This month, the Institute of Real Estate Management celebrates the 75th anniversary of the AMO (Accredited Management Organization) certification, granted to real estate management firms that demonstrate a commitment to best industry practices and professional management. But this milestone isn’t so much about IREM’s milestones as it is about the ethical best practices of the industry.
Accreditation is more than a logo on a business card. For building owners and investors vetting real estate management firms to manage their buildings accreditation, whether it be for the company or for staff members, serves as proof that the holder has been subject to stringent review by a third party and responds to a higher level of performance.
In times like these, when profit margins are squeezed as the costs of doing business continue to rise, company accreditation signifies sound internal financial controls for handling all company and client funds, that the client will be kept informed about the condition of the asset, and that all collected income is properly accounted for, with all “Is” dotted and “Ts” crossed. And, most importantly, that the company will always put the interests of the client ahead of its own. An AMO firm consistently exerts due diligence for the maintenance and protection of client funds against all reasonable losses.
Today, there are more than 500 firms that carry AMO accreditation, exemplary organizations in a highly scrutinized and often criticized profession, in both the commercial and residential sectors, large companies and small. As such, the certification becomes a market differentiator, a pledge to hold management to the highest professional and ethical standards. That’s the draw not just for property owners scouting the landscape, but for potential new hires, especially those seeking alignment with a firm committed to maintaining high standards for clients and staff.
Company accreditation also requires two types of crime insurance coverages: a fidelity bond covering all management employees, officers and owners of the firm with a deductible of no more than $5,000, and depositor’s forgery and alterations insurance of at least $25,000. Those bonding carriers have to carry a minimum B+ rating by A.M. Best or Standard & Poors. In so doing, the AMO protects its clients.
In the rare event an AMO firm wanders afield from ethical and professional commitments, IREM has a rigorous process to review reported violations, including lodging the complaint, a hearing by a panel of peers and, if necessary, an appeals process. The upshot can be either a dismissal of charges, a letter of censure, suspension or loss of AMO certification. To keep everyone’s eyes on the prize, certifications must be renewed every three years to ensure all AMO firms remain in compliance with requirements, including verification of a qualified executive CPM on staff, a current certificate of insurance, and verification of required insurance guidelines.
As president and executive CPM of Watts Realty Company in Birmingham, Ala., AMO certification helped elevate my own company’s stature, since we meet a higher standard of care for our clients. They find us worthy of their trust, and we’ve seen the benefit of promoting our certification in company marketing efforts.
At the end of the day, it all comes down to trust. The AMO is a symbol of trustworthiness—of a company that is reliable, responsible and accountable. Behind it is years of hard work and commitment. Ahead of it is the growing reputation of property managers as ethical professional business partners.
Chip Watts, CPM, CCIM, is the 2021 president of IREM. In addition, he serves as president and executive CPM for Watts Realty Co., Inc., AMO, in Birmingham, Ala.