CMCA Exam Questions with correct Answers

abstention - ANSWER-when a participant in a vote either does not go to vote (on Election Day) or, in parliamentary procedure, is present during the vote, but does not cast a ballot; may be used to indicate the voting individual's ambivalence about the measure or mild disapproval that does not rise to the level of active opposition they do not count in tallying the vote; when practiced members are in effect only attending the meeting to aid in constituting a quorum action item list - ANSWER-a documented event, task, activity, or action that needs to take place usually documented in the meeting minutes and are recorded in the task list of the group—at the next meeting it is reviewed by the group and at that meeting the facilitator will check the status of these items agenda - ANSWER-a list of meeting activities in the order in which they are to be taken up, beginning with the call to order and ending with the adjournment amend a motion - ANSWER-used to modify another motion; takes three basic forms: 1) inserting or adding words or paragraphs; 2) striking out words or paragraphs, and; 3) striking out words and inserting or adding others, or substituting an entire paragraph or complete resolution for another ballot - ANSWER-a device used to record choices made by voters; each voter uses one and are not shared committee report - ANSWER-highlight matters to be decided and recommendations to the board; the actions suggested to the board are clearly stated and should follow a standard format debate - ANSWER-during an election, a formal discussion involving opposing candidates vying for the same position executive session - ANSWER-when a board must hold a discussion or make decisions of a sensitive nature; the topics that commonly discussed and are allowable by law usually include personnel issues, contract negotiations and discussions, lawsuits and other legal matters, and governing document violations financial report - ANSWER-a report on the association's income and expense activities including a general ledger, variance, accounts payable, income statement and balance sheet majority - ANSWER-over 50% of the votes needed to win an election (can come from those owners who attend the meeting, in person or by proxy) to decide all matters except special issues management report - ANSWER-a report on the association's current projects and administrative activities minutes - ANSWER-document the decisions made during a meeting, providing a permanent public record of positions and actions taken by the board motion - ANSWER-a formal proposal stating that the association took a certain action notice of meeting - ANSWER-an official announcement, which should be sent in writing to board members at least a week in advance parliamentary procedure - ANSWER-the body of rules, ethics, and customs governing meetings and other operations plurality - ANSWER-awards the election to the candidate with the most votes, regardless of whether or not they received the majority proxy - ANSWER-the agency, function, or power of a person authorized to act or vote in place of another resident who could not be present quorum - ANSWER-the number of residents required to be present to transact business legally established in the association's by-laws Robert's Rules of Order - ANSWER-common rules and procedures for deliberation and debate in order to place the whole membership on the same footing and speaking the same language second a motion - ANSWER-needed immediately after a proposal by another member of the body for consideration by the assembly table a motion - ANSWER-incomplete items on the agenda that are rescheduled for another meeting timed agenda - ANSWER-a more specific agenda that limits focus on specific areas, so as to move the meeting along at a more thorough and prompt pace Articles of Incorporation - ANSWER-brings the association into existence, defines its basic purposes and powers, indicates whether stock will be issued, and indicates whether there will be a board of directors Bylaws - ANSWER-formally adopted governing regulations for the administration and management of a community association CC&Rs (Covenants, Conditions & Restrictions) - 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 and are legally enforceable by the homeowners association, unless a specific provision conflicts with federal, state or local laws community association - ANSWER-a group of owners who wish to provide a communal basis for preserving, maintaining, and enhancing their homes and property condominium - 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 - ANSWER-wherein an individual owns stock or membership and holds a proprietary lease or occupancy agreement for his or her living unit Declaration - ANSWER-used interchangeably with CC & Rs Governing Documents - ANSWER-documents which provide for the legal structure and operation of the community indemnification - 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 - 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 - 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 - 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 - ANSWER-a rental agreement between a cooperative housing corporation and a shareholder allowing use of a certain unit in the premises public offering statement - 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 - ANSWER-a motion that follows a set format and is formally adopted by the board of directors statute - ANSWER-a formal written enactment of a legislative authority that governs a country, state, city or county umbrella association - ANSWER-a cluster of community association types that can include aspects of homeowners associations, condominiums and cooperatives ad hoc committee - ANSWER-used when an objective needs consideration and no standing organized group can absorb that issue into its scope; usually 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 - ANSWER-directors are assigned to certain committees to guide the committee on Board policy and procedures and to report back to the Board; directors