Community Association Managers to Require Certification?
Community Association Property Managers ("CAPM") are much different than their "property manager" brethren. In general, real estate property managers are responsible for ensuring that the apartment or condo building that they are charged with is functioning properly, much like a superintendent. CAPM's on the other hand are fiduciaries of the properties that they manage. They act on behalf of the Board on a myriad of issues. They are the first line of defense and in some cases are the face of the community. CAPM's contact, interview and bid contractors. They enter into contracts on behalf of the Association. They are responsible for the Association's finances, from tracking delinquent owners to paying vendors. They are sometimes thrust into the role of mediator in attempting to settle homeowner disputes. They are generally responsible for guiding volunteer board members in the procedures of the Association, and they are sometimes called on to interpret or explain the Association's governing documents or the law under which the Association is governed. And yet, with all of this responsibility, community association property managers in New Jersey are not required to be licensed or certified. There is no state-wide standard required for managers, no required training, no background checks, and no governing body charged with ensuring that managers have a minium amount of knowledge and/or experience.
In 2008 Senator Christopher Bateman sponsored a bill (S-759) that would certify Community Association Managers (anyone managing a condo, co-op or homeowners association), and would require anyone in the business of property management for common interest communities to be certified under standards created by the Department of Community Affairs consistent with already existing national standards. The bill would not require certification, but would prohibit those without the certification from holding themselves out as being "certified" in the field of property management. The act would also require all Associations in New Jersey to hire only certified managers, and would require that the contract between the Association and the manager include the insurance, bonding and certification requirements.
The two year certification would require a mix of schooling and experience, and would then require that the applicant pass a written examination. Each certified manger would have to be bonded in the amount of $3,000.
The requirements of the training and exam are likely to be similar to the National Board of Certification for Community Association Managers (NBC-CAM) which has created a certification for community association property managers. This certification requires classroom study and an exam involving subjects such as governance and legal matters, budgets, reserves and assessments, risk management and insurance, maintenance, contracting and human resource management. This certification, while obviously not a guarantee of superior service or compliance with each and every standard, at least sets a minium standard for those who enter this field. The certification also requires that managers:
- Be knowledgeable, act, and encourage clients to act in accordance with any and all federal, state, and local laws applicable to community association management and operations.
- Be knowledgeable, comply and encourage clients to comply with the applicable governing documents, policies and procedures of the Client Association(s) to the extent permitted by that Client.
- Not knowingly misrepresent materials facts, make inaccurate statements or act in any fraudulent manner while representing Client Association(s) or acting as a CMCA.
- Not provide legal advice to Client Association(s) or any of its members, or otherwise engage in the unlicenced practice of law.
- Promptly disclose to Client Association(s) any actual or potential conflicts of interest that may involve the manager.
- Refuse to accept any form of gratuity or other remuneration from individuals or companies that could be viewed as an improper inducement to influence the manager.
- Participate in continuing professional education and satisfy all requirements to maintain the certification.
Manager certification has been an issue since at least 1999 when the Assembly Local Government and Housing Committee discussed the pros and cons of such a certification, related to the proposed Uniform Common Interest Ownership Act. The current bill is presently being debated in committee, and mirrors a similar bill introduced by then Assemblyman Bateman in 2006. The 2006 bill was abandoned before being put up to a vote of the Assembly. However, now more than ever, this certification may be a necessary step in the field of community management. There are new and larger associations cropping up across New Jersey, and more and more management companies being created to service these companies, some of which have no experience with condominiums, townhouses or cooperatives. While obviously not a panacea, it would be extremely helpful to give the Board of Trustees a comfort level that the manager they wish to hire has studied specific issues and subjects that will enhance their ability to serve the community. This is essential for volunteer, part-time Board Members who are often times unable to separate the good from the bad in the ever growing property management world. It may also allow the quality CAPM's out there to further distinguish themselves from those who do not fully understand the full breadth of their position, or who are unable to properly service their community.
