CAI-NJ March 2022

MANAGEMENT TRENDS

Who Has Ethics, And Why Should We Care? By Elaine Warga-Murray, CMCA, AMS, PCAM RMG, Regency Management Group, Inc., AAMC

M ost everyone expects that the professionals with whom they conduct business subscribe to a set of ethical standards. However, not everyone knows or is familiar with the ethical standards that bind each profession. In addition, knowing how an association board can verify which professionals commit to a Code of Ethics is not always part of the selection process. While most people expect confidentiality, honesty, and expertise, only those individuals who have a credential or des- ignation are bound by a formal and registered Ethical Code of Conduct. Therefore, the first step in engaging or electing a person or firm that will provide service is to ensure that the professional hired has and maintains a valid credential. In the field of community management, only practitioners with a certification or designation (noted by the initials listed after the name of the person or business) have professed to abide by a specific standard of care and conduct. Specifically, the Community Association Institute (CAI) provides national desig- nations for managers and management firms – as does The Institute of Real Estate Management (IREM). Clients, association boards, and homeowners should be aware of the ethical parameters governing the profession- als they retain and quantify the credentials of the manager who will be conducting the association’s business. Asking for a copy of the Code of Ethics and a list of credentialed team members serving the community is imperative. Since New Jersey does not require licensure for property manag- ers, such as those required for attorneys and Real Estate agents, a national certification/designation is the only way to affirm that managers have the appropriate education and formal professional standard of care and conduct for the services they provide. Another benefit, that should also be of consideration is the reality that insurance carriers will often offer better and more cost-effective coverages to associations that retain professionals bound by ethical standards of care.

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“Assuring a code of ethics binds professionals is a prominent element of concern to an association...”

Assuring a code of ethics binds professionals is a prom- inent element of concern to an association but neglecting the issue of ensuring that board members adhere to a code of ethics is becoming more of concern, especially as communities face more complex environments. If long-term maintenance initiatives are neglected, community asso- ciations risk collapse or failure. We sadly saw a highly publicized example of this happen in recent times and the problem of failure to maintain has occurred in many states including New York and New Jersey. Rather than waiting for problems to occur and reacting, it is better for associations to adopt a policy requiring all elected board members to agree to abide by a Code of Ethics. Typically, the association attorney can prepare a proforma Board Code of Ethics and the accompanying res- olution requiring that all board members elected to sign and agree to the code as a condition of serving on the board. A code of ethics protects the association and ensures that members do not operate with conflicts of interest.

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