CMCA CMCA - Certified Manager of Community Associations Assessments and Collections Questions and Answers 2 — Questions and Answers
Question 1: Under most state statutes, how far in advance must a homeowner be notified before a lien is filed for delinquent assessments?
- 10 days
- 30 days (Correct answer)
- 60 days
- 90 days
Correct answer: 30 days
Most state statutes require at least 30 days written notice to the homeowner before the association can file a lien for unpaid assessments, giving the owner a chance to cure the delinquency.
State HOA collection laws generally mandate a 30-day notice and opportunity to cure before a lien is recorded. This protects homeowners from sudden encumbrances while still allowing associations to protect their financial interests. The CMCA exam tests knowledge of these procedural safeguards.
Question 2: Which collection method allows an association to intercept a delinquent owner's rental income to satisfy unpaid assessments?
- Foreclosure
- Receivership
- Rent intercept (Correct answer)
- Wage garnishment
Correct answer: Rent intercept
A rent intercept allows the association or a court-appointed receiver to collect rent directly from a tenant in a delinquent owner's unit and apply it toward unpaid assessments.
When an owner rents their unit but fails to pay assessments, some states allow the association to send a rent intercept notice to the tenant, requiring rent to be paid to the association instead of the owner. This is often faster than foreclosure and can satisfy the debt without a lengthy court process.
Question 3: What is the primary purpose of an association's collection policy?
- To punish delinquent owners
- To establish consistent, legally compliant procedures for pursuing unpaid assessments (Correct answer)
- To maximize late fee revenue
- To discourage new homeowners from purchasing
Correct answer: To establish consistent, legally compliant procedures for pursuing unpaid assessments
A collection policy establishes uniform, legally compliant procedures so that all delinquent owners are treated consistently, reducing the association's legal risk and ensuring fair enforcement.
A well-drafted collection policy outlines escalation steps, late fee schedules, and legal remedies, ensuring every delinquent account is handled the same way. This protects the association from claims of selective enforcement and demonstrates fiduciary responsibility.
Question 4: Special assessments differ from regular assessments primarily because they are:
- Collected monthly
- Levied for extraordinary or unanticipated expenses beyond the regular budget (Correct answer)
- Exempt from homeowner notification
- Capped at $100 per unit
Correct answer: Levied for extraordinary or unanticipated expenses beyond the regular budget
Special assessments are one-time levies imposed to cover unexpected or extraordinary costs that exceed what the regular budget can accommodate.
Unlike regular assessments that fund the operating budget, special assessments address specific funding gaps. Governing documents typically require proper notice, sometimes a member vote for amounts above a threshold, and a clear statement of purpose. The CMCA exam frequently tests the procedural requirements for levying special assessments.
Question 5: A payment plan agreement between an association and a delinquent homeowner should include which essential element?
- A clause waiving all future assessments
- An acknowledgment of the total debt owed and clear repayment terms (Correct answer)
- A guarantee from the owner's employer
- A release of the association's lien upon signing
Correct answer: An acknowledgment of the total debt owed and clear repayment terms
A valid payment plan agreement must include the total amount owed, repayment schedule, consequences of default, and the owner's acknowledgment of the debt so both parties are protected.
Without a clear acknowledgment of the debt and defined repayment terms, the association may have difficulty enforcing the agreement in court. The plan should specify that the lien remains in place until the debt is fully paid, and what happens if the owner defaults on the payment plan.
Question 6: When an association pursues judicial foreclosure on a delinquent unit, the process typically begins with:
- Changing the door locks on the unit
- Filing a complaint in court after the lien has been recorded (Correct answer)
- Contacting the mortgage lender to assume the mortgage
- Obtaining a board resolution to evict the owner immediately
Correct answer: Filing a complaint in court after the lien has been recorded
Judicial foreclosure begins with the association filing a complaint in the appropriate court after a lien has already been recorded, seeking a court order to sell the home to satisfy the debt.
In states requiring judicial foreclosure, the association records a lien, then files a civil action to foreclose that lien. The court process includes notice, opportunity for the owner to cure, and ultimately a judgment authorizing a sale. The CMCA exam tests knowledge of both judicial and non-judicial foreclosure processes.
CMCA CMCA - Certified Manager of Community Associations Assessments and Collections Questions and Answers 2
Under most state statutes, how far in advance must a homeowner be notified before a lien is filed for delinquent assessments?