M100 Community Association Management Exam &
Practice Exam Questions and Answers Practice
Questions with Solutions Newest | Already Graded A+
1. A community association manager is reviewing the annual budget. The board wants to reduce
assessments by 10% while maintaining current services. Which financial approach best aligns with
fiduciary duty?
A. Reduce the reserve contribution to offset the shortfall, as long as the reserve balance remains above the
threshold recommended by the most recent reserve study.
B. Defer non-critical maintenance projects and use the savings to lower assessments, ensuring the operating
fund remains positive.
C. Implement a special assessment for capital projects later if needed, allowing a temporary reduction in regular
assessments.
D. Reallocate surplus from the previous year's operating fund to subsidize the reduction, without altering reserve
contributions.
Answer: A
Rationale: Fiduciary duty requires balancing current services with long-term capital needs. Reducing
reserve contributions is permissible only if the reserve balance still meets the study's threshold;
otherwise, it jeopardizes future solvency. Option B defers maintenance, which may accelerate
deterioration. Option C shifts costs to a later special assessment, potentially burdening owners unfairly.
Option D uses surplus that may be restricted or needed for contingencies.
2. During a board meeting, a homeowner alleges that the board violated the open meeting act by
discussing a confidential legal matter in closed session without proper notice. Which of the
following is the most appropriate immediate response by the manager?
A. Advise the board to reconvene in open session and summarize the legal discussion to cure the violation.
B. Refer the homeowner to the association's attorney for clarification of the law.
C. Explain that legal matters are exempt from open meeting requirements and no further action is needed.
D. Document the allegation and recommend the board seek legal counsel to review compliance and future
procedures.
Answer: D
Rationale: The manager should not provide legal advice or attempt to cure the violation independently.
Documenting the allegation and recommending legal review ensures proper handling and avoids
exacerbating liability. Option A may be improper if the discussion remains privileged. Option B shifts
responsibility inappropriately. Option C is incorrect because even exempt discussions must follow
proper procedure (e.g., citation of exemption in minutes).
Page 1
,3. An association's governing documents require a 75% owner vote to approve a special assessment
exceeding $10,000 per unit. The board proposes a $12,000 assessment for major roof replacement.
A group of owners sues, claiming the board can approve it without a vote because it is a necessary
repair. Which legal principle is most relevant?
A. Business judgment rule: The board's decision is protected if made in good faith and with reasonable
diligence.
B. Doctrine of necessity: Emergency repairs may be undertaken without owner approval if the building is
unsafe.
C. Implied consent: Owners who benefit from the repair are deemed to have consented.
D. Statutory override: State law may permit boards to levy assessments for capital improvements without a vote.
Answer: B
Rationale: The doctrine of necessity allows boards to act without owner approval for emergencies that
threaten health or safety. However, a planned roof replacement is typically not an emergency unless
there is imminent collapse. The business judgment rule (A) protects board decisions but does not
override explicit voting requirements in governing documents. Implied consent (C) is not a recognized
legal doctrine for assessments. Statutory override (D) is rare and would need specific citation.
4. A community association manager is preparing a request for proposal (RFP) for landscaping
services. Which of the following contract terms is most critical to include to protect the association
from liability?
A. A liquidated damages clause for failure to meet performance milestones.
B. An indemnification clause holding the association harmless for injuries caused by the contractor's negligence.
C. A right to terminate for convenience with 30 days' notice.
D. A provision requiring the contractor to obtain a performance bond.
Answer: B
Rationale: An indemnification clause shifts the risk of third-party claims arising from the contractor's
work to the contractor, protecting the association's assets. While liquidated damages (A) and termination
rights (C) are useful, they don't directly address liability. A performance bond (D) ensures completion
but does not cover liability for injuries.
5. An association's reserve study indicates a funding ratio of 60%. The board wants to increase it
to 80% over five years. Which funding strategy minimizes the immediate financial burden on
owners while achieving the goal?
