CMCA Ethics and Professional Conduct 5 — Questions and Answers
Question 1: A new CMCA takes over management of a community and discovers the prior manager left incomplete records. What is the ethical obligation regarding these records?
- Discard incomplete records to start fresh
- Document the gaps, attempt to reconstruct records from available sources, and notify the board of deficiencies (Correct answer)
- Hold the prior manager legally responsible before proceeding
- Operate as if the missing records do not exist
Correct answer: Document the gaps, attempt to reconstruct records from available sources, and notify the board of deficiencies
The incoming manager must document what records are missing, attempt reconstruction where possible, and promptly inform the board so the association can protect its legal and financial interests.
Question 2: Under professional ethics standards, when is it acceptable for a CMCA to act on a matter without board direction?
- Whenever the manager believes the action is beneficial to the community
- Only in genuine emergencies where delay would cause immediate harm and board approval cannot be obtained in time (Correct answer)
- When the management agreement grants broad discretionary authority
- When the action involves routine vendor payments already in the approved budget
Correct answer: Only in genuine emergencies where delay would cause immediate harm and board approval cannot be obtained in time
Independent action without board authorization is justified only in true emergencies where delay would cause imminent harm and timely board approval is impossible; all other actions require authorization.
Question 3: A homeowner alleges that the manager discriminated against them in rule enforcement based on national origin. What is the CMCA's first ethical and legal obligation?
- Dismiss the claim since enforcement decisions are based on rules alone
- Take the allegation seriously, cease the potentially discriminatory practice, and consult legal counsel immediately (Correct answer)
- Document the enforcement history and wait for a formal complaint
- Refer the owner to the state HOA ombudsman
Correct answer: Take the allegation seriously, cease the potentially discriminatory practice, and consult legal counsel immediately
Fair housing laws prohibit discriminatory enforcement; the manager must treat the allegation seriously, stop any potentially unlawful practice, and immediately involve legal counsel.
Question 4: A CMCA is asked by the board to waive late fees for a board member's account while enforcing them for all other owners. What ethical principle is at stake?
- Fiduciary duty to maximize revenue
- Equal treatment and the prohibition against preferential treatment for board members (Correct answer)
- The manager's discretion to grant case-by-case exceptions
- The board's authority to establish collection policies
Correct answer: Equal treatment and the prohibition against preferential treatment for board members
Waiving fees exclusively for board members violates the principle of equal treatment and can expose the association to legal claims of selective enforcement and self-dealing.
Question 5: Which of the following is the most accurate description of 'conflict of interest' as it applies to CMCA ethics?
- Any disagreement between the manager and a board member
- A situation where a personal or financial interest could improperly influence the manager's professional judgment or duties (Correct answer)
- A contractual dispute between the management company and the association
- Any situation where the manager disagrees with a board decision
Correct answer: A situation where a personal or financial interest could improperly influence the manager's professional judgment or duties
A conflict of interest occurs when personal or financial interests have the potential to impair the manager's objectivity or undivided loyalty to the association.
Question 6: A board votes to use reserve funds for operating expenses without a properly adopted reserve study or membership approval as required by state law. What should the CMCA do?
- Execute the transfer since the board voted to approve it
- Advise the board of the legal requirement and decline to execute the transfer until proper procedures are followed (Correct answer)
- Transfer the funds but document the manager's objection in writing
- Consult the management company's attorney without informing the board
Correct answer: Advise the board of the legal requirement and decline to execute the transfer until proper procedures are followed
Transferring reserve funds in violation of state law is impermissible; the ethical manager must advise the board of the legal constraint and withhold action until proper authorization is obtained.
Question 7: How does the CAMICB address a CMCA designee who is found to have violated the Code of Professional Ethics?
- Refers the matter solely to state licensing authorities
- May impose sanctions including reprimand, suspension, or revocation of the CMCA designation (Correct answer)
- Issues a public warning but takes no action against certification
- Requires the designee to retake the CMCA examination
Correct answer: May impose sanctions including reprimand, suspension, or revocation of the CMCA designation
CAMICB has authority to discipline designees who violate the Code of Professional Ethics, with sanctions ranging from formal reprimand to permanent revocation of the CMCA designation.
CMCA Ethics and Professional Conduct 5
A new CMCA takes over management of a community and discovers the prior manager left incomplete records.
What is the ethical obligation regarding these records?