M100 EXAM QUESTIONS WITH VERRIFIED
COMPLETE SOLUTIONS
Community Association - CORRECT ANSWER✔✔-a legal entity in which the
| | | | | | | | | |
owners enjoy the PROTECTION, ENHANCEMENT, MAINTENANCE and
| | | | | | |
PRESERVATION of their homes and property. | | | | |
3 Defining Characteristics of a Community Association - CORRECT ANSWER✔✔-1.
| | | | | | | | | |
Membership in the community is MANDATORY and automatic for all owners.
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2. Certain association governing documents bind the owners 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.
| | | | | | | | |
Lien - CORRECT ANSWER✔✔-a 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.
| | | | | |
>Placing a lien on an owner's property protects the community association's
| | | | | | | | | | |
interest. It encourages payment of the debt.
| | | | | |
Purpose of a Community Association - CORRECT ANSWER✔✔-to provide for the
| | | | | | | | | | |
COMMUNITY, BUSINESS, and GOVERNANCE aspects of the association.
| | | | | | | |
>This is achieved 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.
| | | | | | | |
,3 Basic Types of Community Associations - CORRECT ANSWER✔✔-1. Planned
| | | | | | | | | |
Community - An owner owns his lot/unit and the community owns common
| | | | | | | | | | | |
areas.
2. Condominium - Individual owns his living unit and owns an undivided interest
| | | | | | | | | | | | |
in the common elements.
| | |
3. Cooperative or Stock Cooperative - Individual owns stock or membership in the
| | | | | | | | | | | |
cooperative and owns a proprietary lease or occupancy agreement for his living
| | | | | | | | | | | | |
unit. |
>A proprietary lease or occupancy agreement defines the member or
| | | | | | | | | |
stockholder's rights and obligations in relation to the living unit. For most
| | | | | | | | | | | |
cooperatives, the community association owns all of the real estate as a not-for
| | | | | | | | | | | | |
profit corporation. |
3 Types of Residential Community Associations that can exist by themselves or
| | | | | | | | | | | |
can be grouped in CLUSTERS called: - CORRECT ANSWER✔✔-1. Master or
| | | | | | | | | | |
Umbrella Associations - consists of more than one residential community
| | | | | | | | | |
associations.
2. Mixed-Use Development - consists of a mixture of residential and commercial
| | | | | | | | | | | |
and/or industrial uses grouped together. Their marketing slogan is often "live,
| | | | | | | | | | |
work, play." |
3. "55 and Older" Communities - must have one person who is 55 years of age or
| | | | | | | | | | | | | | | | |
older living in at least 80% of its occupied units.
| | | | | | | | |
Sources of Legal Obligations of a Community Association - 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, requirements set by secondary mortgage
| | | | | | | | | |
institutions (FHA, Fannie Mac, Freddie Mae, etc.) | | | | | |
-Standards set by professional bodies - for example, auditing standards set by the
| | | | | | | | | | | | |
American Institute of Certified Public Accountants.
| | | | |
Additional Legal Obligations of Community Associations - CORRECT ANSWER✔✔--
| | | | | | | |
Equal Employment Opportunity Commission (EEOC) - protects against
| | | | | | | |
discrimination.
-Fair Debt Collection Practices Act (FDCPA) - protects debtors from unscrupulous
| | | | | | | | | | |
debt collectors and to impose a consistent and fair method to collect debts.
| | | | | | | | | | | |
-Fair Labor and Standards Act (FSLA) - dictates standards for the basic minimum
| | | | | | | | | | | | |
wage and overtime pay.
| | |
-Family and Medical Leave Act (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 serious illness.
| | | | | | | | | | |
-Federal Insurance Contributions Act (FICA) - requires employers and employees
| | | | | | | | | |
to make matching contributions to social security.
| | | | | |
-Occupational Safety and Health Act (OSHA) - prevents injuries.
