CMCA - Certified Manager of Community Associations Contracting and Vendor Management Questions and Answers Flashcards

A landscaping vendor's contract renews automatically each year unless written notice is given 90 days before expiration. What is the biggest risk of this clause for the association?

Answer: The board may miss the notice window and be locked into another term

Auto-renewal clauses with long notice periods can trap an association in an unwanted term if the deadline is missed.

Which document should a community manager obtain from a contractor to confirm the association is protected under the contractor's liability policy?

Answer: A certificate of insurance naming the association as additional insured

A certificate of insurance with an additional insured endorsement shows the association is covered for claims arising from the contractor's work.

An indemnification (hold harmless) clause in a vendor contract primarily serves to:

Answer: Shift liability for certain claims from the association to the vendor

Indemnification requires the vendor to cover losses and defense costs arising from its negligence or work.

Which payment bond or surety instrument protects an association if a contractor fails to complete a project as agreed?

Answer: Performance bond

A performance bond guarantees completion of the contract by a surety if the contractor defaults.

Why does an association typically withhold retainage on a construction contract?

Answer: To keep leverage until the work is completed satisfactorily

Retainage holds back a percentage of payments until final completion and punch-list items are resolved.

A board member's brother-in-law owns a plumbing company that submitted a bid. What is the best practice?

Answer: Disclose the relationship, have the member abstain, and evaluate bids on merit

Conflicts of interest must be disclosed and the interested director should recuse from the decision.

Before final payment to a contractor on a capital project, the manager should obtain which document to protect the association from claims by subcontractors and suppliers?

Answer: Lien waiver and release

Lien waivers confirm that subcontractors and suppliers have been paid and cannot file liens against the property.