CMCA CMCA - Certified Manager of Community Associations Assessments and Collections Questions and Answers 3

Question 1

An association's assessment becomes a lien on the property on what date in most governing documents?

Accepted Answer

The date the assessment is due and unpaid

Answer

In most CC&Rs and state statutes, assessments automatically become a lien on the property as of the date they become due and remain unpaid, without any additional action by the association.

Question 2

Which statement best describes the business judgment rule as applied to an association's collection decisions?

Accepted Answer

Courts will not second-guess a board's collection decisions made in good faith, with adequate information, and in the association's best interest

Answer

The business judgment rule protects board members from personal liability when they make collection decisions in good faith, on an informed basis, and in the honest belief the action is in the association's best interest.

Question 3

In community association collections, acceleration means:

Accepted Answer

Declaring the entire unpaid balance due immediately upon default

Answer

Acceleration means that upon a default such as missing a payment plan installment, the entire remaining balance becomes immediately due, preventing the owner from resuming partial payments.

Question 4

Which federal law most directly affects how community associations communicate with homeowners about delinquent assessments when a third-party collection agency is involved?

Accepted Answer

The Fair Debt Collection Practices Act

Answer

The FDCPA governs how third-party debt collectors communicate with consumers about debts, including required disclosures, prohibited practices, and dispute rights.

Question 5

What is a super lien in the context of community association collections?

Accepted Answer

A statutory lien giving the association priority over a first mortgage for a limited amount of unpaid assessments

Answer

In states with super lien statutes, the association's lien for a specified number of months of assessments takes priority over the first mortgage lender, giving associations powerful leverage in collection.

CMCA - Certified Manager of Community Associations Practice Test

CMCA - Certified Manager of Community Associations Practice Test

CMCA CMCA - Certified Manager of Community Associations Assessments and Collections Questions and Answers 3