Colorado’s new HOA licensing exam has property managers rushing to meet strict requirements
May 26, 2015
A new licensing exam for property managers and homeowners associations has local companies rushing to meet state requirements.
The mandatory exam is one of several revisions to Colorado's Manager Licensure Clean-Up bill, a bipartisan piece of legislature that easily passed the state House late in 2014.
Along with the exam, the bill also requires all management companies to meet strict fidelity-insurance requirements, based on two months worth of property assessments.
Local management companies are now scrambling to meet both requirements before the July 1 deadline set by the state. In Summit County, dozens of management companies oversee hundreds of properties, from vacation condos to HOA neighborhoods. Under the new law, everyone who directly manages a property must take the exam. Only entry-level employees — say, front desk clerks and work crews — don't need to take it.
“It was very stressful. Most of these people are studying nights and weekends to pass this test. Everyone still has a full-time job.”Pat MillerWildernest Property Management
And the test is proving to be more difficult than managers imagined, even those who have worked in the industry for years. Pat Miller with the Frisco/Breckenridge office of Wildernest Property Management was one of the first in her company to take and pass the exam. After passing it in February, she was asked to collect information and stay up-to-date on the new requirements. She's now in charge of training for the rest of the company. The exam has two sections, including a portion on state law and the Americans with Disabilities Act that Miller says was unexpectedly difficult.
"I don't mind tests and I don't mind studying; but, for some people, this has been a very tough process," Miller said. "It was very stressful. Most of these people are studying nights and weekends to pass this test. Everyone still has a full-time job."
The exam is also proving to be expensive. Before sitting for the exam itself, managers are first required to take a 24-hour online course for $399. The exam itself is $90 the first time and $85 for all subsequent tries. When paired with state-mandated fees, the recertification costs $750 per person on the low end and nearly $1,225 on the high end, Miller says. The nearest testing site is Wheatridge, with several others in Denver, Colorado Springs and Pueblo.
Wildernest has 25 employees who will take the exam, costing the company nearly $19,000. Companies aren't required to pay for licensing — it occasionally falls on the individual employee — but Miller says Wildernest owner Gary Barr will pay for the licensing.
"This is a brand-new expense for management companies," Miller says. "Gary has been very supportive and very proactive and footed the bill for all of us."
Once a manager has passed the exam, they no longer need to take it for as long as they operate in Colorado. It's a one-time expense, but due to a tight licensing timeline — the clean-up bill took effect in January — companies will be forced to eat the cost at one time.
At Wildernest, two employees will likely retire by the end of the year, Miller says, so paying the full exam fee would be a waste of nearly $2,000. There's an option to apply for a probationary license that would last until Dec. 31, but Miller hasn't received any info from the state about the process.
"We knew it was coming, but, all of a sudden, it was here," Miller said of the exam process. "It's just been hurry up and stop."
Across the state, property companies are still running to catch up. Only 336 of an estimated 1,200 community association managers have passed the exam, according to The Denver Post. Of those managers, about one in four have failed it.
Despite the hurdles, Tom Malmgren with Carbonate Property Mangement in Copper believes that a strict mandatory license is good for HOAs in every community. He hasn't yet taken the exam, but he's confident that he can pass, even with ADA questions that rarely factor into his work for Carbonate.
"While it feels like a time crunch, we've known this was in the pipeline for about a year," Malmgren said. "I just think we could've been a bit more proactive preparing for it; but, I truly think that if anyone is astute at what they do, they shouldn't have a problem with it."