Manager Licensing and Model Legislation

CAI-endorsed credentials for individual community managers include:  

• Certified Manager of Community Associations® (CMCA) administered by the Community Association Managers International Certification Board (CAMICB)  

• Association Management Specialist® (AMS)  

• Professional Community Association Manager® (PCAM)  

CAI endorsed accreditation for community association management companies includes:  

• Accredited Association Management Company® (AAMC)  

In states that either propose or begin discussions related to mandatory regulation of community association managers, CAI will support a regulatory system that includes the following:  

• Adequate protections for homeowners living in community associations. 

• Mandatory education and testing on fundamental knowledge of community association management and operations. 

• Definition and enforcement of standards of professional and ethical conduct.  

• Appropriate insurance requirements.  

CAI will support a regulatory system that provides legal recognition of the community association management profession and provides assurances to the public that individuals representing themselves as being involved in the profession have met minimum qualifications for education or experience as a community association manager.  

CAI prefers the licensure of individual community association manager practitioners as opposed to licensure of management companies.  

The CAI Manager Licensing Public Policy and Model Legislation propose two acceptable models: licensure under a professional regulatory department within the state; or privatization of the licensure program.  

1. COMPONENTS OF MODEL LEGISLATION – LICENSURE UNDER A PROFESSIONAL REGULATORY DEPARTMENT  

To ensure adequate consumer protection and appropriate representation of the community association management profession and to obtain CAI support for the adoption of legislation regulating community association managers, the following provisions must be included in the legislation.  

1. Definitions  

“Community Association Manager”  

If the term “community association manager” is not included or defined properly in legislation, community association managers may be required to become real estate brokers, property managers, or members of other professions. “Community association managers” must be distinguished from brokers and property managers in any legislation. Sample definitions include:  

• An individual who, in an advisory capacity, for compensation or in expectation of compensation, whether acting as an independent contractor to, employee of, general manager or executive director of, or agent of a common interest development, provides management or financial services, negotiates an agreement to provide management or financial services, or represents himself or herself to act in the capacity of providing management or financial services to a common interest development.  

• An individual who may be a partner in a partnership in the capacity to advise and direct the activity of a licensee, or who acts as a principal on behalf of a company that provides management or financial services to a common interest development.  

• An individual operating under a fictitious business name that provides management or financial services to a common interest development.  

• An individual who agrees to provide management or financial services to a common interest development.  

• A supervisor of an individual who provides management or financial services to a common interest development.  

“Board”  

Board means the Community Association Manager Regulatory Board.  

2. Qualifications  

• Require an objective examination that tests community association management knowledge.  

• If community association managers are to be regulated, they must be tested on their knowledge of community association management, not a different professions' body of knowledge or an examination based solely on state-specific law; the state shall recognize Certified Manager of Community Associations® (CMCA) examination as the objective examination.  

• For states that want to test state-specific law, a separate section can be added to the CMCA examination.  

• Require relevant community association management education as a prerequisite to sit for the examination; this educational requirement will be CAI’s M-100: The Essentials of Community Association Management course.

3. Require Relevant Continuing Education Requirements  

• Continuing education must be mandated.  

• The continuing education requirements must specifically relate to community association management or topics that assist in a manager’s professional development (e.g., accounting, office administration, and public administration).  

• At least some portion of the continuing education must cover state-specific law governing the operation of community associations.  

4. Standards of Professional and Ethical Conduct and Disciplinary Authority  

• Community association managers must be required to follow professional and ethical standards.  

• The Standards of Professional Conduct created by the Community Association Managers International Certification Board (CAMICB) shall be used as the foundation for a state’s standards.  

• There must be some form of enforcement of the ethical standards. Due process provisions must also be present in the provision.  

5. Regulatory Board  

• A governance board shall be appointed to oversee the regulatory program (unless privatization model is utilized).  

• The legislation shall create a governance board whose members are appointed by the governor with the specific role of developing and interpreting the regulations of the community association manager regulatory program.  

• The governance board must consist primarily of community association managers.  

• Any community association manager regulatory program should be administered by an entity or state department that regulates professions and/or occupations.  

• The real estate commission of a particular state should not govern the community association manager regulatory program.  

Responsibility of the Board shall include:  

• Promulgation and interpretation of all rules and regulations reasonable and necessary to implement the provisions of the legislation. 
  Review, approval, and rejections of applications for licensure, renewal, and reinstatement. 

• Issuance of licenses.  
  Denial, suspension, revocation, or other discipline of a licensee.  
  Disciplinary authority, rule promulgation, interpretation, and enforcement. 
  Determination of fees associated with the licensure program. 

• Meet on a regular basis to provide proper rule promulgation and interpretation.  

6. Legacy Provisions  

A legacy provision permits community association managers currently practicing in the state to become licensed or regulated without having to take the prerequisite educational course or the examination if certain criteria are met. Criteria should include recognition of experience or professional credentials.  

• Hold an active Professional Community Association Manager ® (PCAM) designation from CAI.  

• Hold an active Association Management Specialist® (AMS) from CAI.  

• Hold an active Certified Manager of Community Associations® (CMCA) from Community Association Managers International Certification Board (CAMICB).  

• Has successfully completed CAI’s M:100 Course: Essentials of Community Association Management and have at least five years of experience as a community association manager, with at least 12 months of the experience immediately preceding application for the license.  

