M100 COMMUNITY ASSOCIATION
MANAGEMENT EXAM
WITH COMPLETE QUESTIONS AND
DETAILED SOLUTIONS
The basic authority in a community association lies with the owners. In order for the
association to govern effectively the owners elect a board of directors to act on their behalf.
The governing documents delegate most of the association's decision-making powers to a
board.
D
O
N
Complete the following sentence: The board of directors in a community association has a
_____________ to act in the best interests and for the benefit of the community as a whole. a.
O
bond
T
b. fiduciary duty
C
c.
O
ballot
PY
d. quorum
b. fiduciary duty
The board's fiduciary duty has two components: (1) Board members are required to avoid
conflicts of interest and acting out of self-interest. (2) They are also required to act as
reasonable people in managing the association's affairs.
True or false. The "business judgment rule" means that if a board has exercised reasonable
business judgment in making a decision, the court will generally not consider the board negligent
in its fiduciary duty.
,True
Through judicial decision, a substantial body of law has developed concerning the
standards to which directors must conform while conducting a community association's
affairs. Many courts apply the "business judgment rule" to a board's actions.
Which of the following community association committees typically are assigned
responsibilities related to elections, nominations, and architectural standards? a. standing
committees
b. professional committees
D
c. ad hoc committees
O
d. mandatory committees
N
d. mandatory committees
O
T
A mandatory committee is one that is required by the governing documents. Mandatory
C
committees typically are assigned responsibilities related to elections, nominations, and
architectural standards.
O
PY
True or false. The role of the professional community association manager is to make all
decisions for the association and to delegate information-gathering and fact-finding support to
the board of directors.
False
The professional community association manager is charged with assisting the board of
directors' decision making process by means of providing information-gathering and fact-
finding support, implementing the decisions of the board; and administering the services,
programs, and operations of the community association within the policies and guidelines
set by the board.
,In which of the following forms of community association management is the association
managed by the board itself or by committees under the direction of the board? a. management
company
b. volunteer or self-management
c. association-employed manager
d. municipal management
b. volunteer or self-management
Self-managed community associations make up a majority of all associations in the United
States; approximately 150,000 self-managed community associations currently exist in the
U.S. In self managed associations, the board itself is responsible for all community
D
association functions, including maintaining accounting records, preparing budgets,
collecting dues, and staying informed about association resources and best practices.
O
N
O
True or false. An increase in assessment delinquencies that is not due to a poor economy may be
T
an example of a warning sign of a weak management situation.
C
O
True
PY
When assessment delinquencies increase, the manager should investigate the reasons for
the increase as soon as possible and as objectively as he or she can. In addition, if the
demands of the community association and the board of directors are unreasonable or
exceed the manager's ability to perform the required services, it is the manager's
responsibility to communicate this to the board before it creates a weak management
situation.
Complete the following sentence: A ________________ is a statement of goals and
objectives approved by the board that includes the yearly cycle of tasks that management
should perform on the community association's behalf. a. management audit
b. management contract
, c. management plan
d. employment agreement
c. management plan
Typically, a management plan includes tasks that address the community association's
governance, business, and community aspects. Managers should have a management plan
so both they and their boards are clear on what is expected. In most instances, it will be up
to the manager to propose a plan to the board for approval. Managers should set goals for
the year in relation to the community association's budget.
True or false. It is ethically acceptable for a professional community association manager to
D
arrange for a kickback for giving a contractor an association contract.
O
False
N
O
The manager of a community association has a professional duty to avoid attempting to
T
make any secret profits when acting on the community's behalf. Arranging for a kickback
for giving a contractor an association contract—without disclosing relationship to the
C
board—constitutes making secret profits and is ethically unacceptable. Managers should
O
review and consult the CAI codes of ethics. The Professional Community Association
Manager (PCAM) code of ethics sets forth the general and technical standards for integrity
PY
and objectivity, professional courtesy, conflict of interest, use of client funds, and
limitations of practice.
Reasons for establishing community rules and architectural guidelines include each of the
following EXCEPT:
a. There is the need to create a sense of fairness and equity among residents.
b. In contemporary society, people are more likely to question and challenge authority.
c. In cases where rules have been poorly developed or enforced, the courts are ruling against
community associations. d. Fines imposed on residents who break community rules are
frequently the primary source of association income.
