M-100 The Essentials of community association management Questions And Answers Already Passed!!

community association -legal entity in which the owners enjoy the protection, enhancement, maintenance & preservation of their homes & property community association has 3 defining characteristics -Membership in the community is mandatory & automatic for all owners; certain association docs bind the owner & the association to each other through mandated actions; mandatory lien-based assessments (maintenance fees) are levied on each owner in order to operate & maintain the community assocation lien - 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 does the lien do? - Placing a lien on an owner's property protects the community association's interests. It encourages payment of the debt. Consequence of lien is the owner cant sell or transfer the unit without settling the debt. Purpose of a community assocation - to provide for the community, business, & governance aspects of the association. This is achieved by administering, maintaining, & enhancing a residential real estate development, and through the establishment of a system of property rights, binding covenants & restrictions, & rules & regulations. 3 basic types of residential community associations (1) - Planned community; owner owns his unit ; community owns any common areas such as tennis courts, for the use & benefit of the lot owners second type - Condominium; owner owns his living unit & an undivided interest in the common elements of the community. Each owner owns a % of the common elements, which consist of everything except the living units. third type - Cooperative; person owns stock or membership; holds a proprietary lease or occupancy agreement for his living unitProprietary lease or occupancy agreement - defines the member or stockholders' rights & obligations in relation to the living unit. The community association owns all of the real estate as a notfor-profit corporation. 3 types of residential community associations can exist by themselves or can be group in clusters called: - Master or umbrella associations: consists of more than 1 residential community association. Second type - Mixed-use development-consists of a mixture of residential & commercial &/or industrial uses grouped together. Third type - 55 & older communities; must have 1 person who is 55 of age or older living in at least 80% of occupied units. Sources of legal obligations for a community association - Federal, state & local statues, regulations, & case law second source - legal documents unique to the community association that bind the association & its owners third source - lender requirements; requirements set by secondary institutions (ex; FHA, Fannie Mae) fourth source - standards set by professional bodies; ex: auditing standards set the American Institute of CPAs Types of Federal Laws applying to community associations - Equal employment opportunity commission (EEOC); federal govt prohibits discrimination against otherwise qualified people in hiring, promotion, dismissal, based on specific characteristics like race & ethnicity, age, color, gender, religion