CMCA flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Declaration (CC&Rs)

The recorded governing document that creates the association, imposes covenants and restrictions, and obligates owners to pay assessments; it binds all owners and is amended only by the stated supermajority vote plus recordation.

Bylaws

The document governing the corporation's internal operations, including board size and terms, officer duties, meeting notice, quorum, voting procedures, recordkeeping, and the amendment process.

Quorum

The minimum number of members or directors who must be present at a meeting for the body to transact business, as fixed by the bylaws or by state statute.

Executive session

A closed portion of a board meeting restricted to sensitive matters such as litigation, personnel, contracts, delinquencies, and member discipline, with binding decisions generally made afterward in open session.

Governing document hierarchy

The order of authority applied when documents conflict: federal and state law first, then the recorded declaration, articles of incorporation, bylaws, board-adopted rules, and finally board policies.

Rules and regulations

Board-adopted operating rules that implement the declaration and bylaws; they must be reasonable, consistent with superior documents, within board authority, and enforced uniformly against all owners.

Fiduciary duty

A director's legal obligation to act with care, loyalty, and obedience to the governing documents and law, placing the association's interests above personal interests.

Business judgment rule

A legal presumption protecting board decisions made in good faith, with reasonable investigation, without conflict of interest, and with a rational basis relating to a legitimate association purpose.

Reasonable accommodation

A change to rules, policies, or procedures granted to a resident with a disability so the person can use and enjoy the housing, typically determined through an interactive process with the association.

Conflict of interest

A circumstance where a director's personal or financial interest could influence a board decision; the director discloses it, abstains as required, and the disclosure and recusal are minuted.

Selective enforcement

Enforcing a restriction against some owners while allowing others to violate it; this can defeat the association's enforcement action and support claims of waiver or discrimination.

Percent funded

Reserve fund balance divided by the fully funded balance, multiplied by 100; it measures how much of the components' accumulated deterioration is covered by reserves.

Special assessment

A one-time charge levied on owners outside the annual budget to cover unanticipated costs or reserve shortfalls, authorized by the board or by member vote as the governing documents require.

Operating budget

The annual financial plan of anticipated recurring revenues and day-to-day expenses, excluding major repair and replacement costs funded through the reserve budget.

Audit

An independent examination of financial statements and underlying records that results in an opinion on whether the statements are fairly presented; it provides the highest level of assurance.

Accrual accounting

An accounting method that records revenue when earned and expenses when incurred regardless of cash timing, so unpaid obligations appear on the period-end balance sheet.

Assessment lien

A recorded legal claim against a unit securing unpaid assessments, created after required notices, cure periods, and board authorization, and enforceable through foreclosure under state statute.

Reserve study

A budget planning tool combining a physical analysis of common-element components, condition, and remaining useful life with a financial analysis of reserve fund status and funding plan.

Remaining useful life

The estimated number of years before a component must be repaired or replaced, used to schedule reserve contributions and project future funding needs.

Component inventory

The list of common-element assets the association must maintain and eventually replace, recording quantity, replacement cost, useful life, and remaining useful life for each item.

Risk retention

Accepting the financial consequences of an identified risk instead of avoiding or transferring it, commonly used for low-frequency, low-severity exposures within budget.

Fidelity bond

Coverage for loss caused by dishonest acts of employees, directors, or volunteers who handle association funds; it is separate from property, liability, and directors and officers coverage.

Preventive maintenance

Scheduled inspections and servicing performed before failure occurs, intended to extend the life of building systems and reduce emergency repairs and deferred costs.

Independent contractor test

A multi-factor analysis of behavioral control, financial control, and relationship type used to classify workers; misclassification can create tax, workers compensation, and benefits liability.

Request for proposal

A solicitation document specifying scope, specifications, timeline, insurance and licensing requirements, bidder qualifications, and evaluation criteria so competing vendor bids can be compared.

Additional insured endorsement

A policy provision extending liability coverage under a vendor's policy to the association for claims arising from the vendor's work on the property, typically evidenced by a certificate.

Lien waiver

A signed statement from a contractor or supplier releasing the right to file a mechanics lien for work or materials, commonly required as a condition of progress or final payment.

Workers compensation

Statutory insurance covering employee injuries, medical costs, and lost wages arising from work; it is required for employees and is often verified for contractors as well.

Alternative dispute resolution

Mediation or arbitration used to resolve disputes between owners and the association before litigation; many statutes and declarations require it as a procedural prerequisite.

Welcome packet

Orientation material given to new owners covering governing documents, assessment schedule, rules, architectural request procedures, and key association contacts and emergency information.

Open meeting

A board meeting accessible to members except for limited executive session topics, held with required advance notice and documented by minutes available after the meeting.

De-escalation

A communication approach using a calm tone, active listening, restating the concern, and factual responses to lower tension during a conflict with a resident.