|MANAGEMENT FIRM LICENSURE -- JUST A FORMALITY?|
Opinion By Jan Bergemann
Published March 2, 2009
Community Association bill H-995 (Sponsored by Representative Julio Robaina and Senator Alex Villalobos) not only created many owner-friendly condo provisions, it as well created significant changes to FS 468.431 - 438 -- Part VIII -- among it the requirement for Community Association Management firms to be officially licensed.
The idea behind the changes: Restore the bad reputation of Community Association Management firms, caused by managers continually violating rules without being held accountable by the DBPR. Up to January 1, 2009, management firms could play "musical chairs" with the licenses of their managers. Even if managers lost their license they were able to continue working under the umbrella of another license -- or their spouse's license. We have seen many examples where spouses applied for a license after the partner lost the license.
But does the good idea really work? I
seriously doubt it after looking at recent license information on the
website of the DBPR. It was no problem for THE TIMBERLAKE GROUP, INC.
to get a license under the new rules. This name may not sound familiar to
you, but the names of the principals of that corporation may ring a bell: Rachel
(CAM 30601) and Robert (CAM 1148) Dugger. These two principals of
Timberlake share a record-setting 28 complaints in the last 6 years.
Newspapers reported about the shenanigans of this management firm and its
principals -- see article
in the Miami Herald dated April 29, 2007. An article in the Daily
Business Review published on April 9, 2007,
headlined Management Mess, describes at length the
allegations against former North Bay Village Commissioner
Robert Dugger (See article published in the Miami New Times: "Thug
meets Pug"). And in case you don't trust media articles you
may take a look at the ruling of Miami Judge Linda Singer Stein, who
stated in her ruling after listening to lengthy testimony (quote): "Finally,
it is clear that the Association is merely a sham which does not exercise
any authority and acts solely at the behest of the management company.
Accordingly, Plaintiff has unclean hands in this lawsuit.
But the DBPR issued a license for that firm -- no problem whatsoever!
Shouldn't the DBPR do some serious research before issuing a license?
How about the case of the STAR HOSPITALITY MANAGEMENT, INC. in Punta Gorda? Various media reports allege the theft of more than $1 million (See: Charlotte Square sorting out fiscal fiasco) from association funds in accounts managed by this firm. Sherry Danko, president of the management company, acknowledged in a special meeting that money is missing. But the firm blames a manager for the embezzlement and more or less said that firing this employee was "their share of correcting the wrong."
Not so fast! If an association pays a management firm to manage their finances and bank accounts, the firm is responsible for creating the necessary safeguards to protect this money. The employee may be the person who actually embezzled the money, but it clearly was the firm's obligation to watch over the money! Minimum that's the way where I come from!
In my opinion, it isn't good business practice to give such a firm a license until all the facts are known and the condo associations were refunded the missing money! It surely shouldn't be up to the condo owners to hire an accountant and a law firm trying to recover the missing funds. Common sense?
Community Association Managers and Management firms are licensed for a reason -- to weed out the bad apples. On the other hand, consumers should be able to rely on the agency regulating these professions that only reliable firms and persons receive -- or hold -- valid licenses. But that is clearly not the case!The lack of proper regulation by the DBPR has totally devalued a
And that, especially in our bad economy, hurts the good, honest and hard working CAMs. How should the consumer know who is good or bad? Consumers are told to check for a valid professional license. Association boards, many under extreme financial pressure caused by the bad economy, are checking around to create savings. And, considering the many "ugly" headlines in the media, more and more associations just hire CPAs for their financial needs -- much stricter regulated and bonded -- and self manage their other needs. According to information I received, that way of doing business can save about 50% of the cost of managing an association! And added security to their finances!
The lack of real regulation and the process of handing out licenses like lottery tickets do more damage than good: It hurts consumers and even more the honest CAMs alike.
Another time the DBPR is dropping the ball -- to the detriment of the professionals they are supposed to regulate.