CAI encourages
the national certification of community association managers. In states that
propose mandatory regulation of community association managers, CAI will
support a regulatory system that incorporates adequate protections for
homeowners, mandatory education, and testing on fundamental management
knowledge, standards of conduct and appropriate insurance requirements. CAI
opposes the licensing of community association managers as real estate brokers,
agents or property managers.
This resource
center will provide state-specific information on enacted manager
licensing/registration/certification/standards laws and pending legislation.
It will also provide guidance and resources for those members and states that
are discussing this issue.
Synopsis of Current State Laws:
Alaska
California
Connecticut
District of Columbia
Florida
Georgia
Illinois
Nevada
Virginia
Alaska
Under
Chapter 88 of the Alaska Real Estate Commission's regulation entitled "Real
Estate Statutes and Regulations' Real Estate Brokers and Other Licensees,"
a person may not collect fees for community association management or practice
or negotiate for a contract to practice community association management unless
licensed as a real estate broker, association real estate broker, or real
estate salesperson in this state (Chapter 88, Article 02, Section 08.88.161.(5)
and (6)). A person can qualify for a limited license to practice community
association management by obtaining an associate broker license if, at the time
of issuance, the person is employed by a broker (Sec. 08.88.171.(e-f)). Real Estate
Commission Statutes and Regulations (PDF)
California
As approved by the Governor
September 26, 2007 AB
691 (Chapter
236) reauthorizes for another five years its voluntary Manager
Certification Titling Act, modifying the requirements needed to be called a "certified
common interest development manager." Additionally, under SEC. 4. Section
11502 of the amended Business and Professions Code, the continuing education
courses required for a manager to call herself/himself a "Certified CID
Manager" are preserved.
This Act will remain in effect
until January 1, 2012.
Connecticut
The Connecticut Legislature has
amended a number of provisions of the state's Condominium and the Common
Interest Ownership Acts, as well as the provisions of the Connecticut statutes
governing the registration of managers, effective on October 1, 2007. Among
other provisions, SB 1089 (Public
Act No. 07-243) amends the provisions that govern the registration of
property managers, and broadens the range of people that must register with the
Department of Consumer Protection ("Department").
Prior to October 1, 2007, a
management company was required to register with the Department, but the
individual managers or other employees of that company were not required to
register. However, the Department interprets the amended requirements to be
much broader. According to the Department, these amendments require anyone who
provides management services, as defined by Section 20-450, including any
partner, director, officer, or employee of a management company, to register
individually.
Section 20-450 defines management
services as any one of the following:
- Collecting,
controlling, or disbursing funds of the association or having authority to do
so.
- Preparing budgets or
other financial documents for the association.
- Assisting in the conduct
of or conducting association meetings.
- Advising or assisting
the association in obtaining insurance.
- Advising the association
in the overall operations of the association.
Section 20-450 states that
professionals who are licensed by the state, such as attorneys, are exempt from
having to register. An officer or director is also exempt, so long as he or
she does not control more than two-thirds of the voting power in the
association. However, under the Department's broad interpretation, anyone else
who provides any of the listed management services must register.
Statute for Manager Registration Requirement (PDF)
Manager Registration Form (PDF)
District of Columbia
The Real Estate Board of the District of Columbia's Department
of Consumer and Regulatory Affairs regulates (PDF) community association managers as commercial "property managers."
Unless licensed as such by the District of Columbia, no person shall use the
term or words "property manager" to imply that he or she is licensed
as a property manager in the District.
A person is eligible for licensure
as a property manager, if the person:
- Is able to read, write, and understand the English language
- Has passed the property managers' examination
- Is a high school graduate or the holder of a high school
equivalency certificate
- Has not had an application for a property's manager's license
denied for reasons other than failure to pass the required examination or
examinations, in the District or elsewhere within one year prior to the date on
which the application is filed
- Has not had a property manager's license suspended in the
District or elsewhere which suspension is still in effect on the date on which
his or her application is filed
- Has not had a property manager's license revoked in the District
or elsewhere within three years prior to the date on which his or her
application is filed
There are no pre-licensing
requirements for property managers. All real estate licensees are required to
complete 15 hours education as determined by the Real Estate Board. The
examination utilized for licensure of "property managers," does not
measure the core competencies of community association managers.
