A2658 1R

An Act providing for the licensing of common interest community managers, supplementing Title 45 of the Revised Statutes and amending various parts of the statutory law.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. (New section) Sections 1 through 12 of this act shall be known and may be cited as the “Common Interest Community Manager Licensing Act.”

2. (New section) The Legislature finds and declares that the citizens and residents of the State of New Jersey are entitled to the maximum protection practicable when living in a community association, and that they be protected by the setting of clear licensing requirements for persons engaging in the practice of providing management services to a community association. It is therefore necessary and in the public interest to establish education, training and experience standards and to provide for appropriate examination of those persons who serve as common interest community managers.

3. (New section) As used in this act:

“Board” means the “Common Interest Community Manager Board established pursuant to section 4 of this act.

“Common interest community” or “common interest property” means real estate described in a declaration, master deed, proprietary lease, or such other instrument with respect to which a person, by virtue of ownership of a unit, lot, membership certificate, corporate shares, or such other evidence of individual title, is obligated to pay for a share of real estate taxes, insurance premiums, maintenance, or improvement of, or services or other expenses related to, common areas, other units, or other real estate described in that declaration, master deed, proprietary lease or such other instrument.

“Common interest community manager” means an individual who for compensation provides management services to a common interest community.

“Community association” means a New Jersey corporate entity formed to administer, manage, and operate the common affairs of the owners of a common interest community and to maintain, repair and replace a common interest property.

“Director” means the Director of the Division of Consumer Affairs in the Department of Law and Public Safety.

“Licensed common interest community manager” means an individual who is licensed pursuant to the provisions of this act.

“Provide management services” means to: act with the authority of a community association in its business, operational, legal, financial and other transactions with association members and with non-members; execute the resolutions and decisions of the governing body of a community association or, with the authority of the association, enforce the rights of the association secured by statute, contract, covenant, rule or bylaw; collect, disburse or otherwise exercise dominion or control over money or other property belonging to a common interest community association, provided that this shall not include a person who is the direct salaried employee of a community association, a licensed common interest community manager, or any entity lawfully engaged in community association management, and whose sole participation is performing accounting services with respect to the money of a common interest community, including the receipt of payments and the preparation of checks or other methods of payment and does not perform any other management services as defined in this section; prepares budgets, financial statements or other financial reports for a community association, provided that this shall not include a person whose sole participation is to assist a common interest community manager and who is a direct salaried employee of a community association, a licensed common interest community manager, or any entity engaged in community association management, in the preparation of budgets, financial statements or other financial reports for a community association; arrange, conduct and coordinate meetings of a community association or the governing body of a community association; or negotiate contracts or otherwise coordinate or arrange for services or the purchase of property and goods for or on behalf of a community association.

4. (New section) a. There is created within the Division of Consumer Affairs in the Department of Law and Public Safety the Common Interest Community Manager Board. The board shall consist of nine members who are residents of the State of New Jersey and who, except for the member from the department in the Executive Branch of State Government, shall be appointed by the Governor. In addition to the two public members appointed to represent the interests of the public pursuant to the provisions of subsection b. of section 2 of P.L.1971, c.60 (C.45:1-2.2), one member shall be from a department in the Executive Branch of State Government who shall serve without compensation at the pleasure of the Governor. The remaining six members shall have been actively engaged in providing management services for at least five years immediately preceding their appointment, and except for the members first appointed, shall be licensed common interest community managers.

b. The Governor shall appoint each member, other than the State executive department member, for a term of three years, except that of the common interest community managers first appointed, two shall serve for terms of three years, two shall serve for terms of two years and two shall serve for terms of one year. Any vacancy in the membership shall be filled for the unexpired term in the manner provided by the original appointment. No member of the board shall serve more than two successive terms in addition to any unexpired term to which he has been appointed. The Governor may remove any member of the board, other than the State executive department member, for cause.

c. Members of the board shall be compensated and reimbursed for actual travel, incidental, and clerical expenses necessarily incurred in carrying out the provisions of this act.

5. (New section) The board shall organize within 30 days after the appointment of its members and shall annually elect from among its members a chairperson and a vice-chairperson. The board shall meet twice a year and hold additional meetings as necessary to discharge its duties. A majority of the board membership shall constitute a quorum.

