Illinois Community Association Manager Licensing

Let's See That License

By Debra A. Estock

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 Property managers in Illinois have until October 1, 2012 to prove that they have  met licensing requirements enabling them to perform the services of a community  association manager.  

 Discussed for many years in the state legislature, new rules requiring licensing  of property managers were approved by legislators in 2010 and became law on  October 1, 2011. Governed under the Illinois Department of Financial and  Professional Regulation (IDFPR), which oversees licensing requirements for more  than 60 kinds of professions, this will allow government oversight of CAMs for  the first time.  

 Who, What, When

 After the new law was passed in July 2010, the IDFPR created a five-member board  of directors, which included five real estate industry pros and two board  members, who aren’t involved in the business. From November 2010 through May 2011, the board  worked to draft a set of rules for the new licensing requirement. Now, any  property manager currently working in the industry had one year (from October  2011) to get his or her state-approved license. Prospective property managers  not yet working in the industry have up to three years to complete the process.  

 According to Lara Anderson, Esq. of the Lake Zurich-based law firm of Fullett  Rosenlund Anderson, PC, the law provided that current professionals working as  property managers could be “grandfathered in” if they applied for a CAM license under this “grandfather provision” by March 31, 2012.  

 The grandfather provision would apply if “they practiced as a community association manager for five (5) of the last ten  years” or had “achieved/received one of the following designations” from either the Community Associations Institute, the Institute of Real Estate  Management or the National Board of Certification for Community Association  Managers: CAI Accredited Management Specialist (AMS); CAI Professional  Community Association Manager (PCAM); IREM Certified Property Manager (CPM);  IREM Accredited Residential Manager (ARM); or NBC-CAM Certified Manager of  Community Associations (CMCA).  

 The manager would also be eligible if he or she were licensed in another state  that had substantially the same requirements as that of Illinois. States that  qualify include Georgia, Florida, Nevada and Virginia.  

 New Rules

 The new qualifications for a manager are that an individual must be at least 21  years old, complete 20 hours of community association management courses and  pass one of two specified exams. The required courses will cover subjects such  as association budgets and finances, maintenance and operations, insurance and  the conduct of association meetings and state and federal law applicable to  community associations. Managers must also submit an application and a $300  initial fee.  

 “It’s about time this new law was passed. Associations need protection from  unscrupulous managers,” says Jim Stoller, president of The Building Group Inc., a Chicago-based company  that specializes in the management of condominiums, cooperatives, homeowner and  mixed-use complexes. “Every year you hear about some manager or management company stealing from their  clients, taking kickbacks or steering work to their friends or related  companies. We need to eliminate those managers who do not work for the best  interests of their clients. Managers need to become more professional. Boards  and owners need to understand the value of having professionals working on  their property and protecting their interests.”  

 A crucial provision in the new licensing act is that the Illinois Department of  Financial and Professional Regulation has to power to suspend or revoke a  license for unprofessional behavior by a manager. Failure of a manager to  comply with governing documents, to knowingly misrepresent material facts as  well as act in a fraudulent manner, providing legal advice without being  licensed to practice law or failing to disclose conflicts of interest is  behavior that qualifies for suspension.  

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 “If anything the penalties should be greater for a manager engaging in  unprofessional conduct than having their license revoked,” says Stoller, “however, the new law is a good start.”  

 Additional key aspects of the act are the requirements that the licensed manager  provide to the association a fidelity bond covering the loss of funds and  errors and omissions insurance.  

 Community association managers must renew their licenses every three years. The  first renewal period under the act is August 31, 2013. Managers who practice  without a license can be fined up to $10,000.  

 Volunteers who perform services for self-managed communities will be exempt from  the licensing requirement, and managers at associations of 10 units or fewer  are also exempt. Also exempted is any director, officer, or member of a  community association that provides one or more of the services of a community  association manager without compensation for such services to the association;  a licensed attorney acting solely as an incident to the practice of law; a  person acting as receiver, trustee in bankruptcy, administrator, executor, or  guardian acting under a court order or under the authority of a will or a trust  instrument.  