| | | | | | | |
-Soldiers' and Sailors' Civil Relief Act of 1940 - delays civil court actions.
| | | | | | | | | | | |
Additional legal Obligations of Community Associations cont. - CORRECT
| | | | | | | | |
ANSWER✔✔--US Bankruptcy Code - helps honest people and business find a way | | | | | | | | | | | |
to pay their debt or get a fresh start.
| | | | | | | |
, -Federal Communications Commission (FCC) - overrides a community association
| | | | | | | | |
deed restriction that bans satellite dishes and antennae from property that is
| | | | | | | | | | | |
exclusively used, controlled or owned by the resident.
| | | | | | |
-Fair Housing Act - prohibits discrimination in the sale, rental, financing insuring
| | | | | | | | | | | |
and other housing related services.
| | | |
3 Types of State Statutes - CORRECT ANSWER✔✔-1. General State Statutes -
| | | | | | | | | | | |
applies to community associations, as well as to other types of organizations
| | | | | | | | | | | |
(Regular, corporate or not-for-profit).
| | |
2. Specific State Statutes - applies only to one or more types of community
| | | | | | | | | | | | | |
associations. The specific state statutes take precedence. | | | | | |
3. Uniform State Statutes - the national conference of commissioners on uniform
| | | | | | | | | | | |
state laws has attempted to standardize specific state statutes like: Uniform
| | | | | | | | | | |
Condominium Act, Uniform Planned Communities Act, Model Real Estate | | | | | | | | |
Cooperative Act, Uniform Common Interest Act. | | | | |
Governing Documents - CORRECT ANSWER✔✔-to provide for the legal structure
| | | | | | | | | |
and operation of the community.
| | | |
>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 mechanism for governing and funding the community association's
| | | | | | | | |
operations including the establishment of the automatic lien.
| | | | | | | |
>Set forth rules and restrictions for the: protection of both owners and the
| | | | | | | | | | | | |
community, enhancement of property values and promotion of harmonious
| | | | | | | | |
living.
COMPLETE SOLUTIONS
Community Association - CORRECT ANSWER✔✔-a legal entity in which the
| | | | | | | | | |
owners enjoy the PROTECTION, ENHANCEMENT, MAINTENANCE and
| | | | | | |
PRESERVATION of their homes and property. | | | | |
3 Defining Characteristics of a Community Association - CORRECT ANSWER✔✔-1.
| | | | | | | | | |
Membership in the community is MANDATORY and automatic for all owners.
| | | | | | | | | |
2. Certain association governing documents bind the owners 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.
| | | | | | | | |
Lien - CORRECT ANSWER✔✔-a 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.
| | | | | |
>Placing a lien on an owner's property protects the community association's
| | | | | | | | | | |
interest. It encourages payment of the debt.
| | | | | |
Purpose of a Community Association - CORRECT ANSWER✔✔-to provide for the
| | | | | | | | | | |
COMMUNITY, BUSINESS, and GOVERNANCE aspects of the association.
| | | | | | | |
>This is achieved 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.
| | | | | | | |
,3 Basic Types of Community Associations - CORRECT ANSWER✔✔-1. Planned
| | | | | | | | | |
Community - An owner owns his lot/unit and the community owns common
| | | | | | | | | | | |
areas.
2. Condominium - Individual owns his living unit and owns an undivided interest
| | | | | | | | | | | | |
in the common elements.
| | |
3. Cooperative or Stock Cooperative - Individual owns stock or membership in the
| | | | | | | | | | | |
cooperative and owns a proprietary lease or occupancy agreement for his living
| | | | | | | | | | | | |
unit. |
>A proprietary lease or occupancy agreement defines the member or
| | | | | | | | | |
stockholder's rights and obligations in relation to the living unit. For most
| | | | | | | | | | | |
cooperatives, the community association owns all of the real estate as a not-for
| | | | | | | | | | | | |
profit corporation. |
3 Types of Residential Community Associations that can exist by themselves or
| | | | | | | | | | | |
can be grouped in CLUSTERS called: - CORRECT ANSWER✔✔-1. Master or
| | | | | | | | | | |
Umbrella Associations - consists of more than one residential community
| | | | | | | | | |
associations.