7. Exemptions from Licensure  

Except as otherwise provided, licensure requirements shall not apply to:  

• A licensed practicing attorney acting solely as an incident to the practice of law. 

• A licensed practicing certified public accountant acting solely as an incident to the practice of accounting. 

• Any person acting as a receiver, trustee in bankruptcy, administrator, executor, or guardian acting under a court order or under the authority of a will or a trust instrument.  

• A declarant.  

8. Fidelity Bonds and Segregation of Accounts.  

No licensee shall control, collect, have access to, or disburse funds of a community association unless, at all times during which the licensee collects, has access to, or disburses such funds, there is in effect, a fidelity bond complying with the provisions of this section.  

• The fidelity bond referred to in this section shall be written by an insurance company authorized to write such bonds in the state and except as provided by subsection (b) of this section and shall cover the licensee by either or both his management company or the community association client. Optional coverage known as a crime insurance policy, where available and applicable, may be obtained by the licensee, the licensee’s management company, or the community association client  

• A licensee who provides community association management services for more than one community association shall maintain separate, segregated accounts for each community association. Such funds shall not, in any event, be commingled with the licensee’s or firm’s funds, or with the funds of any other community association. The maintenance of such accounts by the licensee shall be custodial and such accounts shall be in the name of the respective community association.  

Annual Report for Common Interest Development Communities (optional component to track community associations in the state).  

The Board shall develop the regulations regarding the information required in the annual report and related fees. The declarant or common interest development community shall file an annual report in a form and at such time as prescribed by regulations of the Board. The filing of the annual report required by this section shall commence with the declarant when development of the association begins and through the life of the common interest development community.  

2. PRIVATIZATION MODEL 

Privatization model legislation shall include a definition of a community association manager, exemptions from licensure, and name of the required professional credentials in order to do business as a community manager in the state. There will be no fees, no regulations, and no government created oversight board. The act will state that community association managers in the state must comply with one of the following:  

1. Hold an active Professional Community Association Manager ® (PCAM) designation from CAI.  

2. Hold an active Association Management Specialist® (AMS) from CAI.  

3. Hold an active Certified Manager of Community Associations® (CMCA) from Community Association Managers International Certification Board (CAMICB).  

The following provisions have been deemed unacceptable provisions in legislation that regulates community association managers. In the event one or more provisions are present in the legislation, CAI will not support the legislation:  

1. Registration of community association managers or community association management companies. Registration creates an official list of persons. Registration presumes the existence of the right to engage in activity and makes it illegal to practice in a regulated occupation without being registered. It does not assure the public of qualified practitioners.  

2. Requirement that community association managers work under a real estate broker. Legislation may distinguish community association managers from property managers and real estate brokers. However, requiring community association managers to work under real estate brokers or property managers is inappropriate.  

3. Requirement that community association managers obtain a “property management” license. A property management license ignores the distinction between property managers and community association managers. Community association managers obtaining this license will not obtain the necessary education to manage community associations, since community associations will be only one of the several subjects required for a property management license.  

4. Requirement that community association managers obtain a “real estate” license or obtain “real estate” education requirements. Community association management and real estate brokerage require different knowledge and skill sets. Requiring community association managers to take real estate educational courses eliminates the distinction between the two professions and inadequately prepares managers for community association management.  

5. Allowing real estate brokers and agents to manage community associations without appropriate training, education, and regulation.  

BACKGROUND 

CAI supports the protection of homeowners and community associations through increasing professionalism, the training of community association managers, and appropriate insurance coverage. CAI also supports the national certification program—CMCA, administered by CAMICB.  

State legislatures have attempted on several occasions to regulate community association managers. Past legislation has attempted to license community association managers as real estate brokers, salespersons, or property managers. By definition, property managers perform facilities management and leasing services—not community association management. Community association managers perform additional and different job functions, requiring different knowledge than that required of real estate brokers, agents, or property managers. Any regulation of community association managers as brokers, agents, or property managers does not provide community association residents the assurance that these managers have the knowledge and skills required for professional community association management. While licensure of real estate brokers, agents, or property managers protects consumers in sales transactions, it does not protect consumers during the ongoing management and operation of community associations.  

The CMCA program provides many of the same requirements as state licensure. The program requires prerequisite education; a comprehensive examination of entry-level knowledge that was developed based upon rigorous standards set forth by the National Commission for Certifying Agencies (NCCA); required adherence to CMCA Standards of Professional Conduct; enforcement of those standards; and continuing education requirements. The CMCA program allows the state to have licensed professionals without requiring the state to create a new regulatory bureaucracy to administer a licensure program. Therefore, states do not have to license or otherwise regulate community association managers. States should accept CAMICB’s national certification program in lieu of state licensure.  

Adopted by the Board of Trustees, October 1, 1994

Amended and Approved by the Manager Credentialing Legislative Task Force, April 22, 1998

Approved by the Public Affairs Council, April 22, 1998

Adopted by the Board of Trustees, April 25, 1998

Amended and Approved by the Government & Public Affairs Committee, October 17, 2001

Adopted by the Board of Trustees, October 19, 2001

Amended by the Government & Public Affairs Committee, March 25, 2011

Adopted by the Board of Trustees, May 4, 2011