Community Association Management: Roles, Meetings, Contracts, and Conflicts, Exams of Health sciences

Download Community Association Management: Roles, Meetings, Contracts, and Conflicts and more Exams Health sciences in PDF only on Docsity! CMCA Practice Exam (100 OUT OF 100) Questions and Answers (Download To Score An A Quorum requirements conflicts are resolved by: a. state statute b. the board of directors c. a vote of those present at a meeting d. appointment of a person as a proxy A Fidelity insurance provides coverage to ensure that the: a. board will meet its fiduciary obligations. b. manager will faithfully follow all document provisions. c. association will be covered for shortfalls in the reserve accounts. d. association will recover any funds lost through employee dishonesty D Which types of management is the process of operating, maintaining, repairing, and replacing common property? a. human resources b. facilities c. financial d. risk B The higher a document's place in the hierarchy, the: a. harder it is to implement b. greater its power with the board c. more it is regulated legally d. great its legal weight in a court of law D Based on which type of requirements would you choose a contractor over the association to complete work? a. low urgency, cost adequate tools available b. high urgency, low supervision and training possibly needed c. requires supervision, expertise required and low urgency d. low costs, high urgency and borrowed tools C Who is required to be present for an annual association membership meeting to conduct business? a. the treasurer and the secretary b. a quorum of the board of directors c. all members of the board of directors d. a quorum of the members D Which of the following would a condominium unit member's personal insurance policy cover when it is the primary insurance policy? a. wind damage to the roof of the member's unit. b. only effective motions are made c. the board considers one item of business at a time d. the presiding officer is knowledgeable of meeting procedures C GAAP requires which statement for year-end reports for a community association? a. cash flows b. auditing c. compilation d. budgeting A When developing rules, the rules must be capable of: a. uniform enforcement b. modiciations and revisions c. limited interpretations d. selective enforcement A If you prepare a maintenance responsibility chart for your community association, it must be based on all of the following except: a. bylaws and declaration b. board policies c. state statutes d. human resource policy D Who is responsible for selecting a contractor? a. board b. president c. manager d. owners/residents A A manager must take into consideration all of the following federal laws during the hiring process, except the: a. Americans with Disabilities Act of 1990 b. Immigration Reform and Control Act of 1986 c. Housing and Urban Recovery Act of 1983 d. Family and Medical Leave Act of 1993 C Which government agency regulates employee compensation or payment? a. FDIC b. FICA c. OSHA d. DOL D A legally binding contract should include all of the following provisions except: a. assignability b. waiver c. insurance d. severability C If a physical asset is to be replaced, the basis for an association's scheduled replacement consists of the: a. reserve study and replacement fund budget b. maintenance record and inspection report c. inspection checklist and reserve fund budget d. inspection report and analysis sheet A A closed board meeting may also be referred to as a: a. private session b. board session c. executive session d. committee session C All of the following are types of association meetings except: a. special meetings b. annual meetings c. ad hoc meetings d. owner meetings C All the following are criteria to be considered when recommending a contractor to the board except: a. understanding of what needs to be done b. possessing the necessary qualifications to do the job c. price d. timeframe D What authority creates the right to vote by proxy? a. association rules and regulations b. state statutes c. common law d. owner's rights B Periodic maintenance performed to avoid disruptive breakdowns and to prolong the useful life of a physical asset is considered: a. routine maintenance b. requested maintenance c. emergency service maintenance d. preventative maintenance D Before the commencement of any services and repairs, the association should: a. survey the owners/tenants to see if services are necessary b. ask the board to suggest what to do next c. raise assessments to pay for work d. compare three or more bids D All of the following are true with respect to cumulative voting except: a. Many people perceive it as ballot box stuffing b. it allows owners to cast all of their available votes for one person c. the association can amend the governing documents to prohibit it d. it helps establish a quorum D Preparing for a board meeting includes an agenda with: a. the vice president's report b. minutes of the previous meeting c. items to be addressed and voted on d. introductions of the board and manager C Which contract covers the costs of all labor and materials? a. cost and fees b. repair service c. lump sum d. time and materials D Your community association should have established dismissal policies and procedures in its: a. performance evaluation program b. interview process c. employee handbook d. employment records and files C A community association wants to develop a RFP to repair or replace roofs of properties that were damaged in a recent storm. Who should prepare the extensive specifications for the job? a. board members b. association manager c. third-party expert d. possible contractor C Annual meetings are intended to prove a forum: a. in which owners expand their power b. for all business, elections and reports stated c. for owners to decide special issues d. to allow the board to take action at a special meeting B A job description should include: a. required duties of the position b. a list of paydays and holidays b. on-going training c. performance planning d. performance evaluation C All of the following statements are correct with regards to special and annual meetings except: a. both have to meet minimum quorum requirements set by the statute b. both require notice of meeting to be sent to all owners within time allotted c. both provide forum for business not stated in meeting notice d. both allow owners to attend in person or by proxy