M-100 QUIZ (all sections) Questions and Answers

Each of the following are key characteristics of a community association EXCEPT: A. Mandatory lien-based economic charges or assessments are levied on each owner in order to operate and maintain the community association. B. Membership in the ca is mandatory and automatic for all owners. C. A requirement of ca ownership is attending board meetings D. Certain documents bind all owners to be governed by the community. - Answer- C. A requirement of community association ownership is attending board meetings. True or False. The primary purpose of a community association is to provide for the governance, business, and communal aspects of the association. - Answer- True Each of the following are basic types of residential community associations EXCEPT: a. Planned community b. Townhouse c. Cooperative d. Condominium - Answer- b. Townhouse Adoption of the annual budget is an example of which of the following type of resolution? a. policy resolution b. administrative resolution c. special resolution d. general resolution - Answer- D. General True or false. The purpose of a community association's governing documents is to provide for the legal structure and operation of the community. - Answer- True True or false. According to the general hierarchy of authority for governing documents, the bylaws would control in a conflict with the recorded map, plat, or plan. - Answer- False Complete the following sentence: A __________ state statute is one that applies only to one or more types of community associations. a. general b. complex c. specific d. uniform - Answer- C. Specific True or false. A proprietary lease or occupancy agreement in a cooperative defines the member or stockholder's rights and obligations in relation to the living unit. - Answer- True Complete the following sentence: The __________ bring the community association into existence, define its basic purposes and powers, and indicate whether stock will be issued. a. recorded map, plat, or plan b. declaration, CC&Rs, or master deed c. proprietary lease or occupancy agreement d. articles of incorporation - Answer- d. Articles of incorporation True or False. The public offering statement is a governing document, as it often distributed along with the governing documents. - Answer- False Each of the following legal sources specify management authority and responsibilities for community associations EXCEPT: a. survey data b. state statutes c. community association governing documents d. court decisions - Answer- A. Survey data True or false. The basic authority in a community association lies with the developer. - Answer- False. It lies with the owners 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. bond b. fiduciary duty c. ballot d. quorum - Answer- b. fiduciary duty 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. - Answer- True Which of the following community association committees typically are assigned responsibilities related to elections, nominations, and architectural standards? a. standing committees b. professional committees c. ad hoc committees d. mandatory committees - Answer- d. mandatory committees 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. - Answer- False .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 - Answer- b. volunteer or self-managed True or false. An increase in assessment delinquencies that is not due to a poor economy may be an example of a warning sign of a weak management situation. - Answer- True