6. (New section) The board shall, in addition to other powers and duties it may possess by law:

a. Administer the provisions of this act;

b. Issue and renew licenses to common interest community managers pursuant to the provisions of this act;

c. Adopt a code of ethics for common interest community managers;

d. Examine, evaluate and approve all examinations and procedures;

e. Adopt a seal which shall be affixed to all licenses issued by it;

f. Maintain a record of each common interest community manager licensed in this State and the date and number of his license;

g. Annually publish a list of the names and addresses of all persons who are licensed under this act;

h. Establish standards for continuing education as provided in section 12 of this act;

i. Adopt rules and regulations pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.) as it may deem necessary to enable it to perform its duties under and to enforce the provisions of this act; and

j. Prescribe or change the charges for examinations, licensures, renewals and other services performed pursuant to P.L.1974, c.46 (C.45:1-3.1 et seq.).

7. (New section) No person shall engage in the practice of providing, or hold himself out as being able to provide management services to a community association unless licensed in accordance with the provisions of this act.

8. (New section) The provisions of this act shall not apply to:

a. An officer or member of a community association who, for no compensation or expectation thereof, performs the acts or services of a common interest community manager;

b. The acts or services of an attorney at law licensed in this State who is engaged to represent a community association or common interest community manager in any business which constitutes the practice of law;

c. The acts or services of a real estate broker, broker-salesperson or salesperson licensed in this State who is engaged ¹[by a community association to sell or rent real property belonging to the association] in the performance of his duties as provided in R.S. 45:15-3¹;

d. The acts or services of any person regulated by this State as a certified public accountant, professional engineer, insurance agent or broker, or any other person in any other related profession requiring registration, certification or licensure by the State, who is acting within the scope of practice of his profession;

e. A person who is the direct salaried employee of a community association, a licensed common interest community manager, or any entity lawfully engaged in community association management while performing clerical or ministerial functions under the direction and control of a community association, a licensed common interest community manager, or any entity lawfully engaged in community management;

f. A person who acts solely in the role of a superintendent for, or providing maintenance services to, a common interest community;

g. A person who acts as a receiver or trustee in bankruptcy in the performance of duties or a person who acts under a court order from providing management services for a common interest community; or

h. A declarant.

9. (New section) To be eligible to be licensed as a common interest community manager, an applicant shall fulfill the following requirements:

a. Be of good moral character;

b. Be at least 18 years of age; and

c. (1) Have completed a training program approved by the board, and successfully passed an examination approved or developed by the board; or

(2) Have passed an examination that is developed in accordance with national standards accredited by the National Commission for Certifying Agencies.

d. Notwithstanding the provisions of subsections a., b., and c. of this section, for 180 days after the date procedures are established by the board for applying for licensure under the provisions of this act, upon payment to the board of a fee and the submission of a written application provided by the board, the board shall issue to an individual of good moral character a common interest community manager license provided the individual: (1) has been actively engaged in providing management services for at least 12-months before applying for such license; and (2) ¹[holds an active designation from the National Board of Certification of Community Association Managers, Community Associations Institute or the Institute of Real Estate Management as: a Professional Community Association Manager (PCAM); an Association Management Specialist (AMS); a Certified Manager of Community Associations (CMCA); a Certified Property Manager (CPM); or Accredited Residential Manager (ARM)] successfully demonstrates completion of a training program and examination that is the same or substantially similar, as determined by the board, to that which is required pursuant to subsection c. of this section¹.

10. (New section) ¹a.¹ No licensed common interest community manager ¹or the common interest community management agency with which the manager is employed¹ shall control, collect, have access to, or disburse funds of a community association unless, at all times during which the common interest community manager collects, has access to, or disburses such funds, there is in effect¹[, a fidelity bond] employee dishonesty insurance¹ in conformity with the following:

¹[a. The fidelity bond shall be in favor of the State of New Jersey in an amount established by the Director of the Division of Consumer Affairs, by regulation, by a company authorized to transact business in this State, and except as provided in subsection b. of this section shall cover the licensee by either his management company or the community association, or both; and

b. A licensed common interest community manager who provides management services for more than one association shall maintain separate bank accounts for each association. Funds in each association bank account shall not be commingled with the fund of the licensee or another association. The maintenance of bank accounts by a licensee shall be custodial and in the name of the association]

(1) There is a policy of employee dishonesty insurance in place to insure against loss for theft of community association funds;

(2) The employee dishonesty insurance policy provides coverage in an amount that is not less than all moneys under the control of the common interest community manager or the employing common interest community management agency for the association;

