Property managers in New Jersey are not specifically required to be licensed—although many of them do get accredited through organizations like the Institute of Real Estate Management, or IREM, and the New Jersey chapter of the Community Associations Institute (CAI-NJ). Numerous programs already exist to license and train property managers, which helps promote ethics and standards in the industry in addition to ensuring that community associations employ the best possible management staff.
License and Accreditation, Please
CAI offers several different levels of certification that range from managing community associations to accrediting companies that specialize in community association management. Some of the available accreditation titles include Certified Manager of Community Associations (CMCA), Professional Community Association Manager (PCAM), Association Management Specialist (AMS), and Large Scale Manager (LSM).
Curt Macysyn, executive vice president of CAI-NJ in West Trenton, says that at this point becoming a property manager isn't considered a concrete career path, but that with the proliferation of various training programs and even courses that could be offered by community colleges, more people will be attracted to the profession. For those already involved in the industry, Macysyn says, "the whole premise behind the accreditation program is to allow managers to gain professional development, which will allow them to be better in their positions." That benefits associations as well, because they will be more comfortable hiring someone who's gone through the professional development program and thus possesses the proper training and techniques. "The idea of the training is to assist managers in becoming well-rounded leaders in their own community," Macysyn says. Those who take advantage of it, he continues, represent the upper echelon of managers in the industry.
He describes the courses provided by CAI-NJ as being related to the inner workings of an association. Managers would take courses dealing with financial management, such as how to deal with their budget line items and reserve accounts, risk management, which relates to insurance situations and minimizing risk, making sure that the association has proper insurance coverage, and also governance, which covers association bylaws, board relationships and facilities management. "It's a wide range of offerings," Macysyn says, "and there's also a new certification, Large Scale Manager, which gives a distinction to some of these large scale communities that have been popping up that are almost like mini-municipalities."
IREM also promotes ethical real estate management practices through its credentialed membership programs, including the Certified Property Manager®, or CPM designation, the Accredited Residential Manager® (ARM) certification, and the Accredited Management Organization® (AMO) accreditation. The ARM and the CPM are the two main programs offered.
Raymond J. Perkins, an IREM instructor as well as a CPM and general manager of Harbour Management in Somers Point, New Jersey, describes IREM as the world leader in real estate management education whose purpose is to educate real estate managers, certify them to the public, and uphold a code of ethics, which is very stringent with IREM members. Perkins says IREM polices itself so that it can assure the public that the highest ethical standards are being kept. "They have programs in place to train and to certify accredited residential managers that would then receive an ARM designation, and they have training and criteria in place to take an individual to a certified property manager level," he says. That requires specific courses, the experience of managing a qualified portfolio of three years or more, and the completion of a management plan or management plan skills assessment. In addition, he says, they must take an IREM ethics course. "In both cases for the ARM and the CPM there is a conclusion exam after education is completed," Perkins adds. "One is the ARM exam and the other is the CPM exam, and that's a comprehensive exam on all the education the individual has taken."
Legislation in the Works
Although no current legislation exists requiring the certification and licensing of property managers in New Jersey, Perkins says that IREM holds the legislative position that, should licensing of property managers take effect in the state of New Jersey, it should come under the auspices of the New Jersey Real Estate Commission. One of the criteria of Residential Site Management, or an ARM or a CPM designation, he continues, is that the person in that position by law must hold a real estate salesperson's license. IREM requires that as criteria.
Macysyn says that some bills are under consideration by the state Legislature, however, if legislation were ever to pass managers already working in the field would have to keep current in the industry. "Typically when those situations have occurred the legislation in similar situations has allowed them to be grandfathered in," Macysyn says. Continued professional training to maintain that accreditation would follow, he explains. "The notion behind it is that as the industry evolves you can't be stagnant," Macysyn says. For example, if a manager received his certification 10 years ago, the industry will have evolved since then.
Some licensing requirements do apply to very specific management situations. For the most part, Perkins says, "An individual that's working in real estate management doesn't have to be licensed at this point." For example, he continues, if a family owned an apartment complex and was leasing the units or space directly to prospects with a manager working for them, as long as the owner is signing the lease that is within the confines of the state real estate board. When the individual is representing an owner and being paid a fee, he says, that person has to be licensed.
License to Manage
Perkins says that among the projected benefits of licensing property managers would be the quality assurance factor inherent in an accreditation. "Depending on the criteria for licensing, if education were a criteria, there would be assurance back to the public that individuals were educated to a certain level and knowledgeable of the law, especially fair housing and all the federal laws," Perkins explains.
Certification requirements could also result in increased compensation. "Anything that would shrink the pool of managers out there would have the potential of increasing the level of compensation," Macysyn says. "On the association side you would have people who are trained in the latest industry trends, and you'll have more professional managers who are better equipped to handle the tasks that they've being given by the communities, which seem to increase every year."
However, Perkins adds, smaller condos could potentially have objections to such a requirement because licensing might make it difficult to find a manager who was licensed in compliance with the law. "They may find that drives their cost higher than what their present arrangements are," Perkins says. "The key would be that if licensing were to take effect that the proper training for the proper type of real estate that that person were managing were provided and made a part of to give validity to the license." He says property management is different than the sale of real estate property and the straight leasing of property.
Although it could potentially drive up costs for some, overall the licensing of property managers encourages industry standards, assuring the public that what they pay for is what they will get.
Michael McDonough is a freelance writer living on Long Island.