Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key


Play button


Play button




Click to flip

178 Cards in this Set

  • Front
  • Back
When a participant in a vote either does not go to vote or, is present during the vote, but does not cast a ballot
The collection of all assessments due through the end of the fiscal year.
Accrual basis of accounting
Accounting method that records income when it is earned (or assessed to owners) and expenses when they are incurred or acquired.
Action Item List
A documented event, task, activity or action that needs to take place (usually recorded in meeting minutes)
Actual cash value (ACV)
The depreciated value of an item.
Ad hoc committee
A committee used on a short-term basis when an objective needs consideration and no standing committee within the organization can absorb that issue into its scope.
Advertising injury
Damages resulting in “misappropriation of advertising ideas or style of doing business” or “infringement of copyright, slogan or title.”
A list of meeting activities in the order in which they are to be taken up, beginning with the call to order and ending with adjournment
Agreed amount endorsement
A policy endorsement that provides for an agreed upon limit of property insurance.
Alternative dispute resolution
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.
Amend a Motion
Used to modify another motion (inserting or adding words, striking words)
A request for a review of a case by a higher authority - if permitted by the governing docs or statute
Articles of incorporation
A document to bring the corporation into existence, define its basic purposes and powers, indicate whether stock will be issued, and indicate whether there will be a board of directors
The owner’s financial obligation to the community association during a given period of time.
anything owned that has value.
Assignability provision
One of the 6 legally binding contract provisions that states that neither party may assign its obligations under the contract to any other person without the express written consent of the other party.
An examination of the accounting records and procedures of an organization by a CPA for the purpose of verifying the accuracy and completeness of financial records.
Bad debt write-off
Recording an uncollectible debt as an expense that the association must absorb. This usually requires a resolution of the board.
Balance sheet
A summary of a community’s financial position at a specific point in time.
A device used to record the choices made by voters
Baseline funding
A funding strategy whose goal is to keep the reserve cash balance above zero.
Bid request
An announcement that an organization is interested in receiving proposals for a particular project.
Bid specifications
Detailed instructions about the products or services requested through the bid request.
Board liaison system
When directors are assigned to certain committees to guide the committee on Board policy and procedures and to report back to the Board.
Business judgment rule
If a board has exercised reasonable business judgment in making a decision, a court will generally not consider the board negligent in its fiduciary duty, nor substitute its judgment for that of the board.
Formally adopted governing regulations for the administration and management of a community association.
Cash basis of accounting
Accounting method that records income when it is collected and expenses when they are paid.
Certified Public Accountant (CPA)
An accountant who has passed certain examinations and met statutory and licensing requirements of a US State
CC & Rs (Covenants, Conditions & Restrictions)
The governing documents that dictate how the homeowners association operates and what rules the owners—and their tenants and guests —must obey. Legally enforceable unless a specific provision conflicts with federal, state or local laws.
Certificate of deposit
A savings instrument which, when reinvested together with its accumulated interest, the ultimate yield will be higher than the stated rate of interest.
Chapter 11 bankruptcy
A corporate reorganization designed to allow for an orderly payment to creditors that enable a corporation to continue.
Chapter 13 bankruptcy
A reorganization of personal or non-corporate debt that pays off all or nearly all of the debt over a specified period of time.
Chapter 7 bankruptcy
Straight bankruptcy or liquidation that involves the prompt conversion of all the individual’s or corporation’s non-exempt property to cash, and payment of creditors to the extent possible.
Chart of accounts
An organized list of titles, descriptions and assigned numbers of all accounts in an organization’s general ledger.
A standard element in most property policies that obligates the insured to maintain a certain limit of property insurance based on a stated percentage.
Commercial reporting method
Reporting method that combines operating and reserve activities in the same column.
Committee Report
Report that highlights matters to be decided and recommendations by the committee.
Common declarations
The title page" of a policy which It typically includes such information as the name and address of the insured and the period of coverage."
Common policy conditions
The basic provisions that apply to all insurance coverages in the package, such as when to file proof of a loss or what happens when a premium is not paid.
Community association
A group of owners who wish to provide a communal basis for preserving, maintaining, and enhancing their homes and property.
A presentation of financial statements by a CPA without the assurance that the information conforms to GAAP.
A living unit fully owned by an individual with an undivided interest in the common elements of the community.
Contingent liability
A property loss exposure coverage for building ordinance that covers the value of any undamaged portion of a building which may have to be replaced because of building laws.
An agreement between two or more parties—enforceable by law—by which each party promises to do, or not to do, something.
