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Advisory Committee Studies Community Associations

At its January meeting, the Real Estate Commission received the final report and recommendations from its Community Association Management Advisory Committee. The advisory committee was formed in response to the Commission’s concern over the potential for financial loss to real estate consumers which could result from the mishandling of community association monies by unregulated persons.

The Commission noted that the amount of the money collected from homeowners for their association dues and fees can be substantial and that (other than real estate brokers) persons responsible for handling these monies are not licensed or regulated in any way.   The Commission charged the advisory committee to recommend whether these persons should be credentialed and regulated; and if so, how.

The committee held five meetings.  After finding that the demonstrated and potential harm to consumers from the improper handling of consumer association monies warrants governmental action, it recommended to the Real Estate Commission that the Commission support legislation to:

1. Require community associations (both self-managed and fee-managed) which exceed a certain size to register with and provide certain information to a state government agency;

2. Require persons (and firms) in the business of managing community associations to obtain a community association manager license from a state agency, including passing a licensing examination;

3.  Require persons /entities responsible for handling and accounting for association funds to be bonded; and

4.  Create a state government agency consisting primarily of community association managers to administer the licensing and registration programs.

The Commission approved in principal the recommendations submitted by the committee believing that they define a workable framework for a meaningful regulatory program.  Legislation to implement the recommendations will hopefully be considered at the N.C. General Assembly’s 2007 Session.

To assure that all perspectives and points of views were adequately represented, the Commission appointed to the committee community association managers (including a resort association manager), property managers, a builder/developer, a consumer protection attorney from the North Carolina Attorney General’s Office,  a representative of a firm that maintains data on North Carolina homeowner associations, and a professional staff member from the N.C. Association of REALTORS® representing the real estate brokerage industry.

The members were Dennis Abbott (Charlotte), Commission Vice Chair Skip Alston (Greensboro), Robert Hecht (Denver), Henry Jones, Jr. (Raleigh), Robert Lawing (Charlotte), Jim Laumann (Morrisville), John Lawton (Raleigh), Ted Nye (Banner Elk), John Stone (Pinehurst), Associate Attorney General Harriet Worley (Raleigh), and N.C. Association of REALTORS® Director of Regulatory Affairs Rick Zechini.

The Commission expressed its appreciation to the members of the Community Association Management Advisory Committee for their efforts in addressing this timely and important issue, and to Executive Director Fisher who facilitated the committee’s discussions; Legal Counsels Tom Miller and Miriam Baer; Directors Larry Outlaw, Emmet Wood and Fran Whitley; and Chief Deputy Legal Counsel Janet Thoren who served as Commission staff advisors to the committee.

To view the committee’s final report in its entirety, go to the Commission’s website,

This article came from the March 2007-Vol37-3 edition of the bulletin.