CMCA EXAM 2025 REAL EXAM 170 QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) |A+ GRADE ASSURED
Question 1
Which of the following documents legally creates a common interest community and outlines
its basic structure, powers, and restrictions?
A) Bylaws
B) Articles of Incorporation
C) Declaration of Covenants, Conditions, and Restrictions (CC&Rs)
D) Operating Budget
E) Reserve Study
Correct Answer: C) Declaration of Covenants, Conditions, and Restrictions
(CC&Rs)
Rationale: The Declaration (or CC&Rs) is the foundational document that establishes the
community, defines the common and individually owned property, and sets forth the rights and
obligations of owners and the association.
Question 2
The primary purpose of a reserve study is to:
A) Determine the annual operating expenses for the next fiscal year.
B) Evaluate the financial health of individual homeowners.
C) Project the remaining useful life and replacement cost of major common area components.
D) Calculate the amount of property taxes due.
E) Dictate the rules for homeowner renovations.
Correct Answer: C) Project the remaining useful life and replacement cost of
major common area components.
Rationale: A reserve study systematically identifies major common area components,
estimates their remaining useful life, and projects their future replacement or repair costs to
inform reserve funding.
Question 3
In the absence of a specific provision in the governing documents or state law, who typically has
the authority to approve the annual budget for a homeowners association?
A) The community manager alone.
B) A vote of the entire membership.
C) The Board of Directors.
D) The association's attorney.
E) A majority of the major creditors.
Correct Answer: C) The Board of Directors.
,Rationale: Unless specified otherwise in state statute or the association's governing
documents, the Board of Directors generally has the responsibility and authority to adopt the
annual operating budget.
Question 4
Which of the following is considered a fiduciary duty of a community association board
member?
A) Maximizing their personal property values.
B) Acting in the best financial interest of the association and its members.
C) Prioritizing the interests of specific individuals over the community as a whole.
D) Delegating all financial decisions to the community manager.
E) Only attending meetings when convenient.
Correct Answer: B) Acting in the best financial interest of the association and its
members.
Rationale: Fiduciary duty requires board members to act in good faith, with reasonable care,
and in the best interests of the association and its members, placing the community's interests
above personal gain.
Question 5
A homeowner repeatedly violates a covenant regarding exterior paint color despite receiving
multiple warning letters. What is the next appropriate step for the association to take after due
process has been provided?
A) Immediately file a lawsuit against the homeowner.
B) Impose a fine or other enforcement action as per governing documents.
C) Ignore the violation if it's minor.
D) Repaint the homeowner's house without their permission.
E) Revoke the homeowner's membership in the association.
Correct Answer: B) Impose a fine or other enforcement action as per governing
documents.
Rationale: After providing proper notice and an opportunity for a hearing (due process), the
association can impose fines or other permitted enforcement actions as outlined in its
governing documents.
Question 6
Which type of insurance policy protects the community association's board members and
officers from liability for wrongful acts committed in their capacity as directors?
A) Property insurance
B) General liability insurance
,C) Workers' compensation insurance
D) Directors and Officers (D&O) liability insurance
E) Fidelity bond
Correct Answer: D) Directors and Officers (D&O) liability insurance
Rationale: D&O insurance specifically covers board members and officers for claims arising
from their decisions or actions while serving the association, such as alleged mismanagement or
breach of fiduciary duty.
Question 7
What is the primary purpose of a "welcome packet" for new homeowners?
A) To solicit additional donations from new residents.
B) To provide essential information about the community, its rules, and resources.
C) To register the new owner for automatic assessment payments.
D) To list all vendors approved by the association.
E) To collect personal contact information for marketing purposes.
Correct Answer: B) To provide essential information about the community, its
rules, and resources.
Rationale: A welcome packet serves to onboard new residents by providing critical
information about the association's governing documents, rules, amenities, contact information,
and operating procedures.
