About CMCA ~ The Essential Credential

CAMICB is a more than 25 year old independent professional certification body responsible for developing and delivering the Certified Manager of Community Associations® (CMCA) examination. CAMICB awards and maintains the CMCA credential, recognized worldwide as a benchmark of professionalism in the field of common interest community management. The CMCA examination tests the knowledge, skills, and abilities required to perform effectively as a professional community association manager. CMCA credential holders attest to full compliance with the CMCA Standards of Professional Conduct, committing to ethical and informed execution of the duties of a professional manager. The CMCA credentialing program carries dual accreditation. The National Commission for Certifying Agencies (NCCA) accredits the CMCA program for meeting its U.S.-based standards for credentialing bodies. The ANSI National Accreditation Board (ANAB) accredits the CMCA program for meeting the stringent requirements of the ISO/IEC 17024 Standard, the international standards for certification bodies. The program's dual accreditation represents compliance with rigorous standards for developing, delivering, and maintaining a professional credentialing program. It underscores the strength and integrity of the CMCA credential. Privacy Policy: https://www.camicb.org/privacy-policy

HOW LEGAL/FINANCIAL PROBLEMS ARE SOLVED BY NYC CO-OPS AND CONDOS Luxury Condo Unit-Owners Benefitting from 421-a Tax Break

Hudson YardsManhattan

Habitat Magazine


YeIn March, we reported that numerous state legislators want to exclude Gov. Kathy Hochul‘s proposed overhaul of the 421-a tax break from the upcoming state budget. Instead, they want time to debate the merits of the governor’s overhaul of the controversial tax break that was intended to increase the stock of affordable housing. Some say it should be scrapped altogether. Today The New York Times reports that developers have reaped billions in tax breaks under 421-a, but many developments feature “affordable” units that are priced beyond the reach of average New Yorkers.

The Times reports: “In buildings with condos, the tax break extends to individual (unit-)owners, an exemption available in some of the most prominent residential projects in Manhattan, including 35 Hudson Yards, a luxury condo tower. Whoever buys the full-floor penthouse on the 90th floor, currently for sale for $49.5 million, would pay just $27,500 in annual property taxes because of a 421-a exemption that lasts 20 years. Without the tax break, the yearly property taxes would be $342,000.”

First introduced in the 1970s, the tax break for builders of multifamily housing was meant to promote new residential construction when New York City was facing a fiscal crisis and few developers were building anything. After the economy rebounded, the subsidy remained and started to evolve, slowly adding various affordability requirements to qualify for the tax break.

Among the opponents of the 421-a tax break — and Hochul’s proposed modifications of it — is city Comptroller Brad Lander, who has issued a report stating that the tax break costs the city nearly $1.8 billion in lost tax revenue yearly, while it has failed to produce enough affordable units to stem the city’s housing crisis. Instead of modifying the 421-a break, which is due to expire in June, Lander has urged the state Legislature to set a Dec. 31 deadline to overhaul the city’s antiquated and unfair system of levying property taxes.

Another example cited in the Times report is Jackson Park in Long Island City, Queens, a 1,871-unit luxury development in three towers where penthouses rent for $8,500 a month. The developer, Tishman Speyer, legally navigated loopholes in the tax exemption to win an annual reduction of $21 million that nearly eliminates the development’s property tax bill. Since it was built before a provision of 421-a expired, Tishman Speyer was able to include zero below-market units. Meanwhile, co-op and condo boards fret that their soaring property taxes are threatening their buildings’ viability.

Critics say too many apartments marketed as “affordable” are only within reach to families making well over $100,000 a year — far higher than the city’s median household income — and that loopholes in the program’s different versions have allowed some rental and condominium buildings to not include any low-cost units.

Paula Crespo, a senior planner with the Pratt Center for Community Development, which has criticized the program, said she considers the tax break program “a missed opportunity to require something back from the developer for these decades of tax exemptions.”

Hochul’s proposed tweaks to 421-a have won the backing of Mayor Eric Adams and the Real Estate Board of New York.

‘Self-interested’ homeowners board must defend assessment, Md. court says

By Steve Lash for Maryland’s Daily Record

A North Bethesda homeowners association’s board composed entirely of townhouse owners must defend its decision to raise landscaping assessment fees on apartment dwellers against a claim the board members were self-interested, Maryland’s second-highest court ruled Thursday.

