M-100 Community Association Management 2023\/ 2024 Exams STUDY BUNDLE WITH COMPLETE SOLUTIONS| Questions and Verified Answers with Rationales| Grade A<\/p>\n\n\n\n
M-100 Exam |Guide with Questions and
Verified Answers| 2023\/ 2024 Update
Q: Due process procedure?
Answer:
Formal process designed to protect the rights of all parties involved
Q: Alternative dispute resolution (ADR)?
Answer:
Encouraging people to comply with rules and regulations by using trained uninvolved 3rd party
Q: Arbitration?
Answer:
Win lose- lose lose
Q: Mediation?
Answer:
Win win
Q: Budget components?
Answer:
Revenue
Expenses<\/p>\n\n\n\n
Q: Types of expenses?
Answer:
Mandatory
Discretionary
Q: Mandatory expenses?
Answer:
Items based on community and owner needs and requirements that the community is obligated to
meet
Q: Discretionary expenses?
Answer:
Items based on owner, board, and committee desires
Q: Expense calculations methods?
Answer:
Zero-based budgeting
Historical trend budgeting
Q: Zero based budgeting?
Answer:
All line items are set to zero and the amount of funds allowed to each must be justified<\/p>\n\n\n\n
Q: Historical trend budgeting?
Answer:
Method begins with the assumption that existing line items are needed.
Q: Reserve specialist?
Answer:
CAI designated awarded to qualified reserve specialist who, through the years specialized
experience, can ensure that community associations prepare their reserve budget and reserve
studies as accurately as possible
Q: Questions to help you prepare for your budget presentation?
Answer:
What information will help my audience understand and except my estimates of revenue and
expenses?
Q: Questions to help you prepare for your budget presentation?
Answer:
How can I present that information in an easy to understand format?
Q: common mistake to avoid when presenting a budget?
Answer:
Neglecting to present any information on how estimates were developed<\/p>\n\n\n\n
Q: Common mistake to avoid when presenting a budget?
Answer:
Presenting so much information that people are overwhelmed and confused
Q: Authority to collect assessments?
Answer:
Federal laws and regulations
State statutes
Governing documents
Q: Effective collection policy?
Answer:
Be established by a proper and formal resolution
Specify only actions that are within the power of the community association and its board
Set a firm due date
Outlines steps to be taken when payment is late
Specifies delinquent assessment should be referred to legal counsel
Provided for the collection of any costs associated with collecting delinquent assessments
Q: Extra -judicial remedies?
Answer:
Outside the law remedies to collect assessments
Q: Lien?<\/p>\n\n\n\n
M-100 The Essentials of Community
Association Management 2023\/ 2024 Exam|
Guide with Verified Answers
Q: Bylaws?
Answer:
Formally adopted regulations for the administration and management of a community
association.<\/p>\n\n\n\n
General – Routine events.
Q: Criteria for Valid Rules?
Answer:
Must not violate constitutional rights.
Must be consistent with laws, statutes, governing docs.
Must reasonably relate to purpose of community.
Must be reasonable and fair.
Must be capable of uniform enforcement.
Must be necessary.
Q: Resolution Format?
Answer:
Purpose
Authority
Scope & Intent
Specifications
Q: Due Process Procedure?
Answer:
A formal process to protect the rights of all parties.
Q: Alternative DIspute Resolution (ADR)?
Answer:
3rd party resolution used before lawsuit\/court
Q: Internal Resources for Enforcing Rules?<\/p>\n\n\n\n
M-100 Community Association Management
2023\/ 2024 Exam| Questions and Verified
Answers with Rationales| Grade A+
Q: Each of the following are key characteristics of community associations
EXCEPT:
a. Mandatory lien-based economic charges or assessments are levied on each owner in order to
operate and maintain the community association.
b. Membership in the community association is mandatory and automatic for all owners.
c. A requirement of community association ownership is serving on the board of directors.
d. Certain documents bind all owners to be governed by the community association.
Answer:
c. A requirement of community association ownership is serving on the board of directors.
This is one of the three key characteristics common to all community associations. Members of
an association are not legally required to serve on the board of directors; however, the overall
success on the community is dependent upon the members’ involvement its affairs.