Question 8
Which financial statement provides a snapshot of the association's assets, liabilities, and fund
balances at a specific point in time?
A) Income Statement (Profit & Loss)
B) Cash Flow Statement
C) Balance Sheet
D) Budget Report
E) General Ledger
Correct Answer: C) Balance Sheet
Rationale: The Balance Sheet presents a financial snapshot, showing what the association owns
(assets), what it owes (liabilities), and the equity or fund balances, at a given date.
Question 9
Under the Fair Housing Act, which of the following is a protected class?
A) Homeowners who own multiple properties.
B) Families with children.
, C) Individuals with prior convictions.
D) People who work from home.
E) Residents over the age of 70.
Correct Answer: B) Families with children.
Rationale: The Fair Housing Act prohibits discrimination based on race, color, religion,
national origin, sex, familial status (families with children), and disability.
Question 10
A community manager is responsible for preparing for a Board of Directors meeting. Which of
the following is the most important document to distribute to board members prior to the
meeting?
A) The association's tax returns from the previous year.
B) A copy of the manager's personal work schedule.
C) The meeting agenda and relevant reports/materials.
D) The minutes from a homeowner-only meeting.
E) A list of all overdue assessment accounts.
Correct Answer: C) The meeting agenda and relevant reports/materials.
Rationale: Distributing a well-prepared agenda and supporting documents in advance allows
board members to review information, prepare for discussions, and make informed decisions
during the meeting.
Question 11
What is the purpose of an "easement" in a community association?
A) To grant exclusive ownership of common property to a single homeowner.
B) To allow the association or utility companies to use a portion of a private property for a
specific purpose.
C) To restrict the types of pets allowed in the community.
D) To define the boundaries of individual units.
E) To establish the assessment payment schedule.
Correct Answer: B) To allow the association or utility companies to use a portion
of a private property for a specific purpose.
Rationale: An easement grants a specific right to use another's property for a particular
purpose, such as allowing the association access for maintenance or utility companies to
install/maintain lines.
ANSWERS (VERIFIED ANSWERS) |A+ GRADE ASSURED
Question 1
Which of the following documents legally creates a common interest community and outlines
its basic structure, powers, and restrictions?
A) Bylaws
B) Articles of Incorporation
C) Declaration of Covenants, Conditions, and Restrictions (CC&Rs)
D) Operating Budget
E) Reserve Study
Correct Answer: C) Declaration of Covenants, Conditions, and Restrictions
(CC&Rs)
Rationale: The Declaration (or CC&Rs) is the foundational document that establishes the
community, defines the common and individually owned property, and sets forth the rights and
obligations of owners and the association.
Question 2
The primary purpose of a reserve study is to:
A) Determine the annual operating expenses for the next fiscal year.
B) Evaluate the financial health of individual homeowners.
C) Project the remaining useful life and replacement cost of major common area components.
D) Calculate the amount of property taxes due.
E) Dictate the rules for homeowner renovations.
Correct Answer: C) Project the remaining useful life and replacement cost of
major common area components.
Rationale: A reserve study systematically identifies major common area components,
estimates their remaining useful life, and projects their future replacement or repair costs to
inform reserve funding.
Question 3
In the absence of a specific provision in the governing documents or state law, who typically has
the authority to approve the annual budget for a homeowners association?
A) The community manager alone.
B) A vote of the entire membership.
C) The Board of Directors.
D) The association's attorney.
E) A majority of the major creditors.
Correct Answer: C) The Board of Directors.
,Rationale: Unless specified otherwise in state statute or the association's governing
documents, the Board of Directors generally has the responsibility and authority to adopt the
annual operating budget.
Question 4
Which of the following is considered a fiduciary duty of a community association board
member?
A) Maximizing their personal property values.
B) Acting in the best financial interest of the association and its members.
C) Prioritizing the interests of specific individuals over the community as a whole.
D) Delegating all financial decisions to the community manager.
E) Only attending meetings when convenient.