In its reported decision, the Court of Special Appeals said the Cherington Condominium Association will have to show in an administrative proceeding that it was “fair and reasonable” for the board to charge apartment residents for groundskeeping that would seemingly benefit townhouse owners more than above-ground apartment residents.

The controversial assessment was levied against the both the association’s 87 townhouses and the 12 “garden style” apartment units, according to court papers.

The Court of Special Appeals decision was a victory for apartment dweller Heather Kenney in her ongoing challenge to the assessment.

In its 3-0 ruling, the court applied to the association’s board the “interested director” rule that judges generally apply to corporate boards embroiled in conflict of interest allegations.

The rule, as annunciated by Maryland’s top court 114 years ago, holds that a conflicted board can defend a controversial decision by showing it was “just and proper, and that no advantage was taken of the stockholders.” The 1908 Court of Appeals decision, Francis v. Brigham Hopkins Co., involved directors voting for their own salaries.

As in Francis, the homeowners association’s board consisted of “interested directors” in that they stood to gain from the landscaping assessment by having those not represented on the board – apartment owners – pay a share, the Court of Special Appeals said.

The appellate court rejected the association’s argument that the board’s decision was protected by the “business judgment rule,” which shields corporate governing bodies from liability for decisions made within their authority. The association cited its bylaws, which enable the board to maintain the landscaping “of the community grounds as well as the readily accessible yards of the townhouse units.”

But the Court of Special Appeals said the business judgment rule does not apply when the directors are shown to have had a personal interest in their decision.

“The business judgment rule creates a presumption that directors are acting in accordance with their fiduciary duties of care and loyalty,” Judge Andrea M. Leahy wrote for the court, citing Maryland corporate law. “The interested director transaction rule operates as a brake on that presumption when conflicted director transactions are present, requiring that either the conflicts be disclosed and approved, or the transactions implicating those conflicts be shown to be fair and reasonable to the corporation.”

The appellate court sent the case back to the Commission on Common Ownership Communities for Montgomery County to determine if the landscaping contract and related assessment was fair and reasonable.

The association’s attorney, J. Bradford McCullough, expressed concern with the court’s decision and stated via email Friday that he and his client are “weighing our options” and have not decided whether to seek review by the Court of Appeals.

“I fear that the opinion could encourage litigation that challenges community associations’ budgeting decisions,” added McCullough, of Lerch, Early & Brewer Chtd. in Bethesda.

Kenney’s attorney, Matthew D. Skipper, did not immediately return a telephone message Friday seeking comment on the decision. Skipper is with Skipper Law LLC in Crofton.

The case began in January 2019 when Kenney filed an administrative complaint with the commission, alleging the landscaping assessment violated the bylaws by requiring non-townhouse owners to pay. The commission dismissed the complaint, agreeing with the association that the assessment was authorized.

On appeal, however, the Montgomery County Circuit Court held that the board members were self-interested and remanded the case to the commission for further factfinding regarding the fairness and reasonableness of the assessment.

The Court of Special Appeals agreed.

“To be clear, our opinion does not make or mandate a finding that the board acted improperly,” Leahy wrote. “Ms. Kenney made a sufficient showing that the board has a conflict of interest under the interested director transaction rule, but on remand to the CCOC, the association may satisfy the interested director transaction rule by presenting evidence that the … assessment was fair and reasonable to the association and its members.”

Leahy was joined in the opinion by Judges Terrence M.R. Zic and J. Frederick Sharer, a retired jurist sitting by special assignment.

The Court of Special Appeals issued its decision in Cherington Condominium v. Heather Kenney, No. 157, September Term 2021.

Best HOA & Condo Websites for your Association

By Charlie Wilson for Loop21

A website is a handy tool for any homeowners association. It defines how a community interacts with its residents and eases communication. What’s more? An HOA website makes it easy to access community rules and improves transparency between the residents and the management. Are you seeking ideas for the best HOA and condo website? Well, every association has unique needs, but there are must-have features to look out for.

What features define the best HOA websites?

The features matter a lot when it comes to the choice of website. Although all associations are different, the site should make it easier to manage your community. To build a website with the best features, seek help from an HOA Website company, and consider the following characteristics.

