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Random CMCA Practice Test Questions
(Under Construction)
Which of the following is a common management control for ensuring maintenance work is performed in a timely manner? A. A purchase order system B. An equipment warranties C. A work order/response form D. A contractor's invoice - Correct answer C. A work order/response form - A, B, and D speak to elements OTHER than a control to ensure maintenance work is completed. The primary management control tool for identifying whether the association needs to maintain a particular property element is: A. Physical inspections B. Association bylaws C. Maintenance responsibility chart D. Community asset inventory - Correct answer C. Maintenance responsibility chart along, with the governing documents, defines parameters of association maintenance responsibility. The other answers have no bearing on necessity of maintenance or maintenance responsibility. In what type of a contract would a waiver of lien by recommended? A. Repair of the HVAC system B. Re-roofing the buildings C. Repair of the pool pump D. Annual tree pruning - Correct answer B. Re-roofing the buildings - Large contracts involving significant material purchase and/or use of sub-contractors commonly include lien waivers and should be recommended to the board. A, C, and D typically do not include significant material purchases or the use of sub-contractors so a waiver of lien is not necessary. What does "Co-Insurance" obligate the Association to do? A. Pay the deductible B. Maintain certain limits of insurance C. Cover the depreciated value of all association buildings D. Provide insurance for homeowners - Correct answer B. Maintain certain limits of insurance - Co-insurance seeks to the limits of insurance in place at the time of a loss and speaks to insurance obligation for the parties involved in the claim. Co-insurance does not obligate the Association to pay a deductible. Provides no obligation to provide insurance for homeowners. When an association contracts out all of its services and has no employees, it is a best business practice to:
A. Negotiate contracts within the bidding process. B. Purchase employment practices liability insurance. C. Assume the contractors carry their own insurance coverage. D. Increase the coverage under the D&O insurance policy. - Correct answer A. Negotiate contracts within the bidding process. Incorrect Answers: B. Employment practices liability insurance is typically purchased by an association that has employees to provide coverage against certain types of claims by those employees, and usually accompanies a workers compensation insurance policy. C. The association MUST NEVER assume that contractors carry their own insurance coverage and should require all contractors to provide evidence of insurance. D. D&O insurance policies is designed to pay for wrongful acts that do not lead to property damage (PD), bodily injury (BI), personal injury (PI), or advertising injury (AI); an example of a claim for coverage under D&O would be if a board of directors is accused of not uniformly enforcing rules or covenants. Therefore, it is unlikely that the services of independent contractors would lead to claims under D&O. If an owner fails to receive notice of a meeting, the association is not responsible if the owner: A. Did not notify association of their current address. B. Does not usually attend the meetings. C. Already signed the petition to call the meeting. D. Shares title with multiple owners. - Correct answer A. Did not notify association of their current address. It is the owner's responsibility to provide current contact information to Management. Incorrect: B. The duty to notify all owners of meetings belongs to the Board, which is often delegated to Management. C. Signing a petition to hold a meeting is not legal notice of the meeting. The duty to notify all owners of meetings belongs to the Board, which is often delegated to Management. D. The notice of meetings is sent to the "Owner of Record" at the last known address. In the case of multiple owners sharing title to a unit, the owners of that unity have the duty to notify the Board/Management which one of the owners will receive notices, and provide current contact information. What is the primary source of requirements when developing the association's annual maintenance budget? A. Governing documents B. State law C. Annual audit D. Reserve Study - Correct answer A. Governing documents Incorrect:
B. Board recommendations and resolutions C. Guidelines established within the governing documents D. Applicable statues and governing documents - Correct answer D. Applicable statues and governing documents. Rules cannot conflict with statues and governing documents. Incorrect: A. Penalty is not part of development it is part of enforcement. B. Resolution is method of formalizing rule not developing. C. Rules usually are expanded on or clarify governing documents. In an initial letter you send to an owner who has violated one of the association's adopted rules, which of the following is included? A. The amount of fine assessed. B. Steps to amend the rules. C. The offer to meet to hear the owner's viewpoint. D. What the outcome of similar cases has been. - Correct answer C. The offer to meet to hear the owner's viewpoint. Best way to get compliance is to let owner be heard and explain rule to the owner. Knowledge Tested: Successful rule enforcement Procedures. Incorrect: A. You cannot assess a fine without due process; the goal is compliance. B. This is a burdensome process and outside the scope. An amendment would need to be initiated by the board. D. The is only relevant in enforcement (must treat everyone the same). If the governing documents and laws present conflicting notice periods, follow: a. The bylaws b. State laws c. Your attorney's advice d. Declarations - Correct answer b. State laws - The hierarchy of documents is as follows: Federal Laws State Laws Declaration Bylaws Which of the following is a duty of a manager attending a board meeting? a. Call the meeting to order. b. Establish the agenda. c. Take the minutes of the meeting. d. Be the time keeper - Correct answer d. Be the time keeper - It is the manager's responsibility to ensure meetings are efficient and that the Board conducts its business in a timely fashion, particularly if a timed agenda is being used.
