COMMUNITY ASSOCIATION MANDATORY MANAGEMENT BILL IS FILED

HB 465 and SB 822 have been filed by House Rep Danny Nix and Fabian Basabe, together with Senator Joe Gruters and Ana Maria Rodriguez.

These bills cover condominiums, co-ops and HOAs and say:

An association with total annual revenues of $750,000 or more must contract with a community association management firm. Each board member or officer of an association that contracts with a community association manager or a community association management firm has a duty to ensure that the community association manager or community association management firm is properly licensed before entering into a contract.

The condo version goes a little further and adds:

An association operating a multicondominium must contract with a community association management firm. The community association management firm must possess all applicable licenses required by part VIII of chapter 468. Each board member or officer of an association that contracts with a community association manager or a community association management firm has a duty to ensure that the community association manager or community association management firm is properly licensed before entering into a contract.

The strange part about this particular portion of the bill is that it seems to require a multi condominium to contract with a management firm only.  Can it simply hire an in-house manager?  It seems like the answer is NO.

My initial reaction to the bills was amazement and shock.  What a financial boom for management companies!  Since when can’t Boards self manage a community?  How can this be?

Having had time to reflect on the matter, I’m not sure it’s that big of a deal.  I would assume that 99.9 percent of communities with budgets of $750,000 or more already have professional management.  The same goes for multi-condominiums.

This bill really should only require a handful of communities who won’t get on board with professional management to finally get on board.  The question is…… will professional management necessarily do a better job at managing these communities than a self managed community would do?

I am on record numerous times as advocating for professional management in communities with large budgets or a large number of units or homes.  There’s no question that the numerous requirements over the past few years on associations in terms of budgets, reserves, websites and record keeping alone warrant the need for professional management.  There is simply a lot more to know now than there was to know just a few years ago.  Professional management is at least presumed to know what’s required.

So what do you guys think?

Watch our recent episode of Condo Craze and HOAs to learn more about the bill and to hear from House Rep. Fabian Basabe explain the bill's intent.