Florida
Florida's Department of Business
and Professional Regulation ("Department"), through the
Regulatory Council of Community Association Managers, regulates the licensure
of community association managers under Chapter 468, Part VIII, Florida Statutes and Chapter 61-20, Florida Administrative Code.
In most circumstances,
community association managers in Florida are required to be licensed in order
to carry out their duties as a manager. A community association manager is
defined as: a person who is licensed to perform community association
management services including the following:
- Practices requiring substantial specialized knowledge, judgment,
and managerial skill when done for remuneration and when the association or
associations served contain more than 50 units or have an annual budget or
budgets in excess of $100,000;
- Controlling or disbursing funds of a community association;
- Preparing budgets or other financial documents for a community
association;
- Assisting in the noticing or conduct of community association
meetings;
- Coordinating maintenance for the residential development and
other day-to-day services involved with the operation of a community
association.
A person who performs clerical or
ministerial functions under the direct supervision and control of a licensed
manager or who is charged only with performing the maintenance of a community
association and who does not assist in any of the management services described
above is not required to be licensed.
Licensing applicants are required to:
- Be at least 18 years of age
- Have successfully completed all pre-licensure education requirements
- Satisfactorily completed a minimum of 18 in-person classroom
hours of instruction within 12 months prior to the date of examination
- Be of good moral character as defined in Florida administrative
code
- Take and pass the licensure examination
- File a complete set of fingerprints that have been taken by an
authorized law enforcement officer
A Community Association
Management Business Entity must register (PDF):
61-20.003 Business
Entity Registration (MS Word).
(1) A corporation, association or
other organization or entity that engages in, or is desirous of engaging in,
the business of community association management shall be registered under this
rule and shall employ only licensed persons in the direct provision of
community management services. Such entities shall, no later than October 1,
1988, register with the division, on a BPR form 33-008, COMMUNITY ASSOCIATION
MANAGEMENT BUSINESS ENTITY REGISTRATION, incorporated herein by reference and
effective 2-5-91.
(2) No entity described in
subsection (1) above may, subsequent to October 1, 1988, conduct association
management business or use its name in the conduct of its business without
first registering with the division.
(3) There shall be no fee required
to register an entity with the division. Once an entity is registered, no
renewal of the registration is required, and the registration shall be deemed
valid unless suspended or revoked pursuant to Section 468.436, F.S., or Rule
61-20.503, F.A.C.
(4) As officers or licensed
personnel or the business address change, the division shall be notified on BPR
form 33-008, Community Association Management Business Entity Registration,
within 60 days of such change.
The Department has a Q&A (PDF)
for frequently asked questions.
Georgia
Community association managers
(CAMs) must be licensed
under the Georgia Real Estate Commission,
Chapter 40
REAL ESTATE BROKERS AND SALESPERSONS, in order to function as a community
association manager in the state:
(4.2)"Community association
management services" means the provision, for a valuable consideration, to
others of management or administrative services on, in, or to the operation of
the affairs of a community association, including, but not limited to,
collecting, controlling, or disbursing the funds; obtaining insurance,
arranging for and coordinating maintenance to the association property; and
otherwise overseeing the day-to-day operations of the association.
(4.3)"Community association
manager" means a person who acts on behalf of a real estate broker in
providing only community association management services.
Individuals must be at least 18 to
be licensed as a community association manager, and applicants for the CAM exam must complete educational course hours; there are no experience requirements for a
community association manager's license. Reports are that the CAM tests
focuses more on knowledge of real estate issues and law, as opposed to more of
the critical competency areas of managing community associations, although CAI
advocates that managers be tested and regulated on the core functions
associated with managing community associations, and not as property managers,
brokers, or real estate licensees.
The Commission may require that
each broker who provides community association management services under this
chapter and who collects, controls, has access to, or disburses community
association funds shall at all times provide or be covered by a fidelity bond
or fidelity insurance coverage protecting the community associations being
managed by the broker against loss of any funds belonging to those community
associations being held or controlled by the broker.
Illinois
Effective January 1, 2008, Illinois community association managers are required (Public
Act 095-0318; House
Bill 1071) to maintain standards of professionalism and financial
responsibility.
