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M100 COMMUNITY ASSOCIATION MANAGEMENT EXAM |
ALL QUESTIONS AND CORRECT ANSWERS WITH
EXPLANATIONS | GRADED A+ | VERIFIED ANSWERS |
LATEST EXAM 2025
Each of the following include steps in establishing a maintenance system for a community association EXCEPT: a. assign blame to staff not adequately fulfilling maintenance responsibilities b. develop maintenance management controls c. analyze your assets' maintenance needs d. evaluate your maintenance system and efforts ---------CORRECT ANSWER-----------------a. assign blame to staff not adequately fulfilling maintenance responsibilities There are five steps in establishing a maintenance system for a community association. These involve developing maintenance management controls, identifying the physical assets to maintain, analyzing your assets' maintenance needs, establishing five basic maintenance programs, and evaluating your maintenance system and efforts. Assigning blame to staff not adequately fulfilling maintenance responsibilities is not included among these steps. Which of the following is not an example of a maintenance management control? a. work orders b. charts of information c. response forms d. public offering statements ---------CORRECT ANSWER-----------------d. public offering statements A management control is any means used to track, record, remind, or command attention. Usually these means are forms or documents. Examples of maintenance management controls include checklists, charts of information, calendars or schedules, records of actions taken, inventories, work orders, request forms, and response forms.
Effective maintenance cannot occur without management controls. The public offering statement is simply a disclosure statement that provides information on the community association to prospective buyers. It is also mandated by state statute. True or false. The declaration or master deed often includes a maintenance schedule for particular assets. ---------CORRECT ANSWER----------------- True Managers should research legal documents to identify the physical assets their community association is responsible for maintaining. State statutes, board resolutions, and governing documents all often discuss maintenance of physical assets. In particular, the declaration or master deed will frequently include a maintenance schedule for particular assets. Complete the following sentence: The typical management control used to identify physical assets and their maintenance needs is a(n) ____________. a. inspection report b. inspection checklist c. maintenance record d. inventory ---------CORRECT ANSWER-----------------d. inventory The typical management control used to identify physical assets and their maintenance needs is an inventory. This is a record of all real and personal physical property owned and maintained by the community association. Inventories usually record date of purchase, warranty, quantity, description, original installer/builder or service contractor, extended warranty and provider, cost, special maintenance needs, and estimated replacement data. To identify what maintenance must be done, managers should record the following information for every physical asset EXCEPT:
Preventive maintenance is periodic maintenance to avoid disruptive breakdowns and to prolong the useful life of the physical asset in question. Literature from the manufacturer is one of the best sources of information on preventive maintenance for equipment. Examples of preventive maintenance include rebuilding pool pumps with a life expectancy of eight years every five years and cleaning problem sewer lines every month to avoid backups. True or false. Surveying residents is a common method community association managers use to evaluate their maintenance systems and implementation efforts. ---------CORRECT ANSWER-----------------True Surveying residents—either periodically or at the time their maintenance request has been handled—is a common method used by community association managers to evaluate their maintenance systems and implementation efforts. Other common methods include having the board of directors fill out a "report card" that addresses the basic maintenance programs in specific terms, reviewing budget costs for the previous year, reviewing all maintenance work orders, physically inspecting the property, and visiting other similar community associations to obtain a first-hand comparison or self- check. True or false. A contract is an agreement between two or more parties, enforceable by law, by which each party promises to do, or not to do, something. ---------CORRECT ANSWER-----------------True Management of a community association's resources frequently involves the use of contracts to obtain the products and services required. A contract is an agreement between two or more parties, enforceable by law, by which each party promises to do, or not to do, something. Whenever a community association enters into a contract, it is binding itself both legally and financially. Therefore, as a community association manager, you must assist your community to enter contracts as carefully as possible—seeking legal or technical advice whenever necessary.
