CAI Exam questions and answers with
solutions
Community Association - ANSWER legal entity in which the owners enjoy the protection,
enhancement, maintenance and preservation of their homes and property.
What're the three defining characteristics of community associations? - ANSWER 1.
Membership in the community association is mandatory and automatic for all owners
2. Certain association governing documents bind the owner and the association to each other
through mandated actions.
3. Mandatory lien-based assessments (maintenance fees) are levied on each owner in order to
operate and maintain the community association.
What is a lien? - ANSWER legal claim by one party (community association) on the property of
another (delinquent owner) to obtain the payment of a debt or the satisfaction of an obligation.
What is the primary purpose of a community association? - ANSWER Purpose is to provide for
the community, business, and governance aspects of the association. This is done by
administering, maintaining, and enhancing a residential real estate development, and through
the establishment of a system of property rights, binding covenants and restrictions, and rules
and regulations.
What're the 3 types of basic residential community associations? - ANSWER 1. Planned
Community
2. Condominium
3. Cooperative
What is a planned community? - ANSWER Owner owns his or her own long and/or living unit
,The community owns any common areas, such as tennis courts and roads for the use and
benefit of the lot owners.
What is a condominium? - ANSWER The individual owns his or her living unit and an undivided
interest in the common elements of the community. Each owner owns a percentage of the
common elements - which consist of everything except the living units, ex. pool or lobby. The
community association itself owns no real estate as an association.
What is a cooperative association? - ANSWER An individual owns stock or membership in the
cooperative and holds a proprietary lease or occupancy agreement for his or her living unit.
What is a proprietary lease or occupancy agreement? - ANSWER defines the member or
stockholder's rights and obligations in relation to the living unit.
The 3 types of residential community associations can exist by themselves or they can be
grouped in clusters called: - ANSWER 1. Master or umbrella associations
2. Mixed-use developments
3. "55 and Older" Communities
What is a Master or Umbrella Association? - ANSWER A master or umbrella association consists
of more than one residential community association.
What is a Mixed-Use Development? - ANSWER A mixed-use development usually consists of a
mixture of residential and commercial and/or industrial uses group together. Their marketing
slogan is often "live, work, play".
What is a "55 and Older" Community? - ANSWER Must have one person who is 55 years of age
or older living in at least 80% of its occupied units.
,What is the Equal Employment Opportunity Commission (EEOC)? - ANSWER The federal
government prohibits discrimination against otherwise qualified people in hiring, promotion,
dismissal, compensation, and working conditions based on specific personal characteristics
including:
-race and ethnicity
-color
-national origin
-age
-gender
-religion
-pregnancy
-disability
What is the Fair Debt Collection Practices Act (FDCPA)? - ANSWER The purpose of the FDCPA is
to protect debtors from unscrupulous debt collectors and to impose a consistent and fair
method to collect debts.
What is the Fair Labor and Standards Act (FSLA)? - ANSWER FLSA dictates standards for the
basic minimum wage and overtime pay. It affects most private and public employment. It
requires employers to pay covered employees who are not otherwise exempt at least the
federal minimum wage and overtime pay of one-and-one-half-times the regular rate of pay.
Some states have higher basic minimum wage amounts.
What is the Family and Medical Leave Act (FMLA)? - ANSWER Administered by the Wage and
Hour Division of the Department of Labor, FMLA requires employers of 50 or more employees
to provide up to 12 weeks of unpaid, job-protected leave to eligible employees for the birth or
adoption of a child or for the serious illness of the employee or a spouse, child, or parent.
What is the Federal Insurance Contributions Act (FICA)? - ANSWER This act requires employers
and employees to make matching contributions to Social Security. The employer must withhold
, the employee's share of the tax from his or her wages or salary and pay it timely to the federal
government.
What is the Occupational Safety and Health Act (OSHA)? - ANSWER OSHA's mission is to
"prevent injuries and protect the health of America's workers by ensuring safe and healthful
workplaces". Some OSHA requirements include:
-specific working conditions
-
What is the Soldiers' and Sailors' Civil Relief Act of 1940? (SSCRA) - ANSWER SSCRA impacts
American forces on active duty by requiring the delay of all civil court actions, such as
bankruptcy or foreclosure, until the service member returns from active duty. SSCRA also
protects active service members' dependents from being evicted if the rent does not exceed
$1,200 per month by requiring the landlord to obtain a court order authorizing eviction.
What is the U.S. Bankruptcy Code? - ANSWER The purpose of this law is to help honest people
and businesses find a way to pay their debt or get a fresh law. These laws help people who can
no longer pay their creditors start anew -- by liquidating assets to pay their debts or by creating
a repayment plan. Bankruptcy Prevention and Consumer Protection Act (2005) contained a
small provision stating that associations have the authority to collect assessments that come
due after the date the homeowner filed for bankruptcy.
What is the Federal Communications Commission? (FCC) - ANSWER In 1996, FCC adopted the
Over-The-Air Reception Devices (OTARD) Rule concerning restrictions on viewers' ability to view
programming from direct broadcast satellites, wireless cable and television broadcast stations.
This overrides the association's deed restriction that bans satellite dishes and antennae from
property that is exclusively used, controlled or owned by the resident, including tenants.
What is the Fair Housing Act? - ANSWER This prohibits the discrimination in the sale, rental,
financing, insuring and other housing related services of dwellings based on race, color, religion,
or national origin.
solutions
Community Association - ANSWER legal entity in which the owners enjoy the protection,
enhancement, maintenance and preservation of their homes and property.