Q: True or False. The primary purpose of a community association is to provide for the
governance, business, and communal aspects of the association.
Answer:
True
Providing for the governance, business, and communal aspects of the association 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.
Q: Each of the following are basic types of residential community associations
EXCEPT:
a. Planned community b. Townhouse
c. Cooperative<\/p>\n\n\n\n
d. Condominium
Answer:
b. Townhouse
While many community associations are indeed townhouse communities, not all such
developments are necessarily associations. A community association is de- fined in terms of
ownership rights\u2014not architectural style.
Q: Adoption of the annual budget is an example of which of the following type of resolution?
a. policy resolution
b. administrative resolution c. special resolution
d. general resolution
Answer:
d. general resolution
General resolutions involve routine events such as adoption of the annual budget.
Q: True or false. The purpose of a community association’s governing docu- ments is to provide
for the legal structure and operation of the community.
Answer:<\/p>\n\n\n\n
As a general rule, documents lower in the hierarchy of authority cannot conflict with or change
the terms of those above them. The recorded map, plat, or plan is above the bylaws in the
hierarchy, and therefore would prevail in such a conflict.
Q: 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
Answer:
c. specific
A specific state statute is one that applies only to one or more types of community associations.
For example, most states have a condominium act which provides
for the establishment and operation of condominiums as legal entities. These acts vary in terms
of their complexity\u2014the simplest ones just allow for the creation of condominiums.
Q: True or false. A proprietary lease or occupancy agreement in a cooperative defines the
member or stockholder’s rights and obligations in relation to the living unit.
Answer:
True
In a cooperative, the proprietary lease or occupancy agreement serves generally the same
purpose as the declaration, CC&R, or master deed in other community associations. Among
other things, the proprietary lease or occupancy agreement identifies the premises that the
stockholder is permitted to occupy exclusively, defines the term of the lease and the rent that is
payable by the stockholder,
and establishes the powers and obligations of the cooperative’s board of directors, including
assessment rights.
Q: Complete the following sentence: The bring the community association into
existence, define its basic purposes and powers, and indicate whether stock will be issued.
a. recorded map, plat, or plan<\/p>\n\n\n\n
b. declaration, CC&Rs, or master deed
c. proprietary lease or occupancy agreement
d. articles of incorporation
Answer:
d. articles of incorporation
A community association’s corporate structure is established when a developer sets up the
association. The developer files articles of incorporation\u2014sometimes called a corporate
charter\u2014with the appropriate state corporation agency.
Q: True or False. The public offering statement is a governing document, as it often distributed
along with the governing documents.
Answer:
False
The public offering statement is not a governing document; instead, it is simply
a disclosure statement that provides information on the community association to prospective
buyers.
Q: Each of the following legal sources specify management authority and responsibilities for
community associations EXCEPT:
a. survey data
b. state statutes
c. community association governing documents d. court decisions
Answer:
a. survey data
All three types of legal sources\u2014state statutes, governing documents, and court decisions\u2014
specify the authority or power of different parties in a community asso- ciation and the
responsibilities or duties of the different parties.
Q: True or false. The basic authority in a community association lies with the developer.<\/p>\n\n\n\n
M-100 Community Association Management
2023\/ 2024 Exam Terms| Complete Guide
with Verified Answers| 100% Correct
Q: Electronic data processing (EDP) insurance?
Answer:
This insurance may be needed for computer equipment, networks, websites, security systems,
protection from hackers, and similar information technology exposures. Coverages vary so much
that the community association needs to carefully evaluate its exposures and the ability of the
EDP to meet those potential exposures to loss. EDP is one of the common insurance coverages
for property exposures to loss.
Q: Emergency services maintenance?
Answer:
This is the ability to respond to unpre- dictable maintenance problems (for example\u2014sewer
backups, elevator failures, roof leaks, frozen pipes, etc.). The key to a successful response to an
emergency is
to anticipate the different possibilities\u2014and to develop a plan for responding to each one.
