2004 July

Management Issues - Licensing

by Rich Mellin
           
The Connecticut General Statutes (Chapter 400b) requires that any "person" who provides association management services must be “registered”.   It is the responsibility of every Board to know if the individual who manages their business affairs is registered to provide community association management services.

            Community association management services means services provided to an association for remuneration including one or more of the following:

            (a) Collecting, controlling or disbursing funds of the association or having the authority to do so;
            (b)   Preparing budgets or other financial documents for the association;
            (c)   Assisting in the conduct of or conducting association meetings;
            (d)   Advising or assisting the association in obtaining insurance;
            (e)   Coordinating or supervising the overall operations of the association;
            (f)   Advising the association on the overall operations of the association.

            This statute does not apply to any director, officer or other member of an association who provides services, but does apply to salaried on-site managers employed by an association.  It also does not apply to professionals such as lawyers, accountants and other individuals “licensed” to practice particular licensed professions.  However, all community association management advertisements must state that the individual is registered and include the registration number.

            There are a number of important "required provisions of contract" in the statute.  There must be a contract in writing between the community association manager (CAM) and the association.  This contract must spell out how checks are issued and moneys transferred.  The CAM can not enter into any contract binding the association exceeding a specified amount determined in the contract.  No contract with a CAM may be sold or assigned to another person without the approval of the association. 

            There are additional provisions regarding services other than association management services.  The statute does not prohibit a CAM from providing other services but these services must be subject to a written agreement.  A CAM must also disclose affiliate relationships.

            All CAMs must be covered by a fidelity bond.  The fidelity bond must cover the maximum funds that will be in the custody of the CAM at any time but be no less than the sum of three months assessments plus reserve funds.  This bonding can be accomplished through either the association's insurance policy or a separate policy of the CAM that names the association as obligee.

What is Licensing?

            Consumers traditionally look to their governmental bodies to protect them from unqualified and unscrupulous business practices through some sort of licensing requirement.  Among the general public, however, there is often confusion surrounding the terms “registered”, “licensed” and “certified”.  These terms are often used interchangeably.

            Registration requires that an individual file his or her name and address with a designated agency and does not involve pre-entry screening by a regulatory board.  Occupational licensure restricts the scope of practice so that it becomes illegal for unlicensed individuals to provide specified services. 

            Certification grants recognition to individuals who have met predetermined qualifications such as education and examination set by either a state agency or a professional trade organization such as the Community Association Institute (CAI) which has credentialing programs.  Only those who meet the qualifications may legally use a designed title.  In Connecticut, persons licensed by the State as CAMs do not need to meet any education or examination standards… only to complete the two page application form and pay a registration fee.
           
Certification

            CAI established the National Board of Certification for Community Association Managers (NBC-CAM) to ensure that managers have the appropriate skills to effectively manage community associations.  NBC-CAM is the first and only nationwide organization created solely to certify community association managers and to help consumers identify managers who have demonstrated fundamental competency and knowledge in this profession. 

            The Certified Managers of Community Associations (CMCA®) certification demonstrates that these managers have passed NBC-CAM's national exam and met requirements.  To obtain the CMCA® certification, a manager must successfully complete a 16-hour classroom course, the Essentials of Community Association Management, and pass the National Certification Examination.  The test is administered by an independent outside testing agency. 

            Certified managers must also adhere to the CMCA® Standards of Professional Conduct and take continuing education courses to recertify.  If CMCA® certificants do not comply with the Standards of Professional Conduct, they are subject to disciplinary action, up to and including suspension or revocation of the credential.

            The CMCA® certification is the first tier of the pyramid of professionalism for community association managers, which is followed by the Association Management Specialist (AMS®) and the Professional Community Association Manager (PCAM®) designations.

License Verification

            The Connecticut Department of Consumer Protection (DCP) maintains records regarding the licensing of community association managers.  One can use the Internet to go to the DCP website at:  www.state.ct.us/dcp/ to obtain registration and license applications and information, look-up licenses, download roosters, and renew licenses

            To look-up a license, look on the right side of the DCP screen, under “Licensing Information”, you will see a link called “License Lookup”.  Click on this link.  This will open up the “Verify License” page.  Under “Select a Category”, select “Real Estate” and click on the Search button.  Under “Select a credential type”, select “Community Association Manager”.

            Scroll further down the screen and you will be asked to enter either (a) Credential Number; (b) Business Name; or (c) Last Name.  (There are tips for searching.)  Enter the search item(s) and click the Search button.  Scroll towards the bottom of the page for the results.  If you do not find the result you want, go to the top of the page and click on “LICENSE ROSTERS”.  Follow the instructions.  You will be able to create a complete list (in an Excel spreadsheet) of all the CAMs with individual and business names and addresses.

The management of an association's business affairs has become increasingly more complex requiring strong management skills and knowledge of a seasoned CAM professional.  Make sure your CAM is registered and has a CAI certification.  Settle for nothing less!

Richard E. Mellin is a principle in Mellin & Associates LLC, Redding, CT.  He is Chairperson of the Managers’ Council.  To provide feed back regarding this article (or other topics), please contact him at: Rich@Mellin.US.