Summary CMCA Study Guide 2023 Complete Solutions
Verified
Articles of incorporation
Bring the corporation into existence, define its basic
purposes and powers, indicate whether stock will be issued, and indicate whether there
will be a board
of directors
Bylaws
Formally adopted governing regulations for the administration and management of a
community association
CC & Rs (Covenants, Conditions & Restrictions)
The governing documents that
dictate how the homeowners association operates and what rules the owners—and
their tenants and guests —
must obey. These legal documents might also be called
the bylaws, the master deed, the houses rules or another name. These documents and
rules are legally enforceable by the homeowners association, unless a specific provision
conflicts with federal, state or local laws
Community association
A group of owners who wish to provide a communal basis for preserving, maintaining,
and enhancing their homes and property
Condominium
A living unit fully owned by an individual with an undivided interest in the common
elements of the community. The community association itself owns no
real estate as an association
Cooperative
Wherein an individual owns stock or membership in the cooperative, and holds a
proprietary lease or occupancy agreement for his or her living unit
Declaration
Used interchangeably with CC & Rs
Governing documents
Documents which provide for the legal structure and
operation of the community
Indemnification
to exempt an individual or entity from responsibility for claims made against the
organization and to reimburse the individual or entity for damages or expenses incurred
as a result of such claims
Master association
An organization of homeowners in a large condominium or planned unit development
(PUD) which includes representatives from other, smaller
homeowner organizations
Mixed use development
A development which is designed to mix two or more
"uses" of land together (i.e. a shopping center which offers office space for dentists)
, Planned community
the most common type of community association, where an owner owns his or her lot
and/or living unit and the community owns any common areas, such as tennis courts
and roads for the use and benefit of the lot owners
Proprietary lease
A rental agreement between a cooperative housing corporation and a share holder
allowing use of a certain unit in the premises
Public offering statement
A disclosure statement prepared by a developer that
contains all material facts about a property offered for sale and that must be provided to
a prospective purchaser in accordance with applicable state or federal law
Resolution
A motion that follows a set format and is formally adopted by the board of directors
Statute
A formal written enactment of a legislative authority that governs a country, state, city or
county
Umbrella association
A cluster of community association types that can include aspects of homeowners
associations, condominiums and cooperatives
Ad hoc committee
Used when an objective needs consideration and no standing
committee within the organization can absorb that issue into its scope. Usually these
committees
are used on a short
-
term basis, such as temporary oversight of an issue
or review of the standing rules of that community
Board liaison system
Directors are assigned to certain committees to guide the
committee on Board policy and procedures and to repo
rt back to the Board.
Directors serving as a liaison must distinguish their role from the role of the
committee chairperson.
Business judgment rule
If a board has exercised reasonable business judgment in
making a decision, the court will generally not c
onsider the board negligent in it
s
fiduciary duty, nor will the court substitute its judgment for that of the board
Fiduciary duty
Requires directors to act in the best interests and for the benefit of
the corporation, thus the community as a whole.
the members are required to avoid conflicts
of interest and acting
out of self-interest;
Verified
Articles of incorporation
Bring the corporation into existence, define its basic
purposes and powers, indicate whether stock will be issued, and indicate whether there
will be a board
of directors
Bylaws
Formally adopted governing regulations for the administration and management of a
community association
CC & Rs (Covenants, Conditions & Restrictions)
The governing documents that
dictate how the homeowners association operates and what rules the owners—and
their tenants and guests —
must obey. These legal documents might also be called
the bylaws, the master deed, the houses rules or another name. These documents and
rules are legally enforceable by the homeowners association, unless a specific provision
conflicts with federal, state or local laws
Community association
A group of owners who wish to provide a communal basis for preserving, maintaining,
and enhancing their homes and property
Condominium
A living unit fully owned by an individual with an undivided interest in the common
elements of the community. The community association itself owns no
real estate as an association
Cooperative
Wherein an individual owns stock or membership in the cooperative, and holds a
proprietary lease or occupancy agreement for his or her living unit
Declaration
Used interchangeably with CC & Rs
Governing documents
Documents which provide for the legal structure and
operation of the community
Indemnification
to exempt an individual or entity from responsibility for claims made against the
organization and to reimburse the individual or entity for damages or expenses incurred
as a result of such claims
Master association
An organization of homeowners in a large condominium or planned unit development
(PUD) which includes representatives from other, smaller
homeowner organizations
Mixed use development
A development which is designed to mix two or more
"uses" of land together (i.e. a shopping center which offers office space for dentists)
, Planned community
the most common type of community association, where an owner owns his or her lot
and/or living unit and the community owns any common areas, such as tennis courts
and roads for the use and benefit of the lot owners
Proprietary lease
A rental agreement between a cooperative housing corporation and a share holder
allowing use of a certain unit in the premises
Public offering statement
A disclosure statement prepared by a developer that
contains all material facts about a property offered for sale and that must be provided to
a prospective purchaser in accordance with applicable state or federal law
Resolution
A motion that follows a set format and is formally adopted by the board of directors
Statute
A formal written enactment of a legislative authority that governs a country, state, city or
county
Umbrella association
A cluster of community association types that can include aspects of homeowners
associations, condominiums and cooperatives
Ad hoc committee
Used when an objective needs consideration and no standing
committee within the organization can absorb that issue into its scope. Usually these
committees
are used on a short
-
term basis, such as temporary oversight of an issue
or review of the standing rules of that community
Board liaison system
Directors are assigned to certain committees to guide the
committee on Board policy and procedures and to repo
rt back to the Board.
Directors serving as a liaison must distinguish their role from the role of the
committee chairperson.
Business judgment rule
If a board has exercised reasonable business judgment in
making a decision, the court will generally not c
onsider the board negligent in it
s
fiduciary duty, nor will the court substitute its judgment for that of the board
Fiduciary duty
Requires directors to act in the best interests and for the benefit of
the corporation, thus the community as a whole.
the members are required to avoid conflicts
of interest and acting
out of self-interest;
