CAI EXAM 2025 QUESTIONS AND
ANSWERS 100% SOLVED.
Community Association - ANSWERlegal entity in which the owners enjoy the protection,
enhancement, maintenance and preservation of their homes and property.
What're the three defining characteristics of community associations? - ANSWER1.
Membership in the community association is mandatory and automatic for all owners
2. Certain association governing documents bind the owner and the association to each
other through mandated actions.
3. Mandatory lien-based assessments (maintenance fees) are levied on each owner in
order to operate and maintain the community association.
What is a lien? - ANSWERlegal 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 is the primary purpose of a community association? - ANSWERPurpose is to
provide for the community, business, and governance aspects of the association. This is
done by administering, maintaining, and enhancing a residential real estate
development, and through the establishment of a system of property rights, binding
covenants and restrictions, and rules and regulations.
What're the 3 types of basic residential community associations? - ANSWER1. Planned
Community
2. Condominium
3. Cooperative
What is a planned community? - ANSWEROwner owns his or her own long and/or living
unit
The community owns any common areas, such as tennis courts and roads for the use
and benefit of the lot owners.
What is a condominium? - ANSWERThe individual owns his or her living unit and an
undivided interest in the common elements of the community. Each owner owns a
percentage of the common elements - which consist of everything except the living
units, ex. pool or lobby. The community association itself owns no real estate as an
association.
What is a cooperative association? - ANSWERAn individual owns stock or membership
in the cooperative and holds a proprietary lease or occupancy agreement for his or her
living unit.
,What is a proprietary lease or occupancy agreement? - ANSWERdefines the member
or stockholder's rights and obligations in relation to the living unit.
The 3 types of residential community associations can exist by themselves or they can
be grouped in clusters called: - ANSWER1. Master or umbrella associations
2. Mixed-use developments
3. "55 and Older" Communities
What is a Master or Umbrella Association? - ANSWERA master or umbrella association
consists of more than one residential community association.
What is a Mixed-Use Development? - ANSWERA mixed-use development usually
consists of a mixture of residential and commercial and/or industrial uses group
together. Their marketing slogan is often "live, work, play".
What is a "55 and Older" Community? - ANSWERMust have one person who is 55
years of age or older living in at least 80% of its occupied units.
What is the Equal Employment Opportunity Commission (EEOC)? - ANSWERThe
federal government prohibits discrimination against otherwise qualified people in hiring,
promotion, dismissal, compensation, and working conditions based on specific personal
characteristics including:
-race and ethnicity
-color
-national origin
-age
-gender
-religion
-pregnancy
-disability
What is the Fair Debt Collection Practices Act (FDCPA)? - ANSWERThe purpose of the
FDCPA is to protect debtors from unscrupulous debt collectors and to impose a
consistent and fair method to collect debts.
What is the Fair Labor and Standards Act (FSLA)? - ANSWERFLSA dictates standards
for the basic minimum wage and overtime pay. It affects most private and public
employment. It requires employers to pay covered employees who are not otherwise
exempt at least the federal minimum wage and overtime pay of one-and-one-half-times
the regular rate of pay. Some states have higher basic minimum wage amounts.
What is the Family and Medical Leave Act (FMLA)? - ANSWERAdministered by the
Wage and Hour Division of the Department of Labor, FMLA requires employers of 50 or
more employees to provide up to 12 weeks of unpaid, job-protected leave to eligible
employees for the birth or adoption of a child or for the serious illness of the employee
or a spouse, child, or parent.
,What is the Federal Insurance Contributions Act (FICA)? - ANSWERThis act requires
employers and employees to make matching contributions to Social Security. The
employer must withhold the employee's share of the tax from his or her wages or salary
and pay it timely to the federal government.
What is the Occupational Safety and Health Act (OSHA)? - ANSWEROSHA's mission is
to "prevent injuries and protect the health of America's workers by ensuring safe and
healthful workplaces". Some OSHA requirements include:
-specific working conditions
-
What is the Soldiers' and Sailors' Civil Relief Act of 1940? (SSCRA) - ANSWERSSCRA
impacts American forces on active duty by requiring the delay of all civil court actions,
such as bankruptcy or foreclosure, until the service member returns from active duty.
SSCRA also protects active service members' dependents from being evicted if the rent
does not exceed $1,200 per month by requiring the landlord to obtain a court order
authorizing eviction.
What is the U.S. Bankruptcy Code? - ANSWERThe purpose of this law is to help honest
people and businesses find a way to pay their debt or get a fresh law. These laws help
people who can no longer pay their creditors start anew -- by liquidating assets to pay
their debts or by creating a repayment plan. Bankruptcy Prevention and Consumer
Protection Act (2005) contained a small provision stating that associations have the
authority to collect assessments that come due after the date the homeowner filed for
bankruptcy.