The law protects association boards
and owners whose managers administer association funds and maintain association
property. The Act creates a new Section 18.7 of the Illinois Condominium
Property Act, setting standards for community association managers; it applies
to managers of condominiums, cooperatives, town homes, or homeowner associations:
- Managers are individuals who administer for compensation
financial, administrative, maintenance, or other duties called for in a
management contract, including individuals who are direct employees of a
community association (but does not include support staff such as bookkeepers,
secretaries, etc.).
- Managers must be 21 and a citizen or legal permanent resident of
the United States.
- Managers shall not have been convicted of forgery, embezzlement,
obtaining money under false pretensions, etc.
- Managers shall have a working knowledge of the fundamentals of
community association management.
- Managers must cooperate with any law enforcement agency in the
investigation of a management complaint and produce any materials in their
possession or control in management transition.
- Managers will not have sole and exclusive access to and disburse
association funds unless there is a fidelity bond in place. The amount of the
bond must not be less than all monies of that association. The bond covers the
managers and all partners, officers and employees of the management firm.
- Managers shall maintain separate, segregated accounts for each
community association they manage.
Nevada
The Commission for
Common-Interest Communities adopts regulations governing the practice of
community association managers; the Commission is within the Real Estate Division of the
Nevada Department of Business and Industry. Chapter 116A Regulation of
Community Managers and Other Personnel prohibits a person from acting as a
community manager without certification:
"Community manager" is
defined (NRS 116A.070, effective January 1, 2008) as a person who provides for or otherwise engages in the
management of a common-interest community or the management of an association
of a condominium hotel.
"Management of a common-interest
community" means (NRS 116A.110)
the physical, administrative or financial maintenance and
management of a common-interest community, or the supervision of those
activities, for a fee, commission or other valuable consideration.
Applicants
seeking certification as a community association manager must:
- Have successfully completed at least 60 hours of
instruction in courses in the management of a common-interest community that
has been approved by the Commission
- Have engaged in the management of a
common-interest community or has held a management position in a related area
for at least 12 months preceding the date of application
- Pass an examination with a minimum score of 75
percent
- Submit two fingerprint cards completed at an authorized law
enforcement facility
Both community association
management and Nevada-specific law comprise the education requirements for this
certificate, and CAI's Essentials of Community Association Management M100
course is one way to meet the required community association management
provision.
Virginia
Summary and information
provided 6/27/08
Virginia's professional community association managers licensing
bill, HB
516 (Chapter 851), was approved by Governor Kaine on 4/23/08, and is
effective July 1, 2008.
What Does HB 516 Require?
The law requires that any person
or entity engaged in management services in Virginia to acquire a license and
for employees of management companies to obtain a certification.
Under the law, employees of
community association management firms who have principal or supervisory
responsibility for persons providing management services must be certified
according to standards established by regulations adopted by the Common
Interest Community Board. Specific language in the statute allows those
standards to be met by any manager holding a Certified Manager of Community
Associations (CMCA), an Association Management Specialist (AMS), a Professional
Community Associations Manager (PCAM), or a company holding an Accredited
Association Management Company designation.
Important Dates
|
March 23, 2008
|
Legislation signed
|
 |
|
July 1, 2008
|
Legislation is effective
|
|
|
January 1, 2009
|
Deadline for obtaining a
provisional license, Application for provisional licensing must be received
by CICB
|
|
|
June 30, 2011
|
Provisional licenses expire;
full licensing and bonding requirements become effective
|
Provisional Licenses; Future
Board Actions
The new law is effective on July
1, 2008. On this date, the Commonwealth will be authorized to appoint the
Common Interest Community Board ("Board") to being work on implementation of
the law's requirements. Once these regulations are in place, the Board will
begin issuing provisional licenses. Such licenses will be issued for any
company managing properties in Virginia as of December 31, 2008 and whose
application is received by January 1, 2009.
Those who do not apply for a
provisional license by January 1, 2009 will have to meet all licensing
requirements. The provisional licenses will be valid until June 30, 2011. CAI
estimates that the provisional licensing will become available in late summer
or early fall 2008.
Over the course of this summer,
the appointed Board will begin the process of developing regulations to
implement the requirements of the legislation which include substantial other
provisions that will affect community associations: establishing an office of
community association ombudsman, and substantial modifications to resale
disclosure requirements.
