Florida Community Association Manager Practice Exam

Which of the following terms is associated with a financial safety measure for a community association?

1. Transfer fees

2. Fidelity bonds

3. Arbitration

4. Quorum requirements

The correct answer is: Fidelity bonds

The term associated with a financial safety measure for a community association is fidelity bonds. Fidelity bonds are a type of insurance protection that organizations, including community associations, can use to protect themselves against losses caused by dishonest acts of individuals in positions of trust, such as board members or employees. This can include theft, fraud, or embezzlement of funds. By having fidelity bonds in place, community associations minimize their financial risk and enhance their financial security. In contrast, transfer fees refer to charges associated with the transfer of ownership within the community but do not provide a financial safety measure. Arbitration is a method of resolving disputes and does not specifically address financial safety. Quorum requirements relate to the necessity for a minimum number of members to be present for decisions to be valid, which is procedural rather than protective of financial interests.