A. Implement a one-time special assessment equal to the funding shortfall, then maintain current reserve
contributions.
B. Increase annual reserve contributions by a fixed percentage each year based on the study's recommended
contribution.
C. Defer reserve contributions for two years and then increase them aggressively in years three through five.
D. Borrow the shortfall from a bank and repay the loan with interest over five years using operating funds.
Answer: B
Rationale: Gradually increasing contributions spreads the cost over time, minimizing immediate impact
while ensuring the target is met. Option A imposes a large lump sum burden. Option C defers funding,
increasing risk of deferred maintenance. Option D incurs interest costs and uses operating funds that
may be needed for other expenses.
Page 2
,6. A homeowner installs a satellite dish on a common area balcony without board approval. The
governing documents prohibit any alterations to common elements. The board demands removal;
the homeowner argues federal law (FCC rules) allows satellite dishes. Which of the following is
most accurate?
A. FCC rules preempt any association restriction that impairs reception, but the association may require
approval and reasonable placement restrictions.
B. The association's prohibition is enforceable because the balcony is common area, not exclusive use.
C. The homeowner must remove the dish because it was installed without a vote of the membership.
D. FCC rules allow the dish only if the homeowner obtains a waiver from the board.
Answer: A
Rationale: FCC Over-the-Air Reception Devices (OTARD) rules prohibit restrictions that impair
reception of satellite dishes, but associations may enforce reasonable restrictions (e.g., placement,
safety) and require approval. Option B is incorrect because the rule applies regardless of ownership if
the area is within the homeowner's exclusive use or control. Option C is irrelevant; membership vote is
not required for such installations. Option D is wrong; no waiver is needed if the rule applies.
7. An association manager receives a complaint about a homeowner's aggressive dog that has
bitten a visitor. The governing documents prohibit 'dangerous animals.' Which of the following
steps should the manager take first?
A. Immediately demand removal of the dog, citing the governing documents and the bite incident.
B. Notify the board and recommend a hearing to determine if the dog constitutes a nuisance under the
documents.
C. Report the bite to local animal control authorities and cooperate with their investigation.
D. Send a warning letter to the homeowner and require the dog to be muzzled on common areas.
Answer: C
Rationale: The manager's first duty is to ensure safety and comply with local laws; reporting the bite to
animal control is mandatory and takes precedence over internal enforcement. Options A and D may be
premature without a factual determination and could expose the association to liability. Option B is
important but secondary to legal reporting requirements.
8. An association's board is considering a rule that prohibits renting units for fewer than 30 days.
A group of owners objects, claiming the rule is an invalid restraint on alienation. Which legal
principle is most relevant?
A. The rule is presumptively valid if it is reasonable and serves a legitimate purpose, such as preserving
residential character.
B. Any restriction on leasing is void as a restraint on alienation unless expressly authorized in the declaration.
C. The rule is invalid because it exceeds the board's rule-making authority under the declaration.
D. The rule may be enforced only if it applies uniformly to all owners and does not target specific owners.
Answer: A
Rationale: Courts generally uphold reasonable rental restrictions that serve a legitimate purpose (e.g.,
preventing transient occupancy). Option B is too absolute; many states allow such restrictions if
reasonable. Option C may be true if the declaration limits board authority, but the question asks for the
most relevant principle. Option D is a procedural requirement but not the primary legal test.
Page 3
, 9. A manager is evaluating bids for a major painting project. One bid is 20% lower than the
others. The low bidder has no references for projects of similar size. Which of the following actions
best balances cost and risk?
A. Award the contract to the low bidder to save money, but require a performance bond.
B. Reject the low bid and choose the next lowest bidder with strong references.
C. Interview the low bidder, check any available references, and require a detailed project plan before deciding.
D. Ask the low bidder to match the next lowest bid and then award the contract.
Answer: C
Rationale: Due diligence requires investigating the low bidder's capability before awarding. Option A
assumes a bond mitigates all risk, but a bond does not ensure quality. Option B may be overly cautious if
the low bidder is competent. Option D is unethical and may violate procurement policies.
