Attorney client Privilege

Not necessarily. The client is the association, but can only act through the elected board. From an article by an attorney "Privilege refers simply to the right not to disclose the information. .... In order to determine if a privilege exists in the community association arena, you must examine whether the fundamental threshold of confidentiality has been met. Is the opinion based on a matter that would constitute an unwarranted invasion of individual privacy, pending or anticipated litigation or contract negotiations, or personnel matters for employees of the association?"

The balancing test is to determine why a legal opinion is needed. Whom does that legal opinion affect? What purpose will it serve?

In your case it desn't look like it would meet the test. Ask the board to check with the attorney before claiming something that might not exist.

Joe

If the Board is proposing a certain motion for a vote, then they have (I hope) already been advised by the attorney on concerns of that motion.

The Board should then share with the members ALL the details of the amendment - including the consequences for not paying. They ought to disclose this information to the membership at the same time as the present the motion for review.

If it does not get explained, be sure to bring it up at the vote, during the "debate" time of the motion.

Your questions are valid; don't let them sweep them under the rug.

Martyn

You raise important questions. I believe your instincts about privilege, attorney matters, and the covenants/bylaws issues are on the mark. I am usually suspect about advocacy from CAI and CAI-affiliated attorneys on these issues.

As JosephW stated, the client is the association, not the board. Each state has rules for professional conduct. See Rule 1.13 for your state. Privilege belongs to the client, not the attorney. The attorney is obligated by privilege not to disclose any information gained in the attorney-client relationship. The client can elect to disclose the attorney-client communications. The board is the agent of the client, not the client. In Michigan, this is well defined in case law which states,
"... when an attorney is hired to represent a corporation, his client is the corporation rather than the shareholders. Although an attorney must necessarily communicate with a corporation's human agents to effectively represent the corporation, the purpose of the communication is representation of the corporation, not the agents themselves." [citations omitted]

Another aspect of privilege is that the privilege is waived for the entire document when the client, or agent, discloses part of the information in the attorney-client communication. When the agent uses the attorney-client information in a decision and so claims, I believe the privilege has been waived.

As a matter of policy, when the board uses an attorney-client communication to promulgate some rule that affects members, members should have access to the communication. It is important to have access to the communications to the attorney to understand what question was asked of the attorney. The opinion provided depends upon the question asked and the facts provided.

Since a capital assessment at the time of sale is property related, it seems to me that such must be defined in the covenants which run with the land. Only by definition in the covenants can such an assessment be collected by liens, etc. Usually the authority for bylaws is in nonprofit corporation acts, or in owners association acts, and actions are not binding on the property. I would be surprised if such an assessment can be authorized through the owners association. Legal opinions are required. You may need more than one.

Many thanks for all the above comments and ideas.
I have a few thoughts and questions; I have associated these to the gracious contributor that sparked the thought or question.

JosephW,
I like the little article about how to determine if there is a need for privilege/confidentiality, very succinct and useful.

I had previously read the Micheve v Wyndham Place case and it is the very reason I became concerned about this idea and asked if we had sought outside counsel opinion. The New Jersey 2007 Condominium legislation specifically addresses the point for condominiums but does not address the same for HOA’s and I could not determine why. Is it that the HOA is not party to a real estate transaction to the same extent a Condominium Association is? And it is unclear to me if the NJ legislation requires that the by laws be a matter of public record.

JonD1
I have expressed appreciation, and you will note I mentioned it in my posting. I think the idea of who is paying (the buyer or seller) a Capital Contribution at the time of sale is a matter of is the cup half empty or half full. To suggest that an owner’s interest and efforts to assist their association is not warranted is, to say the least, somewhat surprising.

SusanW1
The Board have generally done a good job with a number of ‘town hall’ type meetings to address the change and it amazes me that they do not want to share the opinion of the attorney. I recognize there is a place for confidentiality. Appreciate your support that this is not the case in this situation.

PaulM
Completely agree that the Assessment must be a matter of the public record. I do not think the Association is party to the real estate transaction (ours is a large development with about 20% of lots built on) and thus not represented at the closing. Some closings take place in other states only to be recorded after the fact with the county. If the fee is legal (and I am not a lawyer) my thought is that a ‘deed dog’/attorney should be able to find reference to the fee in the public record. I have seen a number of Covenants where this type of fee is clearly stated. This is not the case with our Covenants…they do refer to annual dues and special assessments. That is why I prefer a small special assessment route which is legal and predictable revenue.

DonN
The law firm that the Association has used in the past has a good reputation and I would respect their opinion, if I could see it.
Your thought process mirrors mine, thanks for reinforcing it.

Joseph
Thanks for the idea of writing the Board and copying the attorney. I will try to do that in the nicest possibly way as my aim is to help not to undermine what is being done.

Thanks agin to all for your time/thoughts.
Martyn