Where this fits on the exam
| Official syllabus topic | Real Estate Practice in Georgia: Community Association Management |
|---|---|
| Official PSI group | Real Estate Practice in Georgia |
| Published group count | 21 of the 52 Georgia questions |
| Exam portion | Georgia salesperson supplement |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
The Rule
PSI publishes 16, 21, and 15 items for the three Georgia groups. It does not publish a guaranteed subtopic count. The statute, current GREC rule, contract, or other cited primary authority controls each lesson.
The lesson
Association, not rental owner
Community association management serves a homeowners, condominium, or similar association and is not identical to managing one owner's rental property.
CAM category
The CAM license authorizes defined association-management activity on behalf of the broker and does not create independent brokerage authority.
Agreement and board
The written agreement allocates authority among the association, board, broker, and manager for vendors, records, assessments, meetings, and operations.
Association funds
Assessments and reserves are association trust funds. Bills may be paid only when enough money is credited and deposited to that association's account.
Fidelity coverage for association funds
Rule 520-1-.06(3) generally requires a broker who handles or can access association funds totaling more than $60,000 to maintain compliant fidelity bond or insurance coverage. Coverage must cover the maximum funds handled and cannot be less than three months of assessments plus required reserves. The association is an additional named insured. The rule specifies separate coverage for each association or an alternative GREC accepts.
Current 2026 attorney-fee notice rule
For actions filed on or after July 1, 2026, Section 7 of SB 406 generally requires certified-mail or statutory-overnight written notice of outstanding fines or delinquent fees, 30 days from receipt to pay, and an itemized list of reasonable attorney fees claimed before those fees may be collected or awarded. The statute has an emergency exception for public safety or preservation of property. Most other provisions begin January 1, 2027.
Decision rule
Georgia rule and national contrast
Worked Georgia example
Scenario. A CAM signs a major vendor contract outside the authority given by the association's agreement and board resolution.
Reason it through. The CAM license does not create unlimited authority. The board's governance power, management agreement, and broker supervision determine what the manager may execute.
Answer. The CAM should obtain proper authorization rather than rely on the license alone.
Common exam traps
- Confusing CAM with rental property management
- Treating a license as contract authority
- Mixing association ledgers
- Ignoring broker supervision
- Treating every provision of SB 406 as effective in 2026
Original practice questions with detailed explanations
These are original instructional questions mapped to the July 1, 2026 PSI outline. They are not copied from PSI or a live examination. Choose an answer before opening the explanation.
Question 1A condominium association's manager holds a community association manager (CAM) license. The board has not approved an $80,000 paving contract, and the management agreement does not let the manager sign it. What should the manager do?
- A. Sign it, because a CAM license covers association contracts.
- B. Sign it if the supervising broker approves the work by phone.
- C. Get the board's authorization before signing the contract.
- D. Sign it now and ask the board to ratify the contract later.
Show answer and explanation →
Answer: C. Get the board's authorization before signing the contract.
A CAM license allows supervised association-management work, but it does not give authority the association has not granted. The board and the management agreement decide what the manager may sign. The broker-approval answer looks plausible, but the broker cannot hand out authority that belongs to the association.
- A. Incorrect. A CAM license does not confer the board's contract-signing authority.
- B. Incorrect. Broker supervision cannot replace authorization from the association whose contract is being signed.
- C. Correct. The manager needs the board's authorization because neither the board nor the agreement has granted it.
- D. Incorrect. Signing first exposes the association to an unauthorized commitment; later ratification cannot be assumed.
Question 2A manager handles two homeowners associations for the same broker. Association A owes a $6,000 landscaping bill but has only $2,000 in its account. Association B has $50,000 in reserves. What may the manager do?
- A. Pay the bill from B's reserves and repay them later.
- B. Use only A's own deposited funds and wait for A to deposit enough to cover the bill.
- C. Borrow from B if B's board president agrees by phone.
- D. Pay the whole bill now, because vendors must be paid on time.
Show answer and explanation →
Answer: B. Use only A's own deposited funds and wait for A to deposit enough to cover the bill.
Each association's money is trust money that belongs to that association. Under GREC Rule 520-1-.08(4)(a), a bill may be paid from the trust account only when that association has enough money credited and deposited to cover it. Using B's reserves, even briefly, mixes association ledgers, and a plan to repay does not make the borrowing lawful.
- A. Incorrect. B's reserves belong to B and cannot cover A's landscaping obligation.
- B. Correct. A must have enough credited and deposited funds of its own before its bill can be paid from the trust account.
- C. Incorrect. An oral promise from B's president does not authorize using B's trust funds to cover A's shortage.
- D. Incorrect. A vendor deadline does not allow a manager to disburse money belonging to another association.
Question 3A property owners' association covered by Section 7 of SB 406 files suit on August 3, 2026, to collect delinquent fees and seeks attorney fees. No public-safety or property-preservation emergency applies. What must it have provided before collecting or being awarded attorney fees?
- A. The specified written notice, 30 days from receipt to pay, and an itemized list of reasonable attorney fees.
- B. A written notice to pay or leave within three business days.