When deciding whether to have staff members or a contractor perform a task, a manager should consider each of the following EXCEPT: a. supervision b. expertise c. number of people d. retirement plan contributions ---------CORRECT ANSWER-----------------d. retirement plan contributions When deciding whether to have staff members or a contractor perform a task, a manager should consider the number of people, expertise, supervision, and availability. If a manager tries to stretch his or her people too thin, there is the danger of demoralizing the staff and delaying completion of all tasks. Always consider the possible "costs" of using inadequately trained people to do a job. Be realistic about the amount of supervision that will be necessary and whether you or anyone else on site can provide it. True or false. When deciding whether to have staff members or a contractor perform a task, a manager should consider where tools, equipment, and supplies will be stored—and the liability involved. --------- CORRECT ANSWER-----------------True A manager is responsible for ensuring that all supplies are stored and labeled in accordance with O.S.H.A. standards. In this respect, the manager should be concerned with security and safety issues and seek to avoid theft and accidents. Depending on the tools, equipment, and supplies involved in a task, an association may not be able to securely and safely store them for the duration of the project, and may wish to instead use a contractor. A bid request or request for proposal (RFP) should include each of the following EXCEPT: a. vague instructions about the products or services requested
waiting for a response—only to find out that none of the receivers were interested or available. Complete the following sentence: A ______________ is a promise or guarantee that parts, materials, or labor will last for a designated period of time. a. prospective bidder's questionnaire b. warranty c. qualifications sheet d. waiver of lien ---------CORRECT ANSWER-----------------b. warranty A warranty is a promise or guarantee that parts, materials, or labor will last for a designated period of time. A prospective bidder's questionnaire or qualifications sheet is a document that asks for certain types of information to determine if the bidder is technically and financially qualified to handle a job of this scope. A waiver of lien is a document which gives up the right to make a claim against the community association for payments not received. Which of the following contract provisions means that if the contractor's employees, agents, or subcontractors damage any common or individual property in the community while performing contracted work, the contractor agrees to fully restore the property to its original condition? a. indemnification b. standard of performance c. restoration d. compensation ---------CORRECT ANSWER-----------------c. restoration Restoration is an essential contract clause stating that if the contractor's employees, agents, or subcontractors damage any common or individual property in the community while performing contracted work, the contractor agrees to fully restore the property to its original condition. This clause may also provide for the community association to retain part of the contract price until restoration has been completed. Or it may provide for deducting from the contract price any costs that the community association is forced to spend to
do the restoration itself—if the contractor does not do it within a specified period after completion of the work. Complete the following sentence: A ______________ is a guarantee by a surety (a third party) to protect the community association if the contractor fails to perform or finish the work. a. payment bond b. default c. performance bond d. waiver of lien ---------CORRECT ANSWER-----------------c. performance bond A contract should provide for the community association's financial protection if the contractor should default. This is important at all times, but especially during a weak economy, or for larger projects. A performance bond is a guarantee by a surety to protect the community association if the contractor fails to perform or finish the work. Because there is a cost to the community association involved, a performance bond typically is used with certain large projects. True or false. The manager should sign all contracts on behalf of the community association. ---------CORRECT ANSWER-----------------False The president and/or secretary of the community association should sign contracts on its behalf. The manager should not sign a contract on the community association's behalf, as he or she is not the party entering the agreement—the community association is. Community association employees are obligated to do each of the following EXCEPT: a. possess the skills needed to perform assigned tasks b. use reasonable care in performing assigned tasks in order to protect the community's assets and interests
The federal government prohibits discrimination against otherwise qualified people based on race and ethnicity, color, national origin, age, gender, religion, pregnancy, and disability. Statutes, regulations, and case law at all three governmental levels prohibit discrimination in hiring, promotion, dismissal, compensation, and working conditions based on specific personal characteristics. Community associations should be encouraged to recruit and hire employees whose skill sets most closely match that of the position. 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. ---------CORRECT 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. ---------CORRECT 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 ---------CORRECT 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 c. special resolution d. general resolution ---------CORRECT 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. ---------CORRECT 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.
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 ---------CORRECT 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. ---------CORRECT 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 ---------CORRECT ANSWER-----------------a. survey data All three types of legal sources—state statutes, governing documents, and court 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. ---------CORRECT 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 ---------CORRECT 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. --------- CORRECT ANSWER-----------------True Through judicial decision, a substantial body of law has developed concerning the standards to which directors must conform while conducting a community association's affairs. Many courts apply the "business judgment rule" to a board's actions.
community associations currently exist in the U.S. In self managed associations, the board itself is responsible for all community association functions, including maintaining accounting records, preparing budgets, collecting dues, and staying informed about association resources and best practices. True or false. An increase in assessment delinquencies that is not due to a poor economy may be an example of a warning sign of a weak management situation. ---------CORRECT ANSWER-----------------True When assessment delinquencies increase, the manager should investigate the reasons for the increase as soon as possible and as objectively as he or she can. In addition, if the demands of the community association and the board of directors are unreasonable or exceed the manager's ability to perform the required services, it is the manager's responsibility to communicate this to the board before it creates a weak management situation. Complete the following sentence: A ________________ is a statement of goals and objectives approved by the board that includes the yearly cycle of tasks that management should perform on the community association's behalf. a. management audit b. management contract c. management plan d. employment agreement ---------CORRECT ANSWER-----------------c. management plan Typically, a management plan includes tasks that address the community association's governance, business, and community aspects. Managers should have a management plan so both they and their boards are clear on what is expected. In most instances, it will be up to the manager to propose a plan to the board for approval. Managers should set goals for the year in relation to the community association's budget.
