Florida Community Association Manager Practice Exam

Which of the following is true about community association properties?

1. They cannot borrow funds

2. They must comply with local government regulations only

3. They can mortgage properties for operational purposes

4. They are not allowed to enter contracts

The correct answer is: They can mortgage properties for operational purposes

Community association properties have specific rights and capabilities under Florida laws. One of the key aspects is that they can mortgage properties for operational purposes. This means that if an association needs to raise funds for operational expenses, capital improvements, or significant repairs, they have the ability to secure a mortgage against their property. This financial flexibility is crucial for maintaining the association's health and ability to provide services to its members. When an association chooses to mortgage its property, it is leveraging its assets to acquire necessary funding. This process often involves a thorough analysis by the board and possibly requires member approval, depending on the association's governing documents. The ability to mortgage allows associations to handle unforeseen expenses or manage cash flow more effectively, ensuring the community remains well-maintained and financially stable. The other choices presented do not accurately reflect the capabilities or requirements of community associations. For instance, associations can borrow funds, which is contrary to the first option. Additionally, while they indeed must comply with local government regulations, it is not limited to those regulations alone; they also need to adhere to state laws and the governing documents of their own association, which is not addressed in the second option. Lastly, community associations are allowed to enter into contracts, particularly as a means of managing services and obligations