CMCA - M100 Latest Update 2024-2025 Actual
Exam 250 Questions and 100% Verified Correct
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55 and older community - CORRECT ANSWER: Must have one person who is 55 years
of age or older living in at least 80% of its occupied units. The community must be
designated "55 and older" to qualify as this type of housing that legally prohibits children
and limits occupancy to a certain age span. The designation process involves
submitting applications and obtaining approval before any enforcement of the ages of
residents commences. Approval from the Department of Housing and Urban
Development (HUD) must be received before construction begins.
Abstention - CORRECT ANSWER: Is to not cast a vote. Board members should abstain
from voting only for clearly stated reasons such as a conflict of interest or ignorance of
the matter at hand.
Acceleration - CORRECT ANSWER: The collection of all assessments due through the
end of the fiscal year. Acceleration is a technique used to collect assessments from
habitually delinquent owners.
Accrual basis of accounting - CORRECT ANSWER: Records revenue when it is earned
and expenses when they are incurred. It provides an accurate picture of the
association's financial condition. GAAP (Generally Accepted Accounting Principles)
requires the use of accrual accounting.
Action item list - CORRECT ANSWER: A list of actions to be taken before the next
board of directors meeting as a result of decisions made at the current one or between
meetings. An action item list contains the decisions to be implemented together with the
names of those assigned implementation responsibility. Excel, Google Docs and
Microsoft Outlook Tasks may be useful programs for helping you compile your action
item list.
Actual cash value (ACV) - CORRECT ANSWER: ACV is the depreciated value of an
item, commonly used in property insurance coverage.
,Ad hoc committees - CORRECT ANSWER: This committee's purpose is to deal with a
one-time issue and make recommendations to the board within a specific time frame.
The board should use a resolution to establish an ad hoc committee and clearly state
the charge and expected outcome to the committee. Ad hoc committees may be formed
to review parking regulations, develop investment guidelines, or to renovate a lobby, for
example.
Advertising injury - CORRECT ANSWER: Advertising injury provisions in commercial
general liability insurance (CGL)include language providing coverage to the community
association with respect to damages resulting in "misappropriation of advertising ideas
or style of doing business" or "infringement of copyright, slogan, or title." Community
associations with newsletters, directories, and websites that contain advertising and use
online, magazine or newspaper articles without reprint permission have this exposure.
Agenda - CORRECT ANSWER: An agenda is more than an announcement of the order
of business for a meeting. It is a meeting management tool. Meeting agendas follow a
standard format, largely based on parliamentary procedure
Aggregate amount - CORRECT ANSWER: The total amount that the insurer will pay out
under an insurance policy. This is a common feature of liability insurance policy.
Agreed amount endorsement - CORRECT ANSWER: Provides for an agreed upon limit
of property insurance. An "agreed amount" endorsement can also suspend the
coinsurance clause. Coinsurance is a standard element in most property policies that
obligates the insured to maintain a certain amount of property insurance on the entire
property or per structure, based on a stated percentage, usually 80% - 90%. If the
insured does not maintain this percentage, the insured will not be reimbursed for the full
loss of the property.
Alternative dispute resolution (ADR) - CORRECT ANSWER: An effective way to resolve
alleged violations. It involves submitting the alleged violation to a disinterested third
party who helps the parties reach an amicable solution. This person is not a judge or an
expert in community association law, but can assist in the resolution of the alleged
violation.
,Appeal - CORRECT ANSWER: An appeal is a request for a review of a case by a higher
authority—if permitted by the governing documents, resolution or state statute. For
example— if the hearing panel is a committee, the board of directors acts as the higher
authority. If the board of directors is the hearing panel, the alleged rule violator must
appeal to an authority outside the community association—for example, alternative
dispute resolution.
Arbitration - CORRECT ANSWER: A process in which a third party—called the
arbitrator—renders a decision as to the respective liabilities of all parties. The object is
not to reach a settlement; instead the arbitrator ultimately makes a ruling. It is an
adversarial process that results in the same "win-lose" or "lose-lose" that you would see
in litigation. Arbitration can be binding or non-binding. A binding arbitration typically
cannot be appealed. Once the decision is rendered, unless you can prove fraud, the
decision will be forever binding. A non-binding arbitration is advisory in nature. The
decision that the arbitrator makes does not have to be followed. In that respect, it is like
getting an opinion of your case from a neutral party, which could result in a fair
settlement figure.
Architectural guideline - CORRECT ANSWER: A rule that applies to the appearance or
exterior of a lot, home, or unit. Community associations frequently develop architectural
guidelines that address fencing, decks and patios, landscaping, doors and windows,
color of exterior surfaces, and location of improvements upon lots, for example.
Articles of incorporation - CORRECT ANSWER: Document that brings a corporation into
existence. The document also defines its basic purposes and powers and indicates
whether stock will be issued. The articles must be filed with a state in order to
incorporate. Among the things it typically must include are the name and address of the
corporation, its general purpose and the number and type of shares of stock to be
issued.
Assessment - CORRECT ANSWER: The owner's financial obligation to the community
association during a given period of time—usually one year. Also commonly known as a
maintenance fee. It covers the owner's share of the common expense (known as
"common expense liabilities" in some states). An annual assessment may be paid on a
monthly, quarterly, or annual basis, or however the governing documents dictate. Most
of a community's revenue will come from owner assessments.
, Assessments receivable insurance - CORRECT ANSWER: This insurance actually has
a certain limited value. It applies to situations in which a covered loss happens to the
property (for example, a fire destroys a unit) and the community association is unable to
collect assessments from the owner. Housing cooperatives can protect their
assessments through "Loss of Rents" coverage, a type of business income.
Assets - CORRECT ANSWER: include anything owned that has value. Unlike
commercial businesses, however, the actual land and buildings of the community
association are not generally shown as an asset, although the association may include
assets that can be sold without an owner vote. For cash basis reports, cash usually is
the only asset.
Assignability provision - CORRECT ANSWER: A contract provision stating that neither
party may assign its obligations under the contract to any other person without the
express written consent of the other party. The contract should specifically state that the
contractor cannot use subcontractors without the association's permission.
Association-employed manager - CORRECT ANSWER: An individual who is directly
employed by the association to manage the community's operations. The role of the
manager is to: • Provide information, training, and leadership on community association
operations to the board, committees, and the community at large • Foster a sense of
community awareness and spirit within the residents • Develop a body of leadership
through the committee structure • Provide the necessary administrative tools to the
board to enable it to make wise, informed decisions on both short-term and long-term
actions and goals.
Audit - CORRECT ANSWER: An examination of the accounting records and procedures
of an organization by a certified public accountant (CPA) for the purpose of verifying the
accuracy and completeness of financial records. An annual audit may be required by
your community association's governing documents and/or your state's statutes.
External verification of the accuracy and completeness of your community's financial
records is a sound business practice.
Bad debt write-off - CORRECT ANSWER: When a community association determines
that a debt cannot be collected from an owner after a reasonable effort has been made,
it should write off the debt. A bad debt write-off consists of recording an uncollectible
debt as an expense that the association must absorb. This usually requires a resolution
of the board.
