3 Important Lessons I've learned working with community associations

Many title agents and real estate attorneys cringe at the thought of requesting documents from homeowner's associations and common interest communities. From long turnaround times to high costs to playing telephone tag with the property managers to get a refund when a deal falls through, associations have a notoriously bad rep in the title and real estate industry.

During my tenure here, I have had the pleasure of working with some large management companies with 50+ CAMs to the small HOAs with 10 lots that have had the same board since their inception. In this time, I’ve come to realize three important things when dealing with an association.

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1. LCAMs are the MVPs of Associations

Many homeowners’ associations use a licensed community association manager to handle tremendous amounts of responsibilities for a homeowner’s association. You might be thinking to yourself, why?

There is estimated to be 9,000 large-scale associations in the US that have at least two of the three following characteristics: a single, contiguous community with a general manager, a minimum of 1,000 lots and/or homes, and a minimum annual budget of $2 million. There are an estimated 351,000 Homeowners associations in the US, 70% of which are managed by a community manager or company. It is projected that around 8,000 new community associations are formed annually. That is a staggering amount of responsibility for the average person on the board to handle.

The job for these Licensed Community Association Managers (LCAM) is to help the board run a smooth operation for their community.

In many states, there are licenses that these managers need to obtain to be able to manage communities. In Florida, we call them CAM’s, but in Illinois, there is the National Board of Certification for CAMs, and in Nevada, there is a Certification by Commissioner for Common Interest Communities. States require these qualifications, so they are prepared to handle all different types of legal situations. Also in Florida, they are required to take an 8-hour course, study and pass an extensive test within a given period of time. This prepares the CAM for many situations that pop up daily.

An LCAM is a jack of all trades. They are hired to advise the HOA board, hire and monitor contractors and jobs, as well as maintain the HOA’s finances. They collect payments, issue refunds, handle violations and community/property notices while handling homeowner disputes within the legal boundaries of the state. Often, they manage more than one community.

2. Completing closing documents takes some footwork

One of the biggest concerns while closing on a property in an association is the lengthy turn around times and unexpected delays on necessary documents. The main culprit for delays is usually the LCAM or violations. Turns out they go hand and hand. The property manager goes out to the property to check for violations if they have not been on site. That entails rearranging their schedule for that day/week, driving out to the property where you hit traffic like we do every day, just to fill out a section on the HOA resale certificate or estoppel letter.

I used to get frustrated with these managers because I didn’t truly understand their day to day job functions. All I wanted was my document and I needed it yesterday. After doing more research I have found that many managers need to inspect properties multiple times weekly, attend board meetings, and often manage more than one community. Their last worry was my vast amount of emails and voicemails. Because of the amount of work, they do daily, many, but not all management companies make their accounting team responsible for the completion of an estoppel letter. For the LCAMs that do not have that luxury, they are spending their evenings filling out these documents after a long day of juggling other issues.

3. State Statutes are helping to streamline the ordering process

Thankfully, Florida has modified the statute to where more and more management companies and CAMs are using new resources due to the mandatory turn around times. Whether you love it or hate it, the new Florida estoppel law has inspired an embrace of technology among many associations and their management.

There are many options out there for automated estoppel preparation, and the list of companies keeps growing. Platforms such as HomewiseDocs and Condocerts have made our lives that much easier in this changing market. For those associations that are still behind the technological curve, we carefully store important data in our system to make contacting the right people with the right information as painless as possible.

The number of associations is only growing in the United States, so LCAMs will continue to be an important point of contact for closing agents and real estate attorneys. Hopefully, there will be more statutes and technological advancements implemented by states and associations to make the request and gathering of these documents quick and painless. 


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