In older condominiums, an association should have what type of contract covering mechanical equipment? a. Time and materials b. Specific repair c. Service d. Preventive maintenance - Correct answer d. Preventive maintenance - Preventive maintenance contracts are used for such items as pool and A/C equipment, boilers and water heaters where regular service is likely to reduce the chance of expensive emergency repairs. INCORRECT: A. Time and material contracts are typically used when the amount of time and/or material cannot be determined in advance. B. Specific repair contracts are for such things as painting, re-roofing and other specific repairs such as paving and concrete and major building repairs. C. Service contracts are used for ongoing services such as landscaping, website maintenance, trash removal, etc. For which project would a board most likely want to use a consultant to help develop bid specifications? a. Landscape renovation project b. Repairing and/or replacing all roofs c. Painting the interior of lobbies and hallways d. Repairing HVAC and boilers - Correct answer b. Repairing and/or replacing all roofs - An outside consultant is most likely to be used in a large, complicated project, such as replacement of all roofs in a HOA. Which of the following has the greatest regulatory influence on the management of a community association? a. Federal statues b. Articles of Incorporation c. Specific state statues d. General state statues - Correct answer c. Specific state statues - There may be specific state statues addressing regulations which effect the management of a community association. TRUE OR FALSE: Employees are finished with training after they receive their initial training for a job. - Correct answer FALSE Which of the following is an example of an association control system? a. Frequent neighborhood inspections b. Owner garage door locks c. Telephone entry system
B. References items to be completed during the year (a maintenance calendar). D. Creates a listing of items needing maintenance attention. What "duty" do the Board members and the manager have to the members? a. Accountability b. Loyalty c. Service d. Conduct - Correct answer b. Loyalty - The Board Members and Manager have the Fiduciary "Duty" of Loyalty to the owners. Incorrect: A. Even though the Board Members and Manager are accountable for their actions, it is not a Fiduciary "Duty". C. Although the Board Members have agreed to "serve" on the Board and Management is contracted to "serve" the community this is not a specified Fiduciary "Duty." D. Although the Board Members and Management must conduct themselves in a manner that cannot be construed, in anyway as a conflict of interest, conduct is not a specified Fiduciary "Duty." TRUE OR FALSE: It's generally a good idea to schedule a performance evaluation meetings with an employee in a public place. - Correct answer FALSE Employment contracts need NOT include: a. Legal sources b. Interests c. Termination d. Notice - Correct answer b. Interests - Is not a relevant component of an employment contract. Incorrect: a. All contracts should reference compliance with the law. c. Almost all contracts should include a clause addressing terms for termination. In an employment contract, it must be included, to protect both parties. d. A notice clause is standard in contracts, noting how each party is to be notified in case of breach or modifications. TRUE OR FALSE: A community association employee who supervises other staff members is automatically classified as salaried (or exempt). - Correct answer TRUE
Which of the following federal laws regulate working conditions, specialized training, safety equipment, the posting of warnings related to products and work site conditions, and the reporting of accidents? a. Fair Labor Standards Act b. Occupational Safety and Health Act c. Federal Insurance Contributions Act d. Child labor laws - Correct answer b. Occupational Safety and Health Act TRUE OR FALSE: An agenda is more than an announcement of the order of business for a meeting; it is a meeting management tool. - Correct answer TRUE Discipline as a part of the HR management can include: a. Counseling the employee b. Selecting using a progressive system c. Terminating an under-performing employee d. Gathering performance information from other employees - Correct answer a. Counseling the employee - Counseling an employee and providing benchmarks to achieve (and penalties for short-falls) is part of the discipline process. Incorrect: B. Selecting a system is not discipline. C. Termination may be the result of the failure of an employee to properly respond to discipline, but in itself is not discipline. D. Gathering performance information is part of performance evaluation, not discipline. What is the primary source of requirements when developing the association's annual maintenance budget? a. Governing documents b. State law c. Annual audit d. Reserv Study - Correct answer a. Governing documents - will give notice requirements and budget cap information. A notice of meeting should be sent in writing to board members at least ______ before meeting. a. a year b. 2 days c. 3 months d. a week - Correct answer d. a week A significant decline in the amount of investments is most likely the result of: a. Failure to invest association funds properly. b. Seasonal timing of expenses.
