Colorado Manager Licensing Making Headlines

One response to “Colorado Manager Licensing Making Headlines”

1. I am a professional community-association manager, and have been since February, 1994. I have lived in the “condo capital of the contiguous 48 states” (Aurora) since 1964. I am a long-time member of the Community Associations Institute (CAI), and I believe it to be a strong advocate for communities. I have served on the Board the Community Associations Institute – Rocky Mountain Chapter (CAI-RMC), and on several committees (currently the Editorial Committee). I am the past-President of the Independent-Managers’ Network, and have been published many times, both locally and nationally. I normally do not trot out my qualifications and accomplishments, because, as a responsible manager, I know that these mean nothing if I have not done an excellent job for the communities I have managed, and unless I have maintained the highest ethical standards. As an independent manager who does not work for a management company, I have been personally and solely responsible for the funds of the associations and the proper accounting for them, and not once has any CPA ever found so-much-as-a penny of discrepancy in any audit. Under the proposal currently supported by the Legislative-Action Committee (LAC) of CAI-RMC, however, I would not qualify to be licensed as a manager in the state of Colorado, because I have not taken any class from CAI, have not passed any test given by CAI, and do not have any CAI-sponsored designations. My comments on the recent Sunrise Review Application by the Legislative-Action Committee of the Community Associations Institute – Rocky Mountain Chapter are listed below.

   Licensing, in and of itself, would do nothing to increase the “professionalism” of a manager, as claimed. All it means is that an individual has gone through the process, obtained the necessary credentials, and paid the required fee. Licensing may, however, impart the impression (sometimes incorrectly) that a manager is more “professional.” True professionalism, however, can be proven only by an ongoing commitment to the industry and to communities by a manager who has a consistent track record of service and ethical behavior.

   The LAC of CAI-RMC proposes that state licensing be handled through its own organization, in which membership is currently voluntary. CAI-RMC proposes to change this and make membership mandatory for any manager seeking a license in Colorado. No organization should be allowed to increase its membership (and coffers) through legislation.

   Payment for membership in CAI would be at the manager’s expense. The Certified Manager of Community Associations (CMCA) certification requires taking a class offered only by CAI, at the manager’s expense, and the passage of an exam given only by CAI, also at the manager’s expense. In order to maintain this certification, or to upgrade it, additional classes are required, both inside (Professional Management-Development Program) and outside of CAI, again at the manager’s expense. The National Board of Commissioners of Community Association Management (NBC-CAM), which has been proposed to oversee the entire process, is itself an arm of CAI, and not an independent entity. Three problems with this process should be readily apparent:

   1. The cost for a manager to become licensed would be much more than the fee paid to the state. There would be the cost of membership in CAI, the cost of each class and exam taken, and the cost of continuing education. These costs are not trivial. In fact, they are a primary reason for my not holding a CAI certification.

   2. This process is at once self-serving and a conflict of interest. CAI proposes to have the state enact legislation that would inure to its sole financial benefit.

   3. CAI would be the sole determiner of who gets to be licensed in Colorado, rather than the Colorado Department of Regulatory Agencies (DORA).

   If a manager is to be licensed by any governmental agency, this should be done independent of membership in any trade organization. In other words, a person should not have to join CAI and pay for classes and tests in order to be able to obtain a license. There are other avenues for courses: community colleges, and the Institute of Real-Estate Management, for example. While CAI’s call for licensing may seem to be in the public interest, its proposals for handling the process are in its sole interest. Governmental oversight should be accomplished without the involvement of a private entity outside of the government. There are numerous examples in which allowing oversight and testing by outside entities has backfired. Just look at the recent scandals involving the issuing of driver licenses.

   The question arises: “To whom should a licensed manager be accountable?” I have always maintained that a manager is accountable to the members of each community that he manages. If to the Division of Real Estate or some other division of DORA, this body would need to have investigative and enforcement abilities. There would need to be some type of due process that provides for a hearing, in which alleged complaints are considered, and in which the accused is able to present a response or defense to the charges, with or without counsel. Is DORA ready, willing and able to administer this process? Without it, licensing would not be a deterrent to any type of malfeasance. It should never be up any civilian organization, to enforce the provisions of the Colorado Common-Interest Ownership Act (CCIOA). In some cases, action should be taken only following criminal prosecution.

   On the other hand, there are numerous examples of malfeasance, including theft, by managers, all of whom could have easily been licensed. A license or any professional designation, such as the Professional Community-Association Manager (PCAM), does not guarantee adherence to ethical standards. In order to obtain the license, each applicant would have to sign a statement agreeing to maintain ethical standards. REALLY? Someone actually thinks this guarantees ethical behavior? Licensing is not, and never has been, a deterrent to criminals. In 1989-90, the husband and wife team who managed Peachwood Homeowners’ Association here in Aurora embezzled $50,000.00 from the association’s reserve account. They were apprehended, convicted, and made to pay restitution. And yet, the wife had CAI’s highest designation, the Professional Community-Association Manager (the coveted and almighty PCAM), and was the President of the local chapter in 1988. No action was ever taken by CAI against her, and, in fact, she and her husband moved to Las Vegas, where they set up shop under a different corporate name. I attempted to alert the Las Vegas Chapter of CAI, but was told that it could not take any action based on my say-so for fear of defamation. Investigation, anyone? It should be apparent that allowing CAI to handle complaints would be an example of “putting the fox in the hen house.” (By the way, the person who uncovered the embezzlement, got the managers fired, put together the prosecution’s case, and insisted upon restitution to the HOA was none-other than yours truly, when I was the HOA’s President and before I became a manager. This was, however what caused me to become a professional community-association manager.)

   In any type of licensing, credentialing or registration, states need to recognize action taken in other states, and be able to deny or revoke a license based on any-such action. There needs to be some type of national database, communication, and mutual enforcement action.

   Most homeowner claims are without any merit whatsoever, and someone would need to explain to the homeowners why this is so. If handled properly, this could be a “teachable moment.” Under the current proposal, however, there would be no “teachable moments.”