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CMCA - M100 Test 2025 Questions and Answers with Complete Solutions 100% Correct
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CMCA - M100 Test 2025 Questions and Answers with Complete Solutions 100% Correct
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CMCA - M100 Test 2025 Questions andAnswers with Complete Solutions 100%
Correct
55 and older community - 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 - 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 - 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 - 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 - 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) - ANSWER ACV is the depreciated value of an item,
commonly used in property insurance coverage.
Workers' Compensation Insurance - ANSWER A common insurance coverage
and endorsement for personnel exposures to loss—in this case, loss of services
due to injuries received while working on behalf of the community association.
State statutes determine the classes of employees to be insured and coverage for
loss of services due to employment related injuries. In most states, workers'
compensation insurance is obtained from commercial insurers. Coverage for
associations with no employees is rated on an "if any employee" basis and usually
is a minimum premium. Every community association should consider obtaining
workers' compensation insurance.
Wrongful acts - ANSWER Legal claims can be brought against a community
association based on the manner in which it conducts its business. Examples of
"wrongful acts" include the failure to file taxes, collect assessments, maintain
replacement reserves, or deliver core services to its residents (member/owners
and tenants). Directors and officers (D&O) liability insurance is designed to pay for
damages arising from wrongful acts that do not lead to property damage, bodily
injury, advertising injury, or personal injury.
Yield - ANSWER One of three essential investment objectives for community
associations, yield is the amount of return on an investment. The other two
essential investment objectives are liquidity and safety.
,Zero-base budgeting - ANSWER A method of budget preparation where all
amounts are set to zero and the budget amount must be justified, instead of
assuming the line item is needed and adjusting the amount for the coming year.
The zerobase approach keeps you from accepting this year's figures at face value.
It requires you to analyze the reasons for the actual amounts spent. The actual
dollar figure may be less or more than the budgeted figure because of
circumstances you cannot assume will exist during the coming year. For example,
lawn maintenance costs during a dry season will be low— but a community
cannot assume that the coming year will be just as dry.
Work order/response form - ANSWER A form for assigning maintenance work
to be done. With some planning, it can be used— To document owner and tenant
requests To assign maintenance tasks to both maintenance staff and contractors
As a response form to be returned to an owner or tenant, indicating that work
was completed or confirming that it was assigned As a basis for allocating charges,
when appropriate A work order/response form has several benefits. It— Identifies
whether the need is an emergency or not Requires attention Allows follow-up to
evaluate satisfactio Provides a means of monitoring costs Provides a history of the
repairs that have been made Documents any problems with contractors reported
by owners or tenants Indicates if the work is a recurring problem necessitating
further evaluation Most software programs have work order/response forms as
part of their system.
Warranty - ANSWER A promise or guarantee that parts, materials, or labor will
last for a designated period of time. Warranties required should be part of the RFP
(request for proposal) packet when a community association is interested in
receiving proposals for a particular project. In addition, any contract the
association signs should state the agreed upon warranties clearly and in detail. A
warranty should state: What is covered For how long What is not covered What
the contractor will do if the work or product proves defective
, Waiver of lien - ANSWER Contract provision that gives up the right to make a
claim against the community association for payments not received. A waiver of
lien should be used when a project involves the heavy use of materials or
subcontractors—e.g., some type of construction project—and the community
association wants to avoid the risk of having to pay for materials or subcontractors
if the contractor fails to do so. A performance bond, payment bond, and waiver of
lien all provide for the community association's financial protection if the
contractor should default.
Waiver of subrogation - ANSWER A common insurance contract endorsement
designed to minimize a community association's property exposure to loss, the
waiver of subrogation prohibits the insurer from attempting to seek restitution
from a third party who causes any kind of loss to the insured. This type of
arrangement is allowable under certain circumstances where the insured could be
held liable for a claim that is paid. In other words, a waiver of subrogation is the
endorsement that deletes the right of the association to seek reimbursement for a
covered loss from the owner who caused the damage. Also commonly known as a
"waiver of the transfer of recovery rights."
Waiver of the transfer of recovery rights - ANSWER A common insurance
contract endorsement designed to minimize a community association's property
exposure to loss, the waiver of the transfer of recovery rights prohibits the insurer
from attempting to seek restitution from a third party who causes any kind of loss
to the insured. This type of arrangement is allowable under certain circumstances
where the insured could be held liable for a claim that is paid. In other words, a
waiver of the transfer of recovery rights is the endorsement that deletes the right
of the association to seek reimbursement for a covered loss from the owner who
caused the damage. Also commonly known as a "waiver of subrogation."
Waiver provision - ANSWER Contract provision that states that a waiver
(permission) by one party of any breach of contract (failure to fulfill a provision) by
the other party shall not act as a general waiver of future breaches. In other
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