- C. Nothing new, since the act's provisions all begin January 1, 2027.
- D. Sixty days' written notice, the same as ending a tenancy at will.
Show answer and explanation →
Answer: A. The specified written notice, 30 days from receipt to pay, and an itemized list of reasonable attorney fees.
Section 7 applies to actions filed on or after July 1, 2026. With no stated emergency, the association must give the initial notice by certified mail or statutory overnight delivery, allow 30 days from receipt to pay the covered fines or delinquent fees, and provide an itemized list of reasonable attorney fees claimed. The itemized list is of attorney fees, not merely the underlying debt. Most other provisions take effect January 1, 2027.
- A. Correct. The notice identifies the covered fines or delinquent fees, the 30 days run from receipt, and the itemized list identifies reasonable attorney fees claimed.
- B. Incorrect. Three business days is the residential rent notice period, not this association collection requirement.
- C. Incorrect. Section 7 already applies to actions filed on or after July 1, 2026, though other provisions wait until 2027.
- D. Incorrect. Sixty days is the landlord's tenancy-at-will termination notice, not this attorney-fee condition.
Question 4A broker handles $75,000 in a homeowners association's funds. The association wants to waive fidelity coverage because it trusts the manager. What does GREC Rule 520-1-.06(3) require?
- A. No coverage if the board signs a waiver.
- B. Compliant fidelity coverage, with the association as an additional named insured.
- C. Only the manager's personal liability insurance.
- D. A $60,000 policy regardless of the funds handled.
Show answer and explanation →
Answer: B. Compliant fidelity coverage, with the association as an additional named insured.
The exemption applies when the broker never handles or has access to more than $60,000 for the association. Here the funds exceed that threshold, so the broker must maintain the required fidelity bond or insurance. The association is an additional named insured, and the amount must satisfy the rule's coverage requirements.
- A. Incorrect. The board cannot waive the broker's regulatory fidelity-coverage duty.
- B. Correct. The $75,000 balance exceeds the exemption threshold, triggering compliant coverage and the association's insured status.
- C. Incorrect. Personal liability insurance is not a substitute for the fidelity protection the rule requires.
- D. Incorrect. The $60,000 figure is an exemption threshold, not a fixed policy limit.
Question 5A broker must carry fidelity coverage for an association. The maximum funds handled are $75,000, monthly assessments are $5,000, and required reserves are $45,000. What minimum amount meets both coverage measures in Rule 520-1-.06(3)?
- A. $60,000
- B. $45,000
- C. $15,000
- D. $75,000
Show answer and explanation →
Answer: D. $75,000
Three months of assessments plus required reserves equal (3 × $5,000) + $45,000 = $60,000. Coverage must also cover the maximum funds handled, which is $75,000. Use the larger requirement, so the minimum here is $75,000.
- A. Incorrect. $60,000 meets the assessments-plus-reserves floor but does not cover the $75,000 maximum funds handled.
- B. Incorrect. $45,000 counts only reserves and omits both assessments and the higher maximum-funds requirement.
- C. Incorrect. $15,000 counts three months of assessments but omits the required reserves.
- D. Correct. $75,000 covers the maximum funds handled and exceeds the $60,000 assessments-plus-reserves floor.
Question 6A broker needs fidelity coverage for two associations and proposes using one policy simply because they share a manager. What must be verified under GREC Rule 520-1-.06(3)(b)?
- A. A separate compliant policy for each association, or alternate coverage acceptable to GREC
- B. Only enough coverage for whichever association has the larger bank balance
- C. A verbal waiver from both board presidents instead of coverage
- D. Only that the broker's professional liability policy exists
Show answer and explanation →
Answer: A. A separate compliant policy for each association, or alternate coverage acceptable to GREC
The rule calls for separate fidelity coverage for each association or an alternative acceptable to the Commission. Shared management does not itself establish that a proposed single policy is an accepted alternative. The other coverage measures still apply.
- A. Correct. This is the rule's separate-policy or accepted-alternative structure; verify compliance rather than assuming approval.
- B. Incorrect. Covering only the larger balance can leave the other association and aggregate requirements unaddressed.
- C. Incorrect. Board agreement does not replace the regulatory coverage duty.
- D. Incorrect. Professional liability and fidelity protection cover different risks; policy existence alone is insufficient.
Ready to move on?
You are ready for the next lesson when all of these are true.
- Distinguish association management from managing one owner's rental property.
- Identify the board's authority, the manager's authority, and the broker's supervision.
- Keep association funds separate and distinguish the 2026 attorney-fee notice rule from provisions effective in 2027.
- Answer the practice questions without looking back, then explain why the other choices fail.
- Explain the worked example in your own words and identify the fact that decides the answer.
- Retest this topic on another day in a mixed question set.
Recommended next lesson
Continue with Georgia Compensation, Referrals, Rebates, and Unlicensed Persons. The compensation lesson explains the holding broker's control over outside compensation, including the consent requirement, and when referral fees and rebates are allowed.
Return to the Real Estate Practice in Georgia hub for the complete official branch and the full lesson list for this Georgia group.