By Todd Likman, Esq.
Starting July 1, 2015, Colorado law requires community association managers to obtain a Colorado community association manager license from the Colorado Division of Real Estate. This law is important both for community association managers in regard to compliance and for common interest communities in regard to their protection.
Colorado’s Division of Real Estate within the Department of Regulatory Agencies is tasked with implementing HB 13-1277 and HB 15-1343 (codified at C.R.S. § 12-61-1001, et seq.), recently enacted laws that have created a comprehensive licensing and regulatory system governing the management of common interest communities, including, without limit, residential, mixed-use, commercial, timeshare and condo hotel communities. The Division of Real Estate is charged with, among other things, implementing the new community manager licensing and regulatory regime through rulemaking, receiving and investigating complaints against community association managers involving potential violations of such laws, and establishing continuing education requirements for community association managers.
The statute specifically provides, in part: “effective July 1, 2015, it is unlawful for any person to engage in, or hold out himself, herself, or itself as qualified to engage in, the business of community association management without having fist obtained a license from [the Division of Real Estate] or during any period in which the manager’s license is revoked or suspended.” C.R.S. § 12-61-1002(1).
The particular individuals and entities required to obtain a community association manager license are: “any person, firm, partnership, limited liability company, association, or corporation” that performs more than one “community association management” practice[1] to any form of common interest community for any form of compensation. C.R.S. § 12-61-1001(4)(a). This includes: “(I) The chief executive officer of a business entity that employs individuals or contracts with other business entities to perform community association management services; and (II) Any executive of a business entity who has direct supervision or oversight of an individual who performs community association management services.” C.R.S. § 12-61-1001(4)(a)(I) and (II). Thus, even self-managed associations that provide remuneration to any person or entity performing two or more community association management practices are required to hold a community association manager license.
How does one obtain a community association manager license?
In order to become licensed, one must: (1) be at least 18 years old with a high school diploma or GED; (2) hold one of the following credentials: Certified Manager of Community Associations (CMCA), Association Management Specialist (AMS), Professional Community Association Manager (PCAM), or the Division of Real Estate alternative credential (i.e. complete an approved 24-hour course on community association management); (3) pass a state examination;2 (4) submit fingerprints to the Colorado Bureau of Investigation for a criminal history record check; (5) complete the Division of Real Estate’s Application; and (6) pay the required fees.
Those who do not pass the examination by July 1, 2015 may obtain a provisional license from the Division of Real Estate that is valid through December 31, 2015. Meanwhile, those without any community association management experience may obtain an apprentice license in order to gain experience in the field. For more information on the licensing process, please visit the Division of Real Estate’s “Community Association Manager Licensing Information” page: http://cdn.colorado.gov/cs/Satellite/DORA-DRE/CBON/DORA/1251661544537
What rules and regulations are currently in effect?
Prior to the passage of HB 15-1343, the Division of Real Estate adopted Permanent Rules on March 8, 2015 that became effective May 6, 2015. When HB 15-1343 was signed into law on May 20, 2015, the Division of Real Estate issued Emergency Rules effective May 21, 2015 that will expire on September 21, 2015. Both sets of rules contain various requirements for licensed community association managers, including mandatory insurance provisions. Stay tuned as the Division of Real Estate will conduct further rulemaking to implement the new community association manager licensing regime. For more information, please visit the Division of Real Estate’s “Community Association Manager Licensing Rules” page: http://cdn.colorado.gov/cs/Satellite/DORA-DRE/CBON/DORA/1251651466155
If you are interested in learning more about Colorado’s new licensing and regulatory regime for community association managers, or need any legal advice regarding management or governance of homeowners’ associations or other forms common interest communities, please call 303-688-3045 for a free telephone consultation.
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1 “Community association management” practices are defined by C.R.S. § 12-61-1001(3) as:
(a) Receiving, depositing, controlling, or disbursing funds of the common interest community, preparing budgets, or preparing other financial documents;
(b) Assisting in the creation and implementation of a reserve program for the replacement of capital assets;
(c) Assisting in the provision of notice or conduct of meetings of board members or unit owners;
(d) Contracting for or coordinating maintenance of property and facilities of the common interest community;
(e) Conducting property inspections, administering applications for architectural review, and keeping records of violations of the governing documents of the common interest community; and
(f) Performing other services relating to the day-to-day operation of the common interest community.
2 The current Colorado community association manager license state exam has two parts, a general portion and a state portion. Managers having an active CMCA, AMS, or PCAM need only pass the state portion of the exam.
