Test Bank Answer Key
Chapter 17 Condominiums and Cooperatives
TRUE/FALSE
1. A swimming pool in a condominium development would be a limited common area.
2. A swimming pool in a condominium development would be a common area.
3. An enclosed backyard in a condominium development would be a common area.
4. An enclosed backyard in a condominium development would be a limited common area.
5. A condominium owner buys stock in a corporation, which owns the condominium; this stock
gives the condominium owner a right to live in a condominium unit.
6. A condominium form of ownership, once created, can never be terminated.
7. A condominium declaration and plat must be in existence before a project can be considered a
condominium and before individual units can be sold.
8. The governing body of most condominiums is a nonprofit corporation in which each owner is
entitled to one vote.
9. Taxes on individual condominium units are paid by the individual condominium unit owners.
10. Taxes on individual condominium units are common expenses paid by the condominium
association.
11. Most condominium declarations require that fire insurance be obtained by each condominium
unit owner.
12. Most condominium declarations require that fire insurance on the units be under a master
policy and that the insurance premium be an expense of the condominium association.
13. A condominium association can foreclose and sell an owner’s condominium unit if the owner
fails to pay common area assessments.
14. A condominium owner’s obligation to pay common area assessments is conditioned upon the
condominium association’s providing services.
15. Condominium owners have joint and several liability for damage or harm caused to persons in
connection with the common areas.
16. Condominium owners do not have joint and several liability for damage or harm caused to
persons in connection with the common areas.
17. Condominiums rarely contain restrictions on the use of the unit and the common areas.
18. Condominium declarations usually contain comprehensive restrictions on the use of the
condominium unit and common areas.
19. Condominiums and cooperatives are the same thing.
20. A cooperative owner generally does not have any restrictions on the owner’s right to resell the
cooperative unit.
21. Most cooperatives are financed by individual mortgages on the individual cooperative
owners’ units.
22. Most cooperatives are financed by a mortgage on the entire cooperative.
23. Individual unit owners own the cooperative living units.
24. Cooperatives are generally owned by a cooperative corporation, with the individual owners
being shareholders in the corporation.
SHORT ANSWER
1. Stefanie owns a condominium unit. Each month she is assessed a condominium assessment fee.
For several months the health club at the condominium has not been open except on weekends
and the landscaping has not been cared for regularly. Stefanie has complained a number of
times to the association board, but has not received any positive response. Stefanie decides that
she will not pay the monthly assessment. Is this a good idea? Can Stefanie defend against any
attempts to collect the fee?
ANS: It is a bad idea for Stefanie not to pay the monthly assessment. In most states a
condominium owner’s obligation to pay the assessment is unconditional. The owner must pay
even if the association is not providing all the services required of it. Failure to pay gives the
association a lien upon Stefanie’s unit for amount of the delinquent assessment. This lien can be
foreclosed and the unit sold to pay the assessment. The association can also sue Stefanie for the
unpaid assessment.
2. Craig owns shares in a cooperative and leases an apartment from the cooperative. Craig wants
to sell his shares and assign his lease to the new owner. The cooperative’s board of directors
tells Craig that he cannot do this unless they approve the new owner. Can the board legally do
this?
3. Brett and Jackie went to a time share sales meeting. After the meeting they decided that it was
a good idea to buy a time share and signed a contract. Three days later they reconsidered their
decision. They want to terminate the contract and not buy the timeshare. Can they legally do
this?