Accept the proxy because intent is clear
Allow the neighbor to vote on non-election matters only
Table the issue until the homeowner can be reached

Correct answer: Reject the proxy and deny the neighbor voting rights for that owner

An unsigned proxy is generally invalid, so the designated proxy holder cannot exercise voting rights on behalf of the absent owner.

Question 117: A community manager's sibling owns a commercial landscaping company. The company submits a bid for the association's grounds maintenance contract that is competitive with other bids. What is the manager's most ethical course of action?

Reject the bid outright to avoid any possible appearance of a conflict of interest.
Recommend their sibling's company only if it is the lowest bid received.
Disclose the relationship in writing to the board of directors and recuse themselves from the decision-making process. (Correct answer)
Advocate for their sibling's company since they can personally vouch for the quality of work.

Correct answer: Disclose the relationship in writing to the board of directors and recuse themselves from the decision-making process.

The CMCA Standards of Professional Conduct require managers to promptly disclose any actual or potential conflicts of interest to the client association. By disclosing the relationship in writing and removing themselves from the decision-making process, the manager maintains transparency and upholds their fiduciary duty to the association, allowing the board to make an objective decision.

Question 118: In the ABC development, you are under a proprietary lease. What best defines your interest in the property?

Stock membership (Correct answer)
A divided interest
An undivided interest
A time-share interest

Correct answer: Stock membership

In a cooperative (co-op) development, residents typically do not own the real estate directly but instead own shares of stock in the corporation that owns the property. This stock membership grants them a proprietary lease, which is a long-term lease allowing them to occupy a specific unit. Therefore, their interest is best defined by their stock ownership in the cooperative entity.

Question 119: A board member suggests awarding a painting contract to a relative's business without a competitive bid process. The manager should advise the board that this creates a:

Violation that automatically invalidates the board member's seat
Business opportunity the association should pursue
Conflict of interest that must be disclosed and managed per the association's policy (Correct answer)
Permissible arrangement if the price is fair

Correct answer: Conflict of interest that must be disclosed and managed per the association's policy

Awarding contracts to related parties constitutes a conflict of interest that must be disclosed and handled according to the association's conflict-of-interest policy.

Question 120: A proxy in the context of an HOA membership meeting is:

A substitute manager hired for the event
The agenda distributed at the meeting
A written authorization allowing one person to vote on behalf of another member (Correct answer)
A type of board resolution

Correct answer: A written authorization allowing one person to vote on behalf of another member

A proxy is a written instrument by which a member authorizes another person to attend and vote on their behalf at a membership meeting.

Certified Manager of Community Associations (CMCA) Exam

The CMCA examination certifies individuals who possess the fundamental knowledge required to manage community associations effectively.

120

Questions

120 min

Time Limit

70%

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These practice questions were written with AI tools. They are not real exam questions. Exam facts are checked against the official sources listed below. Not reviewed by a subject-matter expert. Editorial policy

Sources & references

Exam facts on this page (fees, format, dates, passing scores) are checked against these official sources; the date is our last check. Editorial policy

camicb.org — Eligibility, exam format, retake fee · verified Oct 2026
camicb.org — Test delivery, fees, passing score · verified Oct 2026