What're the three defining characteristics of community associations? - ANSWER 1.
Membership in the community association is mandatory and automatic for all owners
2. Certain association governing documents bind the owner and the association to each other
through mandated actions.
3. Mandatory lien-based assessments (maintenance fees) are levied on each owner in order to
operate and maintain the community association.
What is a lien? - ANSWER legal claim by one party (community association) on the property of
another (delinquent owner) to obtain the payment of a debt or the satisfaction of an obligation.
What is the primary purpose of a community association? - ANSWER Purpose is to provide for
the community, business, and governance aspects of the association. This is done by
administering, maintaining, and enhancing a residential real estate development, and through
the establishment of a system of property rights, binding covenants and restrictions, and rules
and regulations.
What're the 3 types of basic residential community associations? - ANSWER 1. Planned
Community
2. Condominium
3. Cooperative
What is a planned community? - ANSWER Owner owns his or her own long and/or living unit
,The community owns any common areas, such as tennis courts and roads for the use and
benefit of the lot owners.
What is a condominium? - ANSWER The individual owns his or her living unit and an undivided
interest in the common elements of the community. Each owner owns a percentage of the
common elements - which consist of everything except the living units, ex. pool or lobby. The
community association itself owns no real estate as an association.
What is a cooperative association? - ANSWER An individual owns stock or membership in the
cooperative and holds a proprietary lease or occupancy agreement for his or her living unit.
What is a proprietary lease or occupancy agreement? - ANSWER defines the member or
stockholder's rights and obligations in relation to the living unit.
The 3 types of residential community associations can exist by themselves or they can be
grouped in clusters called: - ANSWER 1. Master or umbrella associations
2. Mixed-use developments
3. "55 and Older" Communities
What is a Master or Umbrella Association? - ANSWER A master or umbrella association consists
of more than one residential community association.
What is a Mixed-Use Development? - ANSWER A mixed-use development usually consists of a
mixture of residential and commercial and/or industrial uses group together. Their marketing
slogan is often "live, work, play".
What is a "55 and Older" Community? - ANSWER Must have one person who is 55 years of age
or older living in at least 80% of its occupied units.
,What is the Equal Employment Opportunity Commission (EEOC)? - ANSWER The federal
government prohibits discrimination against otherwise qualified people in hiring, promotion,
dismissal, compensation, and working conditions based on specific personal characteristics
including:
-race and ethnicity
-color
-national origin
-age
-gender
-religion
-pregnancy
-disability
What is the Fair Debt Collection Practices Act (FDCPA)? - ANSWER The purpose of the FDCPA is
to protect debtors from unscrupulous debt collectors and to impose a consistent and fair
method to collect debts.
What is the Fair Labor and Standards Act (FSLA)? - ANSWER FLSA dictates standards for the
basic minimum wage and overtime pay. It affects most private and public employment. It
requires employers to pay covered employees who are not otherwise exempt at least the
federal minimum wage and overtime pay of one-and-one-half-times the regular rate of pay.
Some states have higher basic minimum wage amounts.
What is the Family and Medical Leave Act (FMLA)? - ANSWER Administered by the Wage and
Hour Division of the Department of Labor, FMLA requires employers of 50 or more employees
to provide up to 12 weeks of unpaid, job-protected leave to eligible employees for the birth or
adoption of a child or for the serious illness of the employee or a spouse, child, or parent.
What is the Federal Insurance Contributions Act (FICA)? - ANSWER This act requires employers
and employees to make matching contributions to Social Security. The employer must withhold
, the employee's share of the tax from his or her wages or salary and pay it timely to the federal
government.
What is the Occupational Safety and Health Act (OSHA)? - ANSWER OSHA's mission is to
"prevent injuries and protect the health of America's workers by ensuring safe and healthful
workplaces". Some OSHA requirements include:
-specific working conditions
-
What is the Soldiers' and Sailors' Civil Relief Act of 1940? (SSCRA) - ANSWER SSCRA impacts
American forces on active duty by requiring the delay of all civil court actions, such as
bankruptcy or foreclosure, until the service member returns from active duty. SSCRA also
protects active service members' dependents from being evicted if the rent does not exceed
$1,200 per month by requiring the landlord to obtain a court order authorizing eviction.
What is the U.S. Bankruptcy Code? - ANSWER The purpose of this law is to help honest people
and businesses find a way to pay their debt or get a fresh law. These laws help people who can
no longer pay their creditors start anew -- by liquidating assets to pay their debts or by creating
a repayment plan. Bankruptcy Prevention and Consumer Protection Act (2005) contained a
small provision stating that associations have the authority to collect assessments that come
due after the date the homeowner filed for bankruptcy.
What is the Federal Communications Commission? (FCC) - ANSWER In 1996, FCC adopted the
Over-The-Air Reception Devices (OTARD) Rule concerning restrictions on viewers' ability to view
programming from direct broadcast satellites, wireless cable and television broadcast stations.
This overrides the association's deed restriction that bans satellite dishes and antennae from
property that is exclusively used, controlled or owned by the resident, including tenants.
What is the Fair Housing Act? - ANSWER This prohibits the discrimination in the sale, rental,
financing, insuring and other housing related services of dwellings based on race, color, religion,
or national origin.