Correct Answer: B) Acting in the best financial interest of the association and its
members.
Rationale: Fiduciary duty requires board members to act in good faith, with reasonable care,
and in the best interests of the association and its members, placing the community's interests
above personal gain.
Question 5
A homeowner repeatedly violates a covenant regarding exterior paint color despite receiving
multiple warning letters. What is the next appropriate step for the association to take after due
process has been provided?
A) Immediately file a lawsuit against the homeowner.
B) Impose a fine or other enforcement action as per governing documents.
C) Ignore the violation if it's minor.
D) Repaint the homeowner's house without their permission.
E) Revoke the homeowner's membership in the association.
Correct Answer: B) Impose a fine or other enforcement action as per governing
documents.
Rationale: After providing proper notice and an opportunity for a hearing (due process), the
association can impose fines or other permitted enforcement actions as outlined in its
governing documents.
Question 6
Which type of insurance policy protects the community association's board members and
officers from liability for wrongful acts committed in their capacity as directors?
A) Property insurance
B) General liability insurance
,C) Workers' compensation insurance
D) Directors and Officers (D&O) liability insurance
E) Fidelity bond
Correct Answer: D) Directors and Officers (D&O) liability insurance
Rationale: D&O insurance specifically covers board members and officers for claims arising
from their decisions or actions while serving the association, such as alleged mismanagement or
breach of fiduciary duty.
Question 7
What is the primary purpose of a "welcome packet" for new homeowners?
A) To solicit additional donations from new residents.
B) To provide essential information about the community, its rules, and resources.
C) To register the new owner for automatic assessment payments.
D) To list all vendors approved by the association.
E) To collect personal contact information for marketing purposes.
Correct Answer: B) To provide essential information about the community, its
rules, and resources.
Rationale: A welcome packet serves to onboard new residents by providing critical
information about the association's governing documents, rules, amenities, contact information,
and operating procedures.
Question 8
Which financial statement provides a snapshot of the association's assets, liabilities, and fund
balances at a specific point in time?
A) Income Statement (Profit & Loss)
B) Cash Flow Statement
C) Balance Sheet
D) Budget Report
E) General Ledger
Correct Answer: C) Balance Sheet
Rationale: The Balance Sheet presents a financial snapshot, showing what the association owns
(assets), what it owes (liabilities), and the equity or fund balances, at a given date.
Question 9
Under the Fair Housing Act, which of the following is a protected class?
A) Homeowners who own multiple properties.
B) Families with children.
, C) Individuals with prior convictions.
D) People who work from home.
E) Residents over the age of 70.
Correct Answer: B) Families with children.
Rationale: The Fair Housing Act prohibits discrimination based on race, color, religion,
national origin, sex, familial status (families with children), and disability.
Question 10
A community manager is responsible for preparing for a Board of Directors meeting. Which of
the following is the most important document to distribute to board members prior to the
meeting?
A) The association's tax returns from the previous year.
B) A copy of the manager's personal work schedule.
C) The meeting agenda and relevant reports/materials.
D) The minutes from a homeowner-only meeting.
E) A list of all overdue assessment accounts.
Correct Answer: C) The meeting agenda and relevant reports/materials.
Rationale: Distributing a well-prepared agenda and supporting documents in advance allows
board members to review information, prepare for discussions, and make informed decisions
during the meeting.
Question 11
What is the purpose of an "easement" in a community association?
A) To grant exclusive ownership of common property to a single homeowner.
B) To allow the association or utility companies to use a portion of a private property for a
specific purpose.
C) To restrict the types of pets allowed in the community.
D) To define the boundaries of individual units.
E) To establish the assessment payment schedule.
Correct Answer: B) To allow the association or utility companies to use a portion
of a private property for a specific purpose.
Rationale: An easement grants a specific right to use another's property for a particular
purpose, such as allowing the association access for maintenance or utility companies to
install/maintain lines.