10. An association's annual meeting fails to achieve a quorum. The bylaws state that if a quorum is
not present, the meeting may be adjourned and reconvened. Which of the following is correct
regarding the reconvened meeting?
A. The reconvened meeting must have the same agenda and notice requirements as the original meeting.
B. The reconvened meeting may be held without further notice if the adjournment announcement specified the
new date, time, and place.
C. The reconvened meeting can proceed with any business regardless of quorum if at least 10% of owners are
present.
D. The board may cancel the meeting and conduct the business by written consent of a majority of owners.
Answer: B
Rationale: Under Robert's Rules and typical bylaws, an adjourned meeting is a continuation of the
original meeting; if the adjournment included the new meeting details, no additional notice is required.
Option A is incorrect because notice is not required if properly announced. Option C is false; quorum
rules still apply unless the bylaws specify otherwise. Option D may be possible but is not automatic and
requires specific authorization.
11. A condominium association's governing documents require a 75% vote of unit owners to
approve a special assessment exceeding $10,000. The board proposes a $15,000 assessment for
capital improvements. At the annual meeting, 60 of 100 unit owners vote in favor, 20 vote against,
and 20 abstain. Which statement accurately reflects the legal status of the proposed assessment?
A. The assessment passes because a majority of votes cast (75%) are in favor.
B. The assessment fails because only 60% of all unit owners voted in favor, short of the 75% threshold.
C. The assessment passes because abstentions are counted as not voting, making the threshold 75% of votes cast
(60/80 = 75%).
D. The assessment fails because the governing documents require a unanimous vote for assessments exceeding
$10,000.
Answer: B
Rationale: The governing documents require 75% of unit owners, not just those voting. Abstentions do
not count as votes, so the base is all unit owners (100). 60 out of 100 is only 60%, below the 75%
requirement. Option A incorrectly uses votes cast; option C misapplies the abstention rule; option D
misstates the required threshold.
Page 4
Practice Exam Questions and Answers Practice
Questions with Solutions Newest | Already Graded A+
1. A community association manager is reviewing the annual budget. The board wants to reduce
assessments by 10% while maintaining current services. Which financial approach best aligns with
fiduciary duty?
A. Reduce the reserve contribution to offset the shortfall, as long as the reserve balance remains above the
threshold recommended by the most recent reserve study.
B. Defer non-critical maintenance projects and use the savings to lower assessments, ensuring the operating
fund remains positive.
C. Implement a special assessment for capital projects later if needed, allowing a temporary reduction in regular
assessments.
D. Reallocate surplus from the previous year's operating fund to subsidize the reduction, without altering reserve
contributions.
Answer: A
Rationale: Fiduciary duty requires balancing current services with long-term capital needs. Reducing
reserve contributions is permissible only if the reserve balance still meets the study's threshold;
otherwise, it jeopardizes future solvency. Option B defers maintenance, which may accelerate
deterioration. Option C shifts costs to a later special assessment, potentially burdening owners unfairly.
Option D uses surplus that may be restricted or needed for contingencies.
2. During a board meeting, a homeowner alleges that the board violated the open meeting act by
discussing a confidential legal matter in closed session without proper notice. Which of the
following is the most appropriate immediate response by the manager?
A. Advise the board to reconvene in open session and summarize the legal discussion to cure the violation.
B. Refer the homeowner to the association's attorney for clarification of the law.
C. Explain that legal matters are exempt from open meeting requirements and no further action is needed.
D. Document the allegation and recommend the board seek legal counsel to review compliance and future
procedures.
Answer: D
Rationale: The manager should not provide legal advice or attempt to cure the violation independently.
Documenting the allegation and recommending legal review ensures proper handling and avoids
exacerbating liability. Option A may be improper if the discussion remains privileged. Option B shifts
responsibility inappropriately. Option C is incorrect because even exempt discussions must follow
proper procedure (e.g., citation of exemption in minutes).
