FREE CMCA MCQ Questions and Answers Flashcards

Which statement best describes the business judgment rule?

Answer: Courts generally defer to good-faith, informed board decisions made within the board's authority

The business judgment rule protects directors who act in good faith, with reasonable inquiry, and within their authority.

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

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.

Which type of insurance protects the association against theft of funds by employees, board members, or the management company?

Answer: Fidelity/crime insurance

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

Under the federal Fair Debt Collection Practices Act, assessment collection actions may be regulated because assessments are considered:

Answer: Consumer debts incurred for personal, family, or household purposes

Courts have generally treated association assessments as consumer debts, so third-party collectors must comply with the FDCPA.

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:

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.

What is the main purpose of an association's annual budget?

Answer: To estimate revenues and expenses, including reserve contributions, and set assessments

The operating budget forecasts income and costs, including reserve funding, and is the basis for setting assessments.

In a request for proposal (RFP) for landscaping, which element matters most for comparing bids fairly?

Answer: A uniform, detailed scope of work and specifications for all bidders

Identical specifications let the board compare bids on equal terms.