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LCAM residency

Started by DeniseH7 • 17 replies • 359 views

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DeniseH7 (Florida)
Posts: 3
Posted:
In our HOA community, the LCAM is a renter here in the same community in which she works. Some member said it was ok because the Board said it was. I have asked many people, including independent Property Managers, who say that they cannot live there AND work in the same community. Conflict of interest... I cannot find anything in writing from the State of Florida statutes, nor do our by-laws have any comment on the issue. Does anyone know for sure if there is any Licensing rules on this?
AugustinD
Posts: 1,027
Posted:
Is this a condominium?

Is the LCAM renting from a director? If so, then yes, this is a conflict of interest under FS 617.0832. But per the latter statute section, this does not mean the LCAM cannot necessarily continue renting from the director or officer. In particular, if the relationship between the landlord (who is also either a director or officer) is disclosed per the statute section, then the LCAM can continue renting.

I realize it's also possible the LCAM would treat her/his rented unit more favorably than other units. E.g. suppose the LCAM is a party animal, and noise complaints are made to... the manager, who is also the source of the noise! Under this circumstance the board should be notified immediately so that the manager is taken out of the decision-making loop. The situation is problematic, but as long as there is transparency to owners, it's not a violation of any law of which I am aware. (And I read a lot of HOA/COA/nonprofit corporation statutes and case law.)

Ask these people claiming otherwise to cite the statute section.

This forum has many Florida members. Over the last several years, I have not seen anyone anywhere raise this particular conflict of interest question.

I realize you want to know "for sure." This means this forum cannot help you. I think this forum can help prepare you a bit for a meeting with an attorney, so you can go see if there is a "for sure" answer.

Notes:
FS 617 (applying to Florida nonprofit corporations) has a long section on conflicts of interest.

FS 718 (applying to condominiums) also has a long section on conflicts of interest for directors and officers of the COA.

FS 720 (for HOAs) has no such section.
AugustinD
Posts: 1,027
Posted:
Quote:
Posted By DeniseH7 on 09/10/2022 12:29 PM
I have asked many people, including independent Property Managers, who say that they cannot live there AND work in the same community. Conflict of interest...
One other point: "Property manager" and "HOA/COA Manager" are generally not synonymous. Depending on the state, their duties and legal obligations are quite different. "Property managers" oversee the rental of homes and apartments. HOA/COA managers (like LCAMs) oversee the operations of a HOA/COA.

Licensing requirements for property managers can be extensive. It would not surprise me if there was, at a minimum, a code of ethics for property managers prohibiting living in a home that they also manage on behalf of the landlord-owner.

In short, asking a "property manager" this question is probably a mistake, since as a matter of state regulation they are not at all in the same category as a Licensed Community Association Manager.
CathyA3 (Ohio)
Posts: 6,299
Posted:
The one issue I can see isn't so much a conflict of interest as a lack of objectivity for the manager. It can be difficult to do the dirty work such as dealing with violations and have to live in the community. Ask any resident board member. And the manager will likely have closer relationships with those who live in their immediate area, which can be good or bad. Overall, it becomes too easy to mix up the personal and the professional, which can be a tricky dance.

If the manager is actually renting from a board member, then you also have issues with the chain of command. That is a conflict of interest, but for the landlord/bard member who can't manage the manager objectively.

It's why so many employers forbid employees to date each other, and why managers can't manage relatives or others they have personal relationships with.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
I agree with what Cathy said.
KerryL1 (California)
Posts: 14,550
Posted:
Is issuing violation notices part of this LCAM's contract?

To Aug's point, are the "property managers you consulted with also LCAMs? Or the rental property types of managers?
DouglasK1 (Florida)
Posts: 2,046
Posted:
Posted By AugustinD on 09/10/2022 12:46 PM

I realize you want to know "for sure." This means this forum cannot help you. I think this forum can help prepare you a bit for a meeting with an attorney, so you can go see if there is a "for sure" answer.

Just to clarify, an attorney can give an opinion (basically a guess as to what a judge would decide), a judge would give a "for sure", an even that is subject to appeal to a higher court.
Escaped former treasurer and director of a self managed association.
DeniseH7 (Florida)
Posts: 3
Posted:
To clarify, we are a non-profit HOA governed by Chapter 720 of the Florida Statutes.