Many questions that need to be
answered will depend on the regulations the newly established Board will
develop over the coming months. CAI will keep you updated as information
becomes available, and is planning educational opportunities to bring you up to
date as well.
Many preliminary questions may
be answered by the FAQ released by the Virginia Department of Professional
& Occupational Regulation. That FAQ follows this information, or it may be
viewed on the Virginia Department of Professional & Occupational Regulation's website.
CAI and NBC-CAM Resources to Help with This New Law
CAI and NBC-CAM are preparing grandfather
programs and discount programs for educational courses, designation, and
certification fees to make it easy and less expensive for CAI members and CMCAs to obtain their Virginia license.
We are working with our network of
insurance agents to advise them of the new requirements, and will work with
them to offer the appropriate coverage to fulfill the bonding requirement of
the licensure program.
Information released 6/2008 from the
VIRGINIA DEPARTMENT OF PROFESSIONAL AND
OCCUPATIONAL REGULATION
Common Interest Community Board
Office of the Common Interest Community Ombudsman
http://www.dpor.virginia.gov
http://www.dpor.virginia.gov/dporweb/CIC_Board_FAQs.pdf
The 2008 General Assembly enacted, and the Governor signed,
legislation creating the Common Interest Community Board and the Office
of the Common Interest Community Ombudsman at the Department of
Professional and Occupational Regulation (DPOR).
The new law
is effective July 1, 2008, and DPOR is working on the necessary staffing,
regulatory and programmatic elements required to implement its provisions as
quickly as possible. At the same time, the Governor is seeking to identify
members to serve on the newly created Board. Individuals wishing to submit
nominations for the new Board may obtain application forms from the Office of
the Secretary of the Commonwealth.
Although starting a new regulatory program takes time, we
understand many Virginians have questions about the new Board and Ombudsman. We
hope the following information is helpful in learning about the new law and
what to expect.
Please continue to check the DPOR website for
progress updates, including anticipated timeframes for emergency regulations,
provisional licenses, and complaint processing.
What does the new law mean for Associations?
- Common interest communities subject to the new law include
Property Owners' Associations, Condominium Associations, and Cooperative
Associations. If your community has a governing body, collects mandatory
assessments, and maintains common areas (such as a lake or playground), it
likely falls under the new law.
- In addition to the existing annual report requirement and fee,
Associations must pay an annual assessment of 0.02 percent of their annual
gross assessment income, plus a one-time $25 assessment to finance the Recovery
Fund.
- Property Owners Associations and Condominium Associations must
obtain a blanket fidelity bond/employee dishonesty insurance policy (minimum
coverage of $10,000; $1 million maximum).
- Associations must provide documents and records to the Ombudsman
upon request, in order to assist members with using the complaint process.
- Associations must establish reasonable procedures for resolution
of written complaints, including:
- Maintaining records of each complaint for at least one year after acting on
complaint;
- Providing complaint forms/written procedures to individuals wishing to file
written complaints; and
- Informing Association members of their right to file a Notice of Adverse
Decision with the Ombudsman.
What is the Common Interest Community Board and what will
it do?
- Common Interest Community (CIC) Board is composed of 11 members
appointed by the Governor:
- 3 CIC Managers;
- 1 attorney who represents Associations;
- 1 Certified Public Accountant (CPA) who provides services to Associations;
- 1 timeshare industry representative;
- 2 developers of Associations; and
- 3 citizens (one who serves on Association governing body and two Association
- residents).
- CIC Board promulgates regulations, in accordance with
Administrative Process Act, to:
- Establish fees, procedures and qualifications for licensure;
- Establish educational and training criteria for licensure and certification; and
- Establish standards of conduct for licensees.
- CIC Board may not intervene in the internal activities of
Associations, unless necessary to prevent or remedy violations of regulatory
requirements or statutes.
- CIC Board is authorized to bring suit and intervene in court
actions where it appears an Association or Manager has violated Board
regulations or statutes governing common interest communities (Property Owners'
Association Act, Condominium Act, Cooperative Act, or Timeshare Act). CIC Board
also may issue cease-and-desist orders against Association governing bodies.
- CIC Board may impose a monetary penalty of up to $1,000 per
violation against any person or firm—licensed or unlicensed—who violates
its statutes or regulations. Before issuing any monetary penalty, the CIC Board
must grant the person or firm the opportunity for a hearing pursuant to the
Administrative Process Act.