C What is an aid commonly used for planning and budgeting the use of personnel? a. job description b. annual budget c. manpower reports d. performance planning A What sets forth criteria for the annual meeting, including notice, quorum, voting, and proxy procedures? a. article of incorporation b. bylaws c. state statutes d. parliamentary procedures B What regulates specific working conditions, safety equipment and reporting of accidents? a. Fair Labor Standards Act b. child labor laws c. Worker's compensation laws d. Occupational Safety and Health D Each of the following are key characteristics of community associations except: a. mandatory lein-based economic charges or assessments are levied on each owner in order to operate and maintain the community assocation. b. membership in the community assocation is mandatory and automatic for all owners. c. a requirement of community assocation ownership is attending board meetings. d. certain documents bind all owners to be governed by the community assocation. C True or false: the primary purpose of a community association is to provide for the governance, business, and communal aspects of the association. T Each of the following are basic types of residential community associations except: a. planned community b. townhouse c. cooperative d. condominium B A _____________________ is a motion that follows a set format and is formally adopted by the boord of directors. a. governing document b. plat c. public offering statement d. resolution D True or false: the purpose of a community association's governing documents is to provide for the legal structure and operation of the community. T 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. F 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 C T Which of the following is not one of the basic steps in a due process procedure? a. issue a "cease and desist" letter b. issue a hearing notice if the violation does not end within the stated time c. Hold the scheduled hearing if the violation does not end within the stated time. d. Issue a decision before a hearing is held D True or false: using alternative dispute resolution to encourage residents to comply with rules and guidelines is more costly and time consuming that going through the court system. F Which of the following is an internal resource a community can use to encourage an owner or tenant to conform to community association rules? a. relying on local health department to determine the appropriate number of occupants in a unit b. asking for the local zoning department's help in removing vehicles, boats and trailers from lots and common areas c. having the police enforce traffic regulations d. suspending an owner's voting rights D True or false: to increase the likelihood that a court of law will uphold an association's enforcement or architectural guidelines, the board of directors should turn a blind eye towards violations and permit unapproved architectural changes to exist. F True or false: community managers are ultimately responsible for establishing, approving, and monitoring the community's budget. F Each of the following agencies are federally established secondary mortgage institutions except: a. Environmental Protection Agency b. Federal National Mortgage Assocation c. Veterans' Administration d. Federal Home Loan Mortgage Corporation A True or false: the two main components of a community budget are revenue and expenses. T Which of the following is not a typical source of revenue for a community association? a. owner assessments b. major improvement expenses c. penalty fees d. interest B Each of the following are reasons for maintaining a reserve account except: a. maintaining a reserve account meets legal, fiduciary, and professional requirements b. maintaining a reserve account increases the likelihood that an association will require a special assessment c. maintaining a reserve account equalizes the contributions of old and new owners d. maintaining a reserve account enhances resale values B Which of the following is an example of a discretionary line item in a community budget? a. newsletter b. income taxes c. utilities d. maintenance A True or false: with historical trend budgeting, all line items are set to zero and the amount of funds allotted to each must be justified. F True or false: board member liability is a potential consequence of not having a reserve study. T Complete the following sentence: utilizing a(n) _____________________ means managers and boards can obtain proposals from competent service providers and make informed business decisions to responsibly fund their association's replacement reserves. a. Community Insurance and Risk Management Specialist b. Association Management Specialist c. Professional Community Association Manager d. bad debt write-off C True or false: when a community association forecloses on a unit and it is auctioned off, the association will always get the money it is owed. F Which of the following types of bankruptcy is called a corporation reorganization because it is designed to allow for an orderly payment to creditors while enabling a corporation to continue in business? a. Chapter 7 b. Chapter 11 c. Chapter 13 d. Chapter 21 B Which of the following account methods records revenue when it is collected and expenses when they are paid? a. cash basis b. accrual basis c. modified cash basis d. modified accrual basis A Complete the following sentence: a ________________ occurs when expenses are greater than revenue. a. net income b. net loss c. net gain d. net profit B Which of the following is not one of the three major components of a balance sheet? a. assets b. liabilities c. expenses d. members' equity C True or false: a CPA's representation letter describes the nature of the work to be done, the type of report to be prepared, the fee for services, the time frame for the assignment, and the accountant's disclaimers. F Complete the following sentence: a(n) ______________________ is a year-end financial report prepared by a CPA without the assurance that the information conforms to GAAP. a. compilation b. review c. audit d. opinion letter A True or false: community associations must file a federal income tax return every year. T True or false: requiring a single signature to withdraw funds from an investment account is a good example of a system of internal checks and balances to protect association investments. F Which of the following investment objectives for