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Subject: Should the Board have a Lawyer
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Author Messages
LindaB20
(New York)

Posts:23


11/16/2018 6:08 PM  
Should the Board have a retained lawyer or just retain one when it's needed? How do most boards handle this?
RoyalP
(South Carolina)

Posts:203


11/16/2018 7:00 PM  
No, the 'Board' should never have an attorney.

The Association, which the 'Board' manages, should have an attorney 'on call'.

W/O a 'retainer' said attorney is free to, and very well may, represent a member in an action versus the Association.

With a retainer said attorney will provide certain services 'within' said retainer but will NEVER be 'opposing council'.

Therefor, IMO, the Board of Directors would be wise to have an attorney 'on retainer' on behalf of the Association.

'Generally' the retainer will be 'used up' as there are often issues which would benefit from council.

REMEMBER: The attorney represents and is paid by the Association, NOT the 'Board'. The 'Board' merely employs and 'cuts the checks'.
MelissaP1
(Alabama)

Posts:7762


11/16/2018 7:55 PM  
My opinion on having a lawyer is to use them as needed. Which isn't all that much. I wouldn't keep one on retainer. The HOA needs one for filing liens or foreclosures. It also may need one to file or review changes to the rules. As for lawsuits, that's a case by case situation. Something I also don't think HOA's should be in the practice of doing. It's more of defending in court than filing in court. There are other options to enforce rules than lawsuits.

It is important to understand the type of lawyer or legal services you need. Don't hire a Real Estate attorney. A HOA is not in Real Estate. It's a corporation. A lawyer that specializes in HOA's is a bit more expensive and not always necessary. You can probably hire a legal service to file a lien. A general lawyer may be able to handle filing foreclosures or rule changes. Understand the type of lawyer you need before looking for one.

Do not trust a lawyer who says "I will do what you tell me to do". That statement should raise red flags. It usually means there are other options that may or may not be requiring their services. Find out how they charge not just the amount. They can charge for a Text, email, or even a phone call. So limit who can talk to them. They are NOT every member in the HOA's lawyer. They are the HOA's lawyer representing EVERYONE.

Former HOA President
MarkM19
(Texas)

Posts:159


11/16/2018 8:34 PM  
My issue with lawyers is they are supposed to be on the side of the HOA, we are paying them for opinions, but more often then not they sit in the middle and expect the board to make the call. I feel like 99% of them ruin it for the 1 percent that are good.
JenniferG11
(Texas)

Posts:530


11/16/2018 10:22 PM  
Posted By RoyalP on 11/16/2018 7:00 PM
No, the 'Board' should never have an attorney.

The Association, which the 'Board' manages, should have an attorney 'on call'.

W/O a 'retainer' said attorney is free to, and very well may, represent a member in an action versus the Association.

With a retainer said attorney will provide certain services 'within' said retainer but will NEVER be 'opposing council'.

Therefor, IMO, the Board of Directors would be wise to have an attorney 'on retainer' on behalf of the Association.

'Generally' the retainer will be 'used up' as there are often issues which would benefit from council.

REMEMBER: The attorney represents and is paid by the Association, NOT the 'Board'. The 'Board' merely employs and 'cuts the checks'.




Yeah, no. They represent the board.
JenniferG11
(Texas)

Posts:530


11/16/2018 10:46 PM  
Posted By JenniferG11 on 11/16/2018 10:22 PM
Posted By RoyalP on 11/16/2018 7:00 PM
No, the 'Board' should never have an attorney.

The Association, which the 'Board' manages, should have an attorney 'on call'.

W/O a 'retainer' said attorney is free to, and very well may, represent a member in an action versus the Association.

With a retainer said attorney will provide certain services 'within' said retainer but will NEVER be 'opposing council'.

Therefor, IMO, the Board of Directors would be wise to have an attorney 'on retainer' on behalf of the Association.

'Generally' the retainer will be 'used up' as there are often issues which would benefit from council.

REMEMBER: The attorney represents and is paid by the Association, NOT the 'Board'. The 'Board' merely employs and 'cuts the checks'.




Yeah, no. They represent the board.