- CIC Board enforces its own statutes and regulations, except in
the case of real estate licensees who also are licensed as CIC Managers. The
Virginia Real Estate Board will retain enforcement jurisdiction over licensed
real estate brokers/salespersons who are simultaneously licensed as CIC
Managers.
- CIC Board promotes research on CIC topics and supports seminars
and educational programs designed to improve understanding about Associations.
What will the Ombudsman do?
- Assist individuals in understanding and exercising their rights
in resolving issues with their Associations.
- Receive complaints—Notices of Adverse Decision—from
individuals who allege an Association governing body violated legal
requirements (statutes, regulations, or Association governing documents).
Notices must be filed within 30 days of the final adverse decision, must be
submitted in writing on Board forms, must include supporting documentation, and
must include a $25 filing fee (CIC Board may waive for demonstrated hardship).
- Maintain data on inquiries, requests for assistance, complaint
notices, and resolution of disputes.
- Issue non-binding explanations of laws and regulations governing
Associations. In addition, DPOR Director may determine whether an Association's
final adverse decision complies or conflicts with legal requirements—such
Director's determination is final but non-binding.
- Offer referrals to alternative dispute resolution services.
Who needs to be licensed and what is required?
- The new law provides for three levels of regulation for
Association management services:
- Licensure for firms (CIC Managers)—whether corporations, partners or sole
- proprietors—providing "management services" to a common interest community.
- Mandatory certification for the managing or supervisory employees of licensed
- firms who are involved in direct management services.
- Voluntary certification as an option for non-supervisory employees who are not
- otherwise required by law to hold an individual license.
- As of January 1, 2009, any firm—corporation, partner or sole
proprietor—providing "management services" to an Association must hold a
license issued by the CIC Board. Management services include acting on behalf
of an Association in its business, legal, or financial transactions; exercising
control over Association money or property; and conducting Association meetings
(see § 54.1-2345).
- As of July 1, 2011, every individual management or supervisory
employee of a licensed CIC Manager—who is involved in direct management
services—must hold a mandatory certification issued by the CIC Board (within
two years after employment).
- Individuals exempt from the licensure requirements include:
uncompensated members of Association governing bodies, court-ordered receivers,
attorneys, and CPAs providing certain services to Associations, time-share
associations and agents, and certain real estate licensees (see § 54.1-2347).
- Provisional CIC Manager licenses will be issued to existing
managers who apply for licensure by December 31, 2008. Provisional licenses
expire on June 30, 2011 and will not be renewed.
- NOTE:
The application process for provisional CIC Manager licenses will begin once
the CIC Board adopts emergency regulations, sometime this fall.
- Licensed CIC Managers must pay an annual assessment of 0.02
percent of their annual gross receipts, plus a one-time $25 initial assessment
to finance the Recovery Fund.
- Licensed CIC Managers must obtain a blanket fidelity
bond/employee dishonesty insurance policy (minimum coverage of $10,000; $2
million maximum).
- Licensed CIC Managers must establish a code of conduct to protect
against conflicts of interest; must use written contracts with Associations;
must establish internal accounting controls; and must use a CPA to review/audit
financial statements annually.
- Licensed CIC Managers must maintain separate fiduciary trust
accounts for Association funds.
What is a Receiver? What is the Recovery Fund?
- CIC Board may petition the court to appoint a receiver if a CIC
Manager appears unable to discharge its fiduciary responsibilities to an
Association. Court-appointed receiver may take action to protect Association
interests, including exercising control of all bank accounts. CIC Board also
may petition court for an injunction to prohibit CIC Manager from withdrawing
association monies or disposing of association assets.
- The Common Interest Community Management Recovery Fund is a trust
fund used to pay court-appointed receivers and to restore Association monies in
the event a CIC Manager fails to discharge its fiduciary responsibilities.
- The Recovery Fund is financed by $25 from each licensed CIC
Manager upon initial licensure, plus $25 paid once from Associations. The law
requires a minimum Fund balance of $150,000 by July 1, 2011. If necessary to
meet the minimum balance requirements, the CIC Board may impose special
assessments on each Association and licensed CIC Manager.
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