CMCA - Certified Manager of Community Associations Governance and Legal Issues Questions and Answers Flashcards

An executive session of a board meeting is appropriate for discussing:

Answer: Pending litigation, individual homeowner hearings, and employee personnel matters

Executive sessions are reserved for sensitive matters where confidentiality is essential, including pending or threatened litigation, individual member disciplinary hearings, and employee matters.

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

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.

A homeowner requests access to the association's financial records under state law. The manager should:

Answer: Comply with the request in accordance with state statute and governing documents, providing access to non-exempt records

State HOA statutes typically grant members the right to inspect certain association records, and the manager must comply by providing access to non-exempt records within the timeframe the law specifies.

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

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.

An association's rules and regulations differ from its CC&Rs primarily in that rules and regulations:

Answer: Can typically be adopted and amended by the board alone without a member vote, within the authority granted by the CC&Rs

Rules and regulations are typically adopted by the board under authority granted by the CC&Rs, allowing for more flexible updates than amending the CC&Rs which usually requires a supermajority owner vote.

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

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.