CAM Emerging Trends

Understanding the requirements for Community Association Managers: What is required to be in the Management Agreement? What Insurance is required?

One of the goals of the Community Association Manager (CAM) Program is to ensure uniformity in certain areas of practice. CAM Rule F-6 provides that contracts, agreements, authorizations and disclosures must be in writing.

CAM Rule F-6 goes on to state that the management agreement between the CAM and Common Interest Community must clearly specify the terms and conditions of the management services to be performed by the CAM as well as include specific information.

Every management agreement must contain eight specifically enumerated items.

Minimum Required Management Agreement Items:

  • Beginning and ending dates of the contract;
  • Details of all compensation, fees and charges;
  • Cancellation rights of the parties;
  • Record retention and distribution policy;
  • Errors and omissions insurance coverage;
  • Crime Fidelity insurance coverage;
  • A general description of the records to be kept and the accounting or bookkeeping system to be used; and
  • The designated manager’s license number.

Understanding Insurance Requirements

CAM Rules D-9 and D-10 specify which insurance must be obtained by a CAM.

  • Rule D-9 requires CAMs to obtain E&O insurance, sometimes called Professional Liability, in the amount of $1,000,000; with a deductible no greater than $5,000.
    • Note that a General Liability insurance policy is not the same and will not satisfy the requirements of Rule D-9
  • Rule D-10 requires CAMs to obtain Crime Fidelity insurance coverage, in an amount equal to two months assessments, plus reserves for each Common Interest Community managed. (A Crime Fidelity Bond is not acceptable.)
  • Additional detail concerning these CAM insurance rule requirements can be found at these links:

It is important to keep in mind that the insurance requirements for CAM licensees are separate and distinct from those for Broker licensees. If you are both a CAM and a Broker, you will need separate insurance policies for each license.

Important Compliance Requirements

The Division is looking more closely into the following CAM licensee activities.

Record retention

  • The Division will be reviewing compliance with the 3-year record retention requirement and pinpointing the finer details of the requirement.

Timely notifications to the Director

  • The CAM Program will be looking at the conduct of a licensee when they change employment to ensure they are in compliance with the rules.

Reasonable supervision by Designated Managers

  • The responsibilities of a Designated Manager are a new element in the Community Association Management industry. We will take an indepth look at all the requirements that Designated Managers are currently challenged with.

CAM Program Rules