CMCA key terms

The full set of legal papers that create and regulate an association, typically the articles of incorporation, bylaws, recorded declaration or CC&Rs, and board-adopted rules.

The recorded document that creates the association, imposes covenants and restrictions on the property, and sets owner obligations such as assessments and use limits; it binds future owners.

The governing document covering internal operations: board size and terms, officer duties, meeting notice, quorum, voting, and the procedure for amending the bylaws themselves.

The order of legal precedence among an association's papers; statutes and the recorded declaration control over bylaws, which in turn control over board-made rules when they conflict.

Board-adopted operating rules, such as pool hours or parking limits, that must be consistent with higher governing documents and are usually enforced through notice and a hearing.

The minimum number of directors or members who must be present for a meeting to transact business validly; the required number is set in the bylaws or by statute.

A written authorization allowing one person to vote on an owner's behalf at a membership meeting, subject to limits stated in the bylaws and state law.

A closed portion of a board meeting limited to sensitive matters such as litigation, personnel, contracts, or owner discipline; the board returns to open session afterward.

The official written record of a meeting showing date, attendees, motions, and actions taken; minutes document board decisions and are generally available for owner inspection.

A board member's legal obligation to act in the association's best interest rather than personal interest, using care, loyalty, and good faith in every decision.

The fiduciary obligation to make informed decisions by reading materials, asking questions, and acting as a reasonably prudent person would in similar circumstances.

The fiduciary obligation to place the association's interests above one's own, which means disclosing conflicts and avoiding self-dealing or personal benefit from board service.

A situation in which a director's personal, family, or financial interest could affect an association decision; the director discloses it and generally abstains from discussion and voting.

A legal protection for directors who make good-faith decisions with reasonable care and information, shielding them from liability when the results are simply disappointing or unsuccessful.

Federal and state laws barring discrimination in housing based on protected characteristics such as race, color, religion, sex, disability, familial status, or national origin, including in rules and enforcement.

The association's obligation or agreement to reimburse directors, officers, or employees for legal costs and liabilities incurred while acting in good faith on association business.

The annual financial plan estimating routine income and expenses, such as landscaping, insurance, and management, used to calculate the regular assessments owners pay.

Money set aside to pay for future repair or replacement of major common components, funded through assessments guided by a reserve study rather than routine operating income.

The periodic charge the association levies on each owner under authority of the governing documents to fund operating expenses and reserve contributions.

A separate charge imposed to fund an unexpected expense or a shortfall not covered by the annual budget; approval requirements come from the governing documents and applicable statute.

A recorded legal claim against an owner's unit securing unpaid assessments, which the association may enforce through foreclosure after following statutory notice and collection steps.

Policies and procedures, such as approvals, reconciliations, and reporting, designed to safeguard association money and records and to detect errors or fraud early.

An independent examination of the association's financial statements and records that results in an opinion on whether they fairly present the association's financial position.

A professional analysis of the common components the association must maintain, including their condition, remaining life, and replacement cost, used to plan reserve funding.

A measure comparing the reserve fund balance to the amount that should be saved for the components' current age; higher percentages generally suggest stronger reserve funding.

Scheduled, proactive upkeep, such as filter changes and roof inspections, that keeps systems working, extends service life, and reduces emergency repairs.

Needed repair or upkeep that has been postponed, often due to budget pressure; it shortens the life of components and creates larger costs later.

The ongoing process of identifying exposures and then avoiding, reducing, transferring through insurance, or accepting them in order to protect the association and its assets.

The association's property and liability insurance covering common areas and, as defined by the governing documents and statute, parts of the individual units.

Coverage for claims that board members or officers acted wrongfully in their association roles, such as disputes over enforcement, finances, or governance decisions.

Insurance protecting the association from loss caused by dishonest acts, such as theft or forgery, by directors, employees, or volunteers who handle association funds.

The written contract between the association and a management firm that defines services, fees, term, termination, insurance, authority, and reporting obligations.

A written statement of the specific tasks, deliverables, and responsibilities included in a contract, used to price the job and to measure performance.

A document asking vendors to submit detailed offers describing their approach, qualifications, and pricing for defined work, so the board can compare options before awarding a contract.

Obtaining multiple written price offers for the same defined work so the board can compare cost and value; policies or governing documents often require it above a dollar threshold.

A worker hired under contract to produce results while retaining control over how the work is performed, unlike an employee whose methods the association directs.

A document from a vendor's insurer showing coverage types, limits, and expiration dates; the association collects and tracks it before allowing work to begin.

A meeting at which an owner can respond to an alleged rule violation before the board imposes a penalty, following written notice and an opportunity to be heard.

A voluntary, confidential process in which a neutral third party helps disputing parties reach their own agreement, often used before arbitration or litigation.

A structured welcome process giving new residents the governing documents, payment information, rules summary, and key contacts so they understand obligations and how to participate.