What is the Federal Communications Commission? (FCC) - ANSWERIn 1996, FCC
adopted the Over-The-Air Reception Devices (OTARD) Rule concerning restrictions on
viewers' ability to view programming from direct broadcast satellites, wireless cable and
television broadcast stations. This overrides the association's deed restriction that bans
satellite dishes and antennae from property that is exclusively used, controlled or owned
by the resident, including tenants.
What is the Fair Housing Act? - ANSWERThis prohibits the discrimination in the sale,
rental, financing, insuring and other housing related services of dwellings based on
race, color, religion, or national origin.
In "55 and Older" communities: - ANSWERThere must be one person who is 55 years
of age or older living in at least 80% of its occupied units.
What are the three types of State Statutes? - ANSWER1. General State Statutes
2. Specific State Statutes
3. Uniform State Statutes
, What is a General State Statute? - ANSWERThis generally applies to community
associations, as well as other types of organizations. The statute most often applied to
community associations are the regular corporate or the not-for-profit corporate
statutes.
What is a Specific State Statute? - ANSWERThis applies to one or more types of
community associations. Ex: all states have a condominium act which provides for the
establishment and operation of condominiums as legal entities. The simplest ones just
allow for the creation of condominiums, while others go into great detail dictating what
the condominium association must do and not do for its members, including the specific
process for enforcing the government documents.
A Specific State Statute for a certain type of community association takes precedence
over any General State Statute that applies to the community association.
True or False? - ANSWERTrue
What is a Uniform State Statute? - ANSWERNational Conference of Commissioners on
Uniform State Laws draft generic, content-specific wording for topical issues to
encourage uniformity among the states.
What is the purpose of the governing documents? - ANSWERTo provide the legal
structure and operation of the community.
The governing documents: - ANSWER-Define the rights and obligations of both the
community association and its owners.
-Create a binding relationship between each owner and the community association.
-Establish the mechanisms for governing and funding the community association's
operations, including the establishments of the automatic lien.
The governing documents set forth rules and restrictions for: - ANSWER-Protection of
both owners and the community
-Enhancement of property values
-Promotion of harmonious living
For operating a community association, what is the general hierarchy of authority
among governing documents? - ANSWER1. Recorded map, plat, or plan
2. Declaration, CC&Rs, Master Deed
3. Proprietary lease or occupancy agreement
4. Articles of Incorporation
5. Bylaws
6. Board Resolutions - these cannot conflict with documents above it in the hierarchy
What is a recorded map, plat, or plan? - ANSWERThis is recorded before the first
parcel sold/title transferred. The plat sets development's boundaries.
ANSWERS 100% SOLVED.
Community Association - ANSWERlegal entity in which the owners enjoy the protection,
enhancement, maintenance and preservation of their homes and property.
What're the three defining characteristics of community associations? - ANSWER1.
Membership in the community association is mandatory and automatic for all owners
2. Certain association governing documents bind the owner and the association to each
other through mandated actions.
3. Mandatory lien-based assessments (maintenance fees) are levied on each owner in
order to operate and maintain the community association.
What is a lien? - ANSWERlegal 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 is the primary purpose of a community association? - ANSWERPurpose is to
provide for the community, business, and governance aspects of the association. This is
done by administering, maintaining, and enhancing a residential real estate
development, and through the establishment of a system of property rights, binding
covenants and restrictions, and rules and regulations.
What're the 3 types of basic residential community associations? - ANSWER1. Planned
Community
2. Condominium
3. Cooperative
What is a planned community? - ANSWEROwner owns his or her own long and/or living
unit
The community owns any common areas, such as tennis courts and roads for the use
and benefit of the lot owners.
What is a condominium? - ANSWERThe individual owns his or her living unit and an
undivided interest in the common elements of the community. Each owner owns a
percentage of the common elements - which consist of everything except the living
units, ex. pool or lobby. The community association itself owns no real estate as an
association.
What is a cooperative association? - ANSWERAn individual owns stock or membership
in the cooperative and holds a proprietary lease or occupancy agreement for his or her
living unit.
,What is a proprietary lease or occupancy agreement? - ANSWERdefines the member
or stockholder's rights and obligations in relation to the living unit.
The 3 types of residential community associations can exist by themselves or they can
be grouped in clusters called: - ANSWER1. Master or umbrella associations
2. Mixed-use developments
3. "55 and Older" Communities
What is a Master or Umbrella Association? - ANSWERA master or umbrella association
consists of more than one residential community association.
What is a Mixed-Use Development? - ANSWERA mixed-use development usually
consists of a mixture of residential and commercial and/or industrial uses group
together. Their marketing slogan is often "live, work, play".
What is a "55 and Older" Community? - ANSWERMust have one person who is 55
years of age or older living in at least 80% of its occupied units.