OK, it's more nuanced than this, but the BOD is the client. Only they can have attorney/client privilege. The attorney has a duty to the best interests of the association, but the BOD is their client, not every individual member of the association.

I did contact the one for the prior board to argue about seeing attorney invoices and other financials that were being withheld.

Some people think that is wrong, me racking up a bill. Too bad. If I hired an attorney to handle it, that would rack up the same or a bigger bill for the HOA attorney. /shrug

AND, it worked. With him agreeing that the statute clearly allows us to see all financial records, the BOD had to stop making excuses and do it.

AND they had been sending all my emails to the BOD on this matter to him anyway! It was already racking up a bill but getting nowhere. I stopped the billing by resolving the issue. I should have done it months sooner.

Not saying every attorney would do that, but they do have to respond to demand letters, so why not respond and settle an issue before that? In our case we were sort of rioting. He did the right thing.

JanetB2
(Colorado)

Posts:4166


11/16/2018 11:53 PM  
Posted By JenniferG11 on 11/16/2018 10:22 PM
Posted By RoyalP on 11/16/2018 7:00 PM
No, the 'Board' should never have an attorney.

The Association, which the 'Board' manages, should have an attorney 'on call'.

W/O a 'retainer' said attorney is free to, and very well may, represent a member in an action versus the Association.

With a retainer said attorney will provide certain services 'within' said retainer but will NEVER be 'opposing council'.

Therefor, IMO, the Board of Directors would be wise to have an attorney 'on retainer' on behalf of the Association.

'Generally' the retainer will be 'used up' as there are often issues which would benefit from council.

REMEMBER: The attorney represents and is paid by the Association, NOT the 'Board'. The 'Board' merely employs and 'cuts the checks'.




Yeah, no. They represent the board.


Yeah ... NO ... The attorney is supposed to represent the HOA and what is in the best interest of all the members equally. The attorney if the BOD is in the wrong is supposed to state that fact regarding situations. Granted the BOD is the entity who can hire and fire, but the membership is who pays the bill and who the Court will expect is represented.
JenniferG11
(Texas)

Posts:530


11/17/2018 1:47 AM  
Posted By JanetB2 on 11/16/2018 11:53 PM
Posted By JenniferG11 on 11/16/2018 10:22 PM
Posted By RoyalP on 11/16/2018 7:00 PM
No, the 'Board' should never have an attorney.

The Association, which the 'Board' manages, should have an attorney 'on call'.

W/O a 'retainer' said attorney is free to, and very well may, represent a member in an action versus the Association.

With a retainer said attorney will provide certain services 'within' said retainer but will NEVER be 'opposing council'.

Therefor, IMO, the Board of Directors would be wise to have an attorney 'on retainer' on behalf of the Association.

'Generally' the retainer will be 'used up' as there are often issues which would benefit from council.

REMEMBER: The attorney represents and is paid by the Association, NOT the 'Board'. The 'Board' merely employs and 'cuts the checks'.




Yeah, no. They represent the board.


Yeah ... NO ... The attorney is supposed to represent the HOA and what is in the best interest of all the members equally. The attorney if the BOD is in the wrong is supposed to state that fact regarding situations. Granted the BOD is the entity who can hire and fire, but the membership is who pays the bill and who the Court will expect is represented.




There are nuances as I stated above, but the BOD is the client.
CathyA3
(Ohio)

Posts:76


11/17/2018 5:25 AM  
Posted By MarkM19 on 11/16/2018 8:34 PM
My issue with lawyers is they are supposed to be on the side of the HOA, we are paying them for opinions, but more often then not they sit in the middle and expect the board to make the call. I feel like 99% of them ruin it for the 1 percent that are good.




The board should make the call, it's their job. The attorney gives advice but has no authority to make any decisions.

I don't know about the 99%/1% split, but I think a skilled attorney is well worth paying the retainer. The firm that represents my association only takes associations as their clients. For the annual retainer (less than $1000), the board and community manager get unlimited free 15 minute phones to discuss issues, quarterly free educational seminars, and quarterly newsletters covering hot topics and changes to laws that board members need to know about. The only time we pay is if we have them investigate a specific issue, and our attorney will tell us if he thinks we'd be wasting our money pursuing a particular course of action. I can't say enough good things about them.

