BOARD MEMBER CHARGED WITH LEGAL FEE

A board member solicited some information on an item that was facing the board subsequent to a 4-3 failed vote on the matter. The 3 board members who voted against the item felt like there was not enough information to make a decision when the vote came up. A general lack of knowledge of Robert's Rules led to a forced vote on the matter instead of the appropriate action which would have been to table the issue with questions.

The lawyer was consulted. Information was received. The information received was enough to result in a report at the next board meeting (Aug) that it would have been likely with the opinion of counsel that a unanimous vote would have been in favor of the matter given the new information.

In the following month board meeting (Sep), a board member reported that there was an $xxx dollar unbudgeted expense during the month of Aug associated with the ISSUE voted upon in Jul. A motion by this individual to personally bill the board member who solicited the opinion of counsel was raised and 2nd'd. The primary driver was that the item had been voted on, there should not be any further action, and the board member who asked counsel should be personally liable for the expense incurred from the lawyer.

Clearly are several issues here that I would like some help with:

1) Who on the HOA board can solicit the advice of the HOA? Our association has NO formal protocal.

2) Should it require a majority vote of the board to solicit the advice of counsel or is the system designed that those in the minority if acting in good faith and in a fiduciary capacity of the corporation and its constituents be able to solicit the advice of counsel.

3) The Board has explicit authority to charge homeowner members normal and special assessments along with fines and legal fees associated with breaches or defaults of covenants, rules, etc. Is there any authority to rebill an individual or a board member for a HOA incurred expense?

As you can imagine, we are trying to address a multitude of sticky issues.

Thank you.

I agree with Susan.

The board should not be billing anyone on this, but should sit down and make a clear policy going forward.

John,

This is, indeed, a sticky wicket. Generally the board Pres is the lawyer contact. However, it would not be uncommon for any member of the board to be able to speak to the assn's lawyer. But, asking for paid legal advice is another thing. The board should have a set policy outlining who has the authority to do that. At any rate, IMO, the bill should be paid by the assn . . . period. This is not the same as billing a member attorney fees for collecting a delinquency.

What led up to soliciting the lawyer for advice is an example of getting caught up on Robert's Rules of Order. What ever happened to common sense? If no one on the board understands Robert's then why not adopt another parliamentary procedure. Another prime example of why I do not advocate using Robert's Rules of Order.

I am normally an advocate of "It is often better to catch hell than to ask permission.", but not on this one. This is a stewardship issue involving someone else's money. As such, any doubt about authority to spend should be resolved against spending the money. The fiduciary duty is to do what a prudent person in like circumstances would do.

Boards act through their motions and resolutions. The prior decision on the matter provided a definitive answer. Any board member who wanted a legal opinion or information from another source could have made the motion to obtain same. Any board member could re-open the issue at a subsequent meeting by making the motion to seek additional information.

The board member who contacted the attorney did so without authority.

A definitive answer on the question depends upon many facts not provided in the original post. Specifically, is there a pattern of board members acting for the association without authority?

Frankly, Don, we don't know that the person who contacted the attorney did so "without authority."

It sounds to me like there are a lot of confused people on this board and with no clear direction don't realize what sort of "authority" may have been needed to do what was done.

That's why a clear, written policy needs to be established going forward.

With respect to your question "Is there a pattern of board members acting without authority"

The board member who reached out to the attorney after the "vote", did so in an email, asking the lawyer to "point" him to the right statute on the books. The email asked if he had an experience with the issue and if he had an opinion. The request to the lawyer was done in good faith without the knowledge that a bill would be received for what seemed to be a simple request. The lawyer provided additional information and cc'd the President and Mgmt company on his response. End of matter. Billed -- no further followup. Single Incident.

The board member who reached out to the attorney is in his 1st term and now only 4 months into term. So, no precedent for him. There has been some banter among the board debate that there may have been similar situations in the past where a board member ran up bills with the lawyer. But again, no changes or written protocols were ever established relative to engagement of counsel.

There is again, no written protocol for "who" on the board can talk to the lawyer and request work.

John,

Thx for the clarification! And in light of what you have written, I stand by my original thought that the BOD should pay the attorney fee. The fact that the board member asked the attorney if he had an opinion is probably what triggered the bill. Legal opinions usually aren't free! However, it would have been nice if the attorney would have countered with, "it'll cost you!". In view of what has transpired and the fact that some board members are questioning the incident, it appears to me the board should adopt a policy for communicating with the assn's attorney. The attorney should be apprised of whatever policy the board adopts. IMO, any board member and the PM should be able to speak to the attorney and have simple questions answered; however, to request specific work and/or obtain a legal opinion should only come from one person, usually the board Pres. and this would only be done after a majority vote of the board, unless emergency circumstances required otherwise.

First, if your documents are even close to well written you would never get a legal opinion that you could charge this to the Board member. Read your documents a little closer as the member could turn right around and submit the expense as part of his/her work on the Board. Further they would have the legal right to expect it.

Now reading your post it would appear that the issue failed without the information yet would have passed unanimously with the information. If that is the case whoever had the idea to charge the board member should personally apologize. Further, the issue should be brought up again and passed. (There is nothing to keep an issue from being reconsidered if more information comes up or the situation changes.)

In the meantime to avoid paying a whole lot more in legal fees each one of you should spend hours pouring over your documents. Your board is appears to be on a path to a lawsuit that you will likely lose.