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August 26, 2007
Manager Licensing
Managers and licensing - this question has been argued since condo's first started to bloom. The early problem, which continues today, is that states really don't want to take on any more regulatory responsibility, and so if the subject comes up, they want to place the licensing of CAM's under the Real Estate Licensing Boards, which means they will collect the fees, but not pay much attention to what goes on. In Florida, since they already had a Condo Division in the state government, they just folded the CAM licensing under that. Since Florida's education and licensing courses were prepared by and are run by CAI, so their basic license course is about the same as the CMCA course.
What licensing gives you is a place to complain to and a remote chance of achieving some satisfaction in your complaint. What it also does is add to the assessments as the costs are passed along to the associations.
As for certifying an individual as a competent manager, it only means that the manager passed the minimal requirements and exam. It doesn't mean they know how to apply anything they may have learned in the class(es).
The management industry has been trying for years to determine what makes a good CAM. There is no real consensus, as each association and every board (along with every election) changes the bar that the manager must reach. The problem of changing and fluid expectations is one of the very real problems that managers have to deal with. In the non-profit world, like CAI, or the Red Cross, the professional staff manages their problems by managing who gets on the board. By setting up numerous committees that potential board members have to work their way through, they have the ability to both educate and pre-select those who will be evaluating their performance in the future. If a CAM tried that, all kinds of nasty accusations would fly about manipulation of elections. But without it, they often get people who have a different set of expectations, along with an unknown standard for evaluation.
An example regarding the importance of performance standards -- a local management company whose owner I've known for 30 years has a reputation for good management because they stay small, and have employees who have been in the industry for a lot of years. In an association they had managed for over 15 years, he started hearing that things wre going boad and that there was a growing group who were running for the board on the platform of changing management. Since this site was being managed by his best manager (a PCAM) he needed to find out what the problem really was. The first thing he checked was how much time the manager spent working for that association. Sometimes the demands of other clients force a reduction in time spent on a site and that can be a problem. But in this case, the manager's hours for this client had almost tripled in the past twelve months. He called the board members, but they said the manager was doing fine and that it was only "a few bad apples" causing the problems. (No management company owner can publicly acknowldge a dissident group - management answers to the board, not the owners - but no owner "pooh-pooh's" them either - they may be a majority of the next board) But the time increase was the clue--in talking with the manager, she said that she was spending more and more times calling owners to apologize for the delay in handling their work orders. And there it was, in one year, the work orders from this condo association had increased from an average of 1.1 work orders per unit per year, to over 6 per unit per year, an almost 600% increase. As a result, their standard 48 hour response for non-emergencies had fallen to more than a week. No wonder there were upset owners. What had happened was that a large number of minor structural items, i.e. gutters, shutters, building trim etc. had become loose, or blocked, or failed. The manager had seen the trend and asked the board to bring in contractors to inspect and fix (or do some preventive maintenance) the growing problems. They board had rejected that, as it would have meant a major budget deficit, and since the problems were minor, they didn't fall in the reserves realm. However, this hadn't been communicated to the owners, who still had the original expectations. There were numerous system failures here - the manager for not raising the problems sooner to the company owner, or emphasizing the seriousness of it more strongly to the board; the board, for not taking the problems these items were creating more seriously, and not communicating what was going on to the board; and yes - the owners, for not communicating to the board why they were unhappy, instead of just blaming "management".
I would like to add that contracts should contain the standards by which the manager and management company are to be judged, so that everyone isn't trying to figure out where the line is. If you want complaints responded to in 2 business days, then say so and be prepared to pay for it and communicate this to the owners. Don't set the standards after the contract is signed. And, if the manager fails to meet the standards, the board should sit down with the manager's supervisor, detail the problems, work to put a plan to correct them, agree on the time frame and how it will be monitored, and then go---it's usually easier to fix a problem than replace a company. I know it doesn't always work, but it should be the first step.
We're going to be writing about management for the next few posts, so please bear with me.
Posted by joewest at 9:48 PM