Knowledge Flashcards

When a community association enforces a rule inconsistently against one owner but not others in similar situations, it risks liability for:

Answer: Selective enforcement

Selective enforcement occurs when rules are applied unequally and can invalidate enforcement actions or expose the association to legal claims.

Which of the following best describes the 'business judgment rule' as it applies to community association boards?

Answer: Courts will defer to board decisions made in good faith, with reasonable inquiry, and in the association's best interest

The business judgment rule protects board members from personal liability when they act in good faith, on an informed basis, and in the association's best interest.

An association's right to place a lien on a delinquent owner's unit for unpaid assessments is typically found in which governing document?

Answer: Declaration or CC&Rs

The declaration (CC&Rs) typically grants the association the authority to levy assessments and place a lien on property for non-payment.

What financial statement shows an association's assets, liabilities, and equity at a specific point in time?

Answer: Balance sheet

A balance sheet (statement of financial position) presents assets, liabilities, and equity as of a specific date.

A community association manager's primary client is:

Answer: The board of directors acting on behalf of the association

The manager serves the association through its board of directors, not individual owners or other parties.

Which of the following best describes a 'special assessment'?

Answer: A one-time or short-term charge levied for a specific extraordinary expense

A special assessment is an additional charge beyond regular dues, typically levied to fund an unexpected or major expense not covered by reserves.

What is the primary function of the CAI's CMCA credential?

Answer: To certify that a manager meets a baseline standard of knowledge in community association management

The CMCA is a national certification that validates a manager's foundational knowledge of community association management principles.