MCQ Flashcards

A condominium association's roof needs replacement costing $300,000, but reserves only hold $80,000. What funding option would spread the cost among owners over time without a lump-sum payment?

Answer: Reserve loan

A reserve loan allows the association to borrow funds for the repair and repay over time, avoiding a large immediate special assessment on owners.

Which body typically has the authority to adopt and amend association rules and regulations without a membership vote?

Answer: The board of directors

Most governing documents delegate authority to the board of directors to adopt reasonable rules and regulations governing the community.

An owner installs a satellite dish on a common area roof without approval. Under the FCC's OTARD rule, the association:

Answer: May require removal since common areas are not exclusive use

OTARD protects antenna installations on areas within the owner's exclusive use or control; common area roofs fall outside that protection.

What is the primary purpose of an architectural review committee (ARC) in a community association?

Answer: To maintain the appearance and integrity of the community

The ARC reviews proposed modifications to ensure they conform to community standards, preserving aesthetic consistency and property values.

Which accounting method records income when earned and expenses when incurred, regardless of when cash is received or paid?

Answer: Accrual basis accounting

Accrual basis accounting matches revenues to the period they are earned and expenses to the period incurred, giving a more accurate financial picture.

A manager discovers that a board member disclosed confidential executive session information to a neighbor. The most appropriate immediate action is:

Answer: Report the breach to the full board for action

Breaches of confidentiality by a board member are a governance matter that the full board must address, potentially including censure or removal proceedings.

When an association bids out a maintenance contract, which practice best protects the association legally and financially?

Answer: Requiring all bidders to carry adequate insurance and bonding

Requiring vendors to carry insurance and bonding protects the association from liability for on-site accidents and ensures contractor accountability.