Contractual transfers
One of the four ways to control risk that involves entering into a contract that will, among other things, transfer the community association’s legal responsibility for any loss.
Wherein an individual owns stock or membership and holds a proprietary lease or occupancy agreement for his or her living unit.
Cross liability
A liability coverage which allows an owner to bring a claim against his or her community association.
During an election, a formal discussion involving opposing candidates vying for the same position
A term used interchangeably with CC & Rs.
Failure of either party to fulfill the terms of the contract.
Default Hearing
A hearing held when the alleged violator fails to appear
Direct writer system
A system of insurance comprised of employees of a single insurance company who only place the insurance of that company.
Directors and officers liability insurance
Insurance is designed to pay for damages arising from wrongful acts that do not lead to property damage, bodily injury, advertising injury, or personal injury.
Discretionary budget line items
Items based on owner, board and committee desires.
Due process procedure
A formal process designed to protect the rights of all parties involved.
Electronic data processing (EDP)
A type of property insurance which may be needed for computer equipment, networks, websites, security systems, protection from hackers, and similar information technology exposures.
Emergency services maintenance
The ability to respond to unpredictable problems such as sewer backups, slope failures, roof leaks and frozen pipes.
Employee Handbook
Personnel Manual. Summarizes behavior requirements, outlines benefits, and answers employee questions
Employment at will
This is a statement to the effect that the community association retains the right to dismiss an employee without cause at any time.
Items that expand, contract or clarify coverage.
Engagement letter
Describes the nature of the work to be done, type of report to be prepared, fee for services and time frame for the assignment.
Entire obligation provision
One of the 6 legally binding contract provisions that states that the written, signed contract constitutes the entire agreement between the parties.
The specific choices to be made by an individual in his or her relationships with others.
Executive Session
When a board must hold a discussion or make decisions of a sensitive nature. Topics allowed by law include personnel, contract negotiations, lawsuits, legal matters, governing docs
The cost of goods and services used to operate and maintain the community’s property.
Exposure avoidance
Avoiding the circumstances that would expose the community association to certain type of loss.
Extra demolition
A property loss exposure coverage for building ordinance that covers the value of demolishing any undamaged portion of a building.
Facilities management
The process of operating, maintaining, repairing, and replacing common property—that is, the common elements or areas.
Fair Debt Collection Practices Act
A law which requires that the person who owes a debt receive written notice.
Fair Labor Standards Act (FLSA)
This act addresses minimum wage requirements, maximum hours of work and overtime pay.
Federal Deposit Insurance Corporation (FDIC)
A government agency that guarantees investors’ deposits in member institutions.
Federal Home Loan Mortgage Corporation (FHLMC)
Buys mortgages from lenders and in doing so require certain types of insurance to be in place.
Federal Housing Administration (FHA)
A government agency which buys mortgages from lenders and in doing so require certain types of insurance to be in place.
Federal Insurance Contributions Act (FICA)
This act requires employers and employees to make matching contributions to Social Security. The employer must withhold the employee’s share of the tax from his or her wages or salary.
Federal National Mortgage Association (FNMA)
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.
Fidelity insurance
A type of income insurance which protects against employee dishonesty which may lead to the theft of money, securities, or property.
Fiduciary duty
Requires directors to act in the best interests and for the benefit of the corporation, thus the community as a whole. Components require that members 1) avoid conflicts of interest and acting out of self-interest; and 2) act as reasonable people in managing the association’s affairs.
Financial Report
A reporton the community's financial condition and activities, including a general ledger, variance, accts. Payable, income statement, and balance sheet.
A legal proceeding filed in court whereby a party with a claim against an owner can claim ownership of the unit involved in order to recover the money it is owed.
Full funding
A funding strategy whose goal is to attain and maintain the reserves at or near 100 percent as called for on the component inventory.
Fund reporting method
Consists of preparing separate columns for operating, reserve, and any special funds.
Generally Accepted Accounting Principles (GAAP)
Guidelines whose purpose is to provide uniformity among reports from different organizations.
Governing documents
Documents which provide for the legal structure and operation of the community.
Governing law provision
One of the 6 legally binding contract provisions that states that the law of a particular state will be applied if there are any disputes about the contract after it is signed.
Hearing notice
A written notice to an alleged violator that a hearing will be held to consider his or her alleged violation.
Hierarchy of authority
State that rules and architectural guidelines may not contradict or be in conflict with the legal sources that take precedence over them.
Historical trend budgeting
A budgeting method that begins with the assumption that existing line items are needed, and the amount of funds allotted to each during the current year is adjusted for expected changes in the coming year.