Especially important is the development of a disaster plan to address possible natural and
terrorist catastrophes. The other four types of maintenance include routine maintenance,
preventative maintenance, requested maintenance, and reserve replacement.
Q: Employee handbook?
Answer:<\/p>\n\n\n\n
A written set of personnel policies and procedures that define the relationship between the
association and its employees and explain the responsibilities of both parties. Depending upon
the state in which you work, the content of an employee handbook can have legal implications.
Q: Employers’ Liability Insurance?
Answer:
\u2014in this case, loss of services due to injuries received while working on behalf of the
community association. Commercial insurers include employers’ liability insurance with
workers’ compensation protection. Em- ployers’ liability provides protection for claims made by
injured employees (and their spouses) for certain types of liability that is excluded in the
commercial general liability insurance (CGL). Every community association should consider
obtaining workers’ compensation and employers’ liability insurance.
Q: Employment agreement?
Answer:
A contract that formalizes the relationship between the association and the association-employed
manager. The agreement should contain all of the basic components of a legal contract and:
1.Specify the manager’s authority and duties 2.Establish a clear chain of command (For
example\u2014after a board makes a decision, the president must direct the manager to implement
the decision before he or she can do so.) 3.Provide for the manager’s compensation and
termination 4.Be signed by authorized representatives of both parties\u2014the community
association and the “manager”
Q: Employment at will?
Answer:
A statement that states that the association can dismiss an employee without cause at any time.
This is commonly found in the personnel
manual or employment agreement. The enforceability of an employment at will statement varies
by state.<\/p>\n\n\n\n
Q: Engagement letter?
Answer:
When your community hires a certified public accountant (CPA), s\/he will send the association
an engagement letter, which is a legally-binding contract. This type of letter describes the:
1.Nature of the work to be done 2.Type of report to be prepared 3.Fee for services 4.Time frame
for the assignment 5.Accoun- tant’s disclaimers\u2014statements about what the accountant’s services
do not include
Q: Entire obligation provision?
Answer:
Standard contract provision stating that the writ- ten, signed contract constitutes the entire
agreement between the parties. Except for any documents that are expressly referred to in the
contract, neither party can claim that any other correspondence, communication, or documents
contain obligations, promises, or requirements that are part of the binding contract between the
parties.
Q: Equal Employment Opportunity Commission (EEOC)?
Answer:
The federal govern- ment agency that prohibits discrimination against otherwise qualified
people in hir- ing, promotion, dismissal, compensation, and working conditions based on specific
personal characteristics including\u2014 1.Race and ethnicity 2.Color 3.National origin
4.Age 5.Gender 6.Religion 7.Pregnancy 8.Disability
Q: Ethics?
Answer:<\/p>\n\n\n\n
Ethics involves learning what is right and wrong, and then doing the right thing\u2014but “the right
thing” is not nearly as straightforward as conveyed in a great deal of business ethics literature.
What is an ethical guideline today is often translated to a law, regulation or rule tomorrow.
Q: Eviction?
Answer:
The process of physically removing a tenant (not an owner) from a property. This process
involves the local court system and the use of an attorney. Do not consider this alternative
without consulting your community’s attorney. Many jurisdictions do not permit eviction as a
remedy for violations.
Q: Excess revenue over expense?
Answer:
Excess revenue is the amount left after de- ducting expenses from revenue on a statement of
revenue and expense. This is also known as a net gain. A loss occurs when expenses are greater
than revenue. A loss is indicated by putting the figure in parentheses. The net revenue or loss can
be significantly different depending on whether a cash, accrual, or modified cash basis is used.
Q: Executive session?
Answer:
There are times when a board of directors must hold a discussion or make decisions of a
sensitive nature. Many states have so-called “sunshine laws” which limit the reasons why a
governing board may go into a closed or executive session. Executive sessions may be held to
discuss sensitive items such as litigation, contract negotiation, issues of a sensitive nature or
personnel matters. Typically, there are no minutes for an executive session as the proceedings are
confidential and intended for discussion only. Once the board has decided on its course of action,
it should reconvene to the regular board meeting to vote so that the<\/p>\n","protected":false},"excerpt":{"rendered":"
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