Legal Fees Paid by All Members

Hi,
Todays Home Page has yet another interesting article of legal fees and I have posted 2 paragraphs which I think summarize why the association funds pay for counsul.

"The condo association as a whole is the client. The attorney does not represent the interest of one or more owners or any particular group of owners. The attorney must represent only the association. Owners frequently challenge this concept by suggesting that because the attorney advises the board, he or she represents the board."

And
"The legal counsel is a contractor to the association, the same as the landscaper, accountant, insurance agent, management company, etc. He or she must be paid from the funds of the association just like all the other contractors. As described above, you must remember who the client of the attorney is. Association funds may not be used to pay the attorney for anything other than his or her representation of the condo."

MaryA1,
Short sighted view by those that don't think the problem through. Mention to the doubters that they can sue the board and go to court and the association lawyer will at that point ask them to talk to him.

However it would be bad business for the Lawyer to just flat out refuse to talk to an owner with a question. Sort of like chasing business away. I believe our lawyer would refuse to talk about specific cases with any owner but would find time, to clarify or explain a point of law. Also if you use your attorney to assist in amending the documents, he/she seem happy to explain the process in an open meeting of the owners.

Don,
As usual, a thought provoking post. I endorse your above post and appreciate your read. I find it most helpful to get my thoughts together. Your links I will spend some time on but first read, I find the presentation to explain a difficult problem well addressed. I suppose it just points out to all of us, especially to those that think there are no clear answers out there, that many times we just are not looking in the right place.

My initial comment or observation is: I agree the relationships between associations and lawyer are well decscribed by your post. However, I see some differences (not major) in how the lawyers have to react to owners of different size associations. A small association (mine is 65 units condo)allows for a more intimate contact with a lawyer than a large association. Annual meetings come to mind. My POA (large) annual meeting with lawyer present is strictly policy support, whereas our condo annual meeting with maybe 40 members is much wider ranged.

Good post.

Don in Michigan.........Based on your knowledge........I am a former board member of a voluntary homeowners association in Michigan. A neighbor is trying to quiet title an easement that all property owners have in their deeds. The lawsuit was filed against each property owner. When I was on the board I became aware of a situtaion that no one else had knowledge of. Our President did not enough money for his retainer fee and volunteered the association into a lawsuit that we were not named as a defendant. He used association funds but will not share information with the members regarding the lawsuit. Many property owners are in default for not answering the summons they received individually. Our dues are paying his personal legal fees. I have a different lawyer than his. So my dues pay his legal fees and I have my own personal legal fees. Members dues are for a lawyer that is not representing them at all. How can one person volunteer an association to litigation, use their membership dues, and restrict legal information from the members?

Incidently this same person prompted the lawsuit years ago. After $23,000 in donations for legal expense and 3 years of litigation the Judge ruled that the association had no interest, ownership, or rights to this easement.

The current lawsuit that I am asking about is the 2nd lawsuit. The plantiffs corrected the defendants naming all property owners (individuals). The association owns a park, the park does not have the easement in it's deed, the park cannot walk to the beach, the park was not served a summons nor named as a defendant. The park does not have an address to be served. It was the loop hole that one person used to help defray the Presidents (individual property owner) legal fees. When we call the lawyer to ask for updates he will not take our calls.

Is this legal? Where would I go if we are a non-profit, voluntary dues homeowners association for free legal advice?

Mary,
My Board went one step farther when it came to the attorney responding to the Board. There was only one authorized contact between Board and attorney and that was our President. If other Board members wanted to ask questions, we wrote them down for the President to ask of him. Chatter or just not important enough items at $250.00 per hour were controlled upon agreement between the entire Board itself.

Michelle,
Unfortunately, Florida is not a cheap place to live. That's why I am now in Tennessee.

Robert,

Of course it would be altogether different if the lawyer were present at a meeting of the members. I like to think he would answer questions of the members. If someone asked a question regarding ongoing litigation he would just state client/attorney privilege. BTW, I can't imagine why the board would think it necessary to have the lawyer present at a meeting.

A third reason for an attorney to attend a general or annual meeting is often that they sometimes are also knowledgable about Robert's Rules (at least more so than the Chair) and so they often combine the task of advising the Chair about Robert's Rules and answering questions (usually about the documents). Before you jump on me, I wouldn't have them present just for the Rules, but combining the items makes sense for many boards.

The only issue I have with Don's post is that it implies that there is some sort of perfect answer available. There isn't. First you have the association. The members elect people to make decisions for them. The board, as in any corporation, directs the actions of counsel, in any manner they see fit, unless it is shown to be illegal, unethical or in violation of bar standards. That's the only way the relationship can function. What's the alternative?

Don's proposal of holding attorneys to the "Court of Appeals" standard when providing advice is excellent, but unlikely to be used by associations, not because boards wouldn't want it, but because I suspect the owners would object strenuously to the costs - as has been repeatedly shown on this board, boards and owners will go to great lengths to avoid the costs involved with legal counsel. I can understand that - in our market, the experienced association attorneys are getting $250-350/hour. Given the economic situation associations are more likely to use their attorney less, rather than more.

Joe

Joe,
I would add to all this imperfect mish mash of HOA covenants is the real fact, that many BOD's really are not interested enough to know the demands of the covenants or care if they do know.

I am sure there are rare examples of correct adherance to Robert's and strict compliance to covenants, and frankly with the apathy of owners to all things requiring a little time and effort for the good of all, it is a wonder it works at all. But it stumbles along and I am probably just a cynic.

This is the way we handle it too. We have also told the PM they are not to contact our attorneys. We had previously asked the PM to contact a certain paralegal on minor matters but she still went to the attorney at $300 per hour. It was solved when our pres was made the only contact.

LindaH9

Please post your question on a new thread because it is a different subject. I will try to provide some ideas for you to consider.

Michele and Donna. We, too, have our President as the only contact. However, I find that this is a problem. When our board asks for clarification of some issue, the President "talks" to our lawyer, and then gives us what I believe often is Pres' "interpretation" of the lawyer's response. Last year, as a board member, I called attorney to verify an off the wall statement the President made as to what our legal advice was, and the lawyer said he could not talk to me. On another recent issue,I asked President for a written legal opinion from our lawyer to back up what Pres said was the legal answer from attorney. His response? That I just wanted to waste our homeowners' money, which is what he is telling our neighbors. Lovely.

I will clarify one thing.

For most general issues, the president is the singular contact, when we need to have the attorney write a violation notice or do collections.

If it's an issue of clarification on specific language or something, we NEVER do that by phone or a single contact.

If we have legal questions about what to do in x, y, or z case, or what X covenant means/implies, etc, we schedule a meeting with the attorney (it's the same $$/hour either way), and TWO board members attend the meeting. That's usually the president and one other board member (whoever can arrange to make the meeting).

That way we have TWO ears/heads and not always the same two.

GREAT advice, Michele. I will have to remember that. I never thought of it as either way, you are spending $200/hour. Might as well have it in a face to face meeting versus phone or email.