There are some issues that come up where a "reasonable and prudent" course of action may actually not be legal, and it's easy for even a responsible board to run afoul of the law. You can't avoid the pitfalls if you don't know that they exist, and often this information isn't something that the average person would come across.
CathyA3
(Ohio)

Posts:76


11/17/2018 5:42 AM  
Posted By JenniferG11 on 11/17/2018 1:47 AM
Posted By JanetB2 on 11/16/2018 11:53 PM
Posted By JenniferG11 on 11/16/2018 10:22 PM
Posted By RoyalP on 11/16/2018 7:00 PM
No, the 'Board' should never have an attorney.

The Association, which the 'Board' manages, should have an attorney 'on call'.

W/O a 'retainer' said attorney is free to, and very well may, represent a member in an action versus the Association.

With a retainer said attorney will provide certain services 'within' said retainer but will NEVER be 'opposing council'.

Therefor, IMO, the Board of Directors would be wise to have an attorney 'on retainer' on behalf of the Association.

'Generally' the retainer will be 'used up' as there are often issues which would benefit from council.

REMEMBER: The attorney represents and is paid by the Association, NOT the 'Board'. The 'Board' merely employs and 'cuts the checks'.




Yeah, no. They represent the board.


Yeah ... NO ... The attorney is supposed to represent the HOA and what is in the best interest of all the members equally. The attorney if the BOD is in the wrong is supposed to state that fact regarding situations. Granted the BOD is the entity who can hire and fire, but the membership is who pays the bill and who the Court will expect is represented.




There are nuances as I stated above, but the BOD is the client.




This is probably splitting hairs, but our attorneys always state plainly that they represent the association; thus the association (ie, the corporation) is the client. The board is the agent of the association with whom the attorneys will interact, but that doesn't make the board the client. For example, our attorney would not represent us (the board) if we were taking actions that were contrary to the association's best interest, making it plain where their duty lies.
RoyalP
(South Carolina)

Posts:203


11/17/2018 6:36 AM  
Posted By JenniferG11 on 11/16/2018 10:22 PM
Posted By RoyalP on 11/16/2018 7:00 PM
No, the 'Board' should never have an attorney.

The Association, which the 'Board' manages, should have an attorney 'on call'.

W/O a 'retainer' said attorney is free to, and very well may, represent a member in an action versus the Association.

With a retainer said attorney will provide certain services 'within' said retainer but will NEVER be 'opposing council'.

Therefor, IMO, the Board of Directors would be wise to have an attorney 'on retainer' on behalf of the Association.

'Generally' the retainer will be 'used up' as there are often issues which would benefit from council.

REMEMBER: The attorney represents and is paid by the Association, NOT the 'Board'. The 'Board' merely employs and 'cuts the checks'.




Yeah, no. They represent the board.




They represent the Association.


RoyalP
(South Carolina)

Posts:203


11/17/2018 6:47 AM  
as per: https://www.berding-weil.com/articles/who-is-the-client.php

"..... That means the attorney's client is the association – the incorporated or unincorporated entity; not the Board of Directors and not the association's members either collectively or individually. ....."



Jennifer, feel free to actually research the (non)issue
MelissaP1
(Alabama)

Posts:7762


11/17/2018 7:00 AM  
I've taken some legal course in college so have a different perspective on the use and need for a lawyer. For me it wasn't a matter of going to a lawyer for advice. It was going to them to perform a service that required an attorney. So each HOA needs to evaluate what they need or want a lawyer for. Once that is established then decide what kind and if retainer is needed. My experience has been no retainer really needed except for long term lawsuits (against HOA) or certain money amounts in the claim.

Now as for you as an individual going to the lawyer even as a board member is a HUGE NO-NO!!! It has to be agreed upon by the BOD to contact the lawyer. Plus there should be single point of contact like the President. (Or someone BOD agrees to). Many reasons why. The cost being the biggest. The money being paid out is ALL of the HOA's money. It's not some magical "other fund". There may be confusion if multiple sources contact the attorney. It also helps narrow the contact, information, and decisions. That saves time and money.