We have an elected Board of Directors. We have 4 paid employees...LCAM and 3 maintenance people.

We do not have a property manager, just the LCAM, but I have asked my question to some people I know who are property managers from other communities. They have all indicated that the LCAM should not live on the same community she is working for.

All we know for sure is that she in fact is living in the community in a Board members unit and paying rent to said Board member. She has a community sticker on the car as do all community members.

In the meantime, I have requested this information from the Florida Licensing Board, as well, and am waiting for a response.

Without going into specifics, we are concerned about the "Chain of Command" in our community.
AugustinD
Posts: 1,027
Posted:
Quote:
Posted By DouglasK1 on 09/10/2022 7:00 PM
Just to clarify, an attorney can give an opinion (basically a guess as to what a judge would decide), a judge would give a "for sure", an even that is subject to appeal to a higher court.
DouglasK1, I would never generalize and assert an attorney's counsel is "basically a guess as to what a judge would decide." This is especially so given the question the OP posted. There's either a law or licensing authority that prohibits an LCAM's residing on the grounds of the HOA/COA they manage, or there is not.d
AugustinD
Posts: 1,027
Posted:
Regarding an LCAM who resides on a HOA's grounds:

The short answer is that, as long as full disclosure of this situation (which is a potential conflict of interest) is made to the HOA, and the HOA either approves or authorizes the LCAM working for the HOA while at the same time, residing at the HOA, Florida law has no prohibition on an LCAM living on the grounds of a HOA/COA the LCAM manages.

Elaboration:
Florida statute section FS 468.4315(2) authorizes Florida Regulatory Council of Community Association Managers to "adopt rules relating to the licensure examination, continuing education requirements, continuing education providers, fees, and professional practice standards to assist the department in carrying out the duties and authorities conferred upon the department by this part."

The Florida Administrative Code (FAC) contains the aforementioned "rules."

The FAC has the force of statute.

FAC 61E14-2.001 addresses Standards of Professional Conduct for LCAMs. See this complete set of rules for professional conduct by downloading the word document at https://www.flrules.org/gateway/RuleNo.asp?title=Professional%20Conduct&ID=61E14-2.001

FAC 61E14-2.001 is silent on the matter of an LCAM residing on the grounds of a HOA.

FAC 61E14-2.001 does state that "In the event of a potential conflict of interest, provide full disclosure to the association and obtain authorization or approval."

FS 455.227 (1) has other, more general grounds for discipline for any state licensed professional in Florida. None of the grounds listed concern residing at the HOA. See http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0400-0499/0455/Sections/0455.227.html

Next up: Anything Florida law says about "property managers" residing on properties they manage, bearing in mind that LCAMs and "property managers" have quite different licensing standards.

AugustinD
Posts: 1,027
Posted:
Regarding Property Managers in Florida (said Property Managers being very different legally from LCAMs), from one web site:

There is actually no such thing as a Florida property management license. Instead, to become a property manager in Florida, you must obtain a real estate broker’s license. This is based on Chapter 475 of the 2019 Florida Statutes.

According to the state’s laws, some of the major responsibilities of property managers are considered as real estate services or activities. Specifically, a real estate broker’s license is required if you are involved in renting or leasing the property of another person. You also need a real estate broker’s license if you are advertising a property on behalf of another person.

The applicable statutes and Florida Administrative Code for real estate brokers appear here:

http://www.myfloridalicense.com/DBPR/real-estate-commission/statutes-and-rules/

But this is going off into the wild blue yonder. I hope the OP agrees that a "licensed real estate broker" and a "Licensed Community Association Manager" are very different things.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
It should also be noted that a RENTER in a HOA has no voting rights. Can NOT be on the board. Can not vote for anyone on the board. So this sounds more of a reason in the OP's mind not to like the situation than to bring any positivity to it.
Former HOA President
CathyA3 (Ohio)
Posts: 6,299
Posted:
I think that Denise is right to be concerned. One of the board's duties is to manage the association employees, and the landlord/director can't be objective with the LCAM. A landlord/director would also have a conflict of interest if the tenant violates the CC&Rs or community rules and the board has to determine what to do and to hold a hearing.