Page 1
,3. An association's governing documents require a 75% owner vote to approve a special assessment
exceeding $10,000 per unit. The board proposes a $12,000 assessment for major roof replacement.
A group of owners sues, claiming the board can approve it without a vote because it is a necessary
repair. Which legal principle is most relevant?
A. Business judgment rule: The board's decision is protected if made in good faith and with reasonable
diligence.
B. Doctrine of necessity: Emergency repairs may be undertaken without owner approval if the building is
unsafe.
C. Implied consent: Owners who benefit from the repair are deemed to have consented.
D. Statutory override: State law may permit boards to levy assessments for capital improvements without a vote.
Answer: B
Rationale: The doctrine of necessity allows boards to act without owner approval for emergencies that
threaten health or safety. However, a planned roof replacement is typically not an emergency unless
there is imminent collapse. The business judgment rule (A) protects board decisions but does not
override explicit voting requirements in governing documents. Implied consent (C) is not a recognized
legal doctrine for assessments. Statutory override (D) is rare and would need specific citation.
4. A community association manager is preparing a request for proposal (RFP) for landscaping
services. Which of the following contract terms is most critical to include to protect the association
from liability?
A. A liquidated damages clause for failure to meet performance milestones.
B. An indemnification clause holding the association harmless for injuries caused by the contractor's negligence.
C. A right to terminate for convenience with 30 days' notice.
D. A provision requiring the contractor to obtain a performance bond.
Answer: B
Rationale: An indemnification clause shifts the risk of third-party claims arising from the contractor's
work to the contractor, protecting the association's assets. While liquidated damages (A) and termination
rights (C) are useful, they don't directly address liability. A performance bond (D) ensures completion
but does not cover liability for injuries.
5. An association's reserve study indicates a funding ratio of 60%. The board wants to increase it
to 80% over five years. Which funding strategy minimizes the immediate financial burden on
owners while achieving the goal?
A. Implement a one-time special assessment equal to the funding shortfall, then maintain current reserve
contributions.
B. Increase annual reserve contributions by a fixed percentage each year based on the study's recommended
contribution.
C. Defer reserve contributions for two years and then increase them aggressively in years three through five.
D. Borrow the shortfall from a bank and repay the loan with interest over five years using operating funds.
Answer: B
Rationale: Gradually increasing contributions spreads the cost over time, minimizing immediate impact
while ensuring the target is met. Option A imposes a large lump sum burden. Option C defers funding,
increasing risk of deferred maintenance. Option D incurs interest costs and uses operating funds that
may be needed for other expenses.
Page 2
,6. A homeowner installs a satellite dish on a common area balcony without board approval. The
governing documents prohibit any alterations to common elements. The board demands removal;
the homeowner argues federal law (FCC rules) allows satellite dishes. Which of the following is
most accurate?
A. FCC rules preempt any association restriction that impairs reception, but the association may require
approval and reasonable placement restrictions.
B. The association's prohibition is enforceable because the balcony is common area, not exclusive use.
C. The homeowner must remove the dish because it was installed without a vote of the membership.
D. FCC rules allow the dish only if the homeowner obtains a waiver from the board.
Answer: A
Rationale: FCC Over-the-Air Reception Devices (OTARD) rules prohibit restrictions that impair
reception of satellite dishes, but associations may enforce reasonable restrictions (e.g., placement,
safety) and require approval. Option B is incorrect because the rule applies regardless of ownership if
the area is within the homeowner's exclusive use or control. Option C is irrelevant; membership vote is
not required for such installations. Option D is wrong; no waiver is needed if the rule applies.
7. An association manager receives a complaint about a homeowner's aggressive dog that has
bitten a visitor. The governing documents prohibit 'dangerous animals.' Which of the following
steps should the manager take first?
A. Immediately demand removal of the dog, citing the governing documents and the bite incident.
B. Notify the board and recommend a hearing to determine if the dog constitutes a nuisance under the
documents.
