Manager Ethics Requirements
Managers and management companies are governed by codes of ethics established by two different organizations: the California Association of Community Managers ("CACM"), a statewide professional organization that certifies managers in California, and the Community Associations Institute ("CAI"), a nationwide organization dedicated to the community association industry.
Before Signing a Management Agreement. As required by the Davis-Stirling Act, managing agents must disclose conflicts of interest. Section 5375 of the Civil Code requires a prospective managing agent of a common interest development to provide a written statement to the board as soon as practicable of the following:
(d) Disclose any business or company in which the common interest development manager or common interest development management firm has any ownership interests, profit-sharing arrangements, or other monetary incentives provided to the management firm or managing agent. (e) Whether or not the common interest development manager or common interest development management firm receives a referral fee or other monetary benefit from a third-party provider distributing documents pursuant to Sections 4528 and 4530.
When Presenting Vendor Bids. Disclosing conflicts of interest continues after a management agent is hired. Section 5375.5 of the Civil Code requires:
A common interest development manager or common interest development management firm shall disclose, in writing, any potential conflict of interest when presenting a bid for service to an association’s board of directors. “Conflict of interest,” for purposes of this section, means (a) Any referral fee or other monetary benefit that could be derived from a business or company providing products or services to the association. (b) Any ownership interests or profit-sharing arrangements with service providers recommended to, or used by, the association.
Manager Licensing
Business License. Management companies must have a business license to conduct business. The license is issued in the city or county in which their principal office is located.
Real Estate License. There are no requirements that managers and management companies be licensed Realtors to manage common interest developments.
Recommendation: Associations should ask if (i) the management company is certified as a community manager, (ii) the property supervisors are certified, and (iii) the company is insured.
Manager Certifications
There are no manager licensing requirements for community association managers. Instead, designations and certifications are offered by CACM and CAI which managers can earn. Professional designations and certifications are offered through the following organizations:
- California Association of Community Managers (CACM)
- Community Associations Institute (CAI)
- Community Association Managers International Certification Board (CAMICB)
Community Associations Institute
LSM Large Scale Manager
PCAM Professional Community Association Manager
AMS Association Management Specialist
AAMC Accredited Association Management Company
RS Reserve Specialist
CIRMS Community Insurance and Risk Management Specialist
California Association of Community Managers
MCAM Master of Community Association Management
CCAM Certified Community Association Manager
CAFM Community Association Financial Management
Community Association Managers Int'l Certification Board
CMCA Certified Manager of Community Associations
Certification Protocol
The community management industry has become more sophisticated with more managers earning multiple designations. Unfortunately, style manuals do not agree on how designations should be listed behind a manager's name.
Alphabet Soup. Some authorities, particularly in Europe, advocate listing all degrees and designations in the order earned such as: John Smith, BA, AMS, CCAM, MBA, CMCA, PCAM, CPM, PhD. Doing so provides a history of the person's educational endeavors. However, many view the practice as pretentious. Hence, the trend in the United States is to list only the most advanced degree earned. For example, those who earn a doctorate do not list their high school diploma, undergraduate and graduate degrees: John Smith, HS, BA, MA, PhD. Instead, they simply sign their name, John Smith, PhD.
No Periods. The trend is also away from putting periods behind the degree's initials so it becomes John Smith, MBA not John Smith, M.B.A. Even the cherished "Ph.D." is increasingly used without periods: John Smith, PhD.
Highest One Earned. These same rules apply to manager designations. If a manager earns multiple designations from a single organization, only the most advanced one is used. For example, if a manager earns both the AMS and PCAM designations from CAI, only the highest one is used: John Smith, PCAM. The same rule applies to certifications from the California Association of Community Managers. If a manager earns a CCAM and an MCAM, only the MCAM is used since it is more advanced and requires a CCAM as a precursor. Accordingly, it would be John Smith, MCAM not John Smith, MCAM, CCAM.
Multiple Organizations. It gets tricky when a manager earns designations from two or more certifying organizations. Which one is listed first--designations from the Community Associations Institute or those from the California Association of Community Managers? Is it John Smith, PCAM, CCAM or John Smith, CCAM, PCAM? Or do you keep one and drop the other?
Most Advanced First. The rule of thumb is to list the most advanced/prestigious one first. Is the CCAM more prestigious because it is specific to California or the PCAM because it crosses state lines? Managers will have to decide for themselves which order to use.
Specialty Certifications. CAI offers specialty designations such as the LSM, CIRMS, and RS. Because LSM is a specialty designation, a manager could include the specialty along with the PCAM (John Smith, LSM, PCAM).
Recommendation: Boards should look for professional designations when hiring a manager. They show that a manager has achieved certain levels of training in the management of common interest developments. If the manager is an employee of the association, boards should encourage and pay for the continuing education of their managers. It is worth the cost because knowledgeable managers help steer their associations through the maze of regulatory compliance thereby reducing potential liability and making it easier for volunteer directors to meet their fiduciary duties.
ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.