By Lilliana M. Farinas-Sabogal, Esq. / Published May 2021
Anyone familiar with the world of community association law is aware of the multifaceted job the association’s manager or CAM holds. While the board of directors is the decision maker for the association, the CAM is usually the “face” of the association and is charged with various responsibilities in that regard. Imagine the various issues that a hypothetical association would deal with in any given week: a repaving project in the driveway, an upcoming election and budget meeting, owners selling or leasing their units and requesting board approval, and a resident requesting an emotional support animal. Then consider that in most cases, the CAM is the recipient of the information on behalf of the association and has to properly address each instance in a timely manner. Even when the association’s legal and accounting professionals are directly handling the issue, the CAM must still address the matter and convey pertinent information to the board of directors and to the residents. In a way, the CAM is the middle person between the association and third parties, as well as between the board of directors and the owners. Whether the CAM manages a large or small association, manages only one community and is on site full time or manages several communities and works from his or her office, the CAM is required to discharge all duties performed on behalf of the association “loyally, skillfully, and diligently; dealing honestly and fairly; in good faith; with care and full disclosure to the community association; accounting for all funds; and not charging unreasonable or excessive fees” [per Florida Statutes 468.4334 (1)].
Community association management is a term that is used to generally describe the practice of assisting a board of directors to run and operate the community association. However, there are legal implications to the term. In fact, Part VIII of Chapter 468 in the Florida Statutes is devoted exclusively to “Community Association Management.” Florida Statute §468.431 defines “community association management,” in part, as “any of the following practices requiring substantial specialized knowledge, judgment, and managerial skill when done for remuneration and when the association or associations served contain more than 10 units or have an annual budget or budgets in excess of $100,000…” It then goes on to list a diverse set of practices ranging from controlling and disbursing funds of a community association to calculating the votes required for a quorum and responding to requests for estoppel certificates.
A person who performs these services and/or presents himself or herself to the public as able to manage a community association, as defined above, must be licensed by the Florida Department of Business and Professional Regulation (the DBPR). Obtaining licensure in Florida requires an applicant over the age of 18 to file an application with the DBPR to take the licensure exam. The applicant must have taken a certain number of pre-licensure educational requirements and be determined by the DBPR to be “of good moral character,” something the statutes define as having “personal history of honesty, fairness, and respect for the rights of others and for the laws of this state and nation.” The applicant must also submit a complete set of fingerprints taken by an authorized law enforcement officer to the Department of Law Enforcement for state processing as well as to the Federal Bureau of Investigation for federal processing. Finally, of course, the applicant must pass the exam. These preliminary requirements and education are important because of the role so many CAMs play in the associations they manage. Thereafter, CAM licenses must be renewed, and CAMs must take continuing education courses in order to obtain such renewals.
The statutes note that a CAM is deemed to act as the association’s agent. However, the extent to which the CAM is authorized to act as agent for the association is governed by the terms of the written contract between the association and the CAM. For this reason, it is important for both CAMs and associations to carefully review and tailor the management contract between them to reflect the actual rights and obligations between the parties.
Unfortunately, there are many cases where the association assumes the CAM was responsible for handling something that the CAM was never contracted to do and/or the CAM takes on responsibilities he or she was never authorized to take on. These issues arise when the details of the expectations and duties are not clearly discussed prior to entering into the agreement and when they are not reduced to writing into the contract. It is important to have the parties’ respective duties and expectations clearly spelled out in the contract from the beginning of the relationship. Also, as time passes, the community’s needs may change, and its relationship with the CAM may evolve. In those instances, the parties’ agreement should be revised to reflect the new duties/obligations/expectations. The compensation (monthly and annual), contract term, and renewal options should be clear, as well as cancelation or termination rights. The Condominium Act sets forth other requirements for management contracts in condominiums. Taking the time to carefully review the management agreement at the inception is important to avoid surprises midstream.
Associations contemplating their management needs should understand that not every community is built equally and not every CAM is either. A homeowners association with 200 homes, private roads, and limited common areas or amenities would need a completely different CAM than a master homeowners association where the homes or units are governed by sub-associations and the master common areas include a restaurant, club house, pools, and tennis courts. The first homeowners association may need a manager who is comfortable with covenant enforcement, collection issues, and architectural control matters. The latter might need a CAM who has a knack for hospitality and service.
Once the association decides on the right person or management firm for the job, then they need to understand that even the best CAM cannot do it all without assistance. Associations should not expect or ask CAMs to do legal work or provide legal advice; they should not expect the CAM to provide specifications for complicated repairs to the exterior concrete or post tension cables; they should not expect the CAM to prepare the audit for the association. Instead, the association should have the CAM direct specialized work to the appropriate professional as determined by the board of directors and then work together with the professionals on behalf of achieving the association’s goals.
On the other end of the spectrum, CAMs often end up doing a lot of work that non-licensed assistants could be doing. Office assistants who perform clerical or ministerial functions under the direct supervision and control of a licensed manager and who do not assist in any of the management services described in the statutes are not required to be licensed. Yet, they can be invaluable as they can assist with mail, phone calls, computer issues, etc. Having the CAM properly supported can relieve him or her from time consuming work that may exceed the CAM’s abilities or not need the CAM’s immediate attention. In this way, the association can preserve the highest and best use of the CAM’s time and expertise.
Lilliana Farinas-Sabogal is a shareholder in Becker’s Community Association and Business Litigation practice groups. In addition to her experience in assisting community associations in their day-to-day business, management, and operational aspects of governing their communities, she assists boards of directors, unit owners, and community association managers in analyzing and resolving their often complex contractual and transactional disputes and issues. Ms. Farinas-Sabogal is also one of a select number of attorneys statewide who are Board Certified Specialists in Condominium and Planned Development Law. For more information, email LFarinas@beckerlawyers.com or call (305) 262-4433.