CMCA Contracting and Vendor Management 4

Question 1

A roofing contractor requests a 50% deposit before starting a $200,000 replacement project. What is the BEST practice for the association?

Accepted Answer

Negotiate a smaller deposit and tie remaining payments to project milestones

Answer

Milestone-based payment schedules protect the association by linking disbursements to verifiable progress, reducing the risk of paying for incomplete work.

Question 2

What is the PRIMARY purpose of requiring a contractor to obtain a performance bond on a large capital improvement project?

Accepted Answer

To guarantee the contractor will complete the work if they default

Answer

A performance bond protects the association by guaranteeing project completion by a surety company if the contractor defaults or fails to finish the work.

Question 3

An association manager notices that a vendor's scope of work in an ongoing contract has informally expanded well beyond original terms without contract amendments. This is known as:

Accepted Answer

Scope creep

Answer

Scope creep occurs when work expands beyond the contracted scope without formal amendments, often leading to cost overruns and disputes.

Question 4

Which document should a manager obtain from a vendor BEFORE making final payment on a construction project to protect against mechanic's lien claims?

Accepted Answer

Conditional lien waiver upon final payment

Answer

A conditional lien waiver upon final payment releases the vendor's right to file a mechanic's lien once the final payment clears, protecting the association's property.

Question 5

A contract clause states that disputes must be resolved through binding arbitration. What does this mean for the association?

Accepted Answer

Disputes will be decided by a neutral arbitrator rather than a court, and the decision is final

Answer

Binding arbitration means disputes are resolved by a neutral third party outside court, and the arbitrator's decision is enforceable and generally not appealable.

CMCA - Certified Manager of Community Associations Practice Test

CMCA - Certified Manager of Community Associations Practice Test

CMCA Contracting and Vendor Management 4