MANAGEMENT EXAM
WITH COMPLETE QUESTIONS AND
DETAILED SOLUTIONS
The basic authority in a community association lies with the owners. In order for the
association to govern effectively the owners elect a board of directors to act on their behalf.
The governing documents delegate most of the association's decision-making powers to a
board.
D
O
N
Complete the following sentence: The board of directors in a community association has a
_____________ to act in the best interests and for the benefit of the community as a whole. a.
O
bond
T
b. fiduciary duty
C
c.
O
ballot
PY
d. quorum
b. fiduciary duty
The board's fiduciary duty has two components: (1) Board members are required to avoid
conflicts of interest and acting out of self-interest. (2) They are also required to act as
reasonable people in managing the association's affairs.
True or false. The "business judgment rule" means that if a board has exercised reasonable
business judgment in making a decision, the court will generally not consider the board negligent
in its fiduciary duty.
,True
Through judicial decision, a substantial body of law has developed concerning the
standards to which directors must conform while conducting a community association's
affairs. Many courts apply the "business judgment rule" to a board's actions.
Which of the following community association committees typically are assigned
responsibilities related to elections, nominations, and architectural standards? a. standing
committees
b. professional committees
D
c. ad hoc committees
O
d. mandatory committees
N
d. mandatory committees
O
T
A mandatory committee is one that is required by the governing documents. Mandatory
C
committees typically are assigned responsibilities related to elections, nominations, and
architectural standards.
O
PY
True or false. The role of the professional community association manager is to make all
decisions for the association and to delegate information-gathering and fact-finding support to
the board of directors.
False
The professional community association manager is charged with assisting the board of
directors' decision making process by means of providing information-gathering and fact-
finding support, implementing the decisions of the board; and administering the services,
programs, and operations of the community association within the policies and guidelines
set by the board.
,In which of the following forms of community association management is the association
managed by the board itself or by committees under the direction of the board? a. management
company
b. volunteer or self-management
c. association-employed manager
d. municipal management
b. volunteer or self-management
Self-managed community associations make up a majority of all associations in the United
States; approximately 150,000 self-managed community associations currently exist in the
U.S. In self managed associations, the board itself is responsible for all community
D
association functions, including maintaining accounting records, preparing budgets,
collecting dues, and staying informed about association resources and best practices.
O
N
O
True or false. An increase in assessment delinquencies that is not due to a poor economy may be
T
an example of a warning sign of a weak management situation.
C
O
True
PY
When assessment delinquencies increase, the manager should investigate the reasons for
the increase as soon as possible and as objectively as he or she can. In addition, if the
demands of the community association and the board of directors are unreasonable or
exceed the manager's ability to perform the required services, it is the manager's
responsibility to communicate this to the board before it creates a weak management
situation.
Complete the following sentence: A ________________ is a statement of goals and
objectives approved by the board that includes the yearly cycle of tasks that management
should perform on the community association's behalf. a. management audit
b. management contract
, c. management plan
d. employment agreement
c. management plan
Typically, a management plan includes tasks that address the community association's
governance, business, and community aspects. Managers should have a management plan
so both they and their boards are clear on what is expected. In most instances, it will be up
to the manager to propose a plan to the board for approval. Managers should set goals for
the year in relation to the community association's budget.
True or false. It is ethically acceptable for a professional community association manager to
D
arrange for a kickback for giving a contractor an association contract.
O
False
N
O
The manager of a community association has a professional duty to avoid attempting to
T
make any secret profits when acting on the community's behalf. Arranging for a kickback
for giving a contractor an association contract—without disclosing relationship to the
C
board—constitutes making secret profits and is ethically unacceptable. Managers should
O
review and consult the CAI codes of ethics. The Professional Community Association
Manager (PCAM) code of ethics sets forth the general and technical standards for integrity
PY
and objectivity, professional courtesy, conflict of interest, use of client funds, and
limitations of practice.
Reasons for establishing community rules and architectural guidelines include each of the
following EXCEPT:
a. There is the need to create a sense of fairness and equity among residents.
b. In contemporary society, people are more likely to question and challenge authority.
c. In cases where rules have been poorly developed or enforced, the courts are ruling against
community associations. d. Fines imposed on residents who break community rules are
frequently the primary source of association income.