HO-1, 2, 3, 5,
Refers to policies for owner-occupied units
A tenant’s insurance policy.
An insurance policy for a condominium or cooperative unit owner.
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
Inspection report
A compilation of all the maintenance needs identified during an inspection. Also know as a punch list""
Investment yield
The return received on the investment.
The purchase of anything with money value for the purpose of generating additional money over time
Job description
A specific description of the required duties of a position, skills and knowledge necessary to perform required duties, and reporting relationships of the position.
What is owed to others or collected in advance (e.g. owner assessments received prior to the billed month).
Liability exposure to loss
One of the 4 types of loss exposure which involves a loss that arises when a person or entity threatens or actually brings a legal claim against the community association, its members or others whom it must indemnify by contract (such as a management company).
A legal claim by one party on the property of another to obtain the payment of a debt or the satisfaction of an obligation.
Maintenance contact sheet
A useful management control to record various maintenance services and information needed in case of an emergency.
Maintenance record
Indicates when maintenance was done.
Major improvement expenses
Expenses consisting of items that are not necessarily required, but are added to improve the overall welfare, safety or life of the residents—or to enhance the value of the community association as reflected in the resale value of units.
Over 50% of the votes needed to win an election
Management audit
A review of governing documents and existing policies and procedures, current condition of the property, owner/resident satisfaction, and fiscal operations.
Management control
Any means used to track, record, remind or command attention; usually these means are forms or documents.
Management Ethics
Refers to the specific choices to be made by an individual in his or her relationships with others. Also rules or standards that govern the conduct of members of a profession
Management plan
A statement of goals and objectives approved by the board which includes the yearly cycle of tasks that management should perform on the community association’s behalf.
Management Report
The manager's report on the association's current management & admin activities
Master association
An organization of homeowners in a large condominium or planned unit development (PUD) which includes representatives from other, smaller homeowner organizations.
Members’ equity
The difference between the community association’s assets and liabilities. Also called the fund balance under the fund method of reporting.
This document records the decisions made during the meeting and provides a permanent public record of positions and actions taken by the board.
Mixed use development
A development which is designed to mix two or more uses" of land together"
Modification provision
One of the 6 legally binding contract provisions that states that the contract may not be modified in any way unless such modification is written and signed by both parties.
Modified cash basis of accounting
Accounting method that records income and expenses on a cash basis with selected items recorded on an accrual basis.
A formal proposal stating that the association took a certain action
Net Income
The amount left after deducting expenses from income
Net Loss
Occurs when expenses are greater than income
Notes to Financial Statements
Notes that accompany the CPA-prepared financial statements. Footnotes that help the reader understand the financial situation.
Notice of Meeting
Official announcement that a meeting will take place, which should be sent in writing to board members at least a week before a meeting.
Occupational Safety and Health Administration (OSHA)
The agency responsible for promulgating rules, setting health and safety standards, and overseeing enforcement, whether by direct federal effort or by relying on state enforcement programs.
Operating budget
The section of a budget devoted to operating activities includes operating expenses and major improvement expenses—but not the replacement fund.
Operating expenses
Those items that occur on a regular basis—day to day, week to week, month to month, and year to year.
Parliamentary Procedure
The body of rules, ethics, and customs governing meetings
Payment bond
Where a surety guarantees that the contractor’s suppliers and any subcontractors will be paid if the contractor does not pay them. Comes packaged with performance bond.
Performance bond
This is a guarantee by a surety (a third party) to protect the community association if the contractor fails to perform or finish the work.
Performance evaluation
The process of reviewing a person’s work performance to determine the extent to which his/her established goals and standards have been met.
Performance goals
Those regular and special tasks management expects an employee to perform during a certain time period.
Performance planning
The process of establishing performance goals and standards for an employee.
Performance standards
A description of the results management expects an employee to accomplish during a certain time period.
Personal injury (PI)
One of the 4 types of loss exposure which involves an injury arising from libel, slander, false arrest, invasion of privacy, wrongful entry, or malicious prosecution.
Personal money judgment
A decision by a judge to allow the community association to claim the owner’s personal property to settle a delinquent account.
Personal property
One of the 2 types of property exposure which consists of inventory, furniture, fine arts, equipment, supplies, machinery, electronic data processing (EDP), and valuable papers and records.
Planned community
A community association type where an owner owns his or her lot and/or living unit and the community owns any common areas
Awards the election to the candidate with the most votes, regardless of whether or not they received the majority.
Policy forms
Define the type of insurance coverage provided (ex: property, liability and boiler and machinery) and define how comprehensive each type of coverage is—what is included and what is excluded.