 Hitting the Books

 Licensing requirements go hand-in-hand with a strong educational component.  Organizations like IREM are offering specific courses to fulfill the Illinois  licensing requirement, according to Sharon Peters, public relations manager for  the Chicago-based professional real estate management association that serves  both the multifamily and commercial real estate sectors. IREM has 80 U.S.  chapters, 14 international chapters, and several other partnerships around the  globe. Worldwide membership includes more than 19,000 individual members and over 550  corporate members.  

 The IREM CAM course offering, titled the Illinois Community Association Managers’ Certification Course (CID201CAMS), according to Peters, is available online and  is self-paced. The proctored exam (CID201CAMX) is also being offered. A  certificate of completion is provided to each student who completes the course  and exam. For more information about the course and exam, visit  www.irem.org/CAM. The cost of the course is $480 and the proctored exam fee is  $60.  

 The course covers relationship management—the evolution of common interest developments, common needs vs. individual  rights, declarant/developer transition to management, owner and manager duties  and responsibilities, working with boards, motivating volunteers and employees;  governance—governing documents, the hierarchy of documents, amending documents,  parliamentary procedure, meeting processes (agendas, minutes, etc.),  enforcement issues; legal and risk management—proper disclosure, compliance issues and record retention, managing risk,  insurance, IREM’s Code of Professional Ethics; financials—  

 accounting, budgeting, financial reports, reserve studies, special assessments,  loans and collecting assessments; and maintenance management—maintenance systems, work orders, inspections, contractors’ negotiations, and oversight.  

 Testing, Testing

 An applicant can also qualify by passing the National Board of Certification for  Community Association Managers (NBC-CAM) Certified Manager of Community  Associations (CMCA) examination.  

 NBC-CAM is the professional accreditation body for more than 10,000 community  association managers worldwide. CMCAs manage condominium associations,  homeowner associations, resort communities and commercial tenant associations.  

 Individuals completing CAI-specific coursework, primarily the CMCA, PCAM and AMS  qualifications, essentially fulfill the 20 hour education coursework  requirement for the licensing.  

 The prerequisite to obtaining the CMCA designation is to successfully pass the  M-100 class given by CAI, entitled “The Essentials of Community Association Management.” After successfully passing the Professional Management Development Program’s M-100 course, community managers may register for the CMCA exam, which is a  2-4 hour exam. Any community manager who successfully passes the CMCA exam has  met the initial educational requirement to become a licensed manager.  

 The AMS designation is a second career development track for community  association managers. This requires two years of verified experience in  financial, administrative, and facilities management of at least one  association. The person must have also successfully completed the M-100 course,  and at least one M-200 series course (M-201 - M-206), plus successfully passed  the CMCA exam administered by NBC-CAM. The application fee is $150 for a  CAI-member manager and $250 for a non-member.  

 The PCAM designation is the pinnacle of community association management. To  earn this designation, the highest that can be achieved within the profession,  managers must have five years of direct community association management  experience; must have successfully completed the PMDP’s M-100 and all six M-200 level programs; and successfully passed the CMCA exam.  Application fees are $195 for members; $295 for non-members. This also includes  an annual maintenance fee of $150 for members; $250 for non-members. Please  call the CAI-Illinois chapter office at 847-301-7505 to request a PMDP Course  Catalog which outlines all of the professional designations CAI offers, and all  of the upcoming PMDP courses for the year in your region.  

 While Illinois addressed the issue in 2010, several states still allow managers  to practice without being licensed. “Manager licensing will become more common throughout the country,” says Stoller. “All it will take is a few cases of mismanagement for owners in each state to  demand better protection for their assets and associations.”   

 Debra A. Estock is managing editor of The Chicagoland Cooperator. Staff Writer  Christy Smith-Sloman contributed to this article.

 

Comments

Dennis Zurko

It's truely unbelievable to me, that this law was not passed years. Ihave seen many property managers who don't have a clue what property management is all about. i'm remined of the Richard Nixon interview with David Frost. When Presendent Nixon said, "If the President does it then it's legal." I have seen property managers who put together a budget and leave-off important items and I've seen a property manager only put seven months on a budget. Isn't it sad, that the owners of these property management companies let thier property managers get away with mis-guided information input and output to the board and and then to the association membership. Who ever said ignorance is bliss wasn't kidding.


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