Subrogation is a term often found in insurance policies but does not relate to alternative dispute resolution. Litigation is a court action and exactly what alternative dispute resolution tries to avoid. Indemnification, also known as "hold harmless" is often found in contracts, but is not a form of Alternative Dispute Resolution. MATCH THE COMMITTEE TYPES
- Usually include elections, nominations, and architectural standards. Required by the governing documents.
- Established by the Board to meet some on-going need of the community.
- Task forces that meet some specific need and are then dissolved. Established by the Board. a. Standing b. Mandatory c. Parent Organization d. Ad-hoc - Correct answer 1. b. Mandatory
- a. Standing
- d. Ad-hoc A work order: a. Documents current maintenance standards. b. Identifies what needs to be done during the year. c. Assigns maintenance tasks. d. Is a punch-list of maintenance needs. - Correct answer c. Assigns maintenance tasks. 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 protested by groups of owners. - Correct answer a. Decide issues of policy for the owners in the community. Which type of maintenance should be managed with a routine maintenance contract? a. Replacing dead shrubs b. Painting building hallways c. Cutting the grass d. Cleaning sewer lines. - Correct answer c. Cutting the grass Liability claims should be sent to the insurer: a. Requesting a public adjuster be assigned.
b. Without admitting negligence. c. By the Insurance Trustee. d. Within 72 hours of the incident. - Correct answer b. Without admitting negligence. A component of building ordinance insurance coverage includes: a. Glass damage b. Extra demolition c. Water damage d. Power failure - Correct answer b. Extra demolition A community association is within its legal rights to dismiss an employee without cause or progressive discipline for which of the following reasons? a. substance abuse on the job b. inadequate work performance c. insubordination d. sexual harassment - Correct answer a. substance abuse on the job Each of the following legal sources specify management authority and responsibilities for community associations EXCEPT: a. survey data b. state statues c. community association governing documents d. court decisions - Correct answer a. survey data Directors and officers liability insurance is designed to cover claims resulting from: a. Theft of funds by an association board member. b. Wrongful acts of employees of the association. c. Bodily injury of directors and officers. d. Damage to board owned property. - Correct answer b. Wrongful acts of employees of the association. They are only covered under the D&O if the definition of "insured party" includes such employees. Which of the following types of insurance coverage is one of limited value to a community association? a. Liability b. Assessment fee receivable c. Worker's compensation d. Commercial umbrella - Correct answer b. Assessment fee receivable Assessment fee receivable insurance has a certain limited value to an association. Such insurance will assist in situations such as a fire destroying a home or unit and the association is unable to collect assessments from the owner. It does not provide coverage for the association if an owner refuses or fails to pay assessments.