1. Dedicated domain

The website should feature a dedicated domain. This makes it easy for others to locate it, thus the need to choose something straightforward.

2. Resident portals

The HOA website should also have portals to serve both existing and potential homeowners. The current members should access account balances, file service requests, and retrieve vital documents with ease.

3. Online payment options

Online payment options are also vital. Collecting dues using conventional means is inconvenient and time-consuming. The best websites integrate an online payment option, allowing homeowners to settle dues using their user accounts.

4. Calendar& Communication channels

 The site should also feature a community calendar for events, communication channels, and polling abilities. Lastly, it should be mobile-friendly and easy to use.

What are the best HOA& Condo websites?

1. The Towers Of Channelside

This is a perfect choice for people seeking to build a condo association website. The site features an easy-to-use interface with clear and professional images of both the building and neighborhood. Still, it provides basic information about the community, and the clickable links appeal to all visitors. A vital feature of the website is the resident portal. You can include private access with logins assigned to all members.

2. Kensington Glen 

Kensington Glen website is one of the best HOA & Condo websites. It’s renowned for its crisp, clear images on the landing page and all over the site. Moreover, it features a call to action, which prompts user interaction among members. The site is easy to use and very inviting, and you can use it to list the homes for sale in the neighborhood. This is an impressive bonus that allows residents to learn more about the house on sale.

3. Islands of Cocoplum

This HOA website is excellently designed and features professional photos and an aerial view of the property. It includes features like property information, contact information, excellent imagery, and private resident portals.

4. Waterfall South Jacksonville Beach Condos

Waterfall South Jacksonville Beach Condos makes a great association website due to its intuitive features. It presents simple clickable links on the homepage directing users to useful information and services. It also features information and contact details, making it easier for visitors to get an idea of the property.

Final Thoughts

An HOA website is a great way to organize and automate responsibilities. It acts as a central spot where all members can access information and build better relationships. It also helps board members to keep residents posted on any initiatives and events. However, the best HOA website incorporates various features to enhance communication and ease payments.

Real estate Q&A: How can HOA enforce smoking ban in common areas?

Gary M. Singer, South Florida Sun Sentinel

Q: At our annual meeting, our condominium community passed a “No Smoking” resolution into our bylaws. It encompassed the entire club area, including the outdoor facilities. We now have a small group of new owners who vocally oppose this ban and continue to smoke at our community pool despite numerous requests to stop. How can we enforce the ban? — Jerry

A: Smoking has been banned indoors in condominium common areas for a while. The recent trend is to ban smoking in outdoor common areas, like the pool, and in limited common elements, such as balconies.

To see if your association has the right to do this, you must review the condominium’s declaration. If allowed, it will need to be voted on by a prescribed majority of the unit owners. As long as all of these hoops are jumped through, the ban goes into effect.

Generally, if a community rule is reasonable, it will be upheld if challenged in court. A smoking ban, even outside on a balcony or in the pool area, would likely be found to be reasonable because of the well-known health issues associated with secondhand smoke.

The logic would apply to similar activities, such as pipe smoking or vaping.

Your community can enforce the new rule the same way it would any other rule. First, a warning letter should be sent to the offending homeowner. If this does not work, they can be fined for breaking the rules.

This situation is becoming further complicated by the rising use of medical marijuana. If it were legal, it seems that recreational marijuana would be treated similarly to tobacco.

However, an argument can be made that prescribed marijuana might be accepted in some cases as a reasonable accommodation under housing and disability laws.

Are You Ready to sit for the CMCA Exam? Use This Step-By Step Process To Adequately Prepare

A variety of study aids are available to CMCA exam candidates online at CAMICB.org. Because CAMICB recognizes that people have different learning styles, multiple resources are available in various formats. A quick glance at those resources can be overwhelming. Here, we offer a roadmap designed to help you select and properly use those resources towards a successful outcome.

STEP 1. CMCA Study Guide. Download this FREE guide for an overview of how the CMCA exam was developed and how it’s structured. This is important to developing a study strategy. Here, you will also find the key to your studying success: The CMCA Knowledge

cmca-study-graphic-2

8 Knowledge Areas

Areas. You will be evaluated on these 8 knowledge areas, and understanding your strengths and weaknesses in each area, as well as how each knowledge area is weighted, will help you properly prepare a solid study plan.

