AMO turns 75
IREM celebrates the 75th anniversary of the company-level certification
When IREM was founded in 1933, its first members weren’t individuals; they were companies. But this soon changed, in large part due to the persuasive argument put forth by James Downs, one of IREM’s founders and its 1938–1939 president. It was his opinion that the concept of professionalism was more properly tied to an individual practitioner rather than to a company. The outgrowth of this was the CPM designation, established in 1938.
Although Downs prevailed, others disagreed, and the debate over professionalism at the company level versus the individual level raged on. The conflict continued until Kendall Cady of Chicago put forth a compromise: Instead of it being an either/or situation, he proposed a solution that would enable companies as well as individuals to achieve a professional status within IREM, so long as they likewise submitted to ethical and business practice standards. Out of this compromise, the Accredited Management Organization (AMO) program, approved by the Governing Council on Sept. 6, 1945, was born.
In the months that followed, standards for accrediting management companies were developed with a focus on protecting the public that would be served. Keep in mind that the country was just coming out of the Great Depression at that time. Property managers of the 1930s were not held in high esteem; rather, they were largely regarded as unscrupulous rent collectors who too often absconded with rent payments and demanded kickbacks from suppliers desperate to find work. This was the environment within which the first AMO standards were developed “for the benefit of owners of real estate … so that an owner might select an organization to manage his property in his own or some distinct city with the ability and integrity to render outstanding service.” (See below, “Flashback: 1946.”)
With standards in place and an accrediting process established, many of those companies that had joined IREM as organization members applied to become AMOs. In the spring of 1946, the roster of the first AMO-accredited companies was published in the Journal of Property Management.
The inaugural class of AMOs comprised 162 companies from 31 states and Washington, D.C. Of those 162 firms, only two have held the accreditation continuously for 75 years. One of these is Draper and Kramer, Incorporated, which was already well established when it became an AMO. Founded in Chicago in 1893, Draper and Kramer was then and remains today family-owned, with a reach that now extends beyond its Midwest roots.
The second company celebrating its 75th anniversary as an AMO this year is Morton G. Thalhimer, Inc., from Richmond, Virginia, now operating in affiliation with Cushman & Wakefield—also an AMO—as Cushman & Wakefield | Thalhimer. Speaking of Thalhimer’s continuous accreditation as an AMO, Curtis Mummau, CPM, the company’s senior vice president of commercial property management and its executive CPM, said, “Our association with IREM as an AMO firm further distinguishes our firm as a reputable and professional organization committed to excellence.”
Seventy-five years after the birth of the AMO program, its commitment to serving the public and protecting it from unethical and improper management practices remains at its core. This is expressed in the AMO Code of Professional Ethics, to which all AMOs subscribe and whose purpose “is to establish and maintain public confidence in the honesty, integrity, professionalism, and ability of the professional real estate management organization.” It is also expressed in the AMO qualifying criteria, which were modified in 2013 to align with IREM’s Best Practices: Real Estate Management Service.
The roster of firms holding the AMO accreditation now stands at 534 companies, many of which have branch offices that extend the reach of the AMO network to over 1,000 locations. The vast majority of these firms—517 of them—are headquartered in the United States, but interest is growing internationally, with nine AMO firms in Japan, seven in Canada, and one in China.
Today’s AMO companies include the behemoths of the industry that are multinational in scope as well as smaller companies that focus on local and regional markets. A survey of AMO companies conducted in late 2019 offers a snapshot of the firms:
- In terms of their business operations, AMOs are evenly divided between those that do only third-party management and those that manage both for themselves and for others, with a small segment doing only self-management.
- The majority of AMOs are primarily engaged in residential management (apartments, HOAs, single-family homes), followed by those primarily in commercial management (office, retail, industrial).
- There are AMOs with fewer than 10 property management employees, as well as those whose employee count is in the thousands.
- It shall be reputably engaged in the business of property management in the locality in which it operates
- Its management policies and techniques shall be established by individuals who are experienced and qualified in property management
- It shall cover all money handling, accounting, and disbursement personnel by proper and adequate fidelity bonds
- It shall segregate the funds of its clients, at all times, from those of the organization by deposit in a separate bank account which shall always contain 100 percent of the funds of every client
- It shall not receive a commission, rebate, discount, or other benefit without the client’s knowledge
- It shall not make any misleading or inaccurate representation to the public
- It shall have a Certified Property Manager in an executive position relating to its property management activities
- It or one of its principals shall be a member of a local board, or an Individual member, of the National Association of Real Estate Boards [which later became the National Association of REALTORS®].
Driving NOI during times of economic uncertainty with capital improvement...
Utilizing the right tools helps management companies maximize operational efficiencies