I would be mad if someone on the board took it upon themselves to go to the HOA's attorney. That's NOT your job or responsibility. It is a decision the BOD has to make as a whole and consider the HOA's budget. It's not your money it's EVERY member's money your spending on this.

Former HOA President
SueW6
(Michigan)

Posts:354


11/17/2018 7:16 AM  
The use of a parliamentarian would have handled this issue (release of financial records to members)

It seems no one is reading the state regulations, CCRs, or bylaws and doesn't know how to make the board respond to its own duties.

The parliamentarian could have consulted the board or individual member as to the procedure it had to follow.

BTW - at the Annual Meeting of the Members, a financial report from the board is pretty boilerplate as a part of in its report to the members (Balance Sheet; Revenues and Expenses)

So its not clear what she wanted and didn't get and thought she had to go to a lawyer about it.


KerryL1
(California)

Posts:5950


11/17/2018 11:05 AM  
With RoyalP, Janet and Cathy, our HOA attorney represents the Association (not individual members in it), not the Board. The Board, as with the other Association contracts, hires and dismisses the law firm. The board m ay meet with the stoney in executive session to discuss potential litigation and other legal matters in CA

CA has very complicated statutes about HOAs and our high-rise HOA is very complex, so we do have a Law firm on a $500/ann. retainer and an attorney there is assigned to us. For the $500, we get unlimited phone calls via the president, who's the selected liaison here. He also will meet with us twice a year including the annual meeting & election, which we just held. While the votes for directors were being counted, he brought the membership up to date about new CA legislation. He also visited the inspectors of election table several times to see if they had any questions while tabulating the ballots.

If our property mgr. with the board's consent withheld financial records that Owners may legally review and possess, as in Jennifer's case, the PM & prez undoubtedly would simply have phoned our attorney and asked if members may have x, Y & z. records. It should been handled as part of the retainer with none of the expenses & hassle her HOA went through.

We do not present the expenses at our annual meeting at all and that's not required in CA. Even if it were, it would not have included details such as the ones Jennifer may have wanted.

JenniferG11
(Texas)

Posts:530


11/17/2018 8:04 PM  
Posted By RoyalP on 11/17/2018 6:47 AM
as per: https://www.berding-weil.com/articles/who-is-the-client.php

"..... That means the attorney's client is the association – the incorporated or unincorporated entity; not the Board of Directors and not the association's members either collectively or individually. ....."



Jennifer, feel free to actually research the (non)issue




From your own article:


"Because the individual members of the Laguna Sur Villas Community Association did not consult with or retain the association's lawyers they were not clients of the law firm representing the association. The Court of Appeal rejected the argument of the homeowners that they were the “true clients” because the association was “faceless” and could act only in a representative capacity, and that they were the persons for whose benefit the lawsuit was brought and were paying for the attorneys' legal services through their assessments. The court pointed out that the California Supreme Court had recently1 refused to create a so-called “fiduciary” exception to the attorney-client privilege."

They ruled the BOD was the client.
RoyalP
(South Carolina)

Posts:203


11/17/2018 8:15 PM  
Jennifer,

below is the FULL text of my reference

NOWHERE is what YOU quoted

{quote}

The question sometimes comes up, usually from a homeowner or group of homeowners, concerning who the attorney representing the association in a matter actually represents. Some years ago, the California Court of Appeal provided a clear answer.

“Condominium associations may bring construction defect lawsuits against developers without fear of having to disclose privileged information to individual homeowners. Like closely held corporations and private trusts, the client is the entity that retained the attorney to act on its behalf.” (Smith v. Laguna Sur Villas Community Association (2000) 79 Cal. App. 4th 639)

That means the attorney's client is the association – the incorporated or unincorporated entity; not the Board of Directors and not the association's members either collectively or individually.


