Michelle Green

Michelle Green has worked in the homeowners association management business 15 years. She manages the Flying Horse Homeowners Association as an employee of Hammersmith Management.

 It’s more than just a job overseeing enforcement of covenants, collecting dues and hiring maintenance and landscaping crews.

Green has devoted many personal hours and money to taking classes and getting certified, by an industry peer review group, in various aspects of the business.

She’s proven her proficiency at record-keeping, handling financial statements, perusing insurance policies, navigating government regulations of HOAs and more.

In fact, this week she’s mailing in her final exam for grading as she tries to earn certification as a Professional Community Association Manager, or PCAM, from the Community Associations Institute, a nationwide umbrella group for managers like her. Green is a member of the Southern Colorado Chapter of CAI.

 Achieving PCAM status is the pinnacle of HOA management.

So it bothers her that a lot of people out there seem to wake up one morning and decide they are HOA managers and start trying to run large associations.

“Anybody can hang a shingle on the door and call themselves a management company with no previous experience,” Green said. “They’ve got the checkbooks for the associations. They are doing the financials. They should be monitored so associations don’t lose money or get embezzled.”

In fact, HOA fraud is problem. I’ve written about several HOAs victimized by crooks posing as managers.

But a more common problem is simple mismanagement by rookies which leads to huge legal and financial disputes within an HOA.

Complaints against HOAs are so widespread the Colorado General Assembly created the HOA Information and Resource Center to get a handle on the nature and seriousness of the problems. See previous blogs about the HOA office.

Aaron Acker, HOA Information Officer, spoke to a group of property managers on Feb. 15, 2011, in Colorado Springs.

After nearly a year of taking calls, Aaron Acker, the state HOA information officer, is preparing a report to be delivered to lawmakers during their 2012 legislative session.

Leaders of the CAI’s Rocky Mountain chapter fear the report to be a less-than-glowing assessment of HOAs. They expect shock and outrage. To minimize the anticipated fallout, they have made a preemptive strike.

Last week, the Colorado chapter of the CAI asked the state Department of Regulatory Agencies, or DORA, to initiate an investigation of HOA managers to determine if it’s time for them to join manicurists, barbers and boxers among the dozens of professions licensed and regulated by the state. Check out the list of all the professions licensed by the state!

Green is all for licensing and regulation.

“It would be beneficial for HOAs and their boards if managers were monitored and licensed,” she said. “Managers are handling thousands of dollars, if not millions. Nail technicians and hair stylists all have licensure. Why should someone managing your homeowners association be any different?”

Good question.

I also spoke to Chris Pacetti, a Denver-area manager who is also chairman of the Rocky Mountain CAI’s manager licensing committee. He says the group asked for the investigation by DORA in advance of Acker’s report.

Pacetti said licensing is not new. Nine states and Washington D.C. have enacted manager licensing or certification standards and seven more states are debating the idea.

His group envisions a two-prong test for managers.

One would test an applicant’s skills and knowledge in managing homeowners associations. The other would test for knowledge of Colorado law regarding HOAs.

They would be similar, Pacetti said, to the tests given for basic certification in the industry.

For example, to reach the first rung on the property manager certification ladder, Green took a two-day course followed by a 100-question multiple-choice test.

 Then came the CMCA or Certified Manager of Community Associations exam and another 100 questions. After she logged five years in the industry and passed those two tests, she took the AMS to earn accreditation as an Association Management Specialist.

Now she’s seeking the PMAC.

Green and Pacetti think it’s reasonable to expect every property manager to have a basic education and command of issues before taking the reins of a homeowners association.

But it’s not guaranteed that DORA will agree when it concludes its Sunrise study, likely in 120 days or so.

Attorney Jerry Orten tells me the Legislature studied the issue in 1990 and concluded that new rules were needed to bond managers and protect HOA finances by mandating separate accounts for finances and strict accounting to HOAs of their finances. But lawmakers did not order licensing.

Orten believes licensing would elevate the overall level of servivce to homeowners, resulting in fewer complaints to the new HOA information office.

To recommend licensing managers, DORA must decide the request satisfies three key criteria:

1. Whether the unregulated practice of homeowner association management harms the public and whether potential for harm is easily recognized.
2. Whether the public needs and can be reasonably expected to benefit from occupational competence.
3. Whether protection for homeowners can be achieved by other means in a more cost-effective manner.

 In other words, DORA must find that licensing is needed to protect the health safety and welfare of homeowner, that there is a public need and similar benefit is not available by other means.

Of course, if DORA declines to initiate licensing, individual lawmakers can bypass the agency and simply introduce a bill requiring it.

Stay tuned, HOA fans!

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