CMCA Beginner's 2 — Questions and Answers
Question 1: Which document typically establishes a homeowners association (HOA) as a legal entity?
- Declaration of Covenants, Conditions, and Restrictions
- Articles of Incorporation (Correct answer)
- Bylaws
- Rules and Regulations
Correct answer: Articles of Incorporation
The Articles of Incorporation filed with the state create the HOA as a legal corporate entity.
Question 2: A community association manager receives a homeowner complaint about a neighbor's barking dog. What is the FIRST appropriate step?
- Call animal control immediately
- Verify whether the association's governing documents address pet noise violations (Correct answer)
- Ignore the complaint as a personal dispute
- Fine the dog owner without investigation
Correct answer: Verify whether the association's governing documents address pet noise violations
The manager must first determine whether the governing documents grant the association authority to act on pet noise complaints.
Question 3: What is a quorum in the context of HOA board meetings?
- A unanimous vote of all members
- The minimum number of members needed to conduct official business (Correct answer)
- The maximum number of guests allowed at a meeting
- A special committee formed to review budgets
Correct answer: The minimum number of members needed to conduct official business
A quorum is the minimum percentage or number of members required to be present for a meeting to legally conduct business.
Question 4: Which type of insurance protects HOA board members from personal liability for decisions made in their official capacity?
- General liability insurance
- Property insurance
- Directors and Officers (D&O) insurance (Correct answer)
- Workers' compensation insurance
Correct answer: Directors and Officers (D&O) insurance
Directors and Officers insurance specifically protects board members from personal financial loss due to decisions made while serving the association.
Question 5: A community association's reserve fund is primarily used for what purpose?
- Day-to-day operating expenses like landscaping
- Funding future major repairs and replacements of common elements (Correct answer)
- Paying board member salaries
- Marketing the community to new buyers
Correct answer: Funding future major repairs and replacements of common elements
Reserve funds are set aside to cover the cost of major capital repairs and replacements, such as roofs or parking lots, when they reach end of life.
Question 6: Which federal law requires community associations to make reasonable accommodations for residents with disabilities?
- Fair Credit Reporting Act
- Fair Housing Act (Correct answer)
- Americans with Disabilities Act
- Community Reinvestment Act
Correct answer: Fair Housing Act
The Fair Housing Act prohibits discrimination and requires associations to provide reasonable accommodations and modifications for people with disabilities.
Question 7: What is the primary purpose of an HOA's annual budget?
- To set homeowner property values
- To plan and control the association's income and expenses for the coming year (Correct answer)
- To determine board member compensation
- To establish fines for rule violations
Correct answer: To plan and control the association's income and expenses for the coming year
The annual budget is a financial plan that estimates revenues and expenditures, ensuring the association can fund its operations and obligations.
CMCA Beginner's 2
Which document typically establishes a homeowners association (HOA) as a legal entity?