2. Mixed-Use Development - consists of a mixture of residential and commercial
| | | | | | | | | | | |
and/or industrial uses grouped together. Their marketing slogan is often "live,
| | | | | | | | | | |
work, play." |
3. "55 and Older" Communities - must have one person who is 55 years of age or
| | | | | | | | | | | | | | | | |
older living in at least 80% of its occupied units.
| | | | | | | | |
Sources of Legal Obligations of a Community Association - 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, requirements set by secondary mortgage
| | | | | | | | | |
institutions (FHA, Fannie Mac, Freddie Mae, etc.) | | | | | |
-Standards set by professional bodies - for example, auditing standards set by the
| | | | | | | | | | | | |
American Institute of Certified Public Accountants.
| | | | |
Additional Legal Obligations of Community Associations - CORRECT ANSWER✔✔--
| | | | | | | |
Equal Employment Opportunity Commission (EEOC) - protects against
| | | | | | | |
discrimination.
-Fair Debt Collection Practices Act (FDCPA) - protects debtors from unscrupulous
| | | | | | | | | | |
debt collectors and to impose a consistent and fair method to collect debts.
| | | | | | | | | | | |
-Fair Labor and Standards Act (FSLA) - dictates standards for the basic minimum
| | | | | | | | | | | | |
wage and overtime pay.
| | |
-Family and Medical Leave Act (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 serious illness.
| | | | | | | | | | |
-Federal Insurance Contributions Act (FICA) - requires employers and employees
| | | | | | | | | |
to make matching contributions to social security.
| | | | | |
-Occupational Safety and Health Act (OSHA) - prevents injuries.
| | | | | | | |
-Soldiers' and Sailors' Civil Relief Act of 1940 - delays civil court actions.
| | | | | | | | | | | |
Additional legal Obligations of Community Associations cont. - CORRECT
| | | | | | | | |
ANSWER✔✔--US Bankruptcy Code - helps honest people and business find a way | | | | | | | | | | | |
to pay their debt or get a fresh start.
| | | | | | | |
, -Federal Communications Commission (FCC) - overrides a community association
| | | | | | | | |
deed restriction that bans satellite dishes and antennae from property that is
| | | | | | | | | | | |
exclusively used, controlled or owned by the resident.
| | | | | | |
-Fair Housing Act - prohibits discrimination in the sale, rental, financing insuring
| | | | | | | | | | | |
and other housing related services.
| | | |
3 Types of State Statutes - CORRECT ANSWER✔✔-1. General State Statutes -
| | | | | | | | | | | |
applies to community associations, as well as to other types of organizations
| | | | | | | | | | | |
(Regular, corporate or not-for-profit).
| | |
2. Specific State Statutes - applies only to one or more types of community
| | | | | | | | | | | | | |
associations. The specific state statutes take precedence. | | | | | |
3. Uniform State Statutes - the national conference of commissioners on uniform
| | | | | | | | | | | |
state laws has attempted to standardize specific state statutes like: Uniform
| | | | | | | | | | |
Condominium Act, Uniform Planned Communities Act, Model Real Estate | | | | | | | | |
Cooperative Act, Uniform Common Interest Act. | | | | |
Governing Documents - CORRECT ANSWER✔✔-to provide for the legal structure
| | | | | | | | | |
and operation of the community.
| | | |
>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 mechanism for governing and funding the community association's
| | | | | | | | |
operations including the establishment of the automatic lien.
| | | | | | | |
>Set forth rules and restrictions for the: protection of both owners and the
| | | | | | | | | | | | |
community, enhancement of property values and promotion of harmonious
| | | | | | | | |
living.