STEP 2. CMCA Handbook. Download the FREE handbook for an overview of the program, paying particular attention to:

  • Section 2: Taking the CMCA Exam highlights the policies and procedures of the exam.
  • Section 3: CMCA Examination Content and Study Materials offers just that, as well as strategies for standardized test-taking.

STEP 3. If you took CAI’s M-100: The Essentials of Community Association Management, you are not fully prepared to sit for the CMCA exam. The M-100 will provide you with concrete knowledge (i.e., terms and definitions) but will not give you the knowledge to apply those terms and definitions to concepts. For example, What is a Quorum? is not a question you will see on the CMCA exam. You may, however, see a question like this, Quorum requirements conflicts are resolved by which of the following? That doesn’t mean you can skip this step. It’s still important to know the definitions in order to be able to apply them.

CMCAExamPrepSTEP 4. Quizlet is a FREE online tool that uses fun games and exercises to test your concrete knowledge. If after reviewing the M-100 course material, you find that your knowledge of terms and definitions is lacking, Quizlet is an excellent way to help you master those key terms and phrases, and prepare you for the next step in your study plan.

STEP 5. Best Practices Reports are FREE resource guides courtesy of the Foundation for Community Association Research. These Reports will help you gain applied knowledge in key areas found on the exam. Each report also contains case studies to help you understand how best practices are applied in real life situations, which is key to grasping an applied knowledge of these topics. If you’re a seasoned manager, spend a little extra time here. What you’ve learned on the job, may not be deemed best practices in the industry.

STEP 6. The CMCA Study Kit is available for purchase from the CAI Bookstore. A great tool for developing applied knowledge, you may purchase individual titles or the entire package depending on your needs.

STEP 7. CMCA Practice Exam is available online at a cost of $25 for one attempt and $40 for two. The Practice Exam includes questions that have been rotated off the exam and offers real time feedback on whether you were right or wrong on a question and why, offering real-world insight into the CMCA exam experience.

All of these materials to prepare you for the CMCA Exam can be found at CAMICB.org on the Exam Preparation web page. We encourage you to spend at least 6-8 weeks preparing for the Exam, and if you have any questions you can contact us at 866-779-CMCA or info@camicb.org.

We’d like to hear from managers who are studying for the exam. What’s working for you? What’s not? Please use the Comments section to let us know how you’re doing!

 

Could XR tech redefine workplace culture?

By ALEXANDER YOUNG for Talent Management & HR

In what seems like the blink of an eye, traditional workplace events – chats by the water-cooler; chill-out meets or Friday drinks – have, for many employees, become things of the past. ‘Workplace culture’ as we once knew it is undergoing a seismic shift. As employment increasingly becomes remote or hybrid, HR professionals must get to grips with what this means for their own organizations.

Emerging from the fall-out of the pandemic however, is technology that some may not yet have heard of – technology which has the potential to supercharge organizations and employee cultures once more. It’s called XR (or ‘Extended Reality’) technology. If you haven’t yet looked at it, it’s probably time you should. It could be just the answer HR professionals have been looking for.

What is XR?

XR is often referred to as the coming together of virtual reality (VR) technology and augmented reality (AR) technology – where any human-to-PC screen interface is modified by either 1) immersing the user in a virtual environment; 2) adding to, or augmenting, the user’s surroundings (AR); or 3) both of those. As with most VR-type tech, it began in gaming. But today it’s increasing having B2C use (such as ‘try before you buy experiences’, where you can see how furniture, for example, might look in your own room), and inevitably, it’s developing business-to-employee uses too.

Why XR? 

Cloud-based XR platforms can now provide employees with easy and on-demand access to a variety of immersive content. This includes 360-degree bespoke video, virtual spaces for collaboration and interaction with colleagues, live streaming of events and webinars, and even AI-powered virtual humans that facilitate employee soft-skills training. The key attraction of the technology is that it is cost-efficient, but also the process of creating bespoke content is pretty easy. It’s also scalable, and the impact can be much better measured and quantified.