community associations refers to the ease with which an investment can be converted into cash or a cash equivalent? a. safety b. liquidity c. yield d. treasury bills B Complete the following sentence: for a community association, ___________________ is the process of operating, maintaining, repairing, and replacing common property. a. preventative maintenance b. facilities management c. maintenance record d. scheduled replacement B True or false: one of the goals of maintenance for a community association is to limit injury to residences, guests, and employees. T A bid request or request for proposal (RFP) should include each of the following except: a. vague instructions about the products or services requested b. a request for information about the contractor that will help the association evaluate the contractor's ability c. information about the association that the contract will need in order to prepare a bid d. information about work conditions A True or false: the bidding process and requests for proposals should be used primarily for smaller jobs or purchases of one-time services. F True or false: a good resource for identifying potential contractors is referrals from supply firms doing business with the community association. T Complete the following sentence: a __________________ is a promise or guarantee that parts, materials, or labor will last for a designated period of time. a. prospective bidder's questionnaire b. warranty c. qualifications sheet d. waiver of lien B Which of the following contract provisions means that if the contractor's employees, agents, or subcontractors damage any common or individual property in the community while performing contracted work, the contractor agrees to fully restore the property to its original condition? a. indemnification b. standard of performance c. restoration d. compensation C Complete the following sentence: a ___________________ is a guarantee by a surety (a third party) to protect the community association if the contractor fails to perform or finish the work. a. payment bond b. default c. performance bond d. waiver of lien C True or false: the manager should sign all contracts on behalf of the community association. F Which of the following types of exposure to loss for a community association is characterized by net losses that may involve a reduction in income or an increase in operating expenses or both? a. property exposure to loss b. liability exposure to loss c. income exposure to loss d. personnel exposure to loss C Which of the following demonstrates the risk control technique of exposure avoidance? a. a community association rule prohibiting the use of alcohol in the clubhouse b. conducting weekly fire safety inspections where flammables are stored c. contracting for landscape services d. backing up all computer files and storing the backup files in a separate place A True or false: the insurance industry is unregulated at the state level. F True or false: the Federal National Mortgage Association (FannieMae) has a direct impact on community association insurance obligations. T Which of the following is not a common insurance coverage and endorsement for property exposures to loss? a. commercial package policy (CPP) insurance b. boiler and machinery insurance c. flood insurance d. hired and non-owned automobile liability insurance D True or false: employers' liability insurance provides protection for claims made by employees regarding sexual harassment or discrimination. a. management company b. volunteer or self-management c. association-employed manager d. municipal management B True or false: an increase in assessment delinquencies that is not due to poor economy may be an example of a warning sign of a weak management situation. T Complete the following sentence: a _______________ is a statement of goals and objectives approved by the board that includes the yearly cycle of tasks that management should perform on the community association's behalf. a. management audit b. management contract c. management plan d. employment agreement C Which of the following responsibilities relate to the governance function of a community association board of directors? a. decide issues of policy for the owners in the community b. promote harmony through service programs and regular communication with owners c. monitor financial matters for the purpose of preserving and enhancing the community d. hear appeals of committee and management decisions that are protests by groups of owners A Complete the following sentence: a notice of meeting should be sent in writing to board members at least _____________ before a meeting. a. a year b. 1 day c. 3 months d. a week D True or false: an agenda is more than an announcement of the order of business for a meeting; it is a meeting management tool. T In addition to a meeting agenda, board members should receive each of the following supporting materials prior to a meeting except: a. minutes from the last meeting b. financial reports c. community newsletter d. committee reports C True or false: the home of the association president is a neutral site for board meetings that will encourage owners' attendance. F True or false: a board of directors can legally conduct the business of the association without a quorum. F True or false: personnel issues are an example of a topic that often requires an executive session that is allowable by law. T Complete the following sentence: a ___________________ is a written means of voting when secrecy is desired. a. proxy b. residents forum c. action item list d. ballot D The manager of a community association has a professional duty to do all of the following except: a. disclose and account for anything of value he or she receives as a result of managing the community association (for example-a valuable gift from a contractor) b. delegate more authority than he or she has received from the board only under extreme situations c. decline to perform services that you are not qualified to perform d. make full written disclosure of any matter that presents a potential conflict of interest B Scenario: a manager or management firm acquires an interest in a landscape company that is eligible to do business with the community association. Based on this scenario which of the below doesn't qualify as a conflict of interest? a. management happens to be tasked with or is responsible for maintaining landscaping in the community association's common areas