Ethics and Professional Conduct Flashcards

A manager learns that a board treasurer has been using association funds for personal expenses. What is the CMCA's ethical obligation?

Answer: Document the suspected fraud, report it to the full board and legal counsel, and preserve records

Suspected fraud must be documented, reported to the board (excluding the implicated member) and legal counsel promptly, and records must be preserved to protect the association.

Which of the following best reflects the CMCA's duty of loyalty?

Answer: Acting in the best interests of the association, not personal or employer gain

The duty of loyalty requires the CMCA to act solely in the best interests of the association and its members, free from personal or third-party conflicts.

A prospective management company asks a departing CMCA to bring the prior association's vendor list and contact database to give the new firm a competitive advantage. What should the manager do?

Answer: Refuse, as the vendor and contact data belongs to the association and is confidential

Association records and databases are the property of the association; taking or sharing them for competitive advantage violates confidentiality obligations that persist after employment ends.

What does 'due diligence' mean in the context of a CMCA's professional obligations?

Answer: Exercising the care, skill, and thoroughness a reasonable professional would apply to the same situation

Due diligence requires the manager to apply reasonable care and professional skill when acting on behalf of the association, consistent with the standard of a competent professional.

A CMCA manager has a personal friendship with a contractor who submits the highest bid. How should the manager handle the bid review?

Answer: Disclose the personal relationship to the board and recuse from the selection decision

Personal relationships with bidders create conflicts of interest that must be disclosed to the board; the manager should then recuse from the final selection to ensure impartiality.

Under ethical standards, how should a CMCA respond if a homeowner offers to pay the manager directly for expedited processing of an architectural review application?

Answer: Decline the payment and process the application through normal procedures

Accepting personal payments from homeowners for official duties creates a conflict of interest and undermines fair treatment of all owners; the application must follow standard procedures.

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?

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.