CMCA Knowledge 2 — Questions and Answers
Question 1: Under the Fair Housing Act, which of the following is NOT a protected class at the federal level?
- Race
- Source of income (Correct answer)
- National origin
- Familial status
Correct answer: Source of income
Source of income is not a federally protected class under the Fair Housing Act, though some states and localities have added it.
Question 2: A condominium association's declaration is best described as which type of document?
- An internal policy adopted by the board
- A recorded legal instrument that creates the condominium (Correct answer)
- A contract between the property manager and the association
- A bylaws amendment requiring owner approval
Correct answer: A recorded legal instrument that creates the condominium
The declaration (or master deed) is the recorded governing document that legally creates the condominium and runs with the land.
Question 3: What is the primary purpose of an operating reserve in a community association's budget?
- To fund long-term capital replacements
- To cover day-to-day operating expenses and cash flow needs (Correct answer)
- To pay special assessments levied by the board
- To satisfy lender escrow requirements for delinquent owners
Correct answer: To cover day-to-day operating expenses and cash flow needs
An operating reserve provides a cushion for unanticipated operating expenses and timing gaps in cash flow during the fiscal year.
Question 4: Which document typically outlines the procedures for conducting board meetings and election of officers in a community association?
- Declaration
- Plat map
- Bylaws (Correct answer)
- Rules and regulations
Correct answer: Bylaws
Bylaws govern the internal administration of the association, including meeting procedures, quorum requirements, and officer elections.
Question 5: An association manager discovers that the board has been paying a vendor owned by a board member without prior disclosure. This is an example of:
- A valid business judgment rule decision
- A conflict of interest requiring disclosure and recusal (Correct answer)
- An emergency expenditure exempt from bidding
- A permitted related-party transaction under GAAP
Correct answer: A conflict of interest requiring disclosure and recusal
A board member with a financial interest in a vendor must disclose the conflict and typically recuse themselves from the vote.
Question 6: Under the Americans with Disabilities Act (ADA), community associations that are purely residential are generally:
- Fully subject to ADA Title III requirements
- Required to comply only with Title I employment provisions if they have employees (Correct answer)
- Exempt from all ADA provisions without exception
- Required to retrofit all common areas to ADA standards immediately
Correct answer: Required to comply only with Title I employment provisions if they have employees
Residential community associations are generally not subject to ADA Title III (public accommodations) but may have Title I obligations if they employ workers.
Question 7: A reserve study's 'percent funded' metric indicates:
- The percentage of owners who have paid assessments on time
- The ratio of actual reserves to the fully funded reserve balance (Correct answer)
- The share of the operating budget allocated to capital expenses
- The percentage of components that have been replaced this year
Correct answer: The ratio of actual reserves to the fully funded reserve balance
Percent funded compares the association's current reserve balance to what it theoretically should have if every component were funded proportionally to its age.
CMCA Knowledge 2
Under the Fair Housing Act, which of the following is NOT a protected class at the federal level?