a. audit b. turnover c. restoration d. transition - Correct answer 1. d. transition
- b. turnover The primary purpose of a community association is to: a. Guarantee property tax benefits. b. Protect the financial health of the owners. c. Provide owners protection from municipal laws. d. Deal with governance and business. - Correct answer d. Deal with governance and business. When a dispute is mediated, an uninvolved third party facilitates discussion and: a. Makes the final judgement for both parties. b. Presents a decision which the parties are free to reject. c. Assist both parties in reaching a mutually acceptable agreement. d. Decision is binding upon both parties. - Correct answer c. Assist both parties in reaching a mutually acceptable agreement. INCORRECT: a. This would be arbitration. Mediation is non-binding. b. Mediation allows the parties themselves to come to an agreement. d. Only in arbitration is the decision binding. Who has the ultimate responsibility for the care and maintenance of the common areas, facilities, and physical property? a. The Board of Directors b. The association manager c. The developer until turnover. d. The Executive Committee. - Correct answer a. The Board of Directors You have a proprietary lease in XYZ development. Which of the following best describes your interest in the property? a. A time-share interest. b. A divided interest. c. An undivided interest. d. Stock membership - Correct answer d. Stock membership A proprietary lease is given to the shareholder only in a Cooperative Cooperation. The shareholder receives stock membership. TRUE OR FALSE:
The role of a professional community association manager is to make all decisions for the association and to delegate information-gathering and fact-finding support to the board of directors. - Correct answer FALSE TRUE OR FALSE Assessment Fee Receivable insurance coverage provides coverage for the association if an owner refuses or fails to pay assessments. - Correct answer FALSE Community association employees are obligated to do each of the following EXCEPT: a. possess the skills needed to perform assigned tasks. b. use reasonable care in performing assigned tasks in order to protect the community's assets and interest. c. complete assignments in conformity to performance standards within a reasonable time frame. d. participate in the association's health program. - Correct answer d. participate in the association's health program. The federal government prohibits discrimination against otherwise qualified people for each of the characteristics EXCEPT: a. religion b. gender c. skill d. race and ethnicity - Correct answer c. skill TRUE OR FALSE: If a community association has just one part-time employee, it doesn't need a written personnel manual or employee handbook. - Correct answer FALSE In which of the following forms of community association management is the association management by the board itself or by committees under the direction of the board? a. management company b. volunteer or self-management c. association-employed manager d. municipal management - Correct answer b. volunteer or self-management Which of the following terms regarding the process of making a motion most closely fits this definition: "to change a motion by inserting, adding, striking out, striking out and inserting, or substituting words." a. Take a motion from the table b. Second a motion c. Amend a motion d. Table a motion - Correct answer c. Amend a motion
d. Provides for consistency in making and wording rules. - Correct answer d. Provides for consistency in making and wording rules. TRUE OR FALSE It more owners are showing up at board meetings, this could be a warning sign of a weak management? - Correct answer TRUE MATCH
- The disciplines dealing with what is good and bad and with moral duty and obligation.
- Requires the party acting on behalf of another to exercise the skill and care that a reasonable person would exercise under similar circumstances.
- Applies to the delivery of products or services and to our relationships with customers, employers, vendors and colleagues.
- Requires the fiduciary to act in the other party's interested when administering its assets.
- A set of rules or standards that govern the conduct of members of a profession.
- A situation in which an individual's duty to one leads to the disregard of a duty to another. a. Conflict of Interest b. Duty of Loyalty c. Duty of Care d. Professional ethics e. Business ethics f. Ethics - Correct answer 1. f. Ethics
- c. Duty of Care
- e. Business ethics
- b. Duty of Loyalty
- d. Professional ethics
- a. Conflict of Interest TRUE OR FALSE: Personnel issues are an example of a topic that often requires an executive session and are allowable by law. - Correct answer TRUE A _______________ is a written means of voting when secrecy is desired. a. proxy b. residents forum c. action item list d. ballot - Correct answer d. ballot TRUE OR FALSE:
The primary purpose of a community association is to provide for the governance, business, and communal aspects of the associations. - Correct answer TRUE Reasons for establishing community rules and architectural guidelines include each of the following EXCEPT: a. There is the need to create a sense of fairness and equity among residents. b. In contemporary society, people are more likely to question and challenge authority. c. In cases where rules have been poorly developed or engraved, the courts are ruling against community associations. d. Fines imposed on residents who break community rules are frequently the primary source of association income. - Correct answer d. Fines imposed on residents who break community rules are frequently the primary source of association income. TRUE OR FALSE: According to the general hierarchy of authority for operating community associations, rules and regulations take precedence over the articles of incorporation. - Correct answer FALSE Which of the following is an example of an architectural guideline? a. pets b. noise c. fencing d. parking - Correct answer c. fencing Each of the following are basic types of residential community associations EXCEPT: a. Planned community b. Townhouse c. Cooperative d. Condominium - Correct answer b. Townhouse 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. - Correct answer c. A requirement of community association ownership is serving on the board of directors. Each of the following are sections of a resolution EXCEPT:
a. general b. complex c. specific d. uniform - Correct answer c. specific 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 b. declaration, CC&Rs, or master deed c. proprietary lease of occupancy agreement. d. articles of incorporation - Correct answer d. articles of incorporation TRUE OR FALSE: The public offering statement is a governing document, as it often distributed along with the governing documents. - Correct answer FALSE