In Laguna Sur Villas a group of homeowners, upset by what they thought was a “runaway budget for expenditures” in an association's construction defect lawsuit, demanded to see the work product and legal bills of the association's attorneys in the lawsuit. The association declined to provide those materials on the basis of the attorney-client privilege. A lawsuit ensued raising a number of issues including the right of the demanding homeowners to have access to information and documents that were subject to the attorney-client privilege. The trial court ruled in favor of the association on that question, holding that the privilege was held by the corporation. On appeal, the Court of Appeal agreed, stating:


“The court correctly held [the association] was the holder of the attorney-client privilege and that individual homeowners could not demand the production of privileged documents, except as allowed by the [association's] board.”

As noted by the appellate court, corporations are “persons” under California law, have their own separate legal identity and enjoy the benefit of the attorney-client privilege. Under the California Evidence Code, a client is a person who consults a lawyer for the purpose of retaining the lawyer. The term “Person” includes a corporation and may also include an unincorporated organization when the organization rather than its individual members so consults with a lawyer.

Rule 3-600 of the Rules of Professional Conduct of the State Bar of California, applicable to all California attorneys, provides, in part:


“In representing an organization, a [lawyer] shall conform his or her representation to the concept that the client is the organization itself.”

Because the individual members of the Laguna Sur Villas Community Association did not consult with or retain the association's lawyers they were not clients of the law firm representing the association. The Court of Appeal rejected the argument of the homeowners that they were the “true clients” because the association was “faceless” and could act only in a representative capacity, and that they were the persons for whose benefit the lawsuit was brought and were paying for the attorneys' legal services through their assessments. The court pointed out that the California Supreme Court had recently1 refused to create a so-called “fiduciary” exception to the attorney-client privilege.


In the Wells Fargo Bank case the beneficiaries of a trust sought to obtain confidential communications between the trustee and legal counsel for the trust. They claimed that the trustees owed them independent duties to provide complete and accurate information regarding administration of the trust and to allow them to inspect books and documents. The Supreme Court rejected their claim and declined to allow the trustee's legal responsibilities to trump the attorney-client privilege. The Supreme Court stated:


“Certainly a trustee can keep beneficiaries 'reasonably informed' [citation omitted] and provide 'a report of information' [citation omitted] without necessarily having to disclose privileged communications.”

The court held that the attorneys represented only the trustees and not the trust beneficiaries. Like the Court of Appeal in Smith v. Laguna Sur, the Supreme Court in Wells Fargo Bank was not impressed with the argument that the trust beneficiaries were indirectly paying the attorneys' legal fees because “[p]ayment of fees does not determine ownership of the attorney-client privilege.”

These principles were more recently reaffirmed in a 2004 appellate decision in La Jolla Cove Motel and Hotel Apartments, Inc. v. Superior Court where the Court of Appeal referred to Rule 3-600 of the Rules of Professional Conduct and said,


“In representing a corporation, an attorney's client is the corporate entity [emphasis in original], not the individual shareholders or directors, and the individual shareholders or directors cannot presume that corporate counsel is protecting their interests.”

An earlier 1991 Court of Appeal decision is to the same effect. In Skarbrevik v. Cohen, England & Whitfield the appellate court rejected the claim of a minority shareholder that a law firm representing the corporation in which he held stock owed him a duty of care. The court held that an attorney representing a corporation does not become a representative of its stockholders merely because the attorneys' actions on behalf of the corporation also benefit the stockholders. Corporate counsel's direct duty is to the client corporation, not to shareholders individually, even though legal advice rendered to the corporation may affect its shareholders.

California case law is unequivocal. The client of a lawyer serving as legal counsel to a corporation or other entity is that entity itself and the attorney-client relationship does not extend to the members or shareholders of the entity.

{end quote}
JenniferG11
(Texas)

Posts:530


11/17/2018 8:19 PM  
Posted By KerryL1 on 11/17/2018 11:05 AM
With RoyalP, Janet and Cathy, our HOA attorney represents the Association (not individual members in it), not the Board. The Board, as with the other Association contracts, hires and dismisses the law firm. The board m ay meet with the stoney in executive session to discuss potential litigation and other legal matters in CA

CA has very complicated statutes about HOAs and our high-rise HOA is very complex, so we do have a Law firm on a $500/ann. retainer and an attorney there is assigned to us. For the $500, we get unlimited phone calls via the president, who's the selected liaison here. He also will meet with us twice a year including the annual meeting & election, which we just held. While the votes for directors were being counted, he brought the membership up to date about new CA legislation. He also visited the inspectors of election table several times to see if they had any questions while tabulating the ballots.