serving must distinguish their role from the role of the committee chairperson business judgement rule - ANSWER-if a board has exercised reasonable decision making, the court will generally not consider the board negligent in its fiduciary duty, nor will the court substitute its judgment for that of the board; however, the board must demonstrate how it has taken care in reaching a decision; it is up to the court to decide if the board has been reasonable fiduciary duty - ANSWER-requires directors to act in the best interests and for the benefit of the corporation, thus the community as a whole; this has two components: one, the members are required to avoid conflicts of interest and acting out of self-interest; and two the members are also required to act as reasonable people in managing the association's affairs management ethics - ANSWER-the rules or standards that govern the conduct of members of a profession; the assumption is that the special expertise held by members of the profession holds them to a high standard of trust by others management audit - ANSWER-a review of governing documents and existing policies and procedures, current condition of the property, owner/resident satisfaction, and fiscal operations; can be done by the board and manager together, or a third-party management consultant management plan - ANSWER-a statement of goals and objectives approved by the board including the yearly cycle of tasks that should be performed on the community association's behalf standing committee - ANSWER-organized groups that have a continued existence and are not related to the accomplishment of a specific, once-only task (e.g., budget and nomination committees) alternative dispute resolution - ANSWER-mediation, arbitration and other ways of solving conflicts with the help of a specially trained neutral third party without the need for a formal trial or hearing appeal - ANSWER-a request for a review of a case by a higher authority—if permitted by the governing documents or statute default hearing - ANSWER-held when the alleged violator fails to appear to scheduled meeting due process procedure - ANSWER-a formal practice designed to protect the rights of all parties involved hearing notice - ANSWER-a written notice to an alleged violator that a meeting will be held to consider his or her alleged violation hierarchy of authority - ANSWER-rules and architectural guidelines may not contradict or be in conflict with the legal sources that take precedence over them; although rules and architectural guidelines are ranked lower in the for community associations, they may clarify and expand a community's governing documents—but may not conflict with the other governing documents rule - ANSWER-a specific statement of required behavior whose violation carries a penalty (sometimes called a sanction) assessment - ANSWER-the owner's financial obligation to the community association during a given period of time—usually one year baseline funding - ANSWER-the goal of this strategy is to keep the reserve cash balance above zero chart of accounts - ANSWER-an organized list of titles, descriptions and assigned numbers of all categories in an organization's general ledger; the assigned number helps you locate the account and the title describes the category discretionary budget line items - ANSWER-items based on owner, board and committee desires; they are items people would like to have—given their values, lifestyle, and preferred level of service (e.g. social and recreational expenses, and picnic areas) expenses - ANSWER-the cost of goods and services used to operate and maintain the community's property FHA (Federal Housing Administration) - ANSWER-regulates and influences such items as the amount of insurance a community association must carry, procedures for financial operations and requirements for the upkeep of property FHLMC (Federal Home Loan Mortgage Corporation) - ANSWER-buys mortgages from lenders and in doing so require certain types of insurance to be in place FNMA (Federal National Mortgage Association) - ANSWER-federally established secondary mortgage institution that may set requirements that your community association will have to meet if owners are to participate in their financing programs full funding - ANSWER-the goal of this strategy is to attain and maintain the reserves at or near 100% as called for on the component inventory historical and trend budgeting - ANSWER-this method begins with the assumption that existing line items are needed; the amount of funds allotted to each during the current year is adjusted for expected changes in the coming year major improvement expenses - ANSWER-consist of items that are not necessarily required, but are added to improve the overall welfare, safety or life of the residents—or to enhance the value of the community association as reflected in the resale value of units operating budget - ANSWER-the financial plan devoted to day-to-day activities includes operational expenses and major improvement expenses—but not the replacement fund operating expenses - ANSWER-those items that occur on a regular basis—day to day, week to week, month to month, and year to year reconciliation of expenses and revenue - ANSWER-after you draft both your operating and replacement fund budgets for the coming year, you must settle your estimated expenses with your community's anticipated revenue; to bring together after a difference replacement fund - ANSWER-consists of money put aside—in reserve—for the replacement of major components of a community's common property reserve cash flow statement - ANSWER-shows the amount to be funded and the amount to be expended from the replacement fund over a given period of time reserve study - ANSWER-budget planning tool that considers the current status of the replacement fund and determines a stable and equitable funding plan to offset the anticipated future major common area expenditures revenue - ANSWER-consists of the collective items or amounts of income which, in the case of a community association, are appropriated for public expenses