But exactly how is XR tech being used to redefine culture in the new workplace? Let’s find out…

1) XR facilitates truly flexible hybrid working

For most employees, the ability to work from home, on their own schedule, is now a ‘must’. But without the right technologies and systems in place, remote work can turn into a remote nightmare of miscommunication, isolation and low productivity. XR tech is an excellent solution to the most common problems faced by remote workers. For example, by running immersive virtual meetings (where employees interact as avatars), XR technology can support collaboration in hybrid teams. Setting up virtual offices is also becoming popular, as these XR-mediated spaces can replicate the creative energy of the in-person office without any of the distractions or inconveniences of traveling to a physical location. They can be equipped with breakout rooms, classrooms, deep-work spaces and even XR gyms!

2) XR supports skill building 

Managing employee training is an oft-cited headache for HR professionals. That’s because traditional (in-person or online) skills training and onboarding is expensive, can be boring, and is invariably time-consuming. But in 2022, the status quo is changing. Organizations can now create their own XR training and onboarding content that is interactive, engaging and scalable. Complex technical skills – including equipment operation – can be practiced repeatedly in a zero-risk virtual environment. Soft skills – such as communication – can be honed with the help of a never-tiring virtual human. Built-in AI-powered feedback also provides in-depth analysis of performance, helping HR accurately identify areas where colleagues need extra support to improve. XR up-skilling is more impactful too. Studies have shown that learners who use a virtual platform can improve their performance by up to 230% and reduce skill fade by 52%. This means that team members can spend less time training and more time on the work that matters.

3) XR creates strong communities

While we all know flexible work and training are part of workplace culture, it’s the interactions between colleagues that arguably have the biggest impact on culture overall. Connection matters to teams. Recent data revealed 48% of employees complained they felt isolated from their coworkers during the pandemic; while 56% wished they had a community where they could get advice and 64% wished they had a way to ask questions of industry peers. If HR teams are to orchestrate a supportive community, colleagues need opportunities for non-work related interaction in informal contexts. And it’s virtual and hybrid events that are soaring in popularity, thanks to them offering of a more inclusive and flexible approach to workplace socializing. From coffee mornings to live music streaming and games nights, there are limitless possibilities when it comes to delivering impactful virtual events. Chats and breakout spaces support organic relationship building, and interactive quizzes or competitions can help boost engagement and break the ice. And as an added bonus, no one is at risk of missing that last train home.

Be the future you want to be

Yes, future workplaces will look and feel very different to the workplaces of old. But this means HRs’ approach to building and maintaining workplace culture needs to evolve and adapt. With the correct thought however, XR technology could be the next big opportunity to explore. The power of new immersive technologies really does have the capacity to drive business (and employee) success.

Maintaining High Ethical Standards

CMCAs’ Commitment to Following Strict Standards of Professional Conduct

An important – yet often overlooked – component of CAMICB’s Credentialing Program 

requires a Certified Manager of Community Associations (CMCA) to adhere to a high standard of ethical conduct. This means Certificants must comply with the 10 CMCA Standards of Professional Conduct, which govern their professional activities.  

These Standards of Professional Conduct, detailed at www.camicb.org/standards, range from understanding laws applicable to community association management, to being knowledgeable on association policies and procedures, to carrying out fiduciary responsibilities, and participating in continuing education coursework. A violation of any of these Standards of Professional Conduct may be grounds for administrative action and possible revocation of the CMCA certification by CAMICB.  Abiding by these Standards of Professional Conduct help protect consumers and associations that hire or contract with community association managers. 

“When a community association manager earns the CMCA, they’re pledging to uphold a strict code of professional conduct which is critical to the profession,” said Ron Perl, Esq., a Partner at Hill Wallack LLP, who leads the firm’s community association practice group. “This is more than understanding the many facets of community association management and troubleshooting challenging situations, it brings about accountability, responsibility and trust to the individuals the profession serves.”

Enforcing the Standards of Professional Conduct

In order to maintain and enhance the credibility of the CMCA Certification Program, the CAMICB Board of Commissioners adopted strict procedures that allow consumers and others to bring complaints concerning CMCAs to the Board. 

The CAMICB Chair of the Board appoints members of the Standards of Professional Conduct Compliance Committee which oversees the process and procedures for enforcing the Standards of Professional Conduct. Once a complaint – received in writing – is deemed valid and actionable by the Committee, it will be brought before a Review Panel for investigation and a determination of whether there has been a violation of the Standards. If the Review Panel determines a violation has occurred, an appropriate sanction will be imposed. This process, including the internal investigation, hearing, and timeline of activities, is clearly detailed in the Procedures for Enforcement of the Standards of Professional Conduct document available on the CAMICB website. 