Preventive maintenance
Periodic maintenance to avoid disruptive breakdowns and to prolong the useful life of the physical asset in question.
Progress payments
Partial payments based on some demonstrable progress in completing the work involved.
Progressive discipline system
A procedure whereby performance problems are brought to the employee’s attention and the employee and employer take appropriate actions to correct them.
Property exposure to loss
One of the 4 types of loss exposure which can be to tangible property (buildings and contents) or intangible property (information, proprietary Web site, etc.).
Proprietary lease
A rental agreement between a cooperative housing corporation and a share holder allowing use of a certain unit in the premises
Prospective bidder’s questionnaire
A document that asks for certain types of information to determine if the bidder is technically and financially qualified to handle a job of this scope. Also known as qualification sheet.
The agency, function, or power of a person authorized to act or vote in place of another resident who could not be present
Public offering statement
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.
Qualification Sheet
Prospective Bidder's Questionaire
The number of residents required to be present to transact business legally.
Real property
One of the 2 types of property exposure which includes buildings and land.
Replacement fund
Funds put aside (in reserve) for the replacement of major components of a community’s common property.
Representation letter
A letter from the CPA that states that the information the community association provides is true to the best of its knowledge.
Request for Proposal (RFP)
Bid Request. Announcement that an organization is intrested in receiving proposals
Requested or corrective maintenance
This is maintenance requested by an owner, a tenant, or the board—or identified during routine inspection of the property.
Reserve cash flow statement
Shows the amount to be funded and the amount to be expended from the replacement fund over a given period of time.
Reserve study
A budget planning tool that considers the current status of the replacement fund and determines a stable and equitable funding plan to offset the anticipated future major common area expenditures.
A motion that follows a set format and is formally adopted by the board of directors
Responsibility chart
A management control you can use to keep track of who is responsible for the maintenance of various property elements or areas.
The collective items or amounts of income which, in the case of a community association, are appropriated for public expenses.
Risk financing
The process of obtaining resources to pay for any financial consequences of accidental loss.
Robert's Rules of Order
A book that provides common rules and procedures for deliberation and debate in order to place the membership on the same footing and speaking the same language.
A specific statement of required behavior whose violation carries a penalty (sometimes called a sanction).
Scheduled replacement
Replacing physical assets as they wear out or break which addresses the useful life of the asset.
Second a Motion
Generally, once the motion has been proposed, consideration from the board only occurs if another member of the body seconds the motion
Segregation of exposure
One of the 4 ways to control risk that involves the duplication or separation of property exposures to loss.
Severability provision
One of the 6 legally binding contract provisions that states that if a court finds that any clause of the contract is illegal or unenforceable, that clause shall be severed (separated) from the rest of the contract, so that the whole contract need not be invalidated.
Standing committee
Committees which have a continued existence and are not related to the accomplishment of a specific, once-only task.
Statement of cash flows
A summary of the flow of funds into and out of the community association.
Statement of income and expense
A report recording the community association’s financial transactions during a given period of time.
A formal written enactment of a legislative authority that governs a country, state, city or county.
Table a Motion
Incomplete items on the agenda should be rescheduled, or tabled, for another meeting
Third-party insurance
Liability coverage purchased by an insured (the first party) from an insurer (the second party) for protection against claims of another (third party).
Threshold funding
A baseline-funding concept that sets minimum reserve cash balance at a predetermined dollar amount.
Timed Agenda
A more specific agenda that limits the amount of time focused on specific areas, as to move the meeting along at a more prompt pace.
Treasury bills
Short-term instruments that mature in 13, 26, or 52 week periods, issued in minimum denominations of $10,000. Promised earnings when purchased, face value at maturity.
Treasury bonds
Savings instruments in denominations from $1,000 to $100,000 that mature in 10 years with interest paid every 6 months and face value paid at maturity.
Umbrella association
A cluster of community association types that can include aspects of homeowners associations, condominiums and cooperatives.
Waiver of lien
A document which gives up the right to make a claim against the community association for payments not received.
Waiver of subrogation
When the insurer waives its right to require the association to transfer recovery rights to the insurer regarding unit owners.
Waiver provision
One of the 6 legally binding contract provisions that states that a waiver (permission) by one party of any breach of contract (failure to fulfill a provision) by the other party shall not act as a general waiver of future breaches.
A statement which covers what is covered, for how long, and what the contractor will do if the work or product proves defective.
Work order/response form
A form for assigning work to be done in any one of the five maintenance programs described earlier.
Zero-based budgeting
A budgeting method where all line items are set to zero and the amount of funds allotted to each must be justified.