(3) The employee dishonesty insurance covers the common interest community manager and all partners, officers, and employees of the common interest community management agency with whom the manager is employed during the term of the insurance coverage, as well as the association officers, directors, and employees;

(4) The insurance company issuing the employee dishonesty insurance may not cancel or refuse to renew the insurance policy without giving at least 10 days prior written notice; and

(5) The association secures and pays for the employee dishonesty insurance unless an agreement between the community association and the common interest community manager or the common interest community management agency provides to the contrary. The common interest community manager and the common interest community management agency shall be named as additional insured parties on the policy of employee dishonesty insurance.

b. A common interest community manager or common interest community management agency that provides common interest community management services for more than one community association shall maintain separate, segregated accounts for each community association or, with the consent of the association, combine the accounts of one or more associations, but in that event, separately account for the funds of each association. The funds shall not, in any event, be commingled with the common interest community manager’s or common interest community management agency’s funds. The maintenance of such accounts shall be custodial, and such accounts shall be in the name of the respective community association or common interest community manager or common interest community management agency as the agent for the association.

c. The common interest community manager or common interest community management agency shall obtain the appropriate general liability and errors and omissions insurance, as determined by the board, to cover any losses or claims against community association clients¹.

11. (New section) All licenses shall be issued for a two-year period upon the payment of the licensure fee prescribed by the board and shall be renewed upon filing of a renewal application, the payment of a licensure fee and presentation of satisfactory evidence that the renewal applicant has successfully completed the continuing education and ¹[bonding] insurance¹ requirements prescribed by this act. A license may be renewed without reexamination, if the application for renewal is made within 30 days next preceding or following the scheduled expiration date. Any applicant for renewal making application at any time subsequent to the 30th day next following the scheduled expiration date may be required by the board to be reexamined, and that person shall not continue to act as a licensed common interest community manager until a valid license has been secured.

Any license expiring while the holder is outside the continental limits of the United States in connection with any project undertaken by the government of the United States, or while in the services of the Armed Forces of the United States, shall be renewed without the holder being required to be reexamined, upon payment of the prescribed fee at any time within four months after the person’s return to the United States or discharge from the armed forces, whichever is later.

12. (New section) a. The board shall require each person licensed as a common interest community manager, as a condition for biennial license renewal pursuant to section 1 of P.L.1972, c.108 (C.45:1-7), to complete any continuing education requirements imposed by the board pursuant to this section.

b. The board shall:

(1) Establish standards for continuing common interest community manager education, including the number of credits, which shall not exceed 18 credit hours biennially, of which not less than three credit hours shall be in professional practice ethics;

(2) Approve educational programs offering credit towards continuing common interest community manager education requirements; and

(3) Approve other equivalent educational programs and establish procedures for the issuance of credit upon satisfactory proof of the completion of these programs. In the case of continuing education courses and programs, each hour of instruction shall be equivalent to one credit.

13. Section 1 of P.L.1971, c.60 (C.45:1-2.1) is amended to read as follows:

1. The provisions of this act shall apply to the following boards and commissions: the New Jersey State Board of Accountancy, the New Jersey State Board of Architects, the New Jersey State Board of Cosmetology and Hairstyling, the Board of Examiners of Electrical Contractors, the New Jersey State Board of Dentistry, the State Board of Mortuary Science of New Jersey, the State Board of Professional Engineers and Land Surveyors, the State Board of Marriage and Family Therapy Examiners, the State Board of Medical Examiners, the New Jersey Board of Nursing, the New Jersey State Board of Optometrists, the State Board of Examiners of Ophthalmic Dispensers and Ophthalmic Technicians, the Board of Pharmacy, the State Board of Professional Planners, the State Board of Psychological Examiners, the State Board of Examiners of Master Plumbers, the New Jersey Real Estate Commission, the State Board of Court Reporting, the State Board of Veterinary Medical Examiners, the Radiologic Technology Board of Examiners, the Acupuncture Examining Board, the State Board of Chiropractic Examiners, the State Board of Respiratory Care, the State Real Estate Appraiser Board, the State Board of Social Work Examiners, the State Board of Examiners of Heating, Ventilating, Air Conditioning and Refrigeration Contractors, the State Board of Physical Therapy Examiners, the Orthotics and Prosthetics Board of Examiners, the New Jersey Cemetery Board, the State Board of Polysomnography, the New Jersey Board of Massage and Bodywork Therapy, the Common Interest Community Manager Board, the Genetic Counseling Advisory Committee and any other entity hereafter created under Title 45 to license or otherwise regulate a profession or occupation.