If our property mgr. with the board's consent withheld financial records that Owners may legally review and possess, as in Jennifer's case, the PM & prez undoubtedly would simply have phoned our attorney and asked if members may have x, Y & z. records. It should been handled as part of the retainer with none of the expenses & hassle her HOA went through.

We do not present the expenses at our annual meeting at all and that's not required in CA. Even if it were, it would not have included details such as the ones Jennifer may have wanted.





In our case, their attorney DID advise them that we may, and have the legal right to, these records. They just didn't want to give them. They shifted from arguing that what they were offering met the legal requirement to another BS excuse.

JenniferG11
(Texas)

Posts:530


11/17/2018 8:22 PM  
Posted By RoyalP on 11/17/2018 8:15 PM
Jennifer,

below is the FULL text of my reference

NOWHERE is what YOU quoted

{quote}

The question sometimes comes up, usually from a homeowner or group of homeowners, concerning who the attorney representing the association in a matter actually represents. Some years ago, the California Court of Appeal provided a clear answer.

“Condominium associations may bring construction defect lawsuits against developers without fear of having to disclose privileged information to individual homeowners. Like closely held corporations and private trusts, the client is the entity that retained the attorney to act on its behalf.” (Smith v. Laguna Sur Villas Community Association (2000) 79 Cal. App. 4th 639)

That means the attorney's client is the association – the incorporated or unincorporated entity; not the Board of Directors and not the association's members either collectively or individually.


In Laguna Sur Villas a group of homeowners, upset by what they thought was a “runaway budget for expenditures” in an association's construction defect lawsuit, demanded to see the work product and legal bills of the association's attorneys in the lawsuit. The association declined to provide those materials on the basis of the attorney-client privilege. A lawsuit ensued raising a number of issues including the right of the demanding homeowners to have access to information and documents that were subject to the attorney-client privilege. The trial court ruled in favor of the association on that question, holding that the privilege was held by the corporation. On appeal, the Court of Appeal agreed, stating:


“The court correctly held [the association] was the holder of the attorney-client privilege and that individual homeowners could not demand the production of privileged documents, except as allowed by the [association's] board.”

As noted by the appellate court, corporations are “persons” under California law, have their own separate legal identity and enjoy the benefit of the attorney-client privilege. Under the California Evidence Code, a client is a person who consults a lawyer for the purpose of retaining the lawyer. The term “Person” includes a corporation and may also include an unincorporated organization when the organization rather than its individual members so consults with a lawyer.

Rule 3-600 of the Rules of Professional Conduct of the State Bar of California, applicable to all California attorneys, provides, in part:


“In representing an organization, a [lawyer] shall conform his or her representation to the concept that the client is the organization itself.”

Because the individual members of the Laguna Sur Villas Community Association did not consult with or retain the association's lawyers they were not clients of the law firm representing the association. The Court of Appeal rejected the argument of the homeowners that they were the “true clients” because the association was “faceless” and could act only in a representative capacity, and that they were the persons for whose benefit the lawsuit was brought and were paying for the attorneys' legal services through their assessments. The court pointed out that the California Supreme Court had recently1 refused to create a so-called “fiduciary” exception to the attorney-client privilege.


In the Wells Fargo Bank case the beneficiaries of a trust sought to obtain confidential communications between the trustee and legal counsel for the trust. They claimed that the trustees owed them independent duties to provide complete and accurate information regarding administration of the trust and to allow them to inspect books and documents. The Supreme Court rejected their claim and declined to allow the trustee's legal responsibilities to trump the attorney-client privilege. The Supreme Court stated:


“Certainly a trustee can keep beneficiaries 'reasonably informed' [citation omitted] and provide 'a report of information' [citation omitted] without necessarily having to disclose privileged communications.”

