On top of our agendas, at least for those of us engaged in the common interest community business, is the evolution, and its ramifications, of manager licensing in Colorado. Like all successful businesses, the HOA leadership relies on a well-stocked “tool” cabinet in order to carry out its duties. A contracted community manager is just one of the tools retrieved from that box. So is a competent attorney, a well-informed accountant, an experienced repairman, the HVAC service company, the pool technician … the list goes on.
The HOA board is operating a complex business, in some cases with a very extensive budget which may or may not include a reserve study. It may entrust a significant amount of its duties to the contracted management, but it cannot assign the respective responsibilities. Accordingly, the management needs to be held accountable for its actions, or inactions, as the case may be. The management also requires clear directions, defined goals, with periodic performance reviews. Our industry does have extremely proficient managers, but also suffers from highly ineffective managers. Licensing should help but does not substitute for board oversight and continuing education.
The HOA Information and Resource Center, together with CAI-RMC, both support manager licensing to increase the level of professionalism, accountability and education standards within the industry. The Center collects information, including complaints, from homeowner associations and submits an annual summary to the Director of the Colorado Division of Real Estate. Throughout last year, 1440 complaints were received from 409 different complainants, according to the latest report. Complaints against Managers tallied about 38% of these. There is a need for some perspective here, for about 3.5 complaints apparently were received from each of the 409 complainants. The total number of units registered with the Center is 861,657 through December 31, 2014. Therefore, the number of complainants really represent about 0.05% of the total registered units. Furthermore, in both the 2012 and 2013 annual reports, the Center indicated that “the complainants were sometimes unable to establish whether the HOA board or manager was at the root of their complaint.”
This is not about diverting blame from a manager, but more about the leadership in general, and the need for a more effective “partnership” for community governance. In 2011, the HOA Information Officer wrote, “It is important to note that many of the complaint types involving managers also occur in associations without managers and thus seem to be endemic in associations regardless of management and while managers are often directly responsible for complaints, the fact remains that HOA boards do retain the right to terminate management contracts and as principals in an agency relationship have responsibility for the actions of the managers to a certain level.”
The further west you venture in our great State, self-management becomes more common. There are significantly less managers, even fewer accomplished managers, forcing boards to govern their own affairs, and usually with seriously deficient governing documents. Operating with a lack of understanding of the intrinsic needs and requirements, boards are floundering, managers are overwhelmed. Professional assistance is scarce and, in many cases, unaffordable.
The Mountain Education Committee (MEC), an enterprising group of regional industry volunteers, is a branch of CAI-RMC dedicating itself to bringing information, education, direction and resources to the mountain regions of Colorado, all the way west to the border. We also hope to be the voice of the western communities by providing feedback to the Denver based CAI-RMC leadership.
To further this, and in collaboration with local businesses, the MEC is hosting educational presentations on the new manager licensing laws this spring in the Summit and Eagle Counties, Montrose, Durango and the Roaring Fork Valley. More regions may be added. Please contact the CAI-RMC office for exact dates and registration information. We hope to see you at one of our events.
Original posting: May 20, 2015