Governance and Compliance
23%of exam
Document HierarchyFair Housing ActRecords AccessBoard AuthorityDue Process
Financial Management
20%of exam
Reserve StudyFund AccountingAssessments & LiensFinancial ReportsBudgeting
Meetings and Events
18%of exam
Quorum & VotingProxies & BallotsExecutive SessionMeeting NoticeMinutes
Risk Management
15%of exam
Insurance TypesCOI TrackingDisaster PlanningBusiness Continuity
Property Maintenance
14%of exam
Reserve ComponentsLife Safety CodesTransition StudyPreventive Maintenance
Contracting
10%of exam
RFP ProcessLien WaiversContract TermsVendor Approval
Quick Facts
- Exam
- CMCA
- Credential
- Community Assoc. Manager
- Body
- CAMICB
- Questions
- 120 (100 scored)
- Time
- 2.5 hours
- Pass score
- Criterion-referenced cut
- Fee
- $360
- Provider
- Pearson VUE
- Format
- Multiple choice, computer-based
- Level
- Foundational manager credential
- Blueprint
- Dec 2024 outline
Domain Weight Order
Go Find My Really Precious Contracts
Governance 23%Financial 20%Meetings 18%Risk 15%Maintenance 14%Contracting 10%
Declaration vs Bylaws
Declaration
- Creates property regime
- Second in hierarchy
- Hard to amend
Bylaws
- Governs corporate operations
- Third in hierarchy
- Easier to amend
Declaration outranks bylaws
Which Document Controls?
- Federal/state law conflicts→Federal/state law wins(Top of hierarchy)
- Declaration vs bylaws conflict→Declaration controls(Second in hierarchy)
- Bylaws vs rules conflict→Bylaws control(Rules yield to bylaws)
- Rules vs practice conflict→Written rules control(Custom is not binding)
- Entity existence question→Articles of incorporation(Creates the corporation)
Governing Document Hierarchy
- Federal/state law
- Top of hierarchy
- Declaration
- Creates covenants, property regime
- Articles of incorporation
- Forms legal entity
- Bylaws
- Governs corporate operations
- Rules & regulations
- Implements bylaw authority
- Conflict rule
- Higher document controls
Fair Housing Protected Classes
7 classes: race color religion origin sex family disability
RaceColorReligionNational originSexFamilial statusDisability
Governance Laws & Due Process
- FHA
- 7 protected classes
- ADA
- Title III accommodations
- ECOA
- Bans credit discrimination
- OTARD
- Protects satellite dish install
- Fining hearing
- Due process before penalty
- Right to cure
- Time to fix violation
- Business judgment rule
- Protects reasonable board decisions
Governing Document Hierarchy Order
Law beats declaration beats articles beats bylaws beats rules
1. Federal/state law2. Declaration3. Articles4. Bylaws5. Rules
Audit vs Review
Audit
- Full assurance
- Verifies transactions
- Most expensive
Review
- Limited assurance
- Analytical procedures only
- Less expensive
Audit tests; review analyzes
Which Financial Engagement Level?
- Need highest assurance level→Audit(Verifies transactions independently)
- Need limited assurance level→Review(Analytical procedures only)
- Need data compiled, no assurance→Compilation(Cheapest engagement option)
- State law sets minimum→Follow statute requirement(Thresholds vary by state)
Reserve Study Formulas
- FFB formula
- Age/life x cost
- Percent funded
- Reserves divided by FFB
- Useful life
- Total expected lifespan
- Effective age
- Age adjusted for wear
- Remaining life
- Useful life minus age
- Replacement cost
- Current cost to replace
Operating vs Reserve Fund
Operating fund
- Day-to-day expenses
- Refilled annually
Reserve fund
- Major repair & replacement
- Funded long-term
Never commingle the two
Fund Accounting & Collections
- Operating fund
- Day-to-day expenses
- Reserve fund
- Major repair & replacement
- Audit
- Highest assurance levelCPA
- Review
- Limited assurance level
- Compilation
- No assurance, data only
- Assessment lien
- Secures unpaid dues
- Foreclosure
- Last-resort collection remedy
Quorum vs Proxy
Quorum
- Minimum attendance required
- Set by bylaws
Proxy
- Written vote delegation
- Counts toward quorum
Quorum counts; proxy authorizes
Open or Executive Session?