The court held that the attorneys represented only the trustees and not the trust beneficiaries. Like the Court of Appeal in Smith v. Laguna Sur, the Supreme Court in Wells Fargo Bank was not impressed with the argument that the trust beneficiaries were indirectly paying the attorneys' legal fees because “[p]ayment of fees does not determine ownership of the attorney-client privilege.”

These principles were more recently reaffirmed in a 2004 appellate decision in La Jolla Cove Motel and Hotel Apartments, Inc. v. Superior Court where the Court of Appeal referred to Rule 3-600 of the Rules of Professional Conduct and said,


“In representing a corporation, an attorney's client is the corporate entity [emphasis in original], not the individual shareholders or directors, and the individual shareholders or directors cannot presume that corporate counsel is protecting their interests.”

An earlier 1991 Court of Appeal decision is to the same effect. In Skarbrevik v. Cohen, England & Whitfield the appellate court rejected the claim of a minority shareholder that a law firm representing the corporation in which he held stock owed him a duty of care. The court held that an attorney representing a corporation does not become a representative of its stockholders merely because the attorneys' actions on behalf of the corporation also benefit the stockholders. Corporate counsel's direct duty is to the client corporation, not to shareholders individually, even though legal advice rendered to the corporation may affect its shareholders.

California case law is unequivocal. The client of a lawyer serving as legal counsel to a corporation or other entity is that entity itself and the attorney-client relationship does not extend to the members or shareholders of the entity.

{end quote}




The corporation only has the attorney client privilege, The Directors are the representatives of the association, so only they have it. The corp is the client, and the BOD is the representative of the client, not the members.
RoyalP
(South Carolina)

Posts:203


11/17/2018 8:24 PM  
Jennifer,

NOWHERE in my reference is your quoted statement:

They ruled the BOD was the client.



They ruled quite the opposite, in fact.


While you are entitled to your opinion, you are NOT entitled to misquote or add material which you, personally, would LIKE or THINK is there.
RoyalP
(South Carolina)

Posts:203


11/17/2018 8:34 PM  
as per Jenniffer:

The corporation only has the attorney client privilege, The Directors are the representatives of the association, so only they have it. The corp is the client, and the BOD is the representative of the client, not the members.


(posts crossed)


FINALLY correct, albeit poorly worded.

The Association is incorporated.

Corporation is the client.

BOD is the client's rep = attorney/client privilege.

Corporation, as represented by the Directors, has a fiduciary duty to the membership.

Membership is NOT the client.


This is the POINT of the 'corporate shield'.





Should the Association NOT be incorporated, all hell breaks loose.

It would not have a corporate BOD, it would then have TRUSTEEs.

Trustees are an entirely different 'ball-o-wax'.
JenniferG11
(Texas)

Posts:530


11/17/2018 8:35 PM  
Posted By MelissaP1 on 11/17/2018 7:00 AM
I've taken some legal course in college so have a different perspective on the use and need for a lawyer. For me it wasn't a matter of going to a lawyer for advice. It was going to them to perform a service that required an attorney. So each HOA needs to evaluate what they need or want a lawyer for. Once that is established then decide what kind and if retainer is needed. My experience has been no retainer really needed except for long term lawsuits (against HOA) or certain money amounts in the claim.

Now as for you as an individual going to the lawyer even as a board member is a HUGE NO-NO!!! It has to be agreed upon by the BOD to contact the lawyer. Plus there should be single point of contact like the President. (Or someone BOD agrees to). Many reasons why. The cost being the biggest. The money being paid out is ALL of the HOA's money. It's not some magical "other fund". There may be confusion if multiple sources contact the attorney. It also helps narrow the contact, information, and decisions. That saves time and money.


I would be mad if someone on the board took it upon themselves to go to the HOA's attorney. That's NOT your job or responsibility. It is a decision the BOD has to make as a whole and consider the HOA's budget. It's not your money it's EVERY member's money your spending on this.




We will have to agree to disagree on whether that was a huge NO NO. I could have instead hired an attorney to send a demand letter that the BOD have to turn over to their attorney and he would have then started communicating with mine. What is the difference between that and me 'representing myself' and contacting him?