If the LCAM were not renting from a director, there would still be potential issues with lack of objectivity. And it actually isn't great for the LCAM personally - they never get away from their work, and it would be too easy for the board to assume the LCAM is available 24/7 and not compensate properly for the extra hours. It can be hard to draw a firm line about work hours when your landlord/boss can knock on your door at any time.

There may be absolutely nothing wrong going on now, but the situation lends itself to issues of various degrees of seriousness. If Denise can run something like this past the association attorney, it may be helpful (this is one of those general questions that would be a free 15-minute phone call for us).
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By CathyA3 on 09/11/2022 1:06 PM
I think that Denise is right to be concerned. One of the board's duties is to manage the association employees, and the landlord/director can't be objective with the LCAM. A landlord/director would also have a conflict of interest if the tenant violates the CC&Rs or community rules and the board has to determine what to do and to hold a hearing.

If the LCAM were not renting from a director, there would still be potential issues with lack of objectivity. And it actually isn't great for the LCAM personally - they never get away from their work, and it would be too easy for the board to assume the LCAM is available 24/7 and not compensate properly for the extra hours. It can be hard to draw a firm line about work hours when your landlord/boss can knock on your door at any time.

There may be absolutely nothing wrong going on now, but the situation lends itself to issues of various degrees of seriousness. If Denise can run something like this past the association attorney, it may be helpful (this is one of those general questions that would be a free 15-minute phone call for us).

Well said.
KerryL1 (California)
Posts: 14,550
Posted:
So...the CAM is a direct employee of your HOA, right, Denise? Is there a Code of Ethics for CAMs in Fla.? I, too, would be very concerned about a potential conflict of interest especially since the CAM doesn't work for management company but for the HOA.

AugustinD
Posts: 1,027
Posted:
Quote:
Posted By DeniseH7 on 09/11/2022 6:23 AM
We have 4 paid employees...LCAM and 3 maintenance people.
...
In the meantime, I have requested this information from the Florida Licensing Board, as well, and am waiting for a response.
How long has the LCAM worked for the HOA?

The fact that the LCAM is an employee says to me that, if any director is even thinking of asking the LCAM to either leave or terminate her lease, then now is the time to go to the HOA attorney.

If this manager has been working for the HOA for awhile, then I expect the HOA attorney to say leave the matter alone. Yes, the manager should have disclosed the conflict of interest pursuant to Florida Admin Code 61E14-2.001 and then received the Board's approval. Under FS 617.0832, I think her landlord (one of the directors) should have as well. Either of these facts arguably means the manager can be terminated without a lawsuit resulting. But would termination mean the manager is entitled to unemployment insurance, translating to the HOA possibly being on the hook for some portion of this?

Did the HOA acquiesce (approve of) the arrangement by virtue of saying nothing for a long time?

Other questions arise.

I think the issue is legally complicated at this point.
DeniseH7 (Florida)
Posts: 3
Posted:
Kerry
Yes, LCAM is the person who issues violation notices. Ironically, I'm on the grievance committee.

Augustin
The property managers I consulted with were not LCAM's. The work for property management companies that handle various condos and HOA communities in this county. I do understand that there are different requirements for LCAM and property managers.
It is my understanding that a great many members here are not aware that the LCAM is also a resident, especially those that live on the other side of the community or are homebound. This is a 55 and over community.

Melissa
Working and living in the same community has exposed the LCAM to personal information about the members, and the LCAM has openly expressed some of that personal information to other members. (I have heard it myself)

I am thankful that so many of you have taken your time to express opinions, options, State rulings I have to further check into. As you can see, there is a lot of homework for me to do and other members here to speak with so we can decide, collectively, how to proceed. Any and all additional comments are well appreciated.
KerryL1 (California)
Posts: 14,550
Posted:
If the LCAM has been revealing "personal info" about some owners, that only directors, perhaps a committee, and she know about, to other owners is, imo, immediate grounds for dismissal. And surely that conduct is forbidden in some kind of CAM Code of Ethics.

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