CMCA Assessments and Collections 2

Question 1

Which legal document typically establishes the association's authority to levy special assessments beyond regular monthly dues?

Accepted Answer

The CC&Rs or declaration of covenants

Answer

The CC&Rs (Covenants, Conditions, and Restrictions) or declaration of covenants is the governing document that grants the association authority to levy both regular and special assessments.

Question 2

When a unit owner files for bankruptcy under Chapter 7, which portion of their unpaid assessments is most likely to be discharged?

Accepted Answer

Pre-petition assessments that are unsecured

Answer

In Chapter 7 bankruptcy, pre-petition unsecured assessment debt is typically discharged, while post-petition assessments that accrue while the owner retains the unit remain the owner's responsibility.

Question 3

An association's collection policy must be provided to owners at what point to be most effective and defensible?

Accepted Answer

At the time of purchase or upon request, and posted where accessible

Answer

Best practices and many state laws require that the collection policy be provided to owners at purchase or closing and be made readily accessible so owners cannot claim ignorance of the procedures.

Question 4

What is the primary purpose of a 'payment plan agreement' in community association collections?

Accepted Answer

To allow the owner to cure delinquency over time while preserving the association's lien

Answer

A payment plan agreement lets a delinquent owner repay arrears in installments while the association retains its lien rights until the debt is fully satisfied.

Question 5

In most states, when must a homeowners association record a lien against a delinquent owner's property to protect its priority position?

Accepted Answer

Within the timeframe specified by state law, often before a mortgage lender forecloses

Answer

State statutes typically set deadlines for recording assessment liens; missing these windows can cause the association to lose lien priority, especially in foreclosure situations.

CMCA - Certified Manager of Community Associations Practice Test

CMCA - Certified Manager of Community Associations Practice Test

CMCA Assessments and Collections 2