This was a very cut and dried matter. The Statute plainly states what we are entitled to regarding financials.

And, I should have done it sooner. The BOD wasted a lot of money forwarding all my emails to them to him, to which he probably said 'she is right' but they ignored that and kept obstructing. The majority of his billing for me was indirect. (My emails to the board and PM sent to him).

Contacting him directly and resolving the issue STOPPED the billing. (and the problem).
RoyalP
(South Carolina)

Posts:203


11/17/2018 8:37 PM  
Posted By LindaB20 on 11/16/2018 6:08 PM
Should the Board have a retained lawyer or just retain one when it's needed? How do most boards handle this?




Larry's answer was the best:

If a smaller, simple HOA hire one as needed. Hopefully you can get the same one as needed.

If a larger, complex HOA have one on retainer.
JenniferG11
(Texas)

Posts:530


11/17/2018 8:44 PM  
Posted By RoyalP on 11/17/2018 8:24 PM
Jennifer,

NOWHERE in my reference is your quoted statement:

They ruled the BOD was the client.



They ruled quite the opposite, in fact.


While you are entitled to your opinion, you are NOT entitled to misquote or add material which you, personally, would LIKE or THINK is there.




They ruled only the BOD was entitled to the privileged information. Tomato/tomato. Yes, supposedly the attorney has to act in the best interests of the association. Whether they actually do is another story and not my point. My point is that though they represent the association, that doesn't mean the members, it means via the board. It's a nuanced point and poorly worded or not, I am correct on that.

RoyalP
(South Carolina)

Posts:203


11/17/2018 9:14 PM  
..... My point is that though they represent the association, that doesn't mean the members, it means via the board. .....





JenniferG11
(Texas)

Posts:530


11/17/2018 9:34 PM  
Posted By SueW6 on 11/17/2018 7:16 AM
The use of a parliamentarian would have handled this issue (release of financial records to members)

It seems no one is reading the state regulations, CCRs, or bylaws and doesn't know how to make the board respond to its own duties.

The parliamentarian could have consulted the board or individual member as to the procedure it had to follow.

BTW - at the Annual Meeting of the Members, a financial report from the board is pretty boilerplate as a part of in its report to the members (Balance Sheet; Revenues and Expenses)

So its not clear what she wanted and didn't get and thought she had to go to a lawyer about it.






We have no recourse other than court. We were prepared to go to JP court if we could not get this resolved. That is a step above, not below, contacting the attorney. In fact to go to JP court you have to show that first you sent a demand letter and did everything you could to resolve the matter before filing in court.

Texas law requires more than what you are saying you provide. We can see invoices, receipts, etc. Anything we want.

The obstruction went on for months.

I didn't 'think' I had to go to the lawyer about it, I did have to. First they argued they were waiting on him to say that was ok to do, and when he did they made up a 'logistics' problem that on the spot, at the meeting they said this, prior board members in attendance, who had easily done this many times, were there to say 'There is no logistical problem. I personally did this many times. Here is how you separate the confidential from non', step by step.

They didn't want to hear it until I said HEY to the attorney! He repeated their excuse and I said well, a former board member can tell you exactly how to do it, and she can tell them. The MC knows how, this is dumb, the same company did it for the prior board! But if we have to pretend like suddenly no one knows how, then so and so will be happy to go show them.

He was all great! I will reach out to her right now. Done.
TimB4
(Virginia)

Posts:16045


11/24/2018 5:05 AM  
Linda,

Our Association has an attorney but they are not on retainer.
They are our registered agent (costs about $200/yr).
All other services are on a fee basis and only costs us when we use them.


It is good for an Association to have an attorney available vs. looking for one after one is needed (sometimes, time may be a factor). Shop around. You may get a relationship with an attorney like we have.

Hope this helps,

Tim
GeorgeS21
(Florida)

Posts:796


11/24/2018 8:40 AM  
No Linda.
Please login to post a reply (click Member Login on the menu).
Forums > Homeowner Association > HOA Discussions > Should the Board have a Lawyer



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