M100 FOCUS EXAM QUESTIONS AND ANSWERS (LEGAL BASIS)

M100 FOCUS EXAM QUESTIONS AND ANSWERS (LEGAL BASIS) Define a community association and its 3 characteristics - CORRECT ANSWER -A community association is a legal entity in which the owners enjoy the protection, enhancement, maintenance and preservation of their homes and property. - Membership is mandatory - Governing documents bind the owner and the association to each other through mandated actions - Mandatory lien-based assessments (maintenance fees) are levied on each owner in order to operate and maintain the community association List the basic governing documents for a community association - CORRECT ANSWER -L- (ling) laws, fed, state, local M- (mark) maps, records, plot plans D - (Dad) Declaration of CC&R, P - (Pete)proprietary lease (L) or occupancy agreement A - (And) Articles of Incorporation B- (Bonnie) Bylaws R - (Rule) Rules, Regulations, Board resolution Define the 3 basic types of residential community associations in terms of ownership rights. - CORRECT ANSWER -- Planned Community - Condominium - Cooperative What sources create legal obligations for community associations? - CORRECT ANSWER -- Federal, state, and local statutes, regulations and case law (court decisions) - Legal documents unique to the community association that bind the association and its owners - Lender requirements - for example (FHA, FANNIE MAE, FREDDIE MAC, etc) - Standards set by professional bodies - for example auditing standards set by the American Institute of CPA. Describe some of the Federal laws that affect community associations. - CORRECT ANSWER -- Equal Employment Opportunity Commission (EEOC) - Fair Debt Collection Practice Act (FDCPA) - Fair Housing Act - Fair Labor and Standards Act (FSLA) - Family and Medical Leave Act (FMLA) - Federal Communications Commission (FCC) - Federal Insurance Contribution Act (FICA) - Occupational Safety and Health Act (OSHA) - Soldiers and Sailors Civil Relief Act of 1940 (SSCRA) - US Bankruptcy Code Statutes are laws written and adopted by legislation or administrative agencies. Explain the difference between General, Specific and Uniformed State Statutes (and give examples) - CORRECT ANSWER -A General State Statute is one that applies to community associations as well as other types of organizations. The statutes that most often apply to CA are the regular corporate or the not for profit corporate statutes. CA's are eligible for incorporation unless they are specifically excluded by the statute itself. A Specific State Statutes is one that applies only to one or more types of community associations. For example, all states have a condo act which provides for the establishment and operation of condo as legal entities.