The grounds for sanctions under these Procedures range from conviction of a felony, to gross negligence or willful misconduct in the performance of professional services, to fraud or misrepresentation and, where applicable, loss of state license required to practice community association management.

“These Standards of Professional Conduct are the foundation of the CMCA credentialing program,” added Marilyn Brainard, a public interest member of the CAMICB Board of Commissioners.  “We take them very seriously and are proud of the work our colleagues and managers do to uphold them.”

More information, including a set of Frequently Asked Questions, a list of the 10 clearly outlined Standards of Professional Conduct, complaint form and other pertinent documents can be found at https://www.camicb.org/for-cmcas/standards-of-professional-conduct.

The field of community association management is growing. Here’s what you should know about why and how to earn the Certified Manager of Community Associations (CMCA) credential!

By Matthew Green, CAMICB Associate Executive Director

If you love the idea of a job that offers opportunity, stability, and growth, community association management provides an excellent career path. Community association managers work with homeowners and service providers to take care of the many aspects and operations of condominiums, HOAs, and cooperatives. It’s a great job choice for people who previously worked in the leisure and hospitality industries. Those sectors continue to lead U.S. job losses amid COVID-19, with experts predicting slow growth until at least 2023. The good news is that though the coronavirus has dashed a lot of hopes for hospitality grads and veterans, the world of community association management is a bright spot. The field continues to grow and offers excellent opportunities for anyone who wants to continue in a people-oriented career. 

Community Association Management Stats

The Foundation for Community Association Research reports that as of 2020, there were approximately 355,000 community associations in the United States. They house over 74 million residents, over 12 million more than just a decade ago. Twenty-six percent of people in the U.S. live in a community association. More than 60 percent of new housing completed and over 75 percent of new housing sold is in a community association. 

There are over 8,000 community association management companies in the U.S. and up to 60,000 community association managers. Further, there is an additional 100,000 individuals employed by management companies and onsite for associations with staff. As the number of people living in community associations continues to rise, so does the number of jobs for community association managers. If you’re a people person who’s skilled in handling multiple tasks, a career in community management can be an incredibly rewarding career choice.

Community Association Management Career Outlook

Job prospects in the community association management sector are excellent and growth is stable. Though a college degree and professional designation are not necessary to land a position in the field, those who do command a higher salary when starting out. As of May 2020, the median wage for community association managers was $59,660 per year. In 2019, there were 367,900 jobs in the field. Job prospects and projected wages vary from state to state and community to community, so it’s a good idea to check out your area’s particulars.

CMCA – The Essential Credential 

The key to building a successful community association management career is the Certified Manager of Community Associations (CMCA) credential. Holding the certification lets employers know you’re educated and competent in certain management practices. It also indicates your dedication to professional excellence, ethical business standards, and continuing education. Community management employers are continually looking for committed professionals. The CMCA certification can often make the difference between whether or not you land a first interview.

The CMCA credential is relatively easy to obtain and:

  • Requires limited time and money investments.
  • Demands just a few days of prerequisite course worksome time to study, and one day for the exam. 
  • Is relatively low-cost for such a valuable investment in your career and future.

Earning the CMCA credential opens the door to earning additional credentials and up to 20% higher earnings than community association managers who are non-credentialed.

Studying for the Exam and Earning the Credential

Several resources are available on the Exam Preparation Resources page of the CAMICB website. You’ll find these items and more:

  • CMCA Handbook
  • CMCA Study Guide
  • CMCA Exam Preparation E-Learning Course
  • Community Association Management Best Practices Reports​
  • Community Association Institute’s M-100: Essentials of Community Association Management Course Material Information
  • Community Association Institute’s Guides for Association Practitioners (GAPs)
  • CMCA Practice Exam
  • CMCA Examination Quizlet 

Becoming a Certified Manager of Community Associations is not merely a designation; it can lead to the career journey of a lifetime. It elevates your credibility as a community association manager and makes employers more confident in hiring you. Finally, it offers you a wealth of opportunity, stability, and growth potential in an exciting career that currently shows no sign of slowing down.

