CMCA cheat sheet

Order of authority, highest to lowest: federal and state statutes, the recorded declaration (CC&Rs), articles of incorporation, bylaws, board-adopted rules and regulations, then board policies and resolutions.

The declaration is recorded in the county land records, runs with the land, binds all owners and successors, and is amended only by the owner vote threshold stated in the document (commonly two-thirds or 75%) plus recordation.

Bylaws govern internal corporate operations: board size and terms, officer duties, meeting notice, quorum, voting, removal and vacancy filling, and their own amendment procedure.

Rules and regulations are adopted by the board, must be consistent with the declaration and bylaws, must be reasonable, and must be applied uniformly to all owners.

Quorum is defined in the bylaws or statute; if a member meeting lacks quorum, the meeting is adjourned to a date set by the bylaws and no binding business may be transacted.

Board action requires a quorum plus a majority vote of directors present, unless the bylaws or statute require a supermajority or a vote of the full board.

Typical notice periods: board meetings 3 to 10 days, member annual or special meetings 10 to 30 days, with the notice containing the required agenda, budget, or ballot content.

Executive session is limited to specified subjects such as litigation, personnel, contracts, delinquencies, and member discipline; general association business and most binding votes belong in open session.

Minutes record the actions taken, the vote tally, and required disclosures such as conflict recusals, not verbatim debate.

Directors owe fiduciary duties of care (informed, diligent decisions), loyalty (no self-dealing, no personal gain), and obedience (follow the governing documents and law).

Business judgment rule: a board decision is presumptively valid when made in good faith, with reasonable investigation, without conflict of interest, and with a rational basis.

Conflict of interest protocol: disclose the interest, abstain from discussion and vote where required, and have the disclosure and recusal recorded in the minutes.

Fair housing law prohibits discrimination based on race, color, religion, sex (including sexual orientation and gender identity per federal interpretation), national origin, familial status, and disability.

The Fair Housing Act governs residential housing and reasonable accommodations or modifications for disability; the ADA governs public accommodations and employment, not association housing rules.

Reasonable accommodation requests must be evaluated through an interactive process, and supporting disability documentation may be requested only when the disability or need is not obvious.

Collections: the FDCPA regulates third-party debt collectors; many states require a pre-lien notice, a cure period (often 30 days), and board authorization before recording a lien.

Member inspection of records is limited to a proper purpose, and the association may redact or withhold confidential material such as personnel files, litigation strategy, and discipline records.

Enforcement requires notice of the violation, an opportunity to be heard, and consistent application; selective enforcement is a recognized defense and can waive a restriction.

The operating budget covers recurring annual expenses; the reserve budget funds major repair and replacement of components identified in the reserve study; the two are typically presented separately.

Total assessment = budgeted expenses minus non-assessment income (interest, fees, fines), allocated among owners by the method stated in the declaration (often equally per unit or by assessed value).

Special assessments are levied outside the annual budget; whether the board may levy them unilaterally or members must approve depends on the governing documents and state statute.

Percent funded = actual reserve balance divided by the fully funded balance, times 100; commonly interpreted as under 30% weak and above 70% strong.

Cash-basis accounting records revenue and expenses when cash moves; accrual-basis accounting records them when earned or incurred, capturing unpaid obligations at period end.

Core financial statements are the balance sheet, the statement of revenues and expenses, and the statement of cash flows; budget-to-actual variance analysis explains overages and shortfalls.

Assurance levels, highest to lowest: audit (independent opinion), review (limited assurance, inquiry and analytical procedures), compilation (no assurance).

Fidelity or crime coverage protects against employee and volunteer dishonesty; directors and officers coverage protects against wrongful-act claims; neither substitutes for property or general liability coverage.

Delinquency workflow is lien, then foreclosure or other statutory remedy, governed by a written collections policy applied uniformly; reserve funds are generally restricted to reserve purposes.

Maintenance categories: routine (recurring), preventive (scheduled servicing), corrective (repair after failure), emergency (immediate), and deferred (postponed, which raises future cost).

A reserve study has two parts: a physical analysis (component inventory, quantity, replacement cost, useful life, remaining useful life) and a financial analysis (fund balance, percent funded, funding plan).

Reserve components are common elements the association must maintain or replace that have a limited useful life and significant cost, excluding routine operating items such as landscaping and pool chemicals.

Funding methods include full funding, baseline funding (no positive percent funded target beyond current cost), threshold funding, statutory funding, and cash-flow funding.

Straight-line funding spreads a component's cost evenly across its useful life; cash-flow funding accounts for interest earnings and produces smoother annual contributions.

Common update cycle: a full study with an on-site visit about every three years, with financial-only updates in the intervening years.

Risk management sequence: identify exposures, evaluate frequency and severity, then treat by avoidance, reduction, transfer (insurance, contracts), or retention, and monitor results.

Typical insurance program: master property, general liability, umbrella or excess, directors and officers, fidelity or crime, workers compensation, and ordinance or law coverage.

Replacement-cost appraisals should be updated periodically because coinsurance, deductibles, and limits are tied to accurate insurable values.

Worker classification turns on behavioral control, financial control, and the type of relationship, not the label in the contract; misclassification creates tax, workers compensation, and benefits liability.

Employee onboarding documents include Form I-9 (employment eligibility), Form W-4 (withholding), the job description, and the offer letter; FLSA rules govern overtime eligibility.

A valid contract requires offer, acceptance, consideration, and mutual assent; association contracts must be signed by a person with authority granted by the board or bylaws.

Key contract terms to review: scope of work, term and renewal, price and payment schedule, termination rights, insurance requirements, indemnification, and dispute resolution.

For significant work, obtain at least three written bids using identical specifications so bids are comparable; the lowest bid is not automatically the correct award decision.

An RFP states scope, specifications, schedule, insurance and licensing requirements, bidder qualifications, and the evaluation criteria used to select a vendor.

Before payment, obtain a current certificate of insurance showing required coverage, additional insured status where applicable, a W-9, and lien waivers for completed work.

Records retention is set by statute and the governing documents; governing documents and minutes are typically kept permanently, with financial and contract records retained for a defined multi-year period.

Meeting transparency rules: required notice, an agenda available in advance, an open session with member comment where the bylaws or statute allow, and minutes available afterward.

Many statutes and declarations require alternative dispute resolution (mediation or arbitration) as a precondition to an owner filing suit against the association, and vice versa.

Enforcement correspondence should state the rule, the observed violation, the cure deadline, the appeal path, and stay factual to limit defamation and harassment claims.

New-owner orientation material typically includes governing documents, the assessment schedule and due dates, rules, architectural request procedures, and contact and emergency information.

Board officer roles: president presides and generally serves as spokesperson, secretary maintains records and minutes, treasurer oversees financial reporting and budget preparation.

Committees operate under a board-approved charter or charge and advise or act within delegated authority; the board retains decision authority unless it formally delegates.

De-escalation technique: calm tone, active listening, restating the concern, separating facts from emotion, and committing only to actions the board can actually take.

Document all resident interactions with dates and outcomes, and route legal questions, fair housing requests, and litigation threats to qualified counsel.