Governance and Legal Issues Flashcards

Under the business judgment rule, a board member is protected from personal liability when making a decision if they acted with:

Answer: Reasonable care, good faith, and in the best interest of the association

The business judgment rule protects board members who act in good faith, with reasonable care, and in the best interest of the association, even if the decision later proves unwise.

Which governing document typically establishes the boundaries of individually owned units versus common areas in a condominium?

Answer: Declaration (CC&Rs)

The Declaration (CC&Rs) legally defines unit boundaries, common elements, and limited common elements within a condominium community.

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

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.

When an owner requests to inspect association records, the manager should first:

Answer: Consult the governing documents and applicable state law for inspection rights and procedures

Record inspection rights are governed by state law and the association's governing documents, which specify what records are available, timelines, and any applicable fees.

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

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.

What is a 'proxy' in the context of a community association annual meeting?

Answer: A written authorization allowing another person to vote on an owner's behalf

A proxy is a written document by which an owner authorizes another person—often another owner or the board secretary—to cast their vote at a meeting.

The Fair Housing Act prohibits community associations from discriminating in housing-related activities based on which protected class?

Answer: Familial status

The Fair Housing Act includes familial status (families with children under 18) as one of seven protected classes against which housing discrimination is prohibited.