What is the Equal Employment Opportunity Commission (EEOC)? - ANSWERThe
federal government prohibits discrimination against otherwise qualified people in hiring,
promotion, dismissal, compensation, and working conditions based on specific personal
characteristics including:
-race and ethnicity
-color
-national origin
-age
-gender
-religion
-pregnancy
-disability
What is the Fair Debt Collection Practices Act (FDCPA)? - ANSWERThe purpose of the
FDCPA is to protect debtors from unscrupulous debt collectors and to impose a
consistent and fair method to collect debts.
What is the Fair Labor and Standards Act (FSLA)? - ANSWERFLSA dictates standards
for the basic minimum wage and overtime pay. It affects most private and public
employment. It requires employers to pay covered employees who are not otherwise
exempt at least the federal minimum wage and overtime pay of one-and-one-half-times
the regular rate of pay. Some states have higher basic minimum wage amounts.
What is the Family and Medical Leave Act (FMLA)? - ANSWERAdministered by the
Wage and Hour Division of the Department of Labor, FMLA requires employers of 50 or
more employees to provide up to 12 weeks of unpaid, job-protected leave to eligible
employees for the birth or adoption of a child or for the serious illness of the employee
or a spouse, child, or parent.
,What is the Federal Insurance Contributions Act (FICA)? - ANSWERThis act requires
employers and employees to make matching contributions to Social Security. The
employer must withhold the employee's share of the tax from his or her wages or salary
and pay it timely to the federal government.
What is the Occupational Safety and Health Act (OSHA)? - ANSWEROSHA's mission is
to "prevent injuries and protect the health of America's workers by ensuring safe and
healthful workplaces". Some OSHA requirements include:
-specific working conditions
-
What is the Soldiers' and Sailors' Civil Relief Act of 1940? (SSCRA) - ANSWERSSCRA
impacts American forces on active duty by requiring the delay of all civil court actions,
such as bankruptcy or foreclosure, until the service member returns from active duty.
SSCRA also protects active service members' dependents from being evicted if the rent
does not exceed $1,200 per month by requiring the landlord to obtain a court order
authorizing eviction.
What is the U.S. Bankruptcy Code? - ANSWERThe purpose of this law is to help honest
people and businesses find a way to pay their debt or get a fresh law. These laws help
people who can no longer pay their creditors start anew -- by liquidating assets to pay
their debts or by creating a repayment plan. Bankruptcy Prevention and Consumer
Protection Act (2005) contained a small provision stating that associations have the
authority to collect assessments that come due after the date the homeowner filed for
bankruptcy.
What is the Federal Communications Commission? (FCC) - ANSWERIn 1996, FCC
adopted the Over-The-Air Reception Devices (OTARD) Rule concerning restrictions on
viewers' ability to view programming from direct broadcast satellites, wireless cable and
television broadcast stations. This overrides the association's deed restriction that bans
satellite dishes and antennae from property that is exclusively used, controlled or owned
by the resident, including tenants.
What is the Fair Housing Act? - ANSWERThis prohibits the discrimination in the sale,
rental, financing, insuring and other housing related services of dwellings based on
race, color, religion, or national origin.
In "55 and Older" communities: - ANSWERThere must be one person who is 55 years
of age or older living in at least 80% of its occupied units.
What are the three types of State Statutes? - ANSWER1. General State Statutes
2. Specific State Statutes
3. Uniform State Statutes
, What is a General State Statute? - ANSWERThis generally applies to community
associations, as well as other types of organizations. The statute most often applied to
community associations are the regular corporate or the not-for-profit corporate
statutes.
What is a Specific State Statute? - ANSWERThis applies to one or more types of
community associations. Ex: all states have a condominium act which provides for the
establishment and operation of condominiums as legal entities. The simplest ones just
allow for the creation of condominiums, while others go into great detail dictating what
the condominium association must do and not do for its members, including the specific
process for enforcing the government documents.
A Specific State Statute for a certain type of community association takes precedence
over any General State Statute that applies to the community association.
True or False? - ANSWERTrue
What is a Uniform State Statute? - ANSWERNational Conference of Commissioners on
Uniform State Laws draft generic, content-specific wording for topical issues to
encourage uniformity among the states.
What is the purpose of the governing documents? - ANSWERTo provide the legal
structure and operation of the community.
The governing documents: - ANSWER-Define the rights and obligations of both the
community association and its owners.
-Create a binding relationship between each owner and the community association.
-Establish the mechanisms for governing and funding the community association's
operations, including the establishments of the automatic lien.
The governing documents set forth rules and restrictions for: - ANSWER-Protection of
both owners and the community
-Enhancement of property values
-Promotion of harmonious living
For operating a community association, what is the general hierarchy of authority
among governing documents? - ANSWER1. Recorded map, plat, or plan
2. Declaration, CC&Rs, Master Deed
3. Proprietary lease or occupancy agreement
4. Articles of Incorporation
5. Bylaws
6. Board Resolutions - these cannot conflict with documents above it in the hierarchy
What is a recorded map, plat, or plan? - ANSWERThis is recorded before the first
parcel sold/title transferred. The plat sets development's boundaries.
