CMCA Study Guide QUESTIONS AND ANSWERS 100% CORRECT; 160 QUESTIONS (COMPLETE)

CMCA Study Guide QUESTIONS AND ANSWERS 100% CORRECT; 160 QUESTIONS (COMPLETE) CMCA Study Guide QUESTIONS AND ANSWERS 100% CORRECT| 160 QUESTIONS WITH COMPLETE SOLUTIONS Articles of incorporation Correct Answer: Bring the corporation into existence, define its basic purposes and powers, indicate whether stock will be issued, and indicate whether there will be a board of directors Bylaws Correct Answer: Formally adopted governing regulations for the administration and management of a community association CC & Rs (Covenants, Conditions & Restrictions) Correct Answer: The governing documents that dictate how the homeowners association operates and what rules the owners—and their tenants and guests — must obey. These legal documents might also be called the bylaws, the master deed, the houses rules or another name. These documents and rules are legally enforceable by the homeowners association, unless a specific provision conflicts with federal, state or local laws Community association Correct Answer: A group of owners who wish to provide a communal basis for preserving, maintaining, and enhancing their homes and property Condominium Correct Answer: A living unit fully owned by an individual with an undivided interest in the common elements of the community. The community association itself owns no real estate as an association Cooperative Correct Answer: Wherein an individual owns stock or membership in the cooperative, and holds a proprietary lease or occupancy agreement for his or her living unit Declaration Correct Answer: Used interchangeably with CC & Rs Governing documents Correct Answer: Documents which provide for the legal structure and operation of the community Indemnification Correct Answer: to exempt an individual or entity from responsibility for claims made against the organization and to reimburse the individual or entity for damages or expenses incurred as a result of such claims Master association Correct Answer: An organization of homeowners in a large condominium or planned unit development (PUD) which includes representatives from other, smaller homeowner organizations Mixed use development Correct Answer: A development which is designed to mix two or more "uses" of land together (i.e. a shopping center which offers office space for dentists) Planned community Correct Answer: the most common type of community association, where an owner owns his or her lot and/or living unit and the community owns any common areas, such as tennis courts and roads for the use and benefit of the lot owners Proprietary lease Correct Answer: A rental agreement between a cooperative housing corporation and a share holder allowing use of a certain unit in the premises Public offering statement Correct Answer: A disclosure statement prepared by a developer that contains all material facts about a property offered for sale and that must be provided to a prospective purchaser in accordance with applicable state or federal law Resolution Correct Answer: A motion that follows a set format and is formally adopted by the board of directors Statute Correct Answer: A formal written enactment of a legislative authority that governs a country, state, city or county Umbrella association Correct Answer: A cluster of community association types that can include aspects of homeowners associations, condominiums and cooperatives Ad hoc committee Correct Answer: Used when an objective needs consideration and no standing committee within the organization can absorb that issue into its scope. Usually these committees are used on a short - term basis, such as temporary oversight of an issue or review of the standing rules of that community Board liaison system Correct Answer: Directors are assigned to certain committees to guide the committee on Board policy and procedures and to repo rt back to the Board. Directors serving as a liaison must distinguish their role from the role of the committee chairperson. Business judgment rule Correct Answer: If a board has exercised reasonable business judgment in making a decision, the court will generally not c onsider the board negligent in it s fiduciary duty, nor will the court substitute its judgment for that of the board Fiduciary duty Correct Answer: Requires directors to act in the best interests and for the benefit of the corporation, thus the community as a whole. the members are required to avoid conflicts of interest and acting out of self-interest; the members are also required to act as reasonable people in managing the association's affairs Management ethics Correct Answer: consists of a review of governing documents and existing policies and procedures, current condition of the property, owner/resident satisfaction, and fiscal operations. This review can be done by the board and man ager together, or a third - party management consultant can be hired