Dear Kelly: I recently purchased a condominium and have discovered many improprieties with my HOA. I complained to the attorney general who told me they can’t do much. The real estate board says the manager must have a real estate license but the board told me it wasn’t necessary. Does a property manager have to be licensed by the state of California and is there a governmental department to whom I can complain? — J.C, Lake Forest
Dear J.C.: Your real estate board contact is confusing HOA management with rental management. Rental management in California requires a real estate broker’s license, but California does not require licenses to manage common interest development associations.
A number of states require licensing or minimum levels of education, but not California. The state does have a voluntary title called the “certified common interest development manager” established by Business and Professions Code Section 11502. It requires 30 hours of education in specified topics.
Although the title is optional, Business and Professions 11504 requires managers to annually disclose to the HOA if the manager serving the association is or is not a CCIDM. This requirement applies to the manager serving the HOA, not the company – so having one certified manager in the company does not meet the requirement. Unfortunately, the law is typically not followed by uncertified managers. Association boards should make sure they know if their manager is certified and if they hold any other credentials. Credentials are not a guarantee of competence, but they certainly indicate a level of dedication to the management profession.
There is no state department in California overseeing HOAs, so the best protection is to have educated directors with the right attitude and a solid and qualified manager.
Dear Mr. Richardson: We can’t get people to serve on the board, but people will fight hiring a management company because they know assessments will be increased. The laws regarding HOAs are becoming so demanding and complex that it’s difficult for a self-managed HOA board to keep up. Can a board in a self-managed HOA hire a management company without a membership vote? If so, can the board then increase the assessments if that increase will be more than 20 percent without a homeowners’ vote? — N.A., La Mirada
Dear N.A: Good management makes board service much easier, and all but the very smallest associations should have a professional and qualified manager helping them operate. Normally the hiring of association vendors is a board function. However, with a vendor so important as the manager, it might be helpful to introduce the manager (and their background and qualifications) to the members. The budget will increase, and the board has the right (regardless of anything more restrictive in the governing documents) to increase assessments by up to 20 percent per year (Civil Code 5605(b)), if the association has issued the annual budget report on time.
If the association has not issued the annual budget report items on time, the board may not increase assessments at all without a vote of the membership (Civil Code 5605(a). This is another powerful reason why professional management is important since qualified managers get these report items out on a timely basis.
