Articles of incorporation Correct Answer: Bring the corporation into existence, define its basic
purposes and powers, indicate whether stock will be iss... [Show More] ued, and indicate whether there will be a board
of directors
Bylaws Correct Answer: Formally adopted governing regulations for the administration and management of a community association
CC & Rs (Covenants, Conditions & Restrictions) Correct Answer: The governing documents that
dictate how the homeowners association operates and what rules the owners—and their tenants and guests —
must obey. These legal documents might also be called
the bylaws, the master deed, the houses rules or another name. These documents and rules are legally enforceable by the homeowners association, unless a specific provision conflicts with federal, state or local laws
Community association Correct Answer: A group of owners who wish to provide a communal basis for preserving, maintaining, and enhancing their homes and property
Condominium Correct Answer: A living unit fully owned by an individual with an undivided interest in the common elements of the community. The community association itself owns no
real estate as an association
Cooperative Correct Answer: Wherein an individual owns stock or membership in the cooperative, and holds a proprietary lease or occupancy agreement for his or her living unit
Declaration Correct Answer: Used interchangeably with CC & Rs
Governing documents Correct Answer: Documents which provide for the legal structure and
operation of the community
Indemnification Correct Answer: to exempt an individual or entity from responsibility for claims made against the organization and to reimburse the individual or entity for damages or expenses incurred as a result of such claims
Master association Correct Answer: An organization of homeowners in a large condominium or planned unit development (PUD) which includes representatives from other, smaller
homeowner organizations
Mixed use development Correct Answer: A development which is designed to mix two or more
"uses" of land together (i.e. a shopping center which offers office space for dentists)
Planned community Correct Answer: the most common type of community association, where an owner owns his or her lot and/or living unit and the community owns any common areas, such as tennis courts and roads for the use and benefit of the lot owners
Proprietary lease Correct Answer: A rental agreement between a cooperative housing corporation and a share holder allowing use of a certain unit in the premises
Public offering statement Correct Answer: A disclosure statement prepared by a developer that
contains all material facts about a property offered for sale and that must be provided to a prospective purchaser in accordance with applicable state or federal law
Resolution Correct Answer: A motion that follows a set format and is formally adopted by the board of directors
Statute Correct Answer: A formal written enactment of a legislative authority that governs a country, state, city or county
Umbrella association Correct Answer: A cluster of community association types that can include aspects of homeowners associations, condominiums and cooperatives
Ad hoc committee Correct Answer: Used when an objective needs consideration and no standing
committee within the organization can absorb that issue into its scope. Usually these
committees
are used on a short
-
term basis, such as temporary oversight of an issue
or review of the standing rules of that community
Board liaison system Correct Answer: Directors are assigned to certain committees to guide the
committee on Board policy and procedures and to repo
rt back to the Board.
Directors serving as a liaison must distinguish their role from the role of the
committee chairperson.
Business judgment rule Correct Answer: If a board has exercised reasonable business judgment in
making a decision, the court will generally not c
onsider the board negligent in it
s
fiduciary duty, nor will the court substitute its judgment for that of the board
Fiduciary duty Correct Answer: Requires directors to act in the best interests and for the benefit of
the corporation, thus the community as a whole.
the members are required to avoid conflicts
of interest and acting
out of self-interest;
the members are also required to act as reasonable
people in managing the association's affairs
Management ethics Correct Answer: consists of a review of governing
documents and existing policies and procedures, current condition of the property,
owner/resident satisfaction, and fiscal operations. This review can be done by the
board and man
ager together, or a third
-
party management consultant can be hired
Management plan Correct Answer: a statement of goals and objectives
approved by the board. It includes the yearly cycle of tasks that management should
perform on the community
association's behalf
Standing committee Correct Answer: Committees which have a continued existence and are not
related to the accomplishment of a specific, once
-
only task. Budget and nomination
committees are examples of standing committees
Alternative dispute resolution Correct Answer: Mediation, arbitration and other ways of resolving
conflicts with the help of a specially trained neutral third party without the need for a
formal trial or hearing
Appeal Correct Answer: A request for a review of a case by a higher authority
—
if permitted by the
governing documents or statute
Default hearing Correct Answer: A hearing held when the alleged violator fails to appear
Due process procedure Correct Answer: a formal process designed to protect the rights of all parties
involved
Hearing notice Correct Answer: This is a written notice to an alleged violator that a hearing will be
held to consider his or her alleged violation
Hierarchy of authority Correct Answer: Policy that: Rules and architectural guidelines may not contradict or be in conflict with the legal sources
that take precedence over them. Although rules and
architectural guidelines are lower in the hierarchy of authority for community associations, they may clarify and expand a community's governing documents
—
but
may not conflict with the other governing documents.
Rule Correct Answer: A specific statement of required behavior whose violation carries a penalty
(sometimes called a sanction).
Assessment Correct Answer: the owner's financial obligation to the community
association during a given period of time
—
usually one year
Baseline funding Correct Answer: The goal of this funding strategy is to keep
the reserve cash
balance above zero
Chart of accounts Correct Answer: An organized list of titles, descriptions and assigned numbers of
all accounts in an organization's general ledger. The assigned number helps you
locate the account. The title describes the purpose
of the account
Discretionary budget line items Correct Answer: These are items based on owner, board and
committee desires. They are items people would like to have
—
given their values
FHA or Federal Housing Administration Correct Answer: Regulates and influences such items as the
amount of insurance a community association must
carry, procedures for financial
operations and requirements for the upkeep of property.
FHLMC or Federal Home Loan Mortgage Corporation Correct Answer: Buys mortgages from lenders
and in doing so require certain types of insurance to be in place.
FNMA or Federal National
Mortgage Association Correct Answer: Federally established secondary
mortgage institution that may set requirements that your community association will
have to meet if owners are to participate in their financing programs
Full funding Correct Answer: The goal of this funding strategy
is to attain and maintain the reserves
at or near 100 percent as called for on the component inventory.
Historical trend budgeting Correct Answer: This method begins with the assumption that existing
line items are needed. The amount of funds allotted to each during the current year is adjusted for expected changes in the coming year
Major improvement expenses Correct Answer: Expenses that consist of items that
are not necessarily required, but are
added to improve the overall welfare, safety or
life of the residents
— [Show Less]
