CMCA Contracting and Vendor Management 3

Question 1

An association hires a contractor classified as an independent contractor, but later it is determined the relationship meets the legal test for employment. What is the PRIMARY risk to the association?

Accepted Answer

The association may owe back payroll taxes and benefits

Answer

Misclassifying an employee as an independent contractor exposes the association to liability for unpaid payroll taxes, workers' compensation, and benefits.

Question 2

Which best practice should a manager follow when managing multiple active vendor contracts simultaneously?

Accepted Answer

Maintain a contract management calendar tracking key dates and renewal deadlines

Answer

A contract management calendar prevents missed renewal windows, expirations, and compliance deadlines across multiple active agreements.

Question 3

A vendor performing electrical work on common areas does not carry the required general liability insurance. The manager discovers this mid-project. What should the manager do FIRST?

Accepted Answer

Stop work immediately and require proof of current insurance before resuming

Answer

Allowing uninsured work to continue exposes the association to unprotected liability; work must stop until the vendor provides proof of required coverage.

Question 4

When evaluating vendor bids for a major common-area renovation, the board should PRIMARILY consider:

Accepted Answer

Price, qualifications, references, scope compliance, and insurance coverage

Answer

A thorough vendor selection weighs multiple factors including price, demonstrated qualifications, references, scope compliance, and adequate insurance.

Question 5

A service contract's payment terms specify 'net 30.' The association pays the invoice 45 days after receipt. What is the likely consequence?

Accepted Answer

The vendor may charge late fees as specified in the contract

Answer

Most service contracts include late payment penalties; paying beyond net-30 terms triggers any late fees or interest specified in the agreement.

CMCA - Certified Manager of Community Associations Practice Test

CMCA - Certified Manager of Community Associations Practice Test

CMCA Contracting and Vendor Management 3