CMCA Assessments and Collections 3

Question 1

What is 'super-priority lien' status for HOA assessments, and which states commonly grant it?

Accepted Answer

A lien for a limited number of months of assessments that takes priority over a first mortgage in certain states

Answer

Approximately 23 states and D.C. grant HOAs a 'super-priority' for a limited months-worth of assessments that sits ahead of the first mortgage lender in a foreclosure proceeding.

Question 2

Which internal control best practice helps prevent fraud in the assessment collection process?

Accepted Answer

Requiring dual signatures on checks and separating the duties of billing, receiving, and reconciling

Answer

Separation of duties ensures no single person controls all aspects of a financial transaction, reducing the risk of embezzlement or error.

Question 3

An owner claims they never received an assessment notice and therefore should not owe late fees. What is the association's strongest defense?

Accepted Answer

The governing documents and state law typically impose a duty to pay regardless of notice, and the association should maintain proof of mailing

Answer

Most governing documents and statutes establish that assessments are due whether or not notice is received, and maintaining records of mailed statements strengthens the association's position.

Question 4

Which scenario correctly describes 'voluntary' versus 'involuntary' lien release in HOA collections?

Accepted Answer

Voluntary: owner pays in full and lien is released; Involuntary: a court orders lien released due to procedural defect

Answer

A voluntary lien release occurs when the debt is paid and the association records a satisfaction; an involuntary release can occur if a court finds the lien was improperly filed.

Question 5

Under the Fair Debt Collection Practices Act (FDCPA), which party collecting HOA assessments is most directly regulated?

Accepted Answer

Third-party collection agencies and attorneys hired by the association

Answer

The FDCPA primarily regulates third-party debt collectors, including collection agencies and law firms, when they collect debts on behalf of the association.

CMCA - Certified Manager of Community Associations Practice Test

CMCA - Certified Manager of Community Associations Practice Test

CMCA Assessments and Collections 3