Earlier this afternoon, on a 6 to 5 party line vote, the House Business, Labor, Economic & Workforce Development Committee passed an amended version of HB 1277 – the manager and management company licensure bill.
Here are some of the highlights of the bill as originally introduced:
● Beginning on July 1, 2014, community association managers and management company executives who directly supervise managers will be required to be licensed in Colorado. As originally drafted, this provision was very confusing.
● The CMCA credential, AMS designation and PCAM designation are recognized in the bill as the foundation for the license. In addition to holding the CMCA credential or one of the designations, managers will be required to complete a course and pass an examination relating to applicable Colorado law. As originally introduced, the examination provisions were extremely confusing and in need of clarification.
● Managers will be required to submit to and pass a criminal background check prior to being issued a license.
● The Division of Real Estate will have jurisdiction to discipline licensed managers and management company executives required to hold a license.
As amended today, some of the new provisions of the bill provide the following:
1. Clarification that CEOs of management companies and executives with supervisory oversight over community association managers will be required to be licensed.
2. The testing provisions of the bill were cleaned up to clarify that managers holding a credential recognized by the Division of Real Estate will be required to take a class and pass an examination on governing documents and Colorado law applicable to HOAs. As a reminder, the CMCA credential and AMS and PCAM designations are specified in the bill as credentials which will be recognized by the Division. In addition, the Division has the authority to recognize additional credentials and designations from other organizations.
3. Clarification that association funds must be held by management companies in segregated accounts and not in an escrow account.
4. In order to give the Division of Real Estate and managers adequate time to prepare for licensure, the effective date of the new law will be July 1, 2015 which is a year later than the original effective date.
When the amended version of the bill is published, I will post a link to it.
The next stop for HB 1277 is the House Appropriations Committee which will consider the costs of the licensure program to the State of Colorado as estimated in the Fiscal Note. We expect the bill to clear the Appropriations Committee and move to the floor of the House for consideration.
As always, stay tuned to this blog for important updates on legislation impacting HOAs!