True or false. It is ethically acceptable for a professional community association manager to arrange for a kickback for giving a contractor an association contract. ---------CORRECT ANSWER-----------------False The manager of a community association has a professional duty to avoid attempting to make any secret profits when acting on the community's behalf. Arranging for a kickback for giving a contractor an association contract—without disclosing relationship to the board—constitutes making secret profits and is ethically unacceptable. Managers should review and consult the CAI codes of ethics. The Professional Community Association Manager (PCAM) code of ethics sets forth the general and technical standards for integrity and objectivity, professional courtesy, conflict of interest, use of client funds, and limitations of practice. Reasons for establishing community rules and architectural guidelines include each of the following EXCEPT: a. There is the need to create a sense of fairness and equity among residents. b. In contemporary society, people are more likely to question and challenge authority. c. In cases where rules have been poorly developed or enforced, the courts are ruling against community associations. d. Fines imposed on residents who break community rules are frequently the primary source of association income. ---------CORRECT ANSWER------ -----------d. Fines imposed on residents who break community rules are frequently the primary source of association income. Careful rule making and enforcement are essential for community associations. Rules should never be passed simply to collect income for the association—they must be necessary and intended to contribute to the betterment of the community. True or false. According to the general hierarchy of authority for operating community associations, rules and regulations take precedence over the articles of incorporation. ---------CORRECT ANSWER-----------------False
b. Purpose c. Scope and Intent d. Self help ---------CORRECT ANSWER-----------------d. Self help The fourth component of a resolution is the specifications section (instead of self help). This section states clearly and completely what those bound by the rule will be expected to do. Which of the following is not one of the basic steps in a due process procedure? a. Issue a "cease and desist" letter b. Issue a hearing notice if the violation does not end within the stated time c. Hold the scheduled hearing if the violation does not end within the stated time d. Issue a decision before a hearing is held ---------CORRECT ANSWER---- -------------d. Issue a decision before a hearing is held The hearing panel should issue a decision only after a hearing is held. The hearing panel determines the facts, whether or not a rule has been violated, the penalty to be imposed, if any, and the enforcement date of the penalty, if any. The hearing panel then issues this information in the form of a decision. True or false. Using alternative dispute resolution to encourage residents to comply with rules and guidelines is more costly and time consuming than going through the court system. ---------CORRECT ANSWER----------------- False Alternative dispute resolution (ADR) involves submitting a dispute to a trained, uninvolved third party for assistance with resolution. The third party's decision may be nonbonding or the third party may merely act as a facilitator in the case of a mediator. However, this approach can be a more efficient and effective way to resolve a dispute than other means. A community association might propose ADR when confronted with a difficult rule enforcement situation or the possibility of prolonged litigation. In many
jurisdictions ADR is either required or encouraged before filing suit or during suit, but before trial. Which of the following is an internal resource a community can use to encourage an owner or tenant to conform to community association rules? a. Relying on the local health department to determine the appropriate number of occupants in a unit b. Asking for the local zoning department's help in removing vehicles, boats, and trailers from lots and common areas c. Having the police enforce traffic regulations d. Suspending an owner's voting rights ---------CORRECT ANSWER---------- -------d. Suspending an owner's voting rights Suspending an owner's voting rights is an example of an internal resource a community association can use to encourage residents to obey association rules. While this may be a rather mild action, it can be a very useful resource for encouraging rule violators to conform to community association rules. Each of the other examples listed are examples of external resources available to community associations. True or false. To increase the likelihood that a court of law will uphold an association's enforcement of architectural guidelines, the board of directors should turn a blind eye towards violations and permit unapproved architectural changes to exist. ---------CORRECT ANSWER----------------- False A manager should advise a board of any violations of architectural guidelines as soon as they are discovered—for example, during inspection of the property. The board should also refrain from turning a blind eye towards violations. They should report any known violations to the manager in a timely manner. If unapproved architectural changes are permitted to exist, the association may be hindered if it later tries to enforce the rule that was violated.