(cf: P.L.2009, c.41, s.11)

14. Section 1 of P.L.1974, c.46 (C.45:1-3.1) is amended to read as follows:

1. The provisions of this act shall apply to the following boards and commissions: the New Jersey State Board of Accountancy, the New Jersey State Board of Architects, the New Jersey State Board of Cosmetology and Hairstyling, the Board of Examiners of Electrical Contractors, the New Jersey State Board of Dentistry, the State Board of Mortuary Science of New Jersey, the State Board of Professional Engineers and Land Surveyors, the State Board of Marriage and Family Therapy Examiners, the State Board of Medical Examiners, the New Jersey Board of Nursing, the New Jersey State Board of Optometrists, the State Board of Examiners of Ophthalmic Dispensers and Ophthalmic Technicians, the Board of Pharmacy, the State Board of Professional Planners, the State Board of Psychological Examiners, the State Board of Examiners of Master Plumbers, the State Board of Court Reporting, the State Board of Veterinary Medical Examiners, the Radiologic Technology Board of Examiners, the Acupuncture Examining Board, the State Board of Chiropractic Examiners, the State Board of Respiratory Care, the State Real Estate Appraiser Board, the New Jersey Cemetery Board, the State Board of Social Work Examiners, the State Board of Examiners of Heating, Ventilating, Air Conditioning and Refrigeration Contractors, the State Board of Physical Therapy Examiners, the State Board of Polysomnography, the Orthotics and Prosthetics Board of Examiners, the New Jersey Board of Massage and Bodywork Therapy, the Common Interest Community Manager Board, the Genetic Counseling Advisory Committee and any other entity hereafter created under Title 45 to license or otherwise regulate a profession or occupation.

(cf: P.L.2009, c.41, s.12)

15. Section 2 of P.L.1978, c.73 (C.45:1-15) is amended to read as follows:

2. The provisions of this act shall apply to the following boards and all professions or occupations regulated by, through or with the advice of those boards: the New Jersey State Board of Accountancy, the New Jersey State Board of Architects, the New Jersey State Board of Cosmetology and Hairstyling, the Board of Examiners of Electrical Contractors, the New Jersey State Board of Dentistry, the State Board of Mortuary Science of New Jersey, the State Board of Professional Engineers and Land Surveyors, the State Board of Marriage and Family Therapy Examiners, the State Board of Medical Examiners, the New Jersey Board of Nursing, the New Jersey State Board of Optometrists, the State Board of Examiners of Ophthalmic Dispensers and Ophthalmic Technicians, the Board of Pharmacy, the State Board of Professional Planners, the State Board of Psychological Examiners, the State Board of Examiners of Master Plumbers, the State Board of Court Reporting, the State Board of Veterinary Medical Examiners, the State Board of Chiropractic Examiners, the State Board of Respiratory Care, the State Real Estate Appraiser Board, the State Board of Social Work Examiners, the State Board of Examiners of Heating, Ventilating, Air Conditioning and Refrigeration Contractors, the State Board of Physical Therapy Examiners, the State Board of Polysomnography, the Professional Counselor Examiners Committee, the New Jersey Cemetery Board, the Orthotics and Prosthetics Board of Examiners, the Occupational Therapy Advisory Council, the Electrologists Advisory Committee, the Acupuncture Advisory Committee, the Alcohol and Drug Counselor Committee, the Athletic Training Advisory Committee, the Certified Psychoanalysts Advisory Committee, the Fire Alarm, Burglar Alarm, and Locksmith Advisory Committee, the Home Inspection Advisory Committee, the Interior Design Examination and Evaluation Committee, the Hearing Aid Dispensers Examining Committee, the Landscape Architect Examination and Evaluation Committee, the Perfusionists Advisory Committee, the Physician Assistant Advisory Committee, the Audiology and Speech-Language Pathology Advisory Committee, the New Jersey Board of Massage and Bodywork Therapy, the Common Interest Community Manager Board, the Genetic Counseling Advisory Committee and any other entity hereafter created under Title 45 to license or otherwise regulate a profession or occupation.

(cf: P.L.2009, c.41, s.13)

16. This act shall take effect immediately, except that section 7 shall take effect 360 days following the appointment and qualification of the board members, and provided that the director and the board may take such anticipatory action as may be necessary to effectuate that provision of the act.