M100
Community Association - 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 - 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 - 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 - 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 - 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: - 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 - 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 - 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. - 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 - 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 - 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.
Community Association - 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 - 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 - 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 - 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 - 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: - 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 - 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 - 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. - 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 - 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 - 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.
