M100 Community Association
Management Review Questions
And Answers Rated 100%
Correct!!
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.
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.
Each of the following are basic types of residential community
associations
EXCEPT :
a. Planned
community
b.
Townhouse
c.
Cooperative
d. Condominium - Answer b.
Townhouse
While many community associations are indeed townhouse communities,
not all such developments are necessarily associations. A community
association is defined in terms of ownership rights—not architectural style.
Adoption of the annual budget is an example of which of the following
type of resolution?
a. policy resolution
b. administrative resolution
M100
,M100 Community Association
Management Review Questions
And Answers Rated 100%
Correct!!
c. special resolution
d. general resolution - Answer d. general resolution
General resolutions involve routine events such as adoption of the annual
budget.
True or false. The purpose of a community association's governing
documents is to
provide for the legal structure and operation of the community. -
Answer True
The governing documents define the rights and obligations of both the
community association and its owners, create a binding relationship
between each owner and the community association, and establish the
mechanisms for governing and funding the community association's
operations.
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. - Answer False
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.
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—the
simplest ones just allow for the creation of condominiums.
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
M100
,M100 Community Association
Management Review Questions
And Answers Rated 100%
Correct!!
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.
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
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—
sometimes called a
corporate charter—with the appropriate state
corporation agency.
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.
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—state statutes, governing
documents, and court
M100
, M100 Community Association
Management Review Questions
And Answers Rated 100%
Correct!!
decisions—specify the authority or power of different parties in
a community
association and the responsibilities or duties of the
different parties.
True or false. The basic authority in a community association lies with
the developer.
- Answer
False
The basic authority in a community association lies with the owners.
In order for the
association to govern effectively the owners elect a board of
directors to act on their
behalf. The governing documents delegate most of the
association's decision-
making powers to a
board.
Complete the following sentence: The board of directors in a
community association
has a _____________ to act in the best interests and for the
benefit of the
community as a
whole.
a.
bond
b. fiduciary
duty
c.
ballot
d. quorum - Answer b.
fiduciary duty
The board's fiduciary duty has two components: (1) Board members are
required to avoid conflicts of interest and acting out of self-interest. (2)
They are also required to act as reasonable people in managing the
association's affairs.
True or false. The "business judgment rule" means that if a board has
exercised reasonable business judgment in making a decision, the court
will generally not consider the board negligent in its fiduciary duty. -
Answer True
Through judicial decision, a substantial body of law has developed
concerning the standards to which directors must conform while
M100
Management Review Questions
And Answers Rated 100%
Correct!!
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.
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.
Each of the following are basic types of residential community
associations
EXCEPT :
a. Planned
community
b.
Townhouse
c.
Cooperative
d. Condominium - Answer b.
Townhouse
While many community associations are indeed townhouse communities,
not all such developments are necessarily associations. A community
association is defined in terms of ownership rights—not architectural style.
Adoption of the annual budget is an example of which of the following
type of resolution?
a. policy resolution
b. administrative resolution
M100
,M100 Community Association
Management Review Questions
And Answers Rated 100%
Correct!!
c. special resolution
d. general resolution - Answer d. general resolution
General resolutions involve routine events such as adoption of the annual
budget.
True or false. The purpose of a community association's governing
documents is to
provide for the legal structure and operation of the community. -
Answer True
The governing documents define the rights and obligations of both the
community association and its owners, create a binding relationship
between each owner and the community association, and establish the
mechanisms for governing and funding the community association's
operations.
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. - Answer False
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.
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—the
simplest ones just allow for the creation of condominiums.
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
M100
,M100 Community Association
Management Review Questions
And Answers Rated 100%
Correct!!
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.
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
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—
sometimes called a
corporate charter—with the appropriate state
corporation agency.
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.
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—state statutes, governing
documents, and court
M100
, M100 Community Association
Management Review Questions
And Answers Rated 100%
Correct!!
decisions—specify the authority or power of different parties in
a community
association and the responsibilities or duties of the
different parties.
True or false. The basic authority in a community association lies with
the developer.
- Answer
False
The basic authority in a community association lies with the owners.
In order for the
association to govern effectively the owners elect a board of
directors to act on their
behalf. The governing documents delegate most of the
association's decision-
making powers to a
board.
Complete the following sentence: The board of directors in a
community association
has a _____________ to act in the best interests and for the
benefit of the
community as a
whole.
a.
bond
b. fiduciary
duty
c.
ballot
d. quorum - Answer b.
fiduciary duty
The board's fiduciary duty has two components: (1) Board members are
required to avoid conflicts of interest and acting out of self-interest. (2)
They are also required to act as reasonable people in managing the
association's affairs.
True or false. The "business judgment rule" means that if a board has
exercised reasonable business judgment in making a decision, the court
will generally not consider the board negligent in its fiduciary duty. -
Answer True
Through judicial decision, a substantial body of law has developed
concerning the standards to which directors must conform while
M100