For further information, please visit camicb.org or email us with any questions at info@camicb.org

Privacy Policy: https://www.camicb.org/privacy-policy

Privacy and Data Security for HOAs: What Your Community Association Needs to Know

Privacy and Data Security is the body of law that addresses how an organization can collect, handle, and use personally identifiable information and how that information needs to be protected.

Community Associations quite often have and maintain the names, addresses, and financial information of their residents and homeowners. Many criminal groups find this kind of information valuable for identity theft. Such groups often encrypt the data so the Community Association cannot access it to gain leverage and force an organization to pay a “ransom” for its return. Because of this and in reaction to how much sensitive information is held on everyday people in the broader economy, all fifty states have laws on the books that require most organizations to disclose when an unauthorized party has accessed the information. Community Associations—just like any other North Carolina organization—always must act reasonably when the organization makes decisions to do something with personal information or risk negligence lawsuits and class actions.

Unfortunately, North Carolina does not provide statutory guidance on how Community Associations can act reasonably with respect to residents’ personal data, but the federal government has provided frameworks that it recommends. The National Institute of Standards and Technology has published a Privacy Framework and a Cybersecurity Framework that, when followed, allow organizations to identify the data they have, protect that information, control and manage the data, govern the data with set rules within the organization, communicate the roles of each member of the organization, detect malicious or unauthorized activity, respond when an incident occurs, and recover from the incident.

There are a number of practical steps that organizations can take that can avoid or reduce the severity of common compliance pitfalls. The first is to review vendor contracts regularly—at least once a year—to make sure that they reflect an organization’s risk tolerance. Often, a trusted service provider or another vendor can have a breach that impacts the privacy and security of the data entrusted to a Community Association. Without contractual protections, the organization might incur significant costs remediating the problem with little legal recourse to have those costs covered by the party at fault.

Additionally, encrypting data, which is a mathematical process to transform data from readable text to nonsense and back again when a code (called a key) is used, can be an important tool in the compliance toolbox for Community Associations. Under North Carolina law—and the law of many other states—a breach only triggers reporting obligations when the information that was stolen was also unencrypted or when the encryption key was stolen with the data. This is not a silver bullet but, encryption is a practical technology that will be an important part of any compliance strategy.

Cyber insurance can also be an effective means of covering risk. However, insurance is not as simple as buying a policy and calling it a day. Insurers are increasingly raising premiums and lowering caps on organizations that do not take a proactive approach to mitigate privacy and security risks. So while insurance can act as a hedge against devastating effects, it should not be seen as a substitute for a compliance strategy.

We also recommend getting community input on the Community Association’s Privacy and Data Security efforts. Community Associations are necessarily accountable to their residents and homeowners, so understanding stakeholders’ risk tolerance can inform the leadership on how to move forward with a compliance strategy. The laws at issue obviously do not change based on the community’s sentiments, but discussing the matter at an annual meeting can be a good way to communicate what expectations the stakeholders in your community have of leadership.

Challenges and risks of liability and unmet stakeholder expectations are everywhere for Community Associations that do not take a proactive approach to the Privacy and Data Security of their residents’ and homeowners’ information. 

Voices & Vignettes From CMCAs 

As CAMICB continues to celebrate its 25th anniversary, we reached out to CMCAs who’ve held the credential for 25, or more, years. Many CMCAs graciously offered to share their experiences, highlights, career paths and advice with us. 

John Schick, CMCA, AMS, PCAM, is a Management Executive with Hawaiiana Management Company, Ltd. in Honolulu.  He was a member of the Beta Test Group for the original CMCA examination. Prior to entering the field of professional community association management, John spent 20 years in the United States Air Force and then two decades in motion picture exhibition and theatre building – clearly many talents and interests!

Now with 29 years of community association work in his vast professional repertoire, John finds what he likes most about this profession is assisting home owners and helping them understand the system and how it works, including training board members and helping them  make the best decisions to benefit their properties.

He also enjoys the networking offered at industry-related events. Accepting his PCAM designation at a CAI convention in Ft. Lauderdale in a room full of CAI members was a highlight of his community association management career.

John offers important advice for new managers entering the field, “This is a unique industry. Call on all the life experiences you’ve had to help you come up with solutions. Do not assume you know or understand it all. And, be sure to ask your co-workers questions; someone has certainly been there before you.”