- Litigation strategy discussion→Executive session(Legal privilege applies)
- Personnel discipline discussion→Executive session(Privacy protection)
- Routine budget vote→Open session(Owners may attend)
- Contract negotiation strategy→Executive session(Competitive sensitivity)
- Rule adoption vote→Open session(Standard board business)
Meeting Notice, Quorum & Voting
- Notice period
- Set by statute/documents
- Quorum
- Minimum members present
- Proxy
- Written voting authorization
- Cumulative voting
- Concentrate votes on candidate
- Secret ballot
- Anonymous vote required often
- Adjourned meeting
- Lower quorum may apply
- Written consent
- Vote without a meeting
Open vs Executive Session
Open session
- Owners may attend
- Routine business
Executive session
- Owners excluded
- Legal/personnel matters
Sensitive topics go executive
Executive Session & Records
- Executive session
- Closed to owners
- Open session
- Routine business, owners watch
- Attorney-client privilege
- Protected legal communication
- Records request
- Owner inspection rights
- Minutes
- Official meeting record
- Redaction
- Hide privileged minutes content
Insurance Coverage Buckets
Property Liability Directors Fidelity Umbrella Flood
Property: building damageLiability: third-party injuryD&O: board decisionsFidelity: employee theftUmbrella: excess limitsFlood: separate policy
Fidelity Bond vs D&O
Fidelity bond
- Covers theft/dishonesty
- Protects association funds
D&O insurance
- Covers decision liability
- Protects board members
Theft vs decision liability
Which Insurance Applies?
- Building storm damage→Property insurance(Common areas + building)
- Visitor slip and fall→General liability(Third-party injury claims)
- Board decision challenged→D&O insurance(Wrongful-act defense)
- Manager steals funds→Fidelity bond(Employee dishonesty coverage)
- Losses exceed policy limits→Umbrella policy(Extra liability layer)
- Rising water damage→Flood insurance(Excluded from property policy)
Insurance Program
- Property insurance
- Covers building & common areas
- General liability
- Covers third-party injury
- D&O insurance
- Covers board decisions
- Fidelity bond
- Covers employee theft
- Umbrella policy
- Extra liability above limits
- Flood insurance
- Separate from property policy
- Workers comp
- Covers on-site employee injury
Risk & Disaster Planning
- COI
- Proof of vendor coverage
- Business continuity plan
- Keeps operations running post-disaster
- Emergency response plan
- Steps for crisis events
- Force majeure
- Excuses performance, extreme events
- Named-storm deductible
- Separate hurricane deductible
Straight-Line vs Cash-Flow Funding
Straight-line
- Funds each component separately
- Simpler tracking
Cash-flow
- Pools all components together
- Smooths assessments
Component funding vs pooled funding
Property Maintenance & Codes
- Reserve component
- Major common-element asset
- NFPA 25
- Fire sprinkler inspection code
- NFPA 72
- Fire alarm system code
- Life safety inspection
- Required periodic safety check
- IPM
- Integrated pest management
- Transition study
- Developer-to-owner handoff review
- Statute of repose
- Absolute construction-defect deadline
Lien Waiver Progression
Conditional then unconditional, partial then final
Conditional partialUnconditional partialConditional finalUnconditional final
Which Lien Waiver Form?
- Progress payment, not yet paid→Conditional partial waiver(Waives if paid)
- Progress payment received→Unconditional partial waiver(Payment already confirmed)
- Final payment pending→Conditional final waiver(Contingent on payment)
- Final payment received→Unconditional final waiver(Project fully paid)
Contracting & Lien Waivers
- RFP
- Solicits competitive vendor bids
- Scope of work
- Defines contract deliverables
- Vendor approval
- Board vets qualified contractors
- Termination clause
- Ends contract early terms
- Conditional partial waiver
- Waives rights if paid
- Unconditional partial waiver
- Waives rights, payment confirmed
- Conditional final waiver
- Final waiver pending payment
- Unconditional final waiver
- Final waiver, payment received
Common Traps
Declaration ≠ Bylaws
Declaration ranks higher ≠ Bylaws govern operations only
Audit ≠ Review
Audit verifies transactions ≠ Review only analyzes data
Quorum ≠ Majority vote
Quorum is attendance minimum ≠ Majority decides the outcome
Reserve fund ≠ Operating fund
Reserve covers major repairs ≠ Operating covers daily expenses
D&O ≠ Fidelity bond
D&O covers board decisions ≠ Fidelity covers theft only
Percent funded ≠ Percent complete
Percent funded is reserve ratio ≠ Not construction progress
Notice defect ≠ Formality
Notice defects void actions ≠ Courts enforce notice strictly
M-100 course ≠ Requirement
Course strongly recommended only ≠ Experience or license can substitute
Last Minute
- 1.Governance largest domain at 23%
- 2.120 questions, 100 scored only
- 3.2.5 hour exam time limit
- 4.Declaration outranks bylaws and rules
- 5.FFB = age/life x cost
- 6.Percent funded = reserves / FFB
- 7.Audit verifies; review only analyzes
- 8.Executive session excludes ordinary owners
- 9.D&O covers board decision liability
- 10.Fidelity bond covers employee theft
- 11.M-100 course recommended, not required
- 12.Pearson VUE runs computer-based exam
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