Reader Questions - Is There Mandatory Education?

Dear Kelly,

Why there are no educational requirements for board members and no requirements for either education, certification, background checks, etc. for managers? Particularly in light of the fact that some directors have very little education and are signing million dollar contracts, and when something goes wrong the manager is indemnified.

L.L., Duarte

Dear L.L.,

Yes, amazingly, no education or license is required to manage California associations, and no education is required to serve on California HOA boards. Florida began in 2013 requiring HOA directors to certify they had read the governing documents and promise to uphold them, or to take an HOA certification course. Nevada’s CAI Chapter created a “Dedicated Community Association Leader” (“DCAL”) distinction, in which the volunteer receives about 30 hours of training. That is presently voluntary, but hundreds of Nevada volunteers have already attained their DCAL certification. In 2008, the Community Associations Institute in California sponsored AB 2806, a bill which would have required volunteer directors to obtain at least three hours of education. During the legislative process, the bill was diluted from a mandatory to a voluntary education law, and then was vetoed by the Governor (who said voluntary laws are not helpful).

Perhaps someday California will inaugurate meaningful requirements, at least regarding association boards handling larger amounts of money. Until then, homeowners should be careful when voting for board candidates to check experience and commitment – for example, did the candidate receive any education from CAI, which offers a variety of basic education courses? [Visit www.responsiblecommunities.com or contact your local Chapter]

As to HOA managers, many states already have mandatory licensing, but California appears to be a long way off from such a requirement. California’s Real Estate Commissioner, Wayne Bell, told me last year that manager licensing in California is unlikely to be soon, given the large amount of staff and budget resources which would be required. Until that day, boards should insist on hiring credentialed managers with good reputation and references.

Thanks,
Kelly

Dear Mr. Richardson,

Our board decided a while ago to pay one of the homeowners to act as an on-site manager. Nothing went out to the individual owners or was posted within the complex. There is no line item on the annual budget.

I have asked for clarification as to salary, hours, title, responsibilities, hours and where it is on the budget. Is it on the up and up to keep the job secret and not clearly posted?

B.E., Tarzana

Dear B.E.,

Hiring a neighbor to manage the community is rarely the best option. I routinely discourage associations from doing business with members. A non-professional manager is less likely to be up to date with current legal disclosure requirements, and it is much harder to fire a neighbor if things go badly. Hiring a member often appears to save money, but can create many other problems. Hiring a qualified, independent, and professional manager is the better choice.

If an association does hire a member as manager, it should be clearly disclosed in the minutes. Also, that person’s compensation is not confidential, as the neighbor has now become an association vendor. The cost should be reflected in the association budget, and the contract with the member can be inspected by any member under Civil Code 5200(a)(4).

Best regards,
Kelly

Written by Kelly G. Richardson

Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at www.hoahomefront.com. All rights reserved®.