MCQ Flashcards

What is a 'special assessment' in the context of community association management?

Answer: A one-time charge levied on owners for a specific unbudgeted expense

A special assessment is an extraordinary charge levied on all owners — in addition to regular dues — to cover a specific expense not covered by the operating budget or reserves.

Which of the following best describes the role of a managing agent in a community association?

Answer: The managing agent implements board policies and handles day-to-day operations under the board's direction

The managing agent is a service provider who carries out the board's decisions and manages daily operations, but policy authority remains with the elected board.

A condominium unit owner claims the association failed to maintain a common area pipe, causing water damage to their unit. What type of coverage typically applies to the association's liability?

Answer: Umbrella liability policy

An umbrella liability policy provides excess liability coverage above primary general liability limits, protecting the association against large damage claims.

The Servicemembers Civil Relief Act (SCRA) affects community association collections by:

Answer: Limiting interest rates on pre-service debts and restricting certain enforcement actions

The SCRA caps interest rates at 6% on debts incurred before active duty and restricts certain judicial proceedings against servicemembers.

When conducting an enforcement hearing, what procedural protection must the association typically provide the accused owner?

Answer: Notice of the alleged violation and an opportunity to be heard

Due process in association enforcement requires adequate written notice of the violation and a fair opportunity for the owner to present their side before any fine is imposed.

An association's investment of reserve funds must prioritize which two characteristics above return on investment?

Answer: Safety and liquidity

Reserve funds must remain safe (low risk of loss) and liquid (accessible when capital expenditures arise), making preservation and accessibility paramount over returns.

A board adopts a new rule banning all political signs from the community. In a planned community (not a condominium), which legal issue may arise?

Answer: First Amendment free speech concerns on private property

Some states have laws protecting political sign display rights even in private planned communities, creating potential conflicts with blanket sign bans.