C. Report the bite to local animal control authorities and cooperate with their investigation.
D. Send a warning letter to the homeowner and require the dog to be muzzled on common areas.
Answer: C
Rationale: The manager's first duty is to ensure safety and comply with local laws; reporting the bite to
animal control is mandatory and takes precedence over internal enforcement. Options A and D may be
premature without a factual determination and could expose the association to liability. Option B is
important but secondary to legal reporting requirements.
8. An association's board is considering a rule that prohibits renting units for fewer than 30 days.
A group of owners objects, claiming the rule is an invalid restraint on alienation. Which legal
principle is most relevant?
A. The rule is presumptively valid if it is reasonable and serves a legitimate purpose, such as preserving
residential character.
B. Any restriction on leasing is void as a restraint on alienation unless expressly authorized in the declaration.
C. The rule is invalid because it exceeds the board's rule-making authority under the declaration.
D. The rule may be enforced only if it applies uniformly to all owners and does not target specific owners.
Answer: A
Rationale: Courts generally uphold reasonable rental restrictions that serve a legitimate purpose (e.g.,
preventing transient occupancy). Option B is too absolute; many states allow such restrictions if
reasonable. Option C may be true if the declaration limits board authority, but the question asks for the
most relevant principle. Option D is a procedural requirement but not the primary legal test.
Page 3
, 9. A manager is evaluating bids for a major painting project. One bid is 20% lower than the
others. The low bidder has no references for projects of similar size. Which of the following actions
best balances cost and risk?
A. Award the contract to the low bidder to save money, but require a performance bond.
B. Reject the low bid and choose the next lowest bidder with strong references.
C. Interview the low bidder, check any available references, and require a detailed project plan before deciding.
D. Ask the low bidder to match the next lowest bid and then award the contract.
Answer: C
Rationale: Due diligence requires investigating the low bidder's capability before awarding. Option A
assumes a bond mitigates all risk, but a bond does not ensure quality. Option B may be overly cautious if
the low bidder is competent. Option D is unethical and may violate procurement policies.
10. An association's annual meeting fails to achieve a quorum. The bylaws state that if a quorum is
not present, the meeting may be adjourned and reconvened. Which of the following is correct
regarding the reconvened meeting?
A. The reconvened meeting must have the same agenda and notice requirements as the original meeting.
B. The reconvened meeting may be held without further notice if the adjournment announcement specified the
new date, time, and place.
C. The reconvened meeting can proceed with any business regardless of quorum if at least 10% of owners are
present.
D. The board may cancel the meeting and conduct the business by written consent of a majority of owners.
Answer: B
Rationale: Under Robert's Rules and typical bylaws, an adjourned meeting is a continuation of the
original meeting; if the adjournment included the new meeting details, no additional notice is required.
Option A is incorrect because notice is not required if properly announced. Option C is false; quorum
rules still apply unless the bylaws specify otherwise. Option D may be possible but is not automatic and
requires specific authorization.
11. A condominium association's governing documents require a 75% vote of unit owners to
approve a special assessment exceeding $10,000. The board proposes a $15,000 assessment for
capital improvements. At the annual meeting, 60 of 100 unit owners vote in favor, 20 vote against,
and 20 abstain. Which statement accurately reflects the legal status of the proposed assessment?
A. The assessment passes because a majority of votes cast (75%) are in favor.
B. The assessment fails because only 60% of all unit owners voted in favor, short of the 75% threshold.
C. The assessment passes because abstentions are counted as not voting, making the threshold 75% of votes cast
(60/80 = 75%).
D. The assessment fails because the governing documents require a unanimous vote for assessments exceeding
$10,000.
Answer: B
Rationale: The governing documents require 75% of unit owners, not just those voting. Abstentions do
not count as votes, so the base is all unit owners (100). 60 out of 100 is only 60%, below the 75%
requirement. Option A incorrectly uses votes cast; option C misapplies the abstention rule; option D
misstates the required threshold.
Page 4
