CMCA Knowledge 3

Question 1

When a community association enforces a rule inconsistently against one owner but not others in similar situations, it risks liability for:

Accepted Answer

Selective enforcement

Answer

Selective enforcement occurs when rules are applied unequally and can invalidate enforcement actions or expose the association to legal claims.

Question 2

Which of the following best describes the 'business judgment rule' as it applies to community association boards?

Accepted Answer

Courts will defer to board decisions made in good faith, with reasonable inquiry, and in the association's best interest

Answer

The business judgment rule protects board members from personal liability when they act in good faith, on an informed basis, and in the association's best interest.

Question 3

An association's right to place a lien on a delinquent owner's unit for unpaid assessments is typically found in which governing document?

Accepted Answer

Declaration or CC&Rs

Answer

The declaration (CC&Rs) typically grants the association the authority to levy assessments and place a lien on property for non-payment.

Question 4

What financial statement shows an association's assets, liabilities, and equity at a specific point in time?

Accepted Answer

Balance sheet

Answer

A balance sheet (statement of financial position) presents assets, liabilities, and equity as of a specific date.

Question 5

A community association manager's primary client is:

Accepted Answer

The board of directors acting on behalf of the association

Answer

The manager serves the association through its board of directors, not individual owners or other parties.

CMCA - Certified Manager of Community Associations Practice Test

CMCA - Certified Manager of Community Associations Practice Test

CMCA Knowledge 3