Definitions & Purposes Served (Governance and Compliance)

Question 1

Ad Hoc Committee

Answer 1

Used when an objective needs consideration and no standing committee within the organization
can absorb that issue into its scope. Usually these committees are used on a short-term basis, such as temporary oversight of an issue or review of the standing rules of that community

Question 2

Alternative Dispute Resolution

Answer 2

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

Question 3

Appeal

Answer 3

A request for a review of a case by a higher authority—if permitted by the governing documents or statute

Question 4

Articles of Incorporation

Answer 4

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

Question 5

Board Liaison System

Answer 5

Directors are assigned to certain committees to guide the committee on Board policy and procedures and to report back to the Board. Directors serving as a liaison must distinguish their role from the role of the committee chairperson

Question 6

Business Judgment Rule

Answer 6

: If a board has exercised reasonable business judgment in making a decision, the court will generally not consider the board negligent in its fiduciary duty, nor will the court substitute its judgment for that of the board. However, the board must demonstrate how it has taken care in reaching a decision. It is up to the court to decide if the board has exercised reasonable business judgment

Question 7

Bylaws

Answer 7

Formally adopted governing regulations for the administration and management of a community association.

Question 8

CC & Rs (Covenants, Conditions & Restrictions)

Answer 8

The governing documents that dictate how the homeowners
association operates and what rules the owners—and their tenants and guests —must obey. These legal documents might also be called the bylaws, the master deed, the houses rules or another name. These documents and rules are legally enforceable by the homeowners association, unless a specific provision conflicts with federal, state or local laws

Question 9

Community association

Answer 9

A group of owners who wish to provide a communal basis for preserving, maintaining, and
enhancing their homes and property

Question 10

Condominium

Answer 10

A living unit fully owned by an individual with an undivided interest in the common elements of the
community. The community association itself owns no real estate as an association

Question 11

Cooperative

Answer 11

Wherein an individual owns stock or membership in the cooperative, and holds a proprietary lease or
occupancy agreement for his or her living unit.

Question 12

Declaration

Answer 12

Declaration is used interchangeably with CC & Rs.

Question 13

Default hearing

Answer 13

A hearing held when the alleged violator fails to appear

Question 14

Due Process Procedure

Answer 14

a formal process designed to protect the rights of all parties involved.

Question 15

Employee handbook

Answer 15

Also known as a personnel manual. The employee handbook summarizes company behavior requirements, outlines benefits offered and also gives tools that can be used to enforce disciplinary action if needed. Employers design handbooks to answer employees’ questions before employees ask them and to advise them on company policies that an employee might have never considered

Question 16

Employment at Will

Answer 16

This is a statement to the effect that the community association retains the right to dismiss an employee without cause at any time.

Question 17

Fiduciary duty

Answer 17

Requires directors to act in the best interests and for the benefit of the corporation, thus the
community as a whole. This fiduciary duty has two components: one, the members are required to avoid conflicts of interest and acting out of self-interest; and two the members are also required to act as reasonable people in managing the association’s affairs

Question 18

Governing documents

Answer 18

Documents which provide for the legal structure and operation of the community

Question 19

Hearing notice

Answer 19

This is a written notice to an alleged violator that a hearing will be held to consider his or her alleged
violation

Question 20

Hierarchy of Authority

Answer 20

Rules and architectural guidelines may not contradict or be in conflict with the legal sources
that take precedence over them. Although rules and architectural guidelines are lower in the hierarchy of authority for community associations, they may clarify and expand a community’s governing documents—but may not conflict
with the other governing documents

Question 21

Indemnification

Answer 21

To indemnify and hold harmless means 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

Question 22

Job description

Answer 22

A job description is a specific description of the required duties of a position, skills and knowledge
necessary to perform required duties, and reporting relationships of the position.

Question 23

Management audit

Answer 23

A management audit consists of a review of governing documents and existing policies and
procedures, current condition of the property, owner/resident satisfaction, and fiscal operations. This review can be done by the board and manager together, or a third-party management consultant can be hired

Question 24

Management ethics

Answer 24

The term “ethics” refers to the specific choices to be made by an individual in his or her
relationships with others. Professional ethics are the rules or standards that govern the conduct of members of a profession. The assumption is that the special expertise held by members of the profession holds them to a high standard of trust by others.

Question 25

Management plan

Answer 25

A management plan is a statement of goals and objectives approved by the board. It includes the
yearly cycle of tasks that management should perform on the community association’s behalf

Question 26

Master Association

Answer 26

An organization of homeowners in a large condominium or planned unit development (PUD) which includes representatives from other, smaller homeowner organizations.

Question 27

Mixed use development

Answer 27

A development which is designed to mix two or more “uses” of land together (i.e. a shopping center which offers office space for dentists).

Question 28

OSHA

Answer 28

Occupational Safety and Health Administration: 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

Question 29

Performance evaluation

Answer 29

The process of reviewing a person’s work performance to determine the extent to which his/her established goals and standards have been met.

Question 30

Performance goals

Answer 30

Those regular and special tasks management expects an employee to perform during a certain
time period

Question 31

Performance planning

Answer 31

The process of establishing performance goals and standards for an employee

Question 32

Performance standards

Answer 32

A description of the results management expects an employee to accomplish during a certain time period. They are reflected in the criteria used for performance evaluation.

Question 33

Personnel manual

Answer 33

Also known as employee handbook. The personnel manual summarizes company behavior
requirements, outlines benefits offered and also gives tools that can be used to enforce disciplinary action if needed. Employers design handbooks to answer employees’ questions before employees ask them and to advise them on
company policies that an employee might have never considered.

Question 34

Planned community

Answer 34

The most common type of community association, where an owner owns his or her lot and/or
living unit and the community owns any common areas, such as tennis courts and roads for the use and benefit of the lot owners

Question 35

Progressive discipline system

Answer 35

A procedure whereby performance problems are brought to the employee’s attention and the employee and employer take appropriate actions to correct them

Question 36

Proprietary lease

Answer 36

A rental agreement between a cooperative housing corporation and a shareholder allowing use of
a certain unit in the premises

Question 37

Public offering statement

Answer 37

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

Question 38

Resolution

Answer 38

A resolution is a motion that follows a set format and is formally adopted by the board of directors.

Question 39

Rule

Answer 39

A specific statement of required behavior whose violation carries a penalty (sometimes called a sanction)

Question 40

Standing committee:

Answer 40

Committees which have a continued existence and are not related to the accomplishment of a specific, once-only task. Budget and nomination committees are examples of standing committees.

Question 41

Statute

Answer 41

A formal written enactment of a legislative authority that governs a country, state, city or county

Question 42

Umbrella association

Answer 42

A cluster of community association types that can include